RGEN - Earnings call transcript Q2 2022

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Operator

Good morning and welcome to the Repligen's 2022 Second Quarter Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] In order to accommodate all individuals, who wish to ask questions, there will be a limit of two questions at a time. Please note this event is being recorded. to Investor conference Relations like Newman, to now of Head for would turn over the Sondra I Repligen. Please go ahead.

Sondra Newman

Thank second quarter also provide cover welcome periods ended to this six XXXX. three and financial we'll We'll XX, the and business you, call, highlights month for and updates June report. Renan, On performance our and open our guidance for Snodgres, President call Hunt, Tony CEO, CFO; Q&A. financial the Jon Repligen's will to and deliver will then up for report our and the full year we our XXXX.

events statements reminder, the and we a performance call, may subject As or this the and actual including for regarding forward-looking of results goals that business to risks make are company, that to our differ. during the financial those uncertainties expectations cause

Securities risks which to our we filings today, reports on that events except is which included concerning a on information, XX-K, report information update commit current statements we're could to the new management's make X-K, by the with business result required company of and change future related on current views, our in Form itself comments Commission. otherwise. not our obligate Form filing Form quarterly as The forward-looking report does or annual Exchange law. as other Additional or reflect Today's and XX-Q,

and this following: expenses measures SG&A, profit performance currency, During should sec.gov. share, current EBITDA income investors margin, earnings report include not is this to Repligen's operating measures, which on be financial the net results at in an of well revenue benchmark gross peers to historical included today's are and including call, intended as measures website These the margin, GAAP contingent opportunities. we R&D morning, growth better constant non-GAAP we but Repligen's are to when and performance in issued evaluating providing release as and non-GAAP figures Reconciliations and of as expense, results alternative to and adjusted the operating posted and tax gross GAAP guidance. against financial Non-GAAP investment are and enable EBITDA. press to income viewed operating consideration, income adjusted per that

I'll to Now over call Tony Hunt. turn the

Tony Hunt

welcome good you, thank Sondra, everyone and earnings and morning our call. QX to Hey,

through pleased We first the months first XX% $XXX quarterly half through very of reaching with million for to our six are the quarter half $XXX revenue XX% continues and and revenues finishing and in QX, XXXX first second in performance to up of at the the million. well the year. perform base coming business our Similar with quarter

businesses gene demand Our XX% related product revenue lines. were markets. This of representing in contribution total quarter, this Filtration monoclonal and strong Chromatography from growth was across and our in concern us our to finish future not in situation quarter into the in year A product region, ability during million position therapy ship target to over the was for growth also China revenue. customers related $XXX the therapy antibody core our places up XX% transact gene the and which growth, for above excludes robust our with therapy a of the revenue key or the orders. major XX% our accounts, very but Gene with only drivers almost COVID these good in with direct

the delivering while team excellent our with year. of result This still of the is outstanding China by the on effort there and as worked they numerous a logistic revenues direct ended versus for XX% XX% the an company. Our quarter pandemic orders on issues business of through quarter associated prior

revenues the XX%. in discussed off As call, predicted saw down on we drop our COVID QX quarter in

come year-to-date. business base total perspective, the year second and year on an call. half had were X, are for expect of to in the COVID to revenue at first half X. orders to especially year XX% for expected strong million versus COVID QX of down XX% year-on-year orders and which base be year. below of we of full first $XXX estimate to up our business, book, updating From was our XX% million, orders of on performance just pacing, slightly the from and while Book-to-bill was we Based the down overall still a $XXX strong terms with XX% another base our our In half above revenues to we revenues business guidance now our quarter, order

for guidance projecting organic to of to are revenues range previous growth XX% base total from And range We're now XX% growth We in growth XX%. the of in million XX% anticipate to XX%. business XX% our increasing XX% to for XX%. revenue we the $XXX million to $XXX of to

perspective, XXXX the to and I moments a transitioning to progress XX highlights products year. for business few new the market and traction the last developed to want we Before excellent an made product had with product a unit quarter, start launched discussing on capacity From spend new the expansion. we've

up. New Within number product Chromatography our by customers our affinity are in sensitive and revenues our ARTeSYN half the led first portfolio, performing well of for flat pH A antibodies high through and Protein of now is resin accounted ligand for sheet sales and Ecolab pH scaling our X% a sold cassette systems.

