TECH - Earnings call transcript Q1 2019

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Operator

Good morning, and welcome to the Bio-Techne Earnings Conference Call for the First Quarter of the Fiscal Year 2019. At this time, all participants have been placed in a listen-only mode and the call will be opened for questions following the management's prepared remarks. I would now like to turn the call over to Jim Hippel. Please go ahead - Jim Hippel, Bio-Techne Chief Financial Officer.

Sorry about that. ahead. go Please

Jim Hippel

you. joining Thank and you thank No Good for us. all worries. morning,

call morning On Chief me with the this of Executive is Bio-Techne. Officer Kummeth, Chuck

cover Before Safe me begin, briefly we Harbor let statement. our

this forward-looking made projected company's The company's made factors undertake comments company's or those that identifies materially the XX-K the statements about conference within be and website any the a of company to actual The update call. for Relations as the information differ statements, future during The result fiscal other from during beliefs its results. Some including company's Investor does SEC certain the any results future new XX-K as developments. forward-looking well call not events to could this filings or forward-looking in section. are statements may cause as considered on company's of the available XXXX expectations year

provide measures most During to comparable financial the this www.bio-techne.com. the the are performance. call, GAAP to Bio-Techne ongoing company's non-GAAP used measures may the issued website available Corporation information reconciling measures morning earlier release business at in pertinent Tables these press to on be

the remind in XXXX turn to I like our for beginning segment fiscal over QX. to Before I'd in everyone Chuck, reporting call changes about year

new segment. moved have Genomics our are segments Protein two years from Diagnostics Sciences These and We three and two. segments prior as in to segment our reported

we of Genomics to Advanced Diagnostics the Diagnostics Diagnostics, of refer in The consists the the Biotechnology or segment Sciences Protein consists legacy as division. ACD, to segment legacy segments Genomics addition Protein legacy Cell segment legacy and which addition legacy Our now Platform in segment less the to ACD.

now Diagnostic Diagnostics, the be Exosome turn reminder, acquisition, and call will I will the also recent segment. to over With most Chuck. that Genomics in included Our

Chuck Kummeth

company not legacy end growth. the the year Protein report shipments Sciences Thank favorable completed stellar and to product plan. down us joining in this note started with geographies segment for outstanding ended at and to fast-growing for in again but and XXXX geographic two growth portfolio our M&A and In we and its the strong weighed Thanks, company provide The more QX was an morning, most I new also XXXX results, Diagnostics, much line a almost new to quarter pleased am region. and reported markets. very hard to good the Exosome The our Europe once but delivered by Jim, growth. timing out year our will. acquisitions, front growth OEM XX% XX% year quarter call. where and that with I how a in us quarter of to major produced first for very the led contributing was and on expect fiscal a a call favorite, Genomics This remainder it’s to when surprise this double-digit of give The organic you a category technologies we access going everyone. segment in growth every conference on quarter to of be the Technologies exciting organic the we us fiscal organic was our Quad broad forward. by in segment we overall in organic timing Diagnostics was strategic

XXXX, to customers for double-digit and growth our special Europe, reported sell with growth to makes years. there in combines coupled growth, year selling double-digit me customers with end markets definitely of of is this model funding to results academic from well in two selling began our a the and solutions European we The see last with QX. to backdrop. developed and well campaigns it solid team, what are most to We solution-based particularly toward as The growth our reagents this expand double-digit that in favorable consistency biopharma averaging academic the starting here these working. NIH have are performing is regions calendar the unified with seen While we to is instruments most geared similar solution-based U.S. full focused model

between As leading and sciences in region China over genomics we U.S. QX. five-year Europe, great our do calls to had the minimal impact not China has China on results U.S. don’t in in offer massive are plan and products products as way. not a there materials and growth and the the China expect with in in U.S. The this instrument for and lot portfolio Growth XX% up Also, reminder, delivered our war of alternatives also was tariffs any China, we we of source life for out their that China’s or research, a customers. change. researchers. investment to and domestic

every double-digit major most. category single in Within and we the in growth segment, product growth Sciences Protein experienced

to with great continue in to the and our solutions instruments-based from our newly we there of believe instrument growing led in automated receive still released and over Jess, ELISA XX%, grow by nearly automated plenty market growing is solutions blot here. Ella, our Our room Western QX acceptance XX% solution,

circulating can driven SimplePlex diagnosis creates being testing who point-of-care a that and chip Bioscience biomarker platform Micropoint signatures. and to The facility. that individuals from do complex ability reagents required. for For will only healthcare This point more This integrate cytokine care need to minimal accommodate of and decisions by Micropoint better and growth-factor-related a fluids. volumes Bio-Techne help develop has testing point-of-care with more a in past precision of example, into body treat Bioscience month, will diagnostic test microfluidic by China. a Micropoint for accelerating microfluidic diagnostic are for diagnostic access microfluidic providers samples our Shenzhen, like have tests entered the chip strategic healthcare and Working shrinking advance increasingly developed our in are could of in technology together, diagnostic to so giving China. not by accurate medicine Bioscience the medical that tools a Bioscience China agreement speed testing profiles revolutionize Micropoint of co-operation

