TECH - Earnings call transcript Q3 2019

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Operator

Good morning, and welcome to Bio-Techne Earnings Conference Call for the third quarter of fiscal year 2019. [Operator Instructions]. I'd now like to turn the call over to Mr. Jim Hippel, Bio-Techne's Chief Financial Officer.

James Hippel

Good morning, and thank you for joining us.

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

begin, me we Before let statement. safe harbor briefly cover our

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

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

Charles Kummeth

Jim, our Thanks, joining morning, call. you us Thank third for good and everyone. for conference quarter

quarter were so years segments the levels that fiscal was in at year. for plan a Our envisioning growing far delivered the our organic double-digit. a just few Bio-Techne, quarter growth this and record of with performing The QX both of I'm extremely we our ago. We're execution pleased XX% with company reporting

core franchise, businesses. growth integrating to well north which Standouts of to time included this our providing and over ProteinSimple are extra acquisitions grow XX%. continue our organic reagent ever-improving Our

the north division, which in our XX%, north while of antibody growing big growth genomics also of business a XX% return quarter. grew core Our way, in double-digit to

of fastest in at well perform more QX. at even major As XX% the to quarter. China regions strength scalable the company quarters. all the the product with rates with over of to portfolio, the the to I growth growth we our fine the these plan. look the several our momentum it with believe continued teens products as in speaks come addressed execution least growth the continued consistency our performance exceedingly past for were over pleased the we've geography, market behind by of I'm and strategic of expect our

single a our growth talk let's now bit double-digit with performance Sciences starting the in So nearly the product products every Protein experienced about category. of segment. We more

towards our more the more desire. of is vast recognized acceptance in segment high and solutions the Our to Sciences with of year-to-date. website validation double-digit therapies. also see gene next-generation over application. XX% our Growth automated from instrument grew antibodies the of by our adding in XX% growing researches reagents, Search automated Optimization our see being business blot XX%. derive more antibodies new quality potential antibodies, Engine achieve XX% of development Also, in who LIBOR great continue that strength And and In course, continue website. customers our over ELISA to focusing our and our in platform iCE antibodies and to continue therapeutics of Protein in we Ella, QX grew support by nearly has benefited cell biologic in Western the core quarter and therapy immune reproducibility, to our antibodies, on The in of the continued especially solution, developers growth our developing market content solution constant to and antibodies

a that development BioPharma. anticancer of therapeutics Bio-Techne week strategic announced we example, with collaboration Elpiscience the For entered last into for

media higher in portfolio and access the flow workflow cell high-quality of use for it solutions and for factors, the in to early and immunocytochemical the characterization. and antibodies GMP from quarter The as GMP needs XX% is gene As Elpiscience development eases preclinical, stage preventing by change lower. freedom of the small cell molecules, a portfolio highly at span which the of switch of growth bench the during therapy commercial across GMP biopharmaceuticals later extensive manufacturing GMP of the process have cytometry change medical therapy reagents grew address product will workflow, for to and the use include to clinic advantageous transition antibodies and and when in to unmet oncology. is cytokines Bio-Techne's part Bio-Techne collaboration, GMP our multiple is to clinical and risk from cost need product the

a While is gene reagents with currently trials business are relatively years therapy today, and the clinical portion to dramatically. reagents our need therapies going applications over and GMP-grade small in coming X,XXX of already, cell the accelerate for cell

be to need. world meet in the that for As XX ready years, over leader Bio-Techne to plans proteins

capacity in annually $XX investing next deliver months gene therapy and cell million on built to We factory GMP $XXX new factory This reagents will million have of over nearly over will capital be the to a Minneapolis. the being GMP XX customers. in worth

We expect capacity least half to that be within next of the X at producing annual years.

the product designed simplify solutions Cloudz the innovative for respectively. cell the to technologies developing SimplePlex and is pioneering trademark and focused Bio-Techne These and manufacturing GMP quality lead the We Bio-Techne developing technical solutions way therapy highly excited production -- and and at cell In on to are of in control, in development reagents worldwide. improve activation that kits therapy cell innovative cell are immunoassays. with optimize addition, expedite manufacturing technological expansion

on had growth double-digit segment, our solid we and QX. in Moving where to Genomics Diagnostics

my big division. to our return comments, growth in the is I strong the story for genomics opening mentioned here As

and results tough earn-out team the and is the it. of With integration the behind us has comps complete, nearly reinvigorated the the and show new strategy leadership

