RGEN - Earnings call 3 2023 | Repligen Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to Repligen's 2023 Third Quarter Earnings Conference Call. My name is Keith, and I will be your coordinator. [Operator Instructions] Please also note that today's event is being recorded. I'd now like to turn the conference over to your host for today's call, Sondra Newman, Head of Investor Relations for Repligen.

Sondra Newman

Thank you, Keith, and welcome, everyone, to our third quarter of 2023 report. will and highlights update year-to-date full financial we for financial on call, year quarter the and guidance. this cover and business performance our On provide an deliver our call the for Q&A. Jason and we'll up Hunt; Tony and then CEO, Garland, Repligen's will our report, open CFO,

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

make Additional included reports, information on on our business that filings concerning risks with current related we today report the including to Form the in our is filing SEC. Form annual other other we're reports our and report XX-K quarterly and XX-Q, that

which update as not current as statements, result otherwise. Today's a new events to management's does required The law. information, company comments itself forward-looking reflect could commit change future or except by or views, obligate of

but operations. be margin to margin, gross including providing in viewed results During measures not and to income as income, revenue best we non-GAAP Gap] of R&D adjusted EBITDA. currency, EBITDA the the growth Adjusted website expenses, the included sales, to is and financial non-GAAP you. and to issued morning, share operating income revenue, posted intended book-to-bill measures, and pretax our noted. business earnings [Audio include figures alternative otherwise an income, on measures which of press this adjusted reflect base Reconciliations in operating this of profit tax, are non-GAAP guidance, are that financial unless operations today's Repligen's ongoing we as report gross GAAP GAAP well cost call, and per only Thank release and following: as sec.gov. are financial diluted SG&A, from ratio, should These constant net at

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

Anthony Hunt

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

you our navigate be overall a challenging of play conservatism sectors, the As for to as we to we headwinds, out capital know, we the first macro destocking third pharma year weakness. challenges, the in and quarter. signs the overall beginning industry, see recovery are China and and company primarily continues Despite here these in XXXX believe bioprocessing CDMO

As half on high out the order highlighted for QX future of commercial the of as opportunity of of our demand these these of these I'm August majority share to noted late-stage in many and orders orders the QX. that team projected quarter our in now call, close our we indicative with year. the first would that closed funnel scheduled QX next probability half and happy last late opportunities in funnel delivery

position products sequentially, our Our strengthening order the book that where up is third orders were recover. quarter to demand supports for starting Repligen's XX% through

North Our growth encouraging order were driven was Europe primarily sequential Regionally, by book-to-bill and large CDMOs. modest the and from stronger which for of X.XX% gains. accounts XX% and sequentially quarter up America year-over-year was and pharma showed very

revenue which and our Within year-on-year. of quarter therapy, order therapy revenue delivered in was of solid growth. from gene in highlights Our gene filtration, revenues About growth quarter. were XX% in gene the from XX% total representing accounts, quarter Chromatography the up and therapy came the Analytics

here wins opportunities late-stage market therapy and sequentially. and The continues accounts greater as year-on-year up gains growth XX% from are muted in to over our coming commercial also dominating strong, to customers spend average AAV RNA from therapy in the broader was the top close therapy to continue than with gene as XX% XXXX. importantly, scale. Order year-to-date, gene gene be XX% More accounts was and up

parity optimistic seeing. the cautiously signs recovery about we're are of We

next of improve versus the as will first XXXX this the sequential half is that of will growth half markets in second we expectation that of in business anticipate Our first base move the revenues year. half our We we have year. through

now the and For back to third quarter our second are expecting sequential performance. half of we both gains. Stepping year-on-year XXXX,

level on initiatives the minutes want Before I key to outlined spend performance, we our a business that call. covering few strategic QX on X

controlling first The optimizing our resources on focus our is and costs.

As year, the will discussed versus XX% during end to quarter. of QX our on we reduced have By of by end started about headcount resources last year. the we call, rebalance our the the the

to consolidated will footprint, much cover area have detail expansion a activities future as especially position move his our in rebalancing our also the will better section. in manufacturing will drive us This in sites, into of We our streamlining in of more filtration. margin we put optimizing organization Jason ultimately XXXX.

key Our to on commercial execution. our was focus second initiative increase

One challenges for observed first the the longer was of especially equipment. we year half in cycles approvals, the of the capital on

of the accounts visibility corporate top We increase implementation a key and also our talked about accounts. team penetration at to our

progress of Based to are at whole made CDMO we where team our That lines. said, these pharma results, expect demand good and CDMO to we pick of key accounts, effort and demand entering be pivoted remains our protein up team. growth focus until where portfolio. order this next soft on delays factors more QX, quarter, for product don't at selling to spend product rebound slowdown The accounts our the impacted project there's year. we the at in reflect the strong on and including the early and ligands commercial the our pharma as have done accounts During work