development focus the focus with pre-COVID new wins, lead the of taken through up new With seeing to first validates we our filtration AVIPure R&D this on years, bringing down on have our portfolio. assembly center on increased going launched especially very will are in have are fully infinity five share completed capacity this Rancho, product and perspective, we in QX and times Marlborough hollow are which positive Hopkington. and sampling Overall, expansion feedback our levels, seating online. adoption, fiber as over gain differentiated is quarter in the very last In and pleased product market in in approach we to From with we the performance. addition, which to the adoption year core filtration in evaluation of AAV our strategy. our an resins portfolio disruptive capacity technologies our operations opened of phase

which of we XX expansion programs us capacity our months next another for We the will years well support lined up, base. have growing as customer five position

to year, the in filtration strength So, by the strength quarterly same XX% XXXX. this moving our and was business growth to the performance. first product the our hollow in the and regions broad in six more in In the across business based continued base was story of than lines. The fiber second filtration The chromatography XX% XX% through quarter quarter months periods compared led of filtration, was our the up now franchise. our and

business focused fragments, the been half of opening vectors monoclonal TFDF first year. able and in the than process bodies, With The interest in number viral exosomes. greater for a production in more customer Our XX% conduct of of accelerated is sites accelerating intensification. trials on to up significant mAb the field TFDF up, we've use

customers fully filtration As technology, going the scale driver implement forward. expect and growth will for TFDF that our we key be business of a

bench-top business was strong hollow scale orders than and continue business quarter by had strong demand both systems. our a multiple our ATF And for customers systems fiber and and as to up revenue process scale Our greater modalities. finally, XX% across driven the evaluate, technology implement

XX% guidance filtration XX% to we to from For XX%. for the business increasing XX% our to are our up guidance our growth, year of previous

chromatography. to Moving

qualified driven off now therapy This XX% had OPUS line pre-packed column XXXX for an our by is quarter customers in in business pre-packed our facility Breda start very increase a of mAbs and gene have customers. with In in excellent Our large approximately scale to XX% for columns. demand product strong Europe, columns. our

the by on split columns to our columns We XX% now of encouraged OPUS also revenues. representing resins business continue with overall be and of

resin seeing are should for in second OPUS. we signs supply, result strong half of a Finally, some which positive improved

the the will range that year, in of XX% grow chromatography XX%. For the we anticipate to franchise

down quarter, proteins this had factors. with both tough as but for growth Our comps was ligands a business and very year-on-year anticipated solid franchise

As discussed to we with in agreement QX continues XXXX. call, in our the in demand their signed line reduce external Cytiva

marketplace family continue in by seeing. to well the of we're Our we ligands are NGL encouraged traction perform the and

approximately here be expect in to proteins to XXXX. We down continue XX%

our Finally, of to in the so Pipeline almost XXXX. months around perform and expand, remains FlowVPX approximately year-on-year were expectation we continues on XX% FlowVPX well our adoption. continue to our process first at the XX% six as growth XX% efforts business year. opportunities analytics sales focus up for

in outstanding we quarter had QX. another overall, So

our over the for we year. our you And on through are additional very with our will anticipate growth, continue turn the strategic call by we encouraged coming capacity company. our with The continuing the by I M&As. that, remains year to We business forward to as Jon future We initiatives products, the progress recent updating will update. execute financial base market, to to on which performance XX% this excellent new be hit the bright online, above for look

Jon Snodgres

you, quarter, as reporting and updating mentioned, year. Today, second we our well results discussed, day, otherwise the the good reflect measures guidance all as Tony, adjusted Unless our for Thank financial financial measures. non-GAAP everyone. are for financial

as sequentially once performance. shared As up we business and strong record first our of $XXX.X morning, from Base earnings revenue press quarter again XX% release the as delivered up quarter this year-over-year well totaling in outperformed second XX% million earnings XXXX. expectations

in from during of While COVID-related solid level, with therapy gene of inorganic expanded with and a business another total quarter excluding quarter, contribution revenue XX% accounts. our our base At XX% market the equating revenue total COVID-related gene second of uplift revenue year-over-year presence to at X% represented we approximately XX% saw revenue therapy we M&A. strong the growth nearly

steady Polymem, we monoclonal continue commercial the to XXXX where including the chromatography, accounts share Avitide management fluid gains Our BioFlex quarter. therapy to XX% hollow fiber, cell affinity We’ve to expand in total biosimilars and gene acquisitions markets. of area approvals continued across that the successfully in of integrate to market to growth also our revenue and exciting respective antibody This and market, see Repligen. support available complements continue comprised our

And to facility, fluid here fully with the we’ve management our already business growth support along ongoing. investments Marlborough, to our in scale expansions long-term filtration are shipped this Hopkington California second we Rancho, third customers our Massachusetts projections the to expect of where our out bring products year. quarter, initial online and in building to our Our Massachusetts quarter

up fluid the $XX on million out are and capital year-to-date, For we’ve management manufacturing. and for build excuse spent to scale period, plans and expenditures, me, our now proteins accelerating the year-to-date period, we full

CapEx million, projects support spend Our with to in be million $XX expected goals an XXXX. is go-live XXXX about $XX increase approximately of to additional now