expertise for on immunoassays, patient first just monitoring this disease storm. Growth gold generation and from platform. now, next GMP our the Sciences antibodies cell user-friendly a platforms, pioneering product therapy this and in small these uniquely GMV-grade in-situ and more. cytometry Bio-Techne The span the initiative The of therapy example is provide positioned years high This and with Bio-Techne benefited Through used in Protein the workflow. applications core for is therapy also will These rich cytokine to cell potential in The initiative multi-brand are and cell internal flexible scientific resource clinic. situations discovery like continued and reagents, therapy innovation, reagents for quality provide gene molecules grade unite and its reagents, therapy growth and to innovative will strategic scientific RNA cell providing solutions huge for potential from workflow especially and gene immunoassay our autoimmune this solutions application for the a the set strength quarter SimplePlex of across of for factors, cell from technology and DNA one focus our has with Bio-Techne’s bring few many diagnostic solutions applications. automated in goals workflow. across and assays, acquisitions community instrumentation, flow across include twofold. portfolio. gene gene the XXXX, and will the our of cytokines cell standard and become In a and and hybridization immunocytochemical characterization, reagents, segment Quad like Technologies broad therapy therapy cell mission therapy last instrumentation cell together

First, Cloud’s and branded SimplePlex cell-based and workflow the assays. cell simplify such as provide both develop to immune activation designed kits we’ll cell therapies, innovative solutions stem for and

Second, initiative community. not facilitate needs technologies new provide innovative it stepped this progressive to the therapy easier development the also from to make current the workflow bench the the through can and address discovery from we cell the aim only cell solutions therapy journey Thus, providing to future immediate and be that of to of bedside manufacturing. by manufacturing transition will solutions, will

XXXX, in Moving on XXXX orders for end X. of in which the story scheduling in acquisition OEM and of of a nearly especially Genomics the big for reagents/kits. But OEM diagnostics in growth to but last healthy, the the double-digit Diagnostics, XX% strength it QX of on along our its year where Genomics was Based Diagnostics that quarter going where beyond segment, controls business, is the challenging still Also, remainder is and the to to at the humming of this remainder the was pipeline formerly for our segment especially knew August we closed most hematology be pertains of the OEM segment, into underlying ACD, and comp is this at QX. still orders deal the overshadow end Exosome market year over and growth, timing as year RUO markets. revenue

As number XX% which test would urine, reducing of biopsies. patients. liquid other need of is whether of tool reduce a invasive of with blood for benefit ambiguous since been that biopsies can Exosome lead commercialized fluids, or Diagnostics to who month complications XX Exosome Diagnostics family. rule-out part diagnostic cancers This from biopsy samples a men and EPI which yearly, of a detect PSA pioneered called EPI, biopsies biopsy. The the sensitivity certain test, having to reminder, score diagnostics is use prostate third a to test exosomes X as determines the neurological the will the done Bio-Techne and from the unnecessary a has Its an conditions mark bodily attempts thus has week serious numerous have for between first

measures been the in necessary the beyond. prior This this when enthusiasm quarter Urologists have March XX, in resources that next sales and just course ended force compares great to we the the time, ramp for nearly integration expect and September XX, year EPI. volume under over activities infrastructure, this ownership, compliance During and in force tests the that processed averaged they people. ensure the roughly to sales a XX including processed have from commercial of In ongoing X,XXX of the were X,XXX to support people. July seven shown averaged is the quarter month the field ended tests have

to acquisition the reps. doubled have more investment headcount the we since in So sales than commercial XX date,

ramp the the within we you and gives six of this sense expect a next see to months. test So

increase of to We also and payers reimbursement propagates. EPI as urology expect marketing to private public and the both improve community rep by to per our productivity continue the campaigns visibility

Speaking of Medicaid XX reimbursement, PPO states. enrolled nearly has with nation-wide and the in Exosome team and nearly commercial networks contracted XX private, to they date have

and has payers. public Going and an the private both of continually timeline team coverage aggressive pipeline the to forward, expand

Medicare. and We biggest most all know will likely Of that course, take such we on will be it's of decision but high the What October Well, guidelines. with EPI when of is included clearly a EPI EPI format the don't reimbursement guidelines those for payer have gives the demographics test approved. approved to to XX the finalized confidence? easily be once confidence those it NCCN given aligns provides add in coverage us coverage lab

the will overseeing second peer-reviewed approval the us guidelines. guidelines What the straight September, and to the than that path high-impact December urology their XX, in in guidelines? That go occurred NCCN the we in of NCCN be was of prostate we published already until to test way to XX September normal Well, skipped European year all Journal, integrating will The NCCN the have disclosed EPI needed a in us longer initial by the Urology the with guidelines clinical XXXX revised consensus a in NCCN biopsy. proceeding when the the U.S. no has studies on by board to will guidelines prospective a urology guidelines? included later the guidelines EPI they’re for the since validation that the by journal garner are data an validation into by the instead after into EPI than year presented very a which Well, prospective on they about see the publication won’t and also later on U.S. the So of hopefully decision principle included release. Usually, reached confidence investigators confirming in see end date, XXXX that first will XXXX. EPI will published Oncology care the findings JAMA validation study advised be but go the expect no gives XXXX. so