Olivier in bioprocessing business team should we're As execution Officer. as invaluable prove company. Loeillot delighted a the that joined strengthens on our Olivier's in reins commercial takes the units. us Chief he for noted earlier, as experience commercial top Commercial is priority our And October team and our that to end, and

both the acquisition system Metenova in our focus, fluid announced busy we announced expand innovator solution technology. QX mixing Moving bioreactor and In really bolster bioreactors. for ATF and that of integrated launch This now area seed a third the of in an which is with us. new August, Repligen Then of and launching to incorporates to was our quarter simplifies offering. September, perfusion production products we management integrated train Sartorius

of acquisition the to need Metenova the year, in technology we market. this portfolio this with FlexBiosys their further could single-use the so With bag gap the to and technologies. addresses penetrate add mixing could we see drivetrain mixing earlier

XXXX of in a goal broader part in is build market. and of player solutions out bag Our to become more this single-use significant a the portfolio

expect we As to the the million release, revenue $X quarter. contribute in here fourth noted press in to close in Metenova

will customers working and technology. device, free full Finally, is drugs containment gene in September, for on ideal holder first a -- achievement advancement required. This in be industry's therapy for ADCs product launched TFF we the self-contained milestone of the where TFF

So results. moving now business to our QX

morning, the this strong therapy you of $XXX business our revenue franchises highlights on quarter another in down Analytics. we of performance As delivered our Business more base shortly. saw to gene XX% each accounts year-on-year included with for year-to-date. press in million in quarter cover growth and release our and X% I'll

very front, greater orders XX orders the strength the drop-off CDMOs accounts given up and quarter orders in were year-over-year base up in than year-over-year XX% from in with Pharma up third were base flat. quarter is and demand our encouraging notable where in orders were top On year-to-date, were pharma, which Pharma pharma XX% the in QX.

the sequentially prior In and to revenues quarter. versus third year were on chromatography, quarter versus chromatography, mid-single Moving digits tough comps was now business flat highlights. OPUS Within down prior up level franchise on over our but to orders XX% quarter strong revenues for volume in continue America. Repligen-procured down up in from unit we QX OPUS, on as North strength with resins. away shift was a particular

chromatography XXXX we revenues and X now revenue For flat. to were of the be up full first year expect months X%

Our mainly demand by projects at quarter proteins pharma accounts. slowdown in business and as revenues expected for and had a orders, delayed weak driven both

we year-over-year was last As expect to noted call, proteins a be XX% in In down were the revenues over in driven over filtration, by XX% our period in in continue $XX to which million revenue, on the down business our quarter, our predicted sharp year. same QX by here XXXX. decline COVID-related XX% to

in of ARTeSYN third systems assemblies filtration prior were and of Within significantly most at our for were the revenues by which strength, months first quarter XX% TFF versus the XX% XXXX. the and there year. filtration, year-over-year up base were pockets X notably Looking down business,

upside, where to we down ATF, quarter than strengthened greater the This all, ratio a for and during filtration XX%. approximately site we to seeing demand the continue be orders X.XX%. franchise the book-to-bill multiple XCell with strong are expansions for filtration was expect the All On year, driven in wins. by late-stage

versus Analytics Process year-over-year, slightly but our another down expectations. up X% business Finally, quarter, growth had

and seeing and China. North We Europe demand but growth in America in are weaker strong revenue order

KrosFlo our and FlowVPX in-line are We management portfolio we continue into good process for systems. by to our integrating analytics see RPM, where real-time traction led TFF

it be While $XXX tightening get don't the for a call. developments, dollars QX, We the in our in our of the our here at all range base to decline range the million will enough Analytics be the we now goal single Based year. in us XXXX. to significant high growth on in grow materialize year-end that digits expect expect do we to to business some business to for XX% of and are QX full discussed we reflects of for X% midpoint the revenue end business. updating these to our which $XXX guidance our million year to on We lower expect of now anticipate

made on revenues on and a for been number progress initiatives. business, of it's while have a overall, quarter margins So key we challenging the

of are our optimistic continue coming market late-stage of pharma While therapy signs that we China up of that persist very franchise are and to within macro seeing early over quarter gene filtration orders the in persist traction recovery processes. in to accounts picking signs with the CDMO and sectors in important sectors, other particular, at broaden cautiously headwinds continued these It's accounts, and the recovery quarters. with the we associated commercial of

that X you'll it of call access sustainability next the financial on the report over proud the website. our progress ESG to mention really topics, check update. turn encourage our We're within for want Jason, Jason to With turning out. able the you many on the to to be made XXXX to that, Before call we've I I weeks, I'll