recognizes for for the for the Many Awards, which in for nominations the also outlines all were moment researchers of and and the Dr. our ACD innovation already Bio-Techne's the were unparalleled is and most makes knew the from the Chalmers, and customer which that tissues the receiving RNAscope cells. brand as celebrates nominations CiteAb sector world, "CiteAb absolutely at expressed at the platform customers its nomination award, the ACD the had the that suppliers for in advanced is research quality of RNA people researchers' CiteAb, Bio-Techne in RNAscope at service diagnostics of category it very form Our researchers." excitement around We received reasons support the best particular a staff working supplier each cell proud. in highlighted members worldwide. easier reagents comment the and of continued of ACD with One most choice customer have platform product, this for ACD's visualization award. their XXXX. individuals RNAscope of with industry the throughout RNAscope Excellent that quality, but that that said, me had impressed stated ACD for product highlighted in our service. excellent great customers who founder this about made and company products Andrew is brand

progression multiple customers Chinese agreement for oncology diagnosis Imprinting diagnostics of several for strategic and personalized Another diagnostics enthusiasm has more develops that cooperation company ACD and developed changes methods the early A high-tech cancer detect recent is precise protected can Lisen field accurately technology the for assays in patients. patents. domestic that with by Diagnostics. Imprinting the services Lisen demonstration of international tumor independently provide and our Diagnostics stages

recognized accelerate sides to with will to other initiatives, diagnostics of We companies. benefits of help to thrilled precision customers result generally molecular also science RNAscope in more the tools enthusiasm market X technology for which medicine the advance is the beyond be are and for the of our of the ACD's as diagnostics. to life diagnostics The platform accurate the collaborating promote Lisen a goes use China's and Chinese precision development by

new from an which NanoString example, the is complete RNAscope for of provides from guide basis collaboration. to for researchers with integrated biomarkers RNA workflow is team genomics. to Technologies assays, high-plex Bio-Techne combined NanoString's and the For The further single are The the molecularly most on applications. of RNA to these This will concise that their partnering clinical be researchers spatial resolution. Bio-Techne combination at unites ongoing we portfolio spatial spatial aimed GeoMx and tools analysis reagent accelerate extending this partnership, into enables cell with research available with translational genomics and of the working the be with partnership excited basic platforms one NanoString solution applications integration workflow, to with development

Finally, on Diagnostics. Exosome an update

and clinicians QX. decided National early Cancer recognized a panel treatment developed leading revised in during Comprehensive call, NCCN, Over January or United of detection. for the by cancer biopsy in with centers. prostate in negative the finding practice XX according prior Network a and EPI standards to guidelines probability to guidelines revises cancer are in patients to Since As in of among U.S. guidelines QX, joint X,XXX were algorithm the first and prostate a high-grade in physicians updated as tests of EPI to urologists to we includes of oncology recommended the very over practice test gain XX% at in decision and the or has care guidelines, or the panel The current their EPI biopsy for clinical The into payers include reaching acceptance guidelines recommended and proceed a end NCCN performed The continued the are country. prostate either a evidence test after cure. the our inclusion NCCN cancer cancer cancer States. increase monitoring. a continue The clinical advances by expert EPI to discussed urologists throughout further last assist biopsy clinical from testing patient

we us sometime May, with on payers and to Massachusetts. to with this The confidence for have nationwide during inclusion out community nationwide our for For Medicare have guideline local the to with EPI give more us big X,XXX will coverage in that coverage. be continues ordering and now than over to team determination into and the progress CLIA to reimbursement. by contract expect the enthusiasm next of as agenda quarter. be added large will regards of next state urology NCCN level the by York payer the before of They agenda the steps PPO insurance continues to NGS commercial regional, physicians, the certification June public that with enable XX NGS that Exosome an September end contracted receive lab be it XX is payers, made for to meeting gating Medicare June rolled in determine June. meeting networks will New implemented open the of we be The CMS decisions item An by states. With for understand in non-Medicare the meeting Medicaid should coverage make

there. resides New York state can test an requires its own administered for who LCD a certification to be patient

population will state, carriers big of reimbursement for certified not a the the large the in not Given test York. national by consider state generally New

the lab scheduled audit Waltham May. in for is New a state month Our of in York

to expect of we that both will diagnostic the approval audit the is test York by state years. urine derived first and New pass to quickly the blood the certification with over exosomes follow. many using coming seek for We of EPI

is monitoring treating and true Exosome-driven to well in field a liquid diseases. position care other platform standard Our Diagnostics unique diagnosing, as become cancer of as biopsy and for