So now what? We wait, not and longer. much for hopefully

timing NCCN the to as Our steps is checked factors our EPI possible. sufficient as ramping of team available The all process the many required for meantime, decision validation to quickly the as of and has has and possible believe and the and we completed in all decision resources approval. but are now hands committee are been the the as patients published. external we Medicare, in make the commercial Also,

Jim, turn performance I our in like more the give operating margin comment before to Finally, financial call performance, on details I who QX. adjusted over on to would will our

great basis past I year pleased While we we Diagnostics, excluding year-over-year year, XXX to to margins I as our adjusted to profitably our operating Jim. the past XXX point among the Overall, did core ahead margin commitment in our in indeed over strategy demonstrates five I’ll operating With that proceed turn while very first will holding year call QX. believe executing that, this was years. be basis adjusting great over margins what a plan. experience quarter start acquisitions acquisitions, on over these strong businesses we am to the have made historically more ramping Exosome due the I our report acquired the especially points year have believe many the headwind to over we a to grew to

Jim Hippel

compared to $XXX year. while was million, to with for year quarter $X.XX organic revenue GAAP over Chuck. financial for XX% overall QX as XX%. increase performance in performance, adjusted Starting our Thanks, each of an year, our of some increased well color prior $X.XX, overview the on segments. EPS company, provide X% of increasing total the QX an financial the as provide revenue EPS reported was will with quarter first I the $X.XX

mid-teens, region growth our First the grew reported over foreign Diagnostic growth to organic Note end-market the the OEM digits, made and a exclude high growth BioPharma Genomics in teens, and grew and all and the in X% By from unstable includes growth segment growth from contribution Sciences impact mostly exchange references high while XX%. U.S. the our translation. a a teens. by acquisitions Academia By while sales quarter was was single segment. geography, sales sales, in X% end-market, lesser in extent, in was which China Europe’s our to that rates occur in Protein

the revenue, QX the flat mix where of prior total to QX in leverage margin Adjusted was a details adjusted was basis year volume essentially offset prior-year the a XX.X%, period. SG&A of prior on gross in than points for from as XX SG&A acquisition. additional higher in of margin operating productivity at by by volume a the XXX and basis the the QX result from company Moving P&L, XX.X% prior XXX of revenue, and of The QX while more points adjusted year year acquisitions. negated leverage the expense the was added volume operational R&D was down XX% recent to basis resulting timing leverage X.X% than points decrease was of projects. in

by impact the mentioned, was and adjusted points driven product solid However, volume operational basis strong from core XXX already This recent expanded year-over-year. as favorable margins mix productivity. operating excluding Chuck acquisitions, leverage,

SG&A X.X reflects increase million year. expense prior a For option over for in QX stock the GAAP reporting,

in retirement QX. As definition year the expense that in accelerated resulted you may those retirees policy the a recall, was stock of back fiscal certain employees XXXX fourth continue option grants employment. to time-based retirement permits new compensation an stock mean quarter during in for This investing new in policy implemented at

when grant largely those a For award option timing the This to of expensed year. fourth their the were same receive this we get grant was reversed in annual employees results current awards the difference year-over-year period, the stock QX during who that quarter. in quarter entire

net of expense interest below as net year. interest acquisition our outstanding Diagnostics last compared million higher in on the past higher Exosome in Looking of driven a to interest year was increases credit. The expense million resulted QX well rate at of numbers by levels expense $X.X $X debt LIBOR multiple income, line is our operating our that as from

of non-operating same balance the prior-year million essentially from the on $X.X $XXX.X adjusted of the stood was quarter $XXX the the of debt expense end as QX for as QX. at the up million, quarter. the million, Our bank sheet at end Other

For update with market GAAP standard fair in to of financial loss required accounting $X.X values other report the recorded changes due an in sheet. in available in balance non-operating reporting, as assets adoption investment the then prior This liability ChemoCentryx. in standards value requires on market asset value and statement. The sheet fair any which the recognition in market XXXX-X and financial income a balance recorded equity the section of readily million changes to be our fair from equity of measurement unrealized is includes the investments

Moving on XX.X%, reform. X the QX nearly tax prior down the from point tax was a to improvement in effective percentage due adjusted P&L, our rate year

XXXX year we fiscal minus QX, to this For XXX or basis to plus effective points. tax stay consistent rate expect adjusted

million paid Turning operations from quarter, $X.X million in shares return the at to flow average our net and out million in expenditures were dividends was cash $XX.X $XX.X million. generated of and stood of the of and quarter capital and outstanding. investment XX.X shares capital, first cash diluted was

I’ll revenue the growth growth sales performance to was segment. of with million, discuss XX%. reported our reported sciences growth starting X% exchange revenue and were unfavorably QX contributing the acquisitions reporting Now XX% impacting segments, Organic foreign protein increasing $XXX.X with by with X%.