Jason Garland

morning, everyone. good and Tony, Thanks,

And on margins continuing team resources where spending to First, ensure on and up clarity morning, supporting team. we me say that you'll on month part hear Repligen better and The see Jon position is to look It's thrilled and can I are this role. has a when rebalancing first company's performance. busy of let off and my and left and financial we drive a you been focus as the off kick operating great, to be in picking forward our in XXXX. the optimizing my a I'm been to

third for our updated Today, and we XXXX of guidance reported our financial financial year. results quarter for the the

currency at based $XXX.X sales XX% on conditions, in and a a to from lightest with significant the compared QX quarter in sales reported to decrease the $XX third in quarter, to as of quarter macro XX% expect on XXXX. quarter slight a and the the tailwind and no the year, constant basis expected COVID total navigate This FX million our in full million we third came through be the We as of is industry. provided the of revenue no for COVID impact year-over-year year. in FX headwinds current we continue in

Our which and down revenue was reported constant COVID-related XX% on currency. from at and a XX% base revenue acquisitions business, excludes basis

but the across regions. our Tony for performance our let revenue performance franchises, revenue the me highlight global shared

rest in in sales and and North COVID by of in contraction Year-over-year QX $XX last regions. of million with Asia represented Europe approximately of and all Europe America revenue year the while China contributed the Asia America the world quarter The decline, in of business our represented XX%, absence respectively. in North by down biggest declined Pacific the of XX% context, For Pacific driver XX% that versus XX%, region's by the and XX% XX%. global third XX%, to across in QX, being

prior on was adjusted Third in quarter down which decrease XX% the from XXXX a nearly revenue lower gross gross in quarter, and million million, a $XX.X third XX% the adjusted $XX lower year. was XX% profit margin, on year-over-year of

[Audio margin volume to by the deleverage, quarter It with particularly continues was year-over-year operating filtration depreciation declines It's be the mix a year-over-year our and that by affected at clear impacted and our primarily in proteins top gains decline expansions. Gap] to be and were And also and margin point. need tied sequential volume The from of by our higher revenue low the driving franchises. gross margins capacity company. third effect to our gross expenses product driven finally,

margin streamline rebalance the in the There As expansion. we are our areas Tony program of restructuring to to a business and support discussed, that plan. future continuing to main are execute started July X

versus are to year-end we by of our workforce XX% First, and XXXX. reduce expect headcount, rightsizing

especially have of gone a the manufacturing we post down where operations Second, consolidating significantly peak. our portion are COVID volumes

of took components certain materials when that SKUs Third, into a we're demand tight evaluating the supply were by sale and We're chain was rapid dive exceptionally the and COVID-XX product and environment period in during inventory. acceleration XXXX secured discontinuing the a our was XXXX deep unpredictable. that countered to

activities, realize impact volumes. As $XX a expect offset restructuring the to in second sales these help lower of cost still we half, partially will which of result million to savings approximately the in

were and the noncash fixed related execute the incurred we severance and $XX million write-off which $XX accelerated costs. million approximately third of assets quarter, charges million approximately depreciation were approximately of To employee-related in inventory of $X restructuring, and charges to

of the severance in $X We charges expect million quarter. additional fourth an

are nature reflected quarter year guidance. nonrecurring and are total P&L these in for All third only of in the GAAP and charges our

Continuing P&L. through the

invested was Our operating reduction in the SG&A income to from total discussed to August million in million described, year, in we year, innovative last by those adjusted quarter, adjusted taken expenses. the actions profit down year-over-year million Tony in products earlier. $X.X just versus third operating offset by and consistent new in year-over-year R&D the drop continue rebalancing X% like $X million and was was a compared prior introduce gross driven technology benefiting development $XX down as $XX

million, a of margin This for $XX.X was million XX.X% with second for of rate. EBITDA EBITDA adjusted the Adjusted a to for Adjusted XX.X% quarter income $XX.X quarter the XXXX. million at margin $XX net compares interest million $XX.X income $XX.X higher provisions. the operating was of by quarter versus year, driven income down less the million in drop offset million last adjusted tax $XX by and and

the rate the operation efficient of effective acquisition. X.X%, our use was to funding adjusted Swedish primarily of negative for driven in by Our our tax cash Metenova the prepare

to prior in the We our be XXXX Adjusted the XX% $X.XX have XX%. $X.XX fully to guidance tax compared a updated or EPS for rate $X.XX XX%. decline diluted our the of was quarter to for year third guidance same of compared period,

cash to strong of short-term $XXX.X continue and with not on Please and Metenova cash, does we position the cash flow generate cash million acquisition equivalents quarter ended this Finally, reflect October that investments. closed note, the X.