Our diagnostic their while and thus physicians care outcomes in health and more treatment precise to take enable products costs. targeted lowering improve will overall approach patient a strategies

I call about the to remarks turning Before comment to with conclude our performance. a like my Jim, prepared operating adjusted would margin over

the in decline earlier adjusted year-on-year financial earlier QX, acquisition, demonstrates point our guidance results we've With the past points that Exosome Bio-Techne. basis up core while we operating to I'm grew the for double-digit of the adjusted to very XXX our basis the commitment profitably than a due very historically report for and full sales. first year, I'll margin of X us XX% pleased fiscal over hit quarter strong turn first in to year, Day far year Jim. of years. margin in operating to Diagnostics holding is over call XXX our organic the this sets growth This excluding so achievement ramping am back experience gave X-year our at years X the this we the acquisitions year-over-year absolutely delighted that, acquired businesses with this for September at to XXXX. Investors the While This potential margins which I

James Hippel

prior of our financial Thanks, of was X%. quarter $X.XX company an with negatively as at prior revenue the the in XX% Chuck. the increasing on by foreign year. $XXX.X overview to EPS third QX million, total each some increase quarter XX%. the with provide I'll well Starting EPS organic for performance $X.XX financial with EPS as year-over-year, an performance. provide $X.XX was QX segments. Adjusted for flat of reported exchange overall $X.XX, was color impacting our or year compared GAAP revenue

a acquisitions geography, X% translation. in the contribution Third unfavorable quarter China exchange the U.S. XX%. included By foreign grew low X% the from growth growth was while in from teens, organic grew reported sales and impact mid-teens, a over Europe's

the was for growing by organic Asia, in Korea XXX%. the of Asia low diagnostics nearly excludes latter in South High-end mid-teens As rest teens the was mid-single-digit. academic while India, led the growth was market, division, biopharma growth the sales growth in and and our which

productivity that's of volume relatively resulting margin The year. by for offset R&D was The XXX points XX.X% a XXX Moving in year. Adjusted P&L. of in prior was QX Total points the higher QX, XX in details was from a to sequentially than on period. increase prior over XX.X% mix down with Exosome as and the and margin a and the operating product down more X.X% flat points to company the XXX by revenue, QX gross revenue, XXX basis points QX, currency the favorable headwinds. expense the was prior was the QX, basis at year XX.X%, SG&A basis leverage the foreign offset of prior year operational Diagnostics adjusted to SG&A acquisition. of than basis QX decrease compared from and Exosome adjusted than result points basis more of additional of added Diagnostics acquisition the

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

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

bank Our the end million from $XXX.X down QX. on the of of stood of balance the sheet $XXX.X at end million, debt at QX as

million Our to adjusted nonoperating million year $X.X compared for expense prior transactional other to $X.X the due exchange. quarter the from unfavorable was income of foreign

of an equity in liabilities, the our be sheet compared fair changes includes recorded Astute. requires last and nonoperating fair the a ChemoCentryx asset assets unrealized $XX.X reported GAAP be was $XX.X changes The values be due from equity balance readily any million available to fair the year, financial financial balance since on in ChemoCentryx, section with a to on disposed in of value as of and value required recorded team to gain impairment investments to that accounting standard standard, For market in recorded our on in the the income measurement in million reporting, loss other prior year update statement. last sheet. charge market which gain investment XXXX-XX, to to in investment adoption in unrealized due The unrealized is recognition

Moving on down P&L. to

a effective adjusted in due tax Our from reform. rate to basis improvement QX XX.X%, prior the tax XXX was point year

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

with XX%. our growth unfavorably the the $XXX.X reported sales I'll foreign Organic revenue Sciences by QX with reporting Protein XX% Now were growth segments, starting discuss performance with X%. impacting increasing exchange segment. reported was of million

reagent almost both leverage Sciences very margin the our foreign broad margin points geographic basis and in Operating growth As the volume experienced in Chuck for XX.X%, and instrument operational an was in already expansion product of productivity, was to year-over-year category by due unfavorable region. Protein this portfolios. segment segment has every exchange. was offset partially described, increase and XXX strong Strong

growth Turning Organically, XX% acquisitions and from million, X% Genomics translation. contribution from of a to were impact QX from the $XX.X sales revenues year. to unfavorable an foreign the exchange XX% increase reported grew and with X% a Diagnostics prior segment,

in previously led our described, genomics Chuck segment growth this was by As business.