acquisitions. our and due profitability earlier lower margin our an in operational year category margin and growth the was Chuck's like every regarding commitment I’d the increase the segment geographic XX this acquisitions. points to of broad in to by sciences almost described, of protein productivity, the to strong XX.X%, already Operating has region. mix comment Chuck reiterate for basis As leverage year improving from volume segment over very product offset was partially

record example, new over branded XXX prior well is That XX% quarter, approximately basis our points achieved operating products the profitability an ProteinSimple margin. than greater this a with year. As

sales Organically, contributed due businesses. Turning including the Genomics declined test shipments, ramp the has the year. segment. to X% those Genomics EUROCELL QX on Chuck partially double-digit flat provided million, to unfavorable of growth revenue, Diagnostics revenues Acquisitions our diagnostic $XX.X of EPI. in Diagnostics. and to were OEM commentary reported and to prior offset relatively X% by timing from Exosome

provide EPI accounting on EPI. pertains recognizing the been its basis. revenue revenue a color XXXX. given and will recent as correct I to Here, it some Exosome launch This commercial has Diagnostics on in recognition treatment revenue is cash additional

cycle can be by report insured as long from payment as payers, days. date patients For private to test the XX

delivered, Furthermore, accounting. on needs cash for For tests months until as revenue history has hold given the put made patients insured end last recorded for With performed collection reimbursement. by Medicare cash August billing record on Medicare, detailed recorded the the been Thus, at collections accrual the EPI order In rather not Medicare payment. been an of and accounted our by payer purchase Exosome the are results. at revenue QX, revenue, on little before to only time to we two the decision a minimal had the be two enough tests during pending collected analysis EPI are approval was date tests sheet in X balance to were these still of on owned but from under likely QX before of performed acquisition for there level very substantiate and months performed September.

collection contract commercially year launched, analysis there recognition it fourth fiscal view current on be of year completed at to enough for has that that will we reimbursement knowing dialogue be and fiscal least private EPI Thus, not pertains Given QX perhaps not our and decisions allow year, quarter to this of accrual-based lag. the EPI how test cash as revenue XXXX substantial XXXX. coverage and been the until is recently will recognition will current trends, revenue public payor it our focusing until

and ramp at Chuck rate. the test impressive the to trained, rep is XX% increasing ramp As we has this stated, sales test keep per month XX increasing approximately all expect with

on Moving operating to margin.

operating For segment’s the segment than lower was the year. Genomics Diagnostics X.X%, Diagnostics prior and the at margin substantially

our segment last was the largely from However, and The year. was line operating of quarter, be or to both mix. in overall The due overall our XX product terms margin excluding favorable points improvement of for continues summary categories. XX.X% performance largely growth to mix. better the markets growth for basis favorable with while Diagnostics acquisition, expectations margin due better end product was adjusted than margin was our than In dilution Exosome in solid breadth operating to expected

positive U.S.-based reform the line, most it On as bottom continues real was tax for a to be companies. for Bio-Techne

our the of much As the out remainder ahead, we look quarter the ago. same the year remains view as to fiscal

expect legacy years. to several to execute our to past We strategic has a as business it continue plan the

mind in least difficult holding fast-growing the instrument QX. plan highest genomics portfolio operating comp our fiscal have means operating this growth, keeping strong that we fiscal in legacy platforms. organic single-digit reagent the most near-term the and For maintained revenue also XXXX, means in core margins expanding in in Executing resides this the our margins our year-over-year rapidly while

turns out, company As Diagnostics stated our in mix depending year excluding XXXX between total to XXXX. XXX businesses be we’ve improvement Exosome fiscal of the on for the margins legacy points basis year compared anywhere how operating fiscal quarter, therefore to adjusting flat relative could last

promising. end that most range looks appears our with of performance, more the it Although, recent upper

test more approval million goal XXXX we entering when five-year strategic Exosome to fiscal business for that of recognition we the Diagnostics, accounting trajectory on unit the be much enough of history so approval. higher a $XXX is the recognition, year count XXXX. of and revenue hit to accrual-based to for have will from for for Medicare annual and year this to revenue we in fiscal timing our focused the drive As largely are difficult uncertainty the What for Medicare outcome EPI is reimbursement due revenue continuing predict on

before months. the Exosome I’ll measuring be of reflect company bottom additional that Medicare overall the beyond near recorded slightly sales be with rep while acquisition goals in term, ensuring open comments. the And to we line the over aware improving months prepared the of and very for Naomi my Of call Thus, in and year. we’ll investment line with questions. expect margins QX sequentially two so, the doing hitting back commensurate half to expenses that’s In a concludes course, productivity QX decline mindful QX approval. to from our turn That full back of will three and that, the

Operator

go [Operator first our and from Dan take ahead. ahead Please question from Instructions] We'll go Arias Citigroup.

Dan Arias

Chuck, I wanted few minutes to Genomics Diagnostic on segment. a the spend and

ACD, for research in First fell and mostly ACD? the on the And be I XX% think will And digits are growth there rate then for for of that all-in recognized timing the do then revenue double you on OEM expecting specifically for mentioned the the much ACD issues, how rate out what setting What XQ, or growth year? growth and in be the to overall. of recouped quarter the the all-in over you course you expect that year? was

ChuckKummeth

the probably a First business, quarter last side the on it the one, better. and bit about the quarter just was Diagnostics, little of for like the tool

$X what million out $X forward, Looking fell and was probably. between million

from that in with looks new now. also It pretty The some we aren’t even. I things can to talk back it’ll back. - quarters orders, business get we’ll pipeline, you come even we I don’t I as us yet. quarter. They more -- a forward, these much they with some mentioned, Looking two think year. prepared that the pipeline And as looks do think large about customers move good as these looking as tell know, which have These out are good.