note acquisition today's non-GAAP the included I'll earnings updated And full the our of now impact reconciliation that XXXX. in XXXX to for our the of the move for GAAP announced recently press year our are in Please clarity, to Metenova for release. acquisition. guidance the our reconciliations guidance and both FlexBiosys tables further guidance includes

revenue call. As Tony now year total to full on end in the to decrease guidance and second the in of quarter the of compared shared $XXX our range earlier, as million, lower we XXXX. million discussed to towards are narrowing We the revenue our XX.X% range a $XXX be expect reflecting updating to XX%

X.X% minus with $XX projected our to change no guidance be X% minus is approximately to down of Excluding X%. base revenue year-over-year our in to There's X.X% of previous COVID-related business COVID-related our revenues acquisitions, sales and expected million. compared

guidance the However, now Metenova additional $X our does million in recent from include acquisition. an revenue revenue

in revising range the step of our quarter are XX%, margin XX% to also the XXXX We a guidance. results meaningful of low percentage This previous up the point third point gross a guidance reduction quarter. incorporates adjusted but from the X our to fourth

the $X our million year, profit $XX some gross we August to OpEx at midpoint the profit some a to range modifying drop, our adjusted dropped million While guidance offset reduction a income for million from are -- guidance. improvement, by gross the by operating $XXX of with offset of

to down expect $XX as earlier, million approximately $XX be compared And is Adjusted guidance income -- discussed adjusted of our income expected operating prior expense August XXXX adjusted XX% guidance of of XX%. million. we to the increase other our to estimate guidance income tax from to pretax

$XXX share. $XX fully million, translates and $X.XX midpoint revising $X.X $X.XX puts of these guidance million from to the per With of income adjusted at our diluted to August net range we're of the to to EPS adjusted takes, guidance an guidance a million which decrease our

the -- expected XX.X% amortization of and year, reflective million $XXX intangible guidance and expansion. for XX.X% depreciation from in Adjusted EBITDA expected to at midpoint reduction sorry, million fixed now exclusion This expected $XX expenses our shares range EBITDA is be of fully to the -- range assumes $XX.X $XX of to be capacity to $XXX million million of Adjusted million expected approximately million, weighted to depreciation with diluted outstanding XXXX. respectively. of a our million, the year-end costs from average margins $XX are weighted in XX at be prior the

cash year-end Metenova. cash of payments pleased operations. ending of revised from the million in range the on to We with programs We the expect our in $XXX the made continuing strong margin about remain optimistic execute million from equivalents in place October Overall, for year quarter. our generation forward the off quarter look to of and is an This bioprocessing, lines are figure be orders CapEx cash address accounts, with in our the improved differentiated and positioning at to back $XXX portfolio investments for open pharma to fully putting of inclusive being cash our to questions. challenges. funded cash markets, strategic to fourth M&A With acquisition for many that, will we and operator million by turn developments the we of to and call the finishing our I with $XX

Operator

with question first today's comes And Instructions] [Operator Johnson Jacob from Stephens.

Jacob Johnson

mentioned the clearly focus morning. of the That's you Tony, XXXX. inbound Jason. this Welcome,

that. both then of growth the I to looking growth? next year-over-year around assume year below So range growth half some and consensus imply year-over-year does single second we like in in year. the you of would but high and And something year, the form your growth? that year-over-year think something organic of first sequential seem half, growth wide maybe point next maybe it for LRP Should a is sequential digits

frame Just any kind the to up magnitude understanding of of early. next way it's year, growth

Anthony Hunt

number XXXX. think right Jacob, to it's to a be on going Yes. put hard I now

is think year, how half of next in we now. we there's second continue I orders the half that magnitude And improve say I know expect improve. of right better? and through The to a that I the to seeing better. given as don't going first to degree year be fully also can confidence year of of this that high going what are the it's we're to much go going

For quarter, change us, think some key, order to pattern was than really see though, We to in see it's this it positive was the right? early, but greater needed pharma up and very XX%. I

that it on the before now. right out, depends half So calling, how growth second how of we flat? Is first really plays year see how And that year-over-year, half? tell much plays is out to hard It's do we then in QX down? start QX next versus

Jacob Johnson

follow-up, fair maybe No, And then you streaks customers. it. from all Got therapy enough. gene called for out Tony, the

lot there's on maybe It weaker. therapy. there's debate at strength and seems a earlier like think in about stage stage gene is now demand I cell of while of things, right going the later maybe

kind now? for in Just curious long-term outlook market kind changes any to seeing of that And of what then opportunity? that you're your right