On to and year-over-year. returning our commentary. was revenue approximately top organic Constant growth. million representing of in increase growth the XX% reported currency $XX quarter, second an our revenue XX% XX% line, Now million was we and delivered quarter our $XXX.X growth second of

and acquisitions, growth second XX%, XXXX quarter revenues. point growth. We our we COVID-related four business a of base to six points saw from from closer points XX Looking of decline contributed added our

a Foreign exchange primarily Euro the five-point Yuan. and compared to the by in headwind triggered strength U.S. U.S. dollar Chinese

that the sales For be perspective, XX% denominated based. will for XX% expect of about Euro be sales full year, full of and – we our U.S. approximately year dollar will

across regional quarter increase regions of at America growth We XX% of three by revenue and continue In XX% influenced of expansion each Asia/rest to growth. second by revenues. of region our later European world the North see positive our global XX%, COVID led a

We to the growth in COVID of year the second in our volumes expect half lower be Europe decline. as

second revenue XX%, at North XX%. at America at of regional world distribution Europe quarter the and included for XX%, Our Asia/rest

million of statement. same moving XX.X% expansion second XXXX, ahead well personnel pacing $XXX.X quarter period the income in our Adjusted activities. to XX% Adjusted was of compared quarter or profit had where Now the gross in to $XX.X the capacity XX% revenue same XXXX. period second to in million significant gross increasing compares by for down and of we margin our acceleration of XXXX, the

company. FX We level continue holding costs, reasonable manage margins still in increases and the at material headwinds to while a labor and for

total innovative support Now the for products research spend this of new be to the later expenses. to and P&L development adjusted development Increases continue operating were the several about year. Adjusted transitioning X% to second quarter revenue. expenses down launched of R&D in

in approximately were expectations. increases spend to dollar and lower expenses personnel, same timing XXXX. of expansions our facility Second Year-over-year than revenue, and acquisitions quarter slightly period of XXXX our in XXXX systems growth long-term linked to SG&A to total XX% investments adjusted the continuing support the be continue

adjusted earnings and Now EPS. moving to

operating $XX.X adjusted was compared million same XXXX million, increase $X.X XX% or XXXX quarter the period. to of an Second income

second scaling the the are margin XX.X% report time. compared operating quarter where to prior in We that revenue pleased XXXX, to period XX.X% adjusted activities significantly at acceleration of outpaced of in our

$X.X XX% equivalents, an net GAAP XX, compared second $X.XX XXXX income our EPS an second per increase improvement period. to fully our or adjusted quarter. We’ll $X.XX adjusted $XXX.X guidance. in million to the share Moving finally to quarter diluted same of the of XXXX, was income. And which net or in at XX% cash of cash the June $XX.X In $X.XX to increased quarter Adjusted are now totaled million, XXXX, the transition to million and year XXXX XXXX. our XXXX full metrics, compared

GAAP financial earnings in the today’s guidance our XXXX Our release. non-GAAP reconciliation for included tables to reconciliations in press are

a does As noted, XXXX otherwise of a foreign guidance guidance fluctuations on and previously also we include are $XXX not COVID-related X% to guidance, GAAP by by business be our potential and in which million, mind slightly of the that unless increased acquisitions our million to projected current full any impacted exchange demand XXXX mentioned, base revenue the headwind our reflects beyond non-GAAP. for offset projected discussed rates that all metric full Overall, future financial projection Please pursue. $XXX lower year may sales our updating XXXX may will impact be year revenue. company keep

increase million. $XX $XXX reach midpoint, We is million million and base to expect in to now revenue about XX% to to to as XX% revenue. reported, We to in in growth COVID-related XX% revenue Base business XX% organic expected to $XX to $XXX of At of range $XXX a guiding XX% currency to constant XX%. XX% million in acquisition and revenue million $XXX overall million growth XX% inorganic anticipated revenue. now the at is increase by are this

are our XX adjusted XX.X%. XX.X% increasing basis to to margin We gross by guidance points XXXX

for we are our of range range margin adjusted at the increasing $X.X million by ramping are operating basis the operating $XXX million We adjusted to And our XX guidance by $XXX income midpoint to of million. income to points to transactional year, $X XX% and from at revenue foreign up million for exchange the previous due impacts. $X is expected Adjusted to expense guidance year. of other our of XX% the expense of million

for – we of tax adjusted expect XX% XXXX approximately continue year. income the to income to pretax expect We be expense adjusted