Part on many fronts. that too negotiating of we’re is issue So glucose.

have it’s own kind the next with glucose. we holding been to going a going definitely well a some as years, price away as five harvest some You the category it’s over with know of be There’s so But deal of mode. to you our it. know increases

I that replace with we’re couple we performance next have okay So, it. years, to think but of do

that’s issue one there. So

we’re In as as to. we give really ACD, not going specifics of terms specifics around much used to

quarter. at were a I’d south just than we as like RUO. last largely even well of better little It mentioned last say we XX% So in is quarter,

half pickup more the in from see number forward, Leica we Looking same. potential is and side Any slowness overall and on CDx probably us softness of partners. a dozen though. and do the the going has and other they with are the new the tell the out and lag the still particular X anywhere come months They in a next strong tests XX to Leica coming, between story, months.

here had. bullish as quite more be on well, There's to and actually and on hoping more discussions we’re well. going partnerships there’s our solicit as So to

of of kind talked for had the Genomics the more division. of it’s same, So, kind the same about we rates

there. I see don’t forward, Looking out falling anything of really place

Dan Arias

So the mind? relative your is quarter forecast on to unchanged last in ACD

ChuckKummeth

I would yes. say

Dan Arias

year you about contribution And recognition talked a math on changes million Exosome, Obviously, then just $XX this sounds EPI. that. from it like a

test might year, wanted like expecting for to what, better Medicare you’re clarify if once able I just there year. think So, A, and then this volumes to visibility? revenue you than since And you it were that maybe B, sounds sense maybe expecting talk you. you visibility realize you approval, are of to, anything, this the bolus get revenues that a is do Thank you

Chuck Kummeth

and the the month. gone ratios see per really all We’ve And the from XX and on we’re year ramp two groove. and clarity should the from how reps XX be. months to – can January X, you who XX, of we how up then should I some your own be quarter, how and do first in a realized fully say there by and you told to only give visibility speed to would which calendar went volume. want the we We XX% around QX for it So growth test clip

that is ahead then move helping from little absorb. with and been we’re if A reps even what a in we’re big spend, forward, definitely the the far go. as move on definitely of watching revenue quarter could’ve we’re tailoring to are kind we months but a them and X their our predicted we skis in getting are we to light not came we too watching kind P&L watching You the would’ve and under say test expected We dilution. ramp bit XX so volume it, lot on are and on six I just collected so wouldn’t throttling, though It’s a we that because side of move. for okay of spend

know, have in to because how next a talk collect, see number we going And The thrilled plan when stated, as But a get commercial matters. that way talked in quarter leadership Jim quarter. the we is want can full it have we ago, The fantastic. about really we leadership number of you the that what beast which terms we don’t by I that know that we could that’s what think we’re to XX as a smart is, As grow move as $XX aren’t feed possible. into about and anymore million, even year we’ll with. so to to volume there a of and just we test reps, is to

whereas attracting competitors the We are knows that payroll reps all because probably and all from we the start-up them, the everybody can for players make couldn’t.

pretty looks it So bullish.

could So honest. growing decision, pretty triple that told, overnight we’ll well demand the don’t without We with just course, And know. be to decision. told it, the for to of just volume have double we’re then to see. we’re that It’s being

it? months, submissions pay will submitted. be revenue. go the give that be they’ll considered our allowed in back and and Medicare the been back the to they’ll goes out at full the goes what lot even So be is is we’re paid look decision. a get be in, a - on decision we It’s that’s been what’s of in really XX of won’t back a of we’re kind as it usually now, happens accounting. - is going entails and revenue decision, growing out what on you told as terms month. for of that guarantee know, What we’re wire, course be happy. have will that And what a there’s goes we’ll to of when XX they until next look with it out what of still when of going make decision no and XX% on going kind through Without right And August to per And like even not months, out purchase which we’ll not norm. but just Well, now

I end we’re close really pointed need until for year summer, out, we we’ve XXXX this - will trouble of but We where worry wait we’re think to over. Medicare a the with to long? to about that area as don’t getting And won’t long. safety so even the take while. got dangerously So the would that in is Jim not strategically NCCN guidelines almost say year because it for next

last So they year September. submitted in guidelines their

late. So they’re already

alone, them. of So we we can’t hound leave It’s we’re committee waiting, that course. to have but a

that told know is in a have been we’ve place. heavy agenda. We So they everything

we’re that are As nothing just be as discuss to and team well, help? conundrum of when. it’s real matter I Does that think that best we other a solutions and we guidelines about. all sure which years know But soon. The it’ll gives positive. a them XXX is in you of think there positive we’re a fourth And and know, three the have been four, this I’m makes the for so the just

Dan Arias

you. Thank does. It

Operator

We'll from move Souda Please next Puneet the ahead. on to from question go Leerink.