Anthony Hunt

we've as we Yes. pretty this been consistent the talk about gene therapy Gene market year. therapy,

therapy where when And that the at it's coming million of spot Repligen. on, our we That's on QX back been to to growth get versus plus I XX% we that comes it's though I at had can a now, you're XXXX last in a conditions to to can a activity kind to customers said XXXX XX%-plus soft, be that commercial talked smaller stage pretty from, change. right? that. normal from in coming where $X definitely whatever in of and what market, year. be were players is with been market we would we accounts late you somewhere that before when you the got it's call going that growth XX-plus expect wins. lower that bioprocessing those market that's grower, is XX% year, gene say the It's it into going But kind -- Our from right spend about And saw coming range. clear call, is normal that look you normal our

Operator

Conor from the And with Markets. question RBC next McNamara comes Capital

Conor Noel McNamara

margins. first, Just on

look get margins? about XX% imply EBIT so. it margin will at well next second to that you And you this we level back half below If pre-pandemic and your think for How margin quickly how should guide year? or going year, into can

Jason Garland

So do. margin spent actions what started, Conor as into to on importantly, details of need getting we're what and understanding and the I've time most continue the obviously, we're a -- our I've lot to taking we

Certainly, where we'll that to can on of able I -- see be were right, yet our think can to You right lot But still where are in stepping I going there's a we do now, in work XQ. issue 'XX. guidance our low in fourth really at think guide to we understand you point 'XX the a in margins. we'll not up be from we're gross improve. But quarter, to

Conor Noel McNamara

on the what's just pharma you than how spend? relation customers of what in And order about different you just months to strength, much versus ago pharma X talked And that -- projects? continuing can

Anthony Hunt

dropped just wasn't but it it off right in Conor, QX weak. little pharma then spend see, QX, was that a bit, could really a in We Yes. And trend.

with new, our customers some commercial orders existing in and Phase quarter, large of and of able first to And the III were about QX kind in we second what projects we majority what say with deliveries quarter next we're customers, fall do but on QX was was that. we talked the close on high think out I our that able existing would I forward of saw probability year. to placing moving call,

the the October. right, encouraging itself the can essentially having increased. through month that that as think maintained like pattern has today, to I very I'd of October it's of finished order say So strength add order that we has

think again, point another data So Repligen. positive is for I that

Operator

with comes question next the from Stifel. Dan Arias And

Daniel Arias

to to way improved. good the much you so hear actually that business of percentage where able improvement, things come they it's book not the ballpark It did. like order gene in the pharma, sounds Are the therapy, on Tony, CDMOs.

simplify were of So that, if might that number have handy? or you what to like, crystallize look that you assuming sort

Anthony Hunt

Yes. but gene and CDMOs absolutely not therapy. -- pharma CDMO pharma No, or and it's

on back what sequentially. If to up we XX% XX% on you We I orders pharma pharma orders on were on were said, go up year-on-year.

gene not orders I from in was where a therapy sequentially. Our remain strength last say QX in it really again XX% have up bit little dropped the inched but QX, CDMOs recovered sluggish when dramatically XX% in quarter, of and would year. year-on-year, CDMOs we were in off

the company you is up about in XX% So at way those of from what revenue it integrator/OEM. that that's coming the coming of And kind somewhere look we the is -- and then gene probably and I of CDMOs if XX% those -- the ledger X add close -- between hasn't call is side moved. and bucket, buckets. from XX% pharma And just is X of therapy

Daniel Arias

And this year seems industry segment? on chromatography, backdrop? like the longer there? thinking you're the off So about particular which backdrop, okay. maybe And than resin 'XX That XXXX that you at curious constraint. no in in about touch you an way then whether can might being can area where about a starting be you the just growth next with just more that just off start that point, Yes, on availability think

Anthony Hunt

through gone Yes. There's no improve year. resin has the doubt we've that as to availability continued

to maybe the us percent America. going the to what that's customers to ask predict piece North outside are us hard of think our to changed pack it's for especially procure is, columns, I resin

regions kind look our on the volume So growth QX, side. Europe of seeing up, the And that's is Repligen Asia impacting chromatography the that are like we had we've [Audio where X when and right? Gap] more at we're and

when number and we go the right. look I When up. that shipping, into going next of to comps to get year, going at continue So think you're it's producing up, you and we're it's

to be in it's resin should resins availability of probably high-volume it but be period, issue. I will think for is an that to mean, be X- larger be going -- volumes, yes, big to year think really for discretion I XX normal, I it large our I a less much going to X-week should But be closer more agree, probably that's business. the visibility about chromatography weeks. But of and more of normal XX, again, the XXXX at back in residents. to for suppliers

Operator

And Souda next the Partners. Leerink with from Puneet question comes

Puneet Souda

have Jason, great to you onboard.