$XXX guiding net Our an million $XXX million in of to income range guidance adjusted to increase from $XXX $X.XX per be share. EPS our to expected million. of fully adjusted guidance to $X.XX of million, And previous are is to the $XXX diluted now we

company in outstanding of $XXX expected now at $XX.X million to million $XXX million and end Our respectively. weighted with depreciation and intangible average amortization adjusted an expenses guidance compared $XX projected million diluted expenditures our EPS the EBITDA $XX.X estimated an XXXX. to of million The previous range be $XX our from capital fully to $XXX million April of to to guidance Adjusted XX.X reflects XXXX, year increase spend is million. shares $XXX approximately million expects to in million in be guidance

financial being to to back and operations. report metric cash the and range lines year-end CapEx questions. equivalents, operator to to for turn our our call a by expect with the be completes the GAAP open and will from investments the $XXX We of now million cash in update, our fully This generation million $XXX cash funded guidance

Operator

you. Thank

session. We with question Please first will now ahead. [Operator begin the Instructions] Arias Stifel. comes go question-and-answer from The Dan

Dan Arias

you do difference think level, competitors specific, and Good between morning where you're are percentage Tony, to does might you. the the but a lead most strategic they your guys. sure Thank a it times I'm maybe too are are, of to like then times, as lead you at not where advantage? what can reflect likely where be? on the And shares point high you feel looking get to market portfolio where

Tony Hunt

XXXX is over filtration last a the area so, lot last we're than times we've in really – the probably of build pre-COVID think And portfolio, Yes, lower an I at to been say over to XX months would and and something us. lead we one out able capacity that's on. the effort levels to terms say would definitely I That's of look our or months advantage portfolio six put we I drive say where cases in that focused it's for down when honestly that. some

it's across of that in capacity. board. competitors, of our a Everybody on splits Everybody terms is the think, how position. different I bringing kind with In is

we on we And I the good to think get as focus need that advantage. products we times to just really product, the the who've the have. that think year deliver to have I of nature lead last and can we which struggled differentiated customers, should be over that, our

Dan Arias

can their too that. way which doesn't feel yours of that's been extent half Okay. that? the or year? are expectations you're inventory, just not of in you might And clearly just back your like then or much managing trend into quarter. supply on suggest seeing book-to-bill which to then the year and there comes and seeing coming the it next the But of what destocking customers maybe on your topic the It results And when of the maybe the touch to activity be debate just into the Thanks.

Tony Hunt

from what Yes. of I is of to probably It's other would there little a year. bioprocessing view next pretty world look the half I through go when long and be we seen, first similar you destocking. strong think the hard companies, we our bit where is the at to have to very it our in us in rates destocking, as run is X XXXX. the that because of XX will tell lead which all months, say times order peers suffered think, I On

happen, lot product over timeframe. the that is I that to probably it's two not say destocking four if a sure quarters, up built say be during will happening I'm next to some there whole So – But of would was in there period. that that's going time

Dan Arias

bunch. a Thanks Okay.

Tony Hunt

Yep.

Operator

with question Morgan. next J.P. Qin The from comes Julia

Julia Qin

Congrats morning. a on quarter. good Hi,

have for expect much revenue incremental you pricing Can full noted environment. expect you've increases your terms to orderly given or on from year how so see year? benefit pricing price inflationary seen of the of the in to comment carry growth this peers given then pricing meaningful contribution next time of So year? many do you of into the the far And increases

Tony Hunt

you that want Do one, Jon?

Jon Snodgres

Yes, take sure. I'll one. that

just closely experiencing in yes, help industry, of were challenges understand situations So, work the businesses. to like our them Many them that customers are their in we similar with our seeing. we peers

about And had kind did we the X.X% average on overall. say at said we in X% we're increases I'd implement remember, price HX, Julia, you end. recognized to of double that So if high we historically, per year. typically

So, overall implemented list in realized. that And increase did We a as higher X-ish percent price we mid-year that. range actually than for well. prices

Some of that sticks, of some doesn't. it

the see certain into whatnot. have that as sticking a to We contracts under We the But overall go should we seen backlog through price more coming expect X% quarter than we've contract. roughly on had and bit year, we level.

Julia Qin

in anticipation Got the very more how wondering was you the therapy I me for and That's cell to XX%. second it. acceleration strength we of saw still much incremental one gene up? by near-term And helpful. exceptional in how quarter obviously much of once scale see updates? have expect at commercial positive driven do of FDA Or the and is approval that you

Tony Hunt

Yes.

accounts a through number based. isn't QX, if But positive see lot be of customers trials. scaling you I of from would It anticipation say going are we are more at if scaling been say get when QX So approval. – industry. – of where an that see clinical that using are I across it's or approvals, broad more phases very that we definitely a that our I bioprocessing the look technology would – and we I say would different success for It's board the of it's to really have that

of overall but I be this you'll therapy definitely year terms the see market. approvals, positive the what I've occasions, give really of to we'll few And second brings I on more will think approvals everyone. in think a So said half for momentum gene

Julia Qin

That's great.