Puneet Souda

Protein Wanted to on first touch Platforms. the

Ella, I you growth. XX% about think growth solid there. commented saw You

to get that driving is just there? doing it are us there understand wanted help growth what’s the Or that a unique driving well? Just antibodies Just of was the is sense there? what and anything

ChuckKummeth

business long. up. it Puneet. for to It day lighting talk I’d is Thanks the all question, just love about this

of being and which is very, point took being taking while five material, well. know, on business on you you talking that as in are clinicals growth we’re maybe gamble lots very be get this So of of a XX% to companies. about big a it And a almost The very, side taken these know or to two. it’s rate going finally. that technology to we it’s years ago And all this involved year continues a the cartridges. a in They’re it’s if are going very material, pharma now,

have years takes get other initiatives clinicals. in It We couple place. on of these to a rolling

are that half things. to got doing pharma dozen other up ramping a have We dozen a

after there be company TV was the Micropoint we which So throughput storm a a the be a they’re we cytokine who high Mindray, this what coverage a lot expect going team it’s I it’s application, love of doing. A-rated and founder just was deal company had knows is patient did this then that growth. for system This so China, to and way. monitoring, amazing. in for ubiquitous is diseases. hospital - because It’ll different It And founder with an of strong a by this setting. the autoimmune

and So doing to there. any change have they’ll supply an numbers they’re requirements. everything covering over once real kind the and really an agreement. cartridges the design, we FDA And instruments. integration, rewrap OEM no us We It’s - and anything. staggering. just And They’re of think are just that kicks them, to and in there, there's for it’ll all the

get we’ll once about a an XX-month the lot a So to these that clinical because and as have incite well. But have pedigree guys they other so done, that'll here pretty they it’s we’re impressed, in talk things do. U.S. interest gets of them started, more hoping

we said has - it some Ella a point-of-care thought know, standard you all and see. And our with got ability So a potentially future, we standard strong along we’ll become and to a could work.

Puneet Souda

more on then sense, versus but have tariff like now, it’s a a low to your it lot Obviously, China, wanted briefly view? you get impact hardware. of reagents terms in And seems what’s any just fairly

should given Or how China year China, that any we the So fiscal already in in profile - here similar getting? term? growth tariffs reagents What’s the face getting there? longer you’re for outlook the your sense that sense in that you’re could any

Chuck Kummeth

to And the couple probably we of a the we’ve is not this all CFDA come China its China It’s at component. best years, and business XXs least, hospitals everything thing’s growth really buying. to The percent. PrimeGene solid has component The really back fronts. scandal behind are maybe Well, Baidu really on grew longer. in OEM seen the sure. in from us I’m strong,

certificates, well got things they’ve seem there. to so be ramping So their

into involved everything. chasing world getting the products demand therapy oncology more Not the cell solutions and are different than rest so GMP-grade different of in going that and China. potential GMP-grade in We’re looking for

a because What’s shortage these little quality four, going it. in very heard can’t share this heard. delivering all we’re is us start of and five, if outcry have guys are disappear We were And little up towards a of picking soon investment suppliers GMP-grade been guys they biting be don’t great ago. in going we because are getting that reagents five riding or They’re seven make predict requirements or years they validated top now and three, to for for antibodies, probably years There’s our to those antibodies those been five validated capitalizing all can’t ankles the I the afford, cries six, away. are much us an lot and more stringent. that’s going set

It where some hit the that, them pay kind There that. pass by the later. the especially general, just programs much. silly, the paying business will people have they’re China So local all if for, government-funded. machines they’re raising of of of but on any There’s up afraid have it it well aren’t affected flowing products not it In tariffs We’ve instrument is We’ll been few flows The a been lot not we’re a They well. there. lot. it. to well suppliers. going government quite more. China, could really omitted in really kind need could’ve that terms from as for there more on all government’s that there. buying, a into There for happen some and of is too and not that go there they into they’re The might so been are products, our stupid of know reagents may tools, tariffs end to

be. it’ll So that’s the way

and in in improved, has seen this our is in and So best our have a couple we’ve the China knocking far has impact have years, our now employees And we no China growth there’s been improved, demand results time improved. so. on XXX

Puneet Souda

And just Academia. one last on

to rate the get fiscal growth year? modeling of full sort into the on wanted with Asia's Just year of What be looking here your we sort good. view should going

Chuck Kummeth

Low been. any see We double-digit it’s change. like won’t

Operator

to ahead. from on Schulte Catherine from We’ll move Baird. our next Please question go

Catherine Schulte

Congrats and the on thanks questions. quarter the for

talk and versus the in going sciences? of performance What last Puneet’s you you curious Just government end question, just market protein so could about did if on? pharma in off see within

Chuck Kummeth

here in here Double-digit services here, area, it’s too. in that Academic, the balanced. Pretty side. in I’d But balanced it’s a categories. U.S. U.S., in say pretty higher both than little the probably the including that’s biopharma

it’s talking If just pretty double-digit. science, balanced. Low you’re protein

Catherine Schulte

assets? you pullback market, in your how that with within in the recent to then are add? more private to like you you and And as most going remain does Or on And characterize the would we today the your M&A appetite front, would increase where portfolio on stand your public the interest then side?