'XX wanted second just should Tony, 'XX half I expecting of that half And grow first XXXX. that from said to and clarify, from you're sequentially in improve so think you second to half I then further going of

fair And of quantify So just appreciate versus is to that sort the to XXXX should XXXX I grow mean, it's hard it I magnitude. say that.

is just I So base wanted term, still XX% the you intact? business to for that. that the that think have do XX% to clarify longer And ultimately, algorithm then growth you

Anthony Hunt

level. reason business can't grow Yes, that the why in maybe start no see with XX% base growth business at the longer We term. our

products, differentiated seeing bringing traction new highly to portfolio in products the market. of a we're have field. We We're

product competition less on per a have basis. We

I next for could we overall we is idea look well year, we'll hard about what like. quantify the the now, better from look much XXXX obviously a base some growth Order strong exactly on we what's as COVID-related the like level. talking of order So the years X we're to It's is when When to us and at a key about telling rate. QX business what get that revenue in remember, is you're XXXX. you be to to to and call, QX rate because But And X, been months we'll get the remember, yes, bioprocessing, we'll going run But growth, not February just start next what -- had think year. -- have right. run probably normal to quarter you growth. orders. look, that we grow the And we're think happy to should for has long be good term when start as I about able well finished talk it's

Puneet Souda

more and And how that how levered coming progression is commercialized. to into how really just drugs be and is you main Repligen to getting wanted the sort gene of you're sort approved I mAbs? therapy you see of Phase gene sustainability the clarify, to and of the are -- sort here go commercial of question and -- of book gene stages of look at the the from versus to the phases more contribution we of getting to will and as Are continue and order it. sort when guess the getting the that later seeing therapy of on phase later the that. XXXX, of feeling IIs confident Got much growth they're into then the therapy side, Is products progress continue sort from

Anthony Hunt

Yes.

I therapy, the bit in gene of well think therapy on small, medium proxy early. We're we're we embedded large a were accounts. on gene a Remember, in little and industry.

up. you as going those what commercial, the all that from to drugs can't path because this spend you if I to to still be parallel. II up should and the like of accounts is they're to very think have much III to Phase year. the are in going top But progression XX scaling with take dollar tell that for I it's approval happens Phase happens see you accounts, year average Phase So we what follow I next

So positive I us. a really also sign for think that's

Operator

question comes Larew William next And the with from Matt Blair.

Matthew Larew

of the anything exposure, of out there's customers relative is right modality whether now? If pipeline, regional I sort destocking, point level differences call to discrepant CDMO recovery gene anything our might perhaps exposure, inventory and of a therapy, your pharma there of to control why stocking that perhaps it's or about different to some think between

Anthony Hunt

Yes.

of there the going that there expect happening I'm next I We've market of is having close what's Matt, help out some inventory projects we talking that's to build, just big do that conversations. part should lots CDMOs. about There's have really the was activity kind and of opportunities I of talking think on finish side, I'm we of and some We're next as them. we get a on, CDMOs do And CDMO the not of of lot over We in in a in general, couple CDMOs. into improve. think going us got lot lot to at execution we have are the Repligen, a a there, clearly but quarters, and XXXX. year off to year, about

Matthew Larew

of there. from to another on competitive what's Okay. And perspective update customer a perspective? spoke perspective, then observe China, you of macro months either since sort couple or going to Anything on a last

Anthony Hunt

Yes.

macro the On whole lot changed. a side not a It's environment. tough -- and has still

any goodness, from players in it's don't side, on year. going the what's talking We the happening. until not I we counterbalanced stuff all a next heard There's in China. into pockets think that's but about of get science just by life you few expect recovery tools

much months. So at yes, the China changed all over hasn't last X

Operator

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

Matthew Hewitt

and some of of thanks hold bit your funding a the CDMO Maybe their a at and is off, destocking. do the of of by what just the of this some you process to to customers? the customers. say speak maybe that pretty update. it Congratulations you on for more pharma little conservatism you're on Or Would the think with you that there? up first function is the seeing improvement we're close in And digging kind as some more being point, that done

Anthony Hunt

do all that the dealing levels out on think getting high And we're think I it's to rest in take inventory. the destocking of but the with there. better, the I of kind year of it's still of to going is get hole

We of I think the in think QX. delayed. that, is your encouraging over it definitely something project is is and expect should into side. we accurate, What's do anticipating, I I flow been you There within that, And which as would talked that were on know delays. overall especially definitely projects bounced across than much comment that was stronger there's second well. been And is QX that pharma back industry. CDMOs about the the conservatism of have pharma that couple hurts kind next quarters

we'll how see it goes. So

cautiously I optimistic, think we're Matt.