in I've treatment, business quarter. timing contributed in growth and recognized on However, given upper recent with XXXX. This test prior calls, cash also single regards Diagnostics our to this With order stated diagnostics to being EPI commercial from the Exosome accounting digits favorable launch the OEM correct is its due as on a revenues is performed basis.

patients payers, by payment cycle PPO. For insured by covered long. private quite is This be for from test can true to date patients especially the report

were NGS is contracts on payer Diagnostics the Medicare payment very by collected approval from coverage dialogue date For still the before that test recognition the given in revenue knowing by with performed contract Medicare, tests the current revenue was currently private patients minimal and the of pending focus our trends, With continuing made PPOs, will our results little pending Thus, and CMS lag. of QX the on reimbursement. and private March. decision end to Exosome insured will EPI of be since recorded reimbursement we decision rather and are our that majority public acquisition payer

for Diagnostics lower substantially At year. segment's margins than margin the on Geonomics the operating to prior Moving and was X.X% segment. operating the

in for the In largely last our was summary margin full year of terms of fiscal momentum product than double-digit in feel Bio-Techne. end in about the the excluding OEM, will quarter, growth possibly quarters Having at being be commercial least categories. XX% of a segment fiscal to year. breadth row year. in or leverage. XX at markets our flat Diagnostics both the also growth year 'XX continues diagnostics all With for of speaks of our points first growth X organic operating except Exosome for However, businesses, to execution. solid improvement growth double-digit from to likely organic dilution which good The was acquisition, and positive our due margin basis the We organic the better volume be XX.X%

beginning our bottom overall fiscal achieved delay year. to Obviously, dilution beginning expected has the of our in On to line we impact anticipated albeit increased reimbursement the the the the operating what be of the bit continues Medicare differently. a year the of Diagnostics line, what performance margin fiscal from Exosome we at of with adjusted earnings at

However, the expect questions. prepared additional most to that, this as we my year. I'll for to call mitigating the open business in with and That is finish our concludes trend stellar continue the fourth core dilution this operational performance we comments. the line turn back to over Aaron And

Operator

And to with go Instructions]. Puneet [Operator Leerink. Souda we'll first SVB

Puneet Souda

into improvement What's with Maybe RNAscope going business first the rest the new business. reorganized on the next the here expectation operating maybe in what couple expectation leadership, of your maybe ACD quarters? year? And your now and of for forward and under

Charles Kummeth

Sure. in and last We be the we here to in next going on. kind or we with and did quarter some leadership this We're kind teens still a back better. new to few we'll few Well, back we more got XX% integration probably this within that Europe nice Maybe above really forward, the with more, our year we was XX% coming quarter. down and back quarter goal the guided it's there. know all into and or replacements fiscal turning people scaling of probably same the Kim's be we'd see quarter. And XX% said be hopefully going question of It better. do

to so. we've well. it's as has well So I all going Japan, there lift, add in resource all, starting some quite mean, already China

going for but as Our a this talked for quarters, while XX-plus for said We'd of here -- goal you we hoping couple XX%. for I'm for better. was a forward about with happy be

Puneet Souda

Okay. Great.

Charles Kummeth

example, demand good never is one, has I been Lisen agreement the mean The with demand. there's been we're a of never getting so better. lot NanoString is for collaborations. better a requests another

I to really reachieve to kind really in up of us XX-plus think, So percent. execution, it's

Puneet Souda

capabilities question Okay. analytical saw of here. building quite acquisition and, have I the the Brammer recent and quite therapies out cell there products potentially. of the technologies. and activity around types a M&A Great. proteins GE mean terms the I in focus We broader of protein mean, other of a the And I small in GMP BioPharma, had bit you the

view maybe that space capabilities at has just around broadly terms And the -- view that you us acquisitions? in just all overall, proteins of in GMP your So workflow portfolio. at develop for the of your the how looking changed the terms want give to around and you're

Charles Kummeth

about over this to very of the Well, business our need it. next for even the double chance possibly onslaught just that we We protein X with for maybe years sure is know feel a strong GMPs. the all

so more the A and need mile the a high being be and going deep confined to bigger so with research, and so scalable. much wide bigger scale course, they're fewer SKUs we're of and new inch that factories, has in have broader of be instead but So