you of initial traction double to previously on me strong new talked products. TFDF about Lastly you momentum from noted track I for products terms know every in and year several new

those think so broadly far Just new the thinking about products a could Or three in products launched know revenue to today. of for year launched benchmark new uptake past said, XX more use you Is combined that I last accelerated there seven all factors years? accounts support and that's this the even the launched I XX% seven think potential the are previously how to year? of trajectory? that more reasonable years next for

Tony Hunt

actually least I seven revenue, through. contribution thinking new that XX% run revenue just impact through that the the really on XX% done expect it'll that of the about Yes, good and products contributing XXXX. There for X% of years products great I really haven't launched that would in but basis. say a – were and we've coming of be a those would what last number analysis, go at a I the is lot is products that forward of only for over

I to we that's So that in pipeline contributors also a the think a and of will lot have think be the major really we in sign the positive overall other products company. growth

new think products. on our we're bullish I pretty So

Julia Qin

Great. you. That's me. it for Thank

Tony Hunt

Thanks, Julia.

Operator

question next Johnson from with Stephens. comes Jacob The

Jacob Johnson

good Hey, have quarter, that continuing you products like accounts much on Tony, about just of Inter maybe highlighting It those mix up those question. there talk you're what's commercial of today? winning is key Can revenue Maybe truly how came for there. markets get XX% traction XX you're all? trying TFDF. products? disruptive I for seems last just runway for the of new long to penetrated like is just growth those from following of what kind guess think your that just to I'm at do you a for kind you you've clinical how products of morning.

Tony Hunt

think there growth. runway a I is long for

fairly Our industry is moves slowly.

pre-clinical go a phase X, get get a X. you really lucky to So into phase you're you maybe new once launched, if they phase into they're in of X, terms tend products, into

of number get for commercial to years those processes. a take does into products it So

are launched in beginning. when disruptive the products those commercial since at at So processes, very we're products you XX XXXX, XXXX, look now the many but of

right? momentum to I mean, have will and They how a specifically to company. very impact tracking we year right doing, to that's marketplace. the the You where can we're may one track fold last the that And have an doubling application, a base in expected we're want year, it's even products more you you the idea A are to what continue this we to, around will the TFDF. to customers the say the few on products have And over of into that's I application into years. but broaden would number getting next that really why a of type they And and launching it years, me, the you So see a really expect in it's more positive contribution. highlighted for very it's start most with gain those target words, and applications of lots I bring processes positive also expanding. technology. reasons impressive asked the of when have other that products,

Jacob Johnson

it on – opportunity, for follow point up Got a nearing just And the Tony. for inflection like we're on then products. biosimilar Thanks as it. seems an those that, probably

how these Just those? best meaningful that to could market, areas is of suited Repligen? as think of some I opportunity for particular that your guess what larger in biosimilars portfolio come are about support to we that

Tony Hunt

– biosimilars. the things kind mAB focused of expect it portfolio into say the really in think I you really intensification, important We've since suited think, bioprocessing filtration are that biosimilars with that about for portfolio of of people And be We are yes, part meaningful would process where sufficiency I looking that to Repligen, for improvement, on biosimilars. the all XXXX. these improvement, yield to are worked the in areas companies manufacturing Yes, if most XXXX, the clearly market. it our only the we're upstream because are our But of I history are into best always the have lump the portfolio.

to in So the drugs in side so get companies commercial on Repligen bioprocessing another in some of the biosimilar marketplace. the not originator we're opportunity jump and for younger molecule, it's share like really

Jacob Johnson

questions, my taking for Thanks it. Tony. Got

Tony Hunt

Yep. Thanks, Jacob.

Operator

UBS. Garcia Lisa with from you comes question may proceed. next Lisa, The

Tony Hunt

want We She problem Lisa to at have might might the to with… back come a end.

Lisa Garcia

me? hear you Can guys. Hello,

Tony Hunt

Yes, we can hear you now.

Lisa Garcia

and I about on Good sorry of guide. guess, just, quarter Thanks I the higher level. the a so updated for Congratulations question. little kind much that. bit taking off Oh, guys. Hello. the morning on starting

that and Just business of trends for billion how about of longer term have the revenue. kind and think what that and And kind maybe the about that there the demand you're kind target capacity of and kind an would that you expansions given you doing. of that you thinking current of out $X how for That base does great of capacity the us on – the of update giving think kind that about how takes just the kind puts to that. and hear be incremental expansions – kind you're

Tony Hunt

Yes.

as we've Purely, – fantastic we're it dealing all something piece a has with. organic Lisa, the We've years business, company. the really well the last last three rates base So talked is base very high years. few that about for well, been growth honestly, had for really in row where COVID quarter. We business really, performed

we goal that to goal. business to of in getting $X think year of terms us achieving much about gets XX%, grow our I our every closer base much, billion,