Matthew Hewitt

how realize That's is of early from types going? great. those Metenova What acquisition integration on or And been things? customers, I so very your has month feedback then in it's the but the the days, a

Anthony Hunt

Metenova, their majority business -- it channel different it's a we They been They have On through. steel. the sell reuse business. straightforward. is than Yes. very That's call of stainless

a with with at their team working very closely meeting larger meetings channel with Metenova, So we've next of the got leadership channel week we've some partners been group partners.

numbers So it track in I expecting hit year. business hit right for on to expect we're on to that, the next QX is track that

months have over single-use start next player that big into the part a FlexBiosys of and in to the XX across think side I really that we with bag to it have the do up and bag technology steel that that they've move from the market. implemented we the single-use, technology is take in bigger become marry format the stainless

goal. running accomplish. happy what of can we're to we keep have that's the equation So our kind of X with have what kind of and we sides We and really

Operator

Daley The Fargo. next with Wells question from Tim comes

Timothy Daley

on questions earlier orders. X Tony, So

called OEM maintained moved. out to through strength out, customers' itself question, has orders you another haven't CDMO the you October. And greater As then called order and

basis. are be October So to both an -- the basis on as interpreted want I as those could just quarterly well confirm,

Anthony Hunt

not of just I'm Yes. orders total QX. that an we by but talking see that to done in strong, October same analysis is saw in, haven't remained I have and exactly gone and CDMO versus at about kind orders I pharma the October looked the segment. have

Timothy Daley

at higher easier about anything there was apples-to-apples That's pricing, apples in -- get right. Has to then I helpful. the this, the increase And or use up? what the just that in okay. or quarter All in price price or pricing thinking promotions any than increase guess, in of revenues But way to the apples was stepped was an quarter? discounting orders?

Anthony Hunt

small we typically in a of the our Yes. run I QX, end systems. -- that on that promotion We've done prior of especially some Yes. years. say benchtop at through would

that website. for kind say, X% a we've nothing towards our on what That's is XXXX that used Jason year. pretty maintaining different see And versus prior ago. would price, of kind I that we've X, standard the You'll years, in range X%, of years in tactic done X maybe

to on we So the in that don't at year. any were I going promotions for said do impacts And we track I running of price the smaller the we're price for really think what think beginning year. we're of the

Operator

question Vatnsdal the comes with And Rachel JPMorgan. next from

Rachel Vatnsdal Olson

some night on questions comments last this data saw So its just some number where up therapy. to Obviously, We're of failed strength Sarepta there quarter. around I nice earlier on of has you meet EMBARK to the getting that released that was gene follow want a primary endpoint.

customer that revenues? So can EMBARK how does then expectations your And there going data a for and of of meaningful for contributor forward? going walk XQ the us a anything gene in you through orders change is forward, big And failure and how was Sarepta? that how therapy

Anthony Hunt

I'll maybe with your start So of the part question. second

think happen really think the I reports And sure submission So that but next the months. early. results how a all still we there's and probably that which did. to couple of I the in. it's plays to are saw we're We wait I'm sort FDA see same over of as disappointing, all to you drugs I don't comment should has out the on

are think of the year, are right might clearer have that the and in we next probably tracking in will XX accounts I be I commercial XX, volumes some this bumps that in think the think of what well I their terms this the when road. that what And get we scale happened in we said now I'll we're got of why approved see XXXX. and approvals you're year, to majority it drugs going be But to year. up, reiterate,

Rachel Vatnsdal Olson

of book to follow comments up some then And wanted it. the trends. Got just around order on

to the into XX% strength? through nice has you grew you And walk mentioned then continued that orders sequentially just see that order that on exit order monthly strength us quarter. this So October. rates Can

in saw or that that quarter? means, So stable got the growth can a you orders, to you continued really beyond this meaning XX% what we've step-up clarify sequential is XX% that

Anthony Hunt

be question said? that is monthly quarter, what the in trends first clear to what you just your was Rachel,

Rachel Vatnsdal Olson

Yes. Yes.

like exiting So for September, in rates were what order example.

Anthony Hunt

October. strong But So very second August we've remarks, each of We months, if the prepared weeks looked as it's very above average seen had a picked is significantly had in not weeks in quarter were maintained and but of the in what hey, on, better that that other in July, QX. going we October I order we trend half say than month X strong or seeing you better. October, at September. September September. weeks a a September, in said better well got not in August, to I'm orders my comment it's year, X July for than We up, the would we've what strong X kind in

Operator

comes next from the with Leonard And question Dan UBS.

Daniel Leonard

improve. guide second to it's the would that margin. that And Jason, expect the I Or using gross of to on you half appreciate comment But full question you XXXX as should XXXX margins 'XX from framing. XXXX early improve result? was First baseline? gross mentioned year margins made a

Jason Garland

Yes.