Chuck Kummeth

the We’ll probably side. on private remain more

two we deals titch times We’re a We over but have definitely this some just we’re last capacity leverage. did year five on and integrating.

right. We plate. how to important is our it on enough have We get Diagnostics know Exosome

are to million, the about really told we run-rate million we’ve to It’s the as division It’s a the We business level. area last growing we’ve need quarter. numbers growth you. $XX $XX where definitely in at inflection talked take next Genomics

attention. needs still that so And

leadership there new have We well. as

Asia. We’re expanding in Europe and ground in we’re just that getting off with the

Biologics it serum expand work. R&D the systems. takes rebranding business, is It but ideas a to We’ve about it talk we media don’t a and business. globally much Atlanta We have it got some with

somebody that But as lot smaller work. don’t well so some something. of be have assigned We to it’s to it always a ones take has

a we’re So now. busy little right

run So a here. run where weeks. a still are we Frank’s process. every busy We two pretty interested? still We meeting

positions. I prices Our interested got we hopper’s a lot awful more positions wheel the flywheel cell more It’s private We’ve an most still for we’re definitely over public. this the at. than that in for the lot therapies. look a through of lot still going working Where don’t sizes see down private a lot of we There’s XXX. is probably don’t have. especially

definitely a We player We’re now. love that.

getting a of We’re more because it. lot interest

We’d other at sight. mass. But areas. certain looking came A it. bio-reactor solution into getting more be are there critical We’re wonderful

the general therapies – looking formed in There’s predicted areas we’re have in still staggering. I that cell as There’s work at are five cell quality that at There’s The that small some nice, as wave. still. the levels, are looking control. companies numbers CAR-T We’re in pieces growing and flow things there areas. in next therapy know and riding years and – do of that are numbers interest well you single-cell

I if everybody-wins it’s an be market get in. to just So do going think you

a this of So matter it’s land at point. getting

Operator

question Donnelly next our from from Goldman go Sachs. take and Please ahead go Patrick ahead. We'll

Patrick Donnelly

Maybe just little taking the pick you Can you you Leica expected. mentioned I than longer ACD, know there. to one on the through up bit a maybe talk opportunity clinical just be there Leica, there, would then know to to other early? also, I exclusive partners? aren’t so guys opportunity Any is And acknowledging thoughts with great. there again opportunities it’s you expand

Chuck Kummeth

there. So as but and are notes, some we’re there’s things exclusive looking well. and trying Leica. on first Leica seem hard, in notes got are what we’ve up some forward the working partner, not going Jim’s menu serious. few is here I very partner very They with we a And our Entana our primary they and like and they’re

definitely also as with working are some well. others we’re working and with We Entana

not interest. there’s strong We’re them going to name now, right but

And situ be understands get This because interest. tissue we that As a this been while, there’s solution worked the it’s well before. in really hybridization what works. never think a to critical is biopsy going had I just market around technology mass, it’s

capabilities this really but there’s going will markets growth. more think these I big. transition It’ll get dollar of and be where are mass will diagnostic happen attraction. people into towards the mean from takes don’t where companion trained we publications grow is and critical next to a awareness and stuff these is CDx as overnight, wave and I scale and - it’s more to research, I happen the pathologist So think billion time, get areas. -

and we And be. have patient just patient be will to we so

Patrick Donnelly

you just revenues there. can curious employee the occurred people on pretty pull then? healthy. are on the on underlying payout And the been just trends seeing hit there’s talk to guys risk you seeing the seem I - staying you’ve the any always But attrition, inside - mouth then since forward what since of leaving, what just Clearly maybe increased know ACD,

Chuck Kummeth

On ACD?

Patrick Donnelly

Yes.

Chuck Kummeth

Genomics we call Which division now. Yeah.

of the left before. This for is worked or He’s ago talked We came Fisher. Thermo outstanding in. much probably from it leader. running So think He in Kim me brought was we Thermo pretty via Genomics, track record. I for months a Ion guy all days. came four my about recently. I has Torrent so. Genomics know BD. except an leader He from Kim him and

global his across team lives think knows a is. and virus player He’s office from on good the just He’s a got he hands I this. actually where leader. he’s safe super personally bridge He languages. the

the operation Diagnostics yet has So in terms for really. experience division of is, a that along kind not Kim’s with He him big what it’s so play child’s it’s as of well.

that In intact. we’re It has to terms of working team right what been. sure make now the stays want We on?

that We unit. Monroe, intact. All have – the from scientists still is company’s is Chief who the business Rob are Medical Officer

people, retention packages have better. We of for These key never to in course, all that’s been segments going out have run years. few a

place. in So I we’re think good a

in together they’re place want of a good exploding deal Tissue lot to a doing and we’ll and Newark yet. that with doing platform part division, we the biopsy, close to biopsy think in a an forces, is but you a with Bay but well, competitive being it’s is a of certainly I the areas not a things be cousin lipid come. have now, a is to as this be great far. and big course company There work going If technology future, for which Exosome be with so of area, in we’re okay

Patrick Donnelly

a feel one talk driven looking really growth. outperformance that last year of the if And over next just markets there? with about Any the you at one so? in, Can durability mid-teens I be that sneak about just have Europe. the to there could good you’re standout double-digit you It growth on key continues just or