I to accomplish think being to able that. we're on track right

all business to I make and to numbers up year with have trying deal growth. think shortfall COVID we'll next through that lower base

So I performance revenues in COVID and base track think or $X XXXX. in the message XXXX is slower driven with dealing by really on COVID lower obviously for really revenues and billion business

Lisa Garcia

be pipeline. mean, it there's in certainly kind great mean, moving just you're of kind M&A what pieces market portfolio? you're pieces the of market would kind the and kind would I a I volatility what seeing might in you be to just think of given get of and then, And it great terms for seeing of of Great. be couple the any to hear updated valuations. would But incremental great

Tony Hunt

Yes.

to last available. has Every fit love of of So different in right there right conversations the to might add. year the question, be and little terms part we'd active it always of be what pieces the terms just is a maybe timing. and the very is We're in

other year. any tend Repligen conversations And little this think in and of I I a we would think the year we family. that of become different but say see of terms go. handful companies to the target don't Repligen how than I year then then half opportunities, slower make a this of was part do So sense over think that time – for they is first can hopefully any

Lisa Garcia

guys. you Thank Great.

Operator

Blair. The comes next from Matt William with question Larew

Matt Larew

Hi, good morning.

material As – we help margins from for labor off just inflationary the expansion jumping bit out understand get help be maybe will XXXX us year can the capacity impact like freight little think could second to the we true you end. in costs and a maybe point the activity that parse half, drug as better about the versus what us and

Tony Hunt

Yes.

I'll – we'll just drivers margin – key of then operating from margin and that So handle as an gross well. the this perspective take it really

you is at to the a see and one weakening I us an other right? having That's we translational globe. certainly three currencies If both transactional look FX, impact a strengthening think drivers, across dollar, impact. So, the on continue from

inflation. headwind FX. seeing cost also a We're is there associated So with there

in the to our we've inflation carried into plan quite us largest most as that's the costs, yet by bit cost inventory hasn't material of overall XXXX stocking year. half a And really For our first that XXXX. up we of from a component P&L on the is significantly of hit of which COGS, do because

half QX, as and QX, have through but projects and And start start headcount to add starting of impact. of we'll a pretty projects together. expansion continue And we've the to adds to inventory off start and heads then depreciation kind throughout. those second having capacity we live, burn at the continued take to in QX we going significant to tie lower it's that that's So rolling going cost, into

As growth because in I up revenue prepared to catch remarks, to the year my all expansion. revenue our had growth to we've obviously the try preceded to mentioned continued capacity last we do ability

gross go XXX makes So, years. good I comes This tell level to, XXXX at margin. margin. you top the would of maybe We're a to gross gross guess, points the XXXX year-to-date. performance through on other We've expanded the margin component I basis there. the three we've last really about on sense seen XX.X% on it

that half there. we at margins XX% so, our implied good we've to a do look had in be And second range. the to But we expect run as XX.X% in

expect as it. the through all with we contributing elements of these slow end down do a we really come So bit year of to the different

Matt Larew

outlook you you. for back Thank updated the then, an great. on provided Okay, half. COVID And

curious for range if COVID ability a to the give an ability the also bit as tighter XXXX Just on outlook there to get has with well?

Tony Hunt

Yes.

peak in that normalize is XX% after that’s stage of XXXX, going of COVID there best of going our to be to at years. this revenue. probably be of be know that. and sort COVID two, There’s on slow for be that clear is There’s it’ll it revenues about numbers three, XX% That’ll some right? the four So range kind it’s May the COVID year reality, talked the In the saw in we QX, clearly in back second we of lighter. in down QX. general in front, normalized in will to half next we that think what level the that pretty a We

what So kind in to of XXXX. see about that’s of peak XX% XX% revenue we

Matt Larew

Tony. Thanks, Thanks, Jon. Okay.

Operator

KeyBanc. next Knight with from The Paul comes question

Paul Knight

had talking you that is and part going were Hi, that we in the of flow market. you the acquired path Tony. second fluid just BioFlex, portfolio single What’s cited So develop that, parter in use to was about of flow days management kind question in you a kind use? When portfolio. single of early there. to starting two in path the still in Are then

Tony Hunt

Yes.

start portfolio. in with maybe what’s So fluid management the

of a acquired we’ve at acquired half have years, end last in we you of management. two of in the then almost we stated, you in last XXXX, as BioFlex – And NMS, business fluid the but the ARTeSYN year. the back latest being EMT, is over really companies BioFlex December, So number

all that goal one together bringing the XXXX. So under roof really was in here

have we integrated those We’ve business we So have a a management together. companies group. team,

those is companies so piece opened is best an in at our part, there’s the to come split Hopkington then to to probably many into of management a And which path way assembly And part from flow assembly the it center. bioprocessing, There’s right? individual fluid basically up we the look sell components the business component two. that players where the where we’ve

actually systems integrating they with what et so sales. and sets, our we They complement we’re we’re the selling integrating systems, support our so with portfolio, those. we with other in clamps our or sell and line are So cetera products tubing our filters

also of and systems in ARTeSYN a that our Systems the for number Spectrum our had we’ve So marketplace years.