So certainly versus second the half 'XX. of

but it's an again, of of we the that terms in what revenue. similar improvement. just we've year guide, in try certainly in framework we company a the has to -- were Tony the the that feel So terms But from read half for second vast early that a looks continue But of again, so of lot got a we where to like talked for again, rightsize that step and about 'XX. we appropriately up

Daniel Leonard

you comment China. And on I I reflect trends then Understood. on to on order and of specifically algorithm was China have long-term wondering a important Tony, the that region could growth is how follow-up Repligen? in if

Anthony Hunt

I that X/X China COVID, But X/X think revenue year business. came it's our represented year, -- remember, so important. last orders XX% China last about we from of call what or yes, it's from clearly base. about total came of

we're well we overly why important It's but we want not in reason need we to about do number, $XX no not I And there's a and about the a local good So down we huge And have competition. to base. and really this XX%, it's on of year easy are differentiated, into exist. math. grow region. probably XX% that concerned does just to We'll think the it's move region, products back portfolio and an can't be It's recovery. do million. It

needs really is better. to the to what And environment get happen macro needs

like have lot with, there we Repligen. that like, of We work a accounts that we that

the this in what remained in us really should the light light. QX China -- we turns, were were well. been the all numbers revenue -- it's which versus strong So made China an for QX orders. bringing than And going as when a and coming had in improvement have into order been We -- year, expect has for better orders in much trend that be there it order through backlog XXXX,

So it but XXXX, move as macro-driven. get through better we should it's all

Operator

And Justin the Deutsche question comes next Bowers with Bank. from

Justin Bowers

sort the entering one a XQ off on Just year? and of Is jumping of next rate the XQ for exit cadence good XQ XXXX.

Anthony Hunt

from a of point revenue margin From point both? a from view, of view,

Justin Bowers

Yes, from of a view. revenue point

Anthony Hunt

Yes.

-- so have that the didn't that COVID. and yes, one I QX has is QX thing think QX

get you point, QX. think our -- results, base we is off a QX versus will to QX the which business good in jumping improved when I think I So be

next the So first are going QX we're quarter QX will and we're that in year. expecting And reflected, to as of that things next get and also into think QX Justin, that orders early of about the fact delivered move and a talking lot we that I here that's get got we've in QX in the at the year. end second in better

Justin Bowers

this were of And year growth versus just X that was you this referencing year. over half second just half it. that, of Got

just the wanted cadence. quarterly just I So to clarify

Anthony Hunt

Okay. it's base Yes, business... but

Justin Bowers

just normalized the And Got terms bit are a but the thing last geography? across differences way geography we order in you look seasonality, has mean over by exists any by see different a -- mix peers. business customer of a there that if of such in just is that or of certain a some you level, it's And your on have -- sort of is patterns or also do then noting can characterize there orders, transformed like there in sort years. just the okay. basis unique whether just when But seasonality or anymore? And of account high I at and your it. and a I then know you Yes. either business few accounts, quite by by

Anthony Hunt

Yes. year. I not -- a that know a normal I it's a great and question. -- we say would not it's is this

capital order really spend topsy-turvy what's between and inventory in conservatism like on delayed to destocking conclusions and trying year then patterns on a So build draw been and projects.

and in I is think XX% encouraging to funnel, in that at right? order like even funnel me our above and is to the good bit we Justin, in are time the though And it, way the little that I is a see look most had improvements replenish -- able same probability what's piece quarter we've in for we've a QX, been period. that beginning

more there's which pharma encouraging So spread across that's and is opportunities moving is what's CDMO through, that integrators. and

do So lot make what order gone in as patterns whole about tell we look draw to conclusion a to we what do future to progress to going QX? that's like. looking QX, what on make progress is what we've us I'm through this see trying I in year a think going the isn't

Operator

the And next from question comes Brandon with Couillard Jefferies.

S. Brandon Couillard

whether segments that not revenues. touch affect already can imagine Jason programs for talked planned. about just you any share that? more would some but headwind on Could a that to that's will be you it are color which I on and SKU commercial, rationalization

Jason Garland

on it's focused just we had. COVID-related that really the business Brandon, Yes,

So is whether COVID a that longer there. level it's at no demand or SKU

from any business a So nothing base that affects perspective. forward go

Anthony Hunt

filtration mainly And mean. I

S. Brandon Couillard

terms do And growth that of in to Okay. cell in gene the do and had if 'XX now? flat. Tony, changed. curious think you therapy then what customer base I revenue expect just that been I'm

Anthony Hunt

the where market have I is I rest the think say been don't probably would number, the not but Which -- exact this considering year-on-year. it's and I flat, year. has bad of

Operator

would Hunt over Tony And session. any turn comments. like to conference for closing the this question-and-answer I concludes our to

Anthony Hunt

XXXX. few Great. months' hopefully, forward improvements and out and about time, to talk a everybody, in chatting with for XXXX close us. No, everybody in thanks, joining Look

So catching Thank you, guys. up then. look forward to

Operator

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

disconnect now lines. may your You

Repligen (RGEN) 31 Oct 232023 Q3 Earnings call transcript