Chuck Kummeth

had the hiccup. Europe years can. of three Europe. in is at here. a situation not sure we study a best Europe gets I’m And We we’ve to prosperity least without anyone five But couple

it does, that But do material a Brexit to the to it does it we us even anything big think I happen us whatsoever. studied risk hard will occur. surprised what hard I’m Brexit. a not around some if doesn’t would and convinced next be

because across material But it. strong some Funding and a So academic basis the If of in products by large it suggests we’ll they’ll up we tools or we with place with customers need deal course in U.K., have anything there. having think biotech these something now we to model we’re end of get do and all don’t EU company-related Europe about or on and worry country are that right. board. Again, very customers right arrangements to around if that remains the pretty we country and our the it. have they the want, kind in part prices is of

of the and the in taking nice I going these locally board. and all And board, out expanding in fully here think Europe subsidiaries businesses. balance on across teams leaders the living their of They buying gotten they’re and we’re all on countries. excited, our with we’ve all-Europe from these stayed countries share still off keeping distributors

So right it pretty looks good. now

we’re with other I trying get ran as to crack think And a idea look area more us. Europe. and areas for a strong well. Israel’s I into still good Eastern a for at while. we

Southern honest. actually so France, and The and we bought Not to be a come allows the we I Germany our bigger, though. Italy operations, has we French U.K. be are of and so this because also have still to yet, little mainly main to are but deeper we get Eurosome, gravy be bought will France and entity. UK should space come would nicely, seeing really get to a size a us going continue country. leadership now little Germany. up the Germany, again get is in Germany think out in all and to a say is more it there’s into But same that share roughly little European in those eventually where right located all layer. is Russia thing which to us again a surprising, strength more, subsidiary is our for from good. be

in course taken there’s gets always Italy. and been of, care And Italy so of strong research

good. looking all So that’s pretty

you all of see guys it Greece hops good. in something, will Europe, we or outside Right but runs with or back So into before it. knows, see looking who it’s scare the a these like a now, lira Italy short-term new going cause trouble to

Operator

Dan next Leonard Please our ahead. from go move We’ll question from onto Bank. Deutsche

Dan Leonard

area could rebounded last So products color hoping you couple - not Electro on - appreciate capital Atlanta, the free quarters the hoping color that lines, had product some broad-based offer the pickup? Sciences, strength but a on biologics and Protein that quarter, of or but a

Chuck Kummeth

the still It’s have it’s quarter we strong our improved. obviously numbers. a percent I mean reflected still. this XX-plus And come. comps But was last and in did okay, been

of we So do whole solution with still ourselves, looking a forward everything solution we I a should with exchange, other one see production, fights is kind primary quarters which competing we We from used in are has Western iron think definitely fight improvements. large development what we These production. winning manufacturing the with been our couple market But team iCE we which ago. tough technologies, fight. is customers, team used be had but blotting. of softness some been there isn’t this in unique every the on This where the We’ve to platform a day. a have the like

of out of related where manufacturing don’t some to have related system a we sites Some it also integrated, require fact that that but limb of the lot the of Empower Waters. Empower to

the forces. we’re more I is still those get. still like has I think against side. summer. and And category. help, this helped of and there’s for make generations of have on the has and still honest. are was We size, getting their we’ll helping for six decisions, knee-jerk long it They’re messaging the actually. think new into that We so hope We application in we’re see share by full-blown helping which - development improve Maurice term, - months guys the but QC more production we’d just platform, to be looking for happy the we’re to Charge, to don’t okay specifying are now, then next And on that that These platforms to have the released also new as not platform, at expanding, right? competitive drive it we size

Dan. growth with so don’t we’ll goes. The And so the there, improved anymore numbers see back that of how in good, have I is platform, far, days double-digit so XX% think we’re realistic. certainly but it

Dan Leonard

related operating in just R&D or And I Exosome Jim. expenses that didn’t have you given thought? of timing more question tick-up had I anything Jim, months sequentially expense just fewer R&D working does an was folks surprised Exosome. two there for than Was

Jim Hippel

there No, timing some was items.

Simple cartridges back shift Plex get sale. customers, the in cartridges and in a up some was we work move Plex, the as - for will shift on development of development cartridges cartridges shift In own was those quarters. with expect flow our work from here producing to more to the will essentially And side, so when expense there in protein And on particular, backlog and some they facility of and and fact, on and for we high demand that as who cartridges, there’s new Minneapolis, caught resources developing the same R&D expect certainly new demand to folks to folks ebb operations well that that there between in flows. of that particularly development, Simple this they for new quarter forward

Chuck Kummeth

numbers a coded and activity quarter manufacturing. is exploding. just this it’s an versus saw research you the basic on they’re this gave we between and by Simple you Plex, was So area And on you some do heavy manufacturing

R&D more more going hiring side. the we’re and and there, on be to probably probably more So expanding

of think still out. that’ll So We been. levels we’ve committed I level to stay that investment always our

Operator

no like back it have I to [Operator time. over this questions at would Instructions] to turn We you. further

Chuck Kummeth

you. following with great after forward I that’s everybody, Okay. Thank of be about next great all and this, questions. Well, the for you Thank and anyway, most the look on up on to talking call quarter. of you fine. And, we'll you, the we’re hour so one-on-ones again to course,

Operator

call. you for participation. today’s concludes Thank This your

now You disconnect. may

Bio-Techne (TECH) 30 Oct 182019 Q1 Earnings call transcript