our it. So it that’s supports paths to then run And of part big those flow a customers who need well. systems their as

all part how you’re absolutely it together. use comes single increasing. that’s right. The So It’s

more as paths own into flow who line those the the come centers buying we product can provide I think products. and online customers to assembly our paths more flow it and are more increases

it how future. for it the see plus see of XX% $XX a playing business year, about revenue Paul, that’s million and as north foreseeable growing the So of out. well this kind We we

Paul Knight

Okay. Thank you.

Operator

from comes The Capital question Hewitt with Matt Craig-Hallum Group. next

Matt Hewitt

morning the the But some Maybe on growth products little this obviously first and bit. new you’ve you’ve seen you launched. thank for that strong up, from questions. were Good touched taking but a

were few think to I this got expectations out year, for last as Are yet target? still door. nine XX that on of the you’ve to quarter, have a your track you new products

Tony Hunt

products we pipeline the are. coming the A year. be the number second of in through of Yes, will half here

the were or them we into and four products, to max. if get teams maybe products back group, out Because R&D three two expect three, then ability of deals five that launching the of that’s nine the we really the able and maybe years in it’s the to year five the to absorb went produce over And done R&D a be great those reflection going four range. years, Matt importance be products to we’ve larger ago, last or a door. years, and So XX now three

to we products Now our help going really into we’re per XX disruptive to of That’s are, as on term, in us focus that bioprocessing just more long kind products adding year. especially is market. nine the

Matt Hewitt

That’s job Phenomenal second navigating last then challenges a of great. the quarter. for China maybe And question me.

of subsides potentially subsides? that a And this first in and or curious back the much so next for the maybe that has just of did half the half, QX entering little growth year? I’m and or incremental a year, headwind either far represent year how Does that represent

Tony Hunt

QX. China the Remember, strong in into just book, all QX, so order of with we really less challenge like year challenge came a was a pretty our of in peers. a Yes,

It an getting wasn’t shut challenging down, get around product hit or like really view issue it just that. was more from really was it the So Shanghai [indiscernible] a orders to QX into anything country. of logistics point

May, As it open up. started we exited to

in just everything getting so U.S. And door. phenomenal job, in folks the just the the the out did and logistics here team a China,

the hit the there’s don’t really targets to for had going we quarter. I the road. expect in know the some of you’ve if So there’s our be the in second bumps reason And is half upside year. kind that of

If Omicron like you U.S. months and not in few wave, at coming the six five, a every Omicron pretty it’s look waves months waves there’s through. it’s between Europe, there’s of

to some last just beginning China expect in week. see regions. over the So we’re actually in shutdowns see that to again And

So I of whole a don’t lot think there’s upside.

shown with our And product around to punches team and as for they need. I we need that sure our think making to be over has execute. the to execute and in the think it’s their customers there the more I executing plan to that year roll get able China ability the

broader same of we more So team. from the execution of in expect terms the Repligen

Matt Hewitt

you. That’s great. Thank

Operator

from comes Jefferies. Couillard Brandon question next with The

Unidentified Analyst

you more driving Hey better a guys, little more bit of question. about on visibility projects demand, Quick chain that? that’s this CapEx for is if for projects confirm the Thanks up $XX the talk a kind of or CapEx as of Thanks. And pull forward what’s and spent? step taking one of Brandon. from Matt bit just we on little it Is million. Can should then, makes from incremental that you the you XXXX, supply just that on if think had feasible? easing

Jon Snodgres

Yes. Great question.

talked the expecting we’ve a expansion forward facilities, cetera. significant in a been capacity it’s adding of bit, three-year dollars out out We’ve quite about building to through journey. XXXX, put et of think building it terms in XXXX facilities, I we’re middle equipment,

journey. So is that part it of

we as close projects we’ve that and out some start are and opportunity a projects had expansion. projects to ability these we’ve I and management think like of these. that other slated the working have we on major year kick just XXXX go filtration we’ve to the been for that we on couple we’ve fluid completed really work and actually ahead projects And the some on we execute to forward seen to filtration this pulled the because feel start

will right capacity little were expansion years three a part which happy And growth. of longer-term said couple to for everybody about all support So to just in and with we we I that it when year be plans the all we plan pulling forward have our again, line here that capacity very do. a going bit, think to five in

Unidentified Analyst

side, demand more expand then on That’s helpful. that talk you just continues Thanks. coming the just building? talked modality is Can about where on And process Tony, more a you bit how by bit to color applications, pipeline that newer a analytics there. pipeline’s customer type, either about the where little from

Tony Hunt

the and Yes, trait gene say traditional combination space. [ph] of a mAbs would I it’s therapy

So over application. two three when plus focused base on really we we’ve acquired expanding customer the terms years, mAb CTech, of last they really the years, focused in were

opportunity a So gene growing therapy. there’s within

definitely the that we’ve taken with we have. advantage think products I So that of

is the other it’s this would by the is part the done and really to all So sales applications say I do is, that’s driving team work being just that evaluations.

technology the like when The about So up year has at evaluations number significantly. market a of just you FlowVPX this think a on about clinical gone stage.

clinical So for in to momentum technology make gains the for evaluations technology as us those it and and VPE customers and marketplace. wins floor results put bring the the the completed also that are manufacturing decision on in

it. that there be two So would the driving things are

Unidentified Analyst

you. thank Super,

Operator

Securities. Puneet comes next The with SVB from Souda question

Puneet Souda

the question. hi, Yes, Thanks taking Tony. thanks, for

of So in little sort XXXX? just bit a to this how to it peak maybe about XX% and or was revenues thinking sort XXXX, could you peak just clarify wanted talk to XX% COVID were of the for XX% on XX% revenues. about of And the you

Jon Snodgres

this stage. get going at a that’s about Yes, pretty to think of what we range but to XX% look revenues. of see obviously the of I like, to the when end We’ll we’ll peak a year, so XX% range fair better have the we sense XXXX of is

and based peak it revenues XX weeks. $XXX yes, that for the peak next And the So we the on projections calling Repligen. XX we’ve in we’re weeks, conversations it’s is last see had are for year million what revenues the

Puneet Souda

For XXXX?

Jon Snodgres

Yes.

Puneet Souda

on we And around, one environment. a more continue to get under then it. recessionary being is biotechs Okay. pressure question in Got smaller

more trials to if the trials that clinical that there on see provide have has, can helps can versus to point, given your exposure were wondering to of for product there, but production what’s clinical just innovative any And if or you wanted a historically what’s levered importantly, Repligen exposure been smaller you updates there? more just metric there commercial mAb understand then that sort provide there a the biotechs? So number us

Tony Hunt

Yes.

really companies if impact So a funding for Repligen. doesn’t biotech in majority looked well. impacted hasn’t are therapy The Yes, players. space, there’s bioprocessing as small big smaller big the customers huge have I in biotech general, companies, probably the think a of you number impacted our at But general, Repligen really name name of CDMOs. I and hasn’t gene –

right that’s XX% that run numbers bumps the and question at now. now clinical I that’s COVID, up have you good that we right a probably bit. at little XX% second commercial, we’re where but your the those But we end think the a again, expected year, on year commercial, without of clinical, Puneet we’ll in that’s are So the of will the end run numbers sense

Puneet Souda

that see the then overall to talk marketplace wondering and just on capabilities the on itself is chromatography great more there and with approach? then about competitors But chromatography time? systems rate? existing you we being what there seeing Thank growth OPUS wondering some versus Repligen the customers. and of about providing the there in you. positioned Tony, for think the offering how the are the the expansion you’re talked when you’ve feedback And systems so systems Okay. bit about more Could it’s to a the front, And a systems’ what’s far

Tony Hunt

pieces system dissect that I’ll answer the But obviously, the acquisition. known for right. the we Spectrum for have hopefully the Okay. in this the portfolio, that came an days on that the hollow fiber give right? So foundational early marketplace one. And and you we’re side us, systems for for really on from

portfolio Repligen to of that paths buying do customers really are really that’s focused we well have last associated And our those those half flow to products continues earlier, Paul in hollow Knight’s the years. dozen marketplace, – on lot the for much and of been So question the a very systems fibers. the with

half Now with into right, a and which deal, year is the ARTeSYN a we’re that. still essentially

for systems they part creating. expect and absolutely and our the that quite filtration on both chrom that chromatography really of We’re we six portfolio our over to We’ve an important consumables become clearly systems. of grow working They and continue have, over the nine that years expect path we expanding are well portfolio brought last market the the and portfolio. next doing for some months. that They’re complement few to expand complement the to systems in solutions marketplace, flow to

Puneet Souda

Okay. Thank you.

Operator

remarks. to would turn to conference our like I session. concludes question-and-answer Hunt the back closing Tony any for This over

Tony Hunt

joining few great Now for Obviously first a And to We in today. of to joining just again, you up time. thank guys a for the thanks look for today. year like months us Repligen. catching forward half everybody with

Operator

presentation. attending you today’s conference The now for has Thank concluded.

disconnect. now may You

Repligen (RGEN) 2 Aug 222022 Q2 Earnings call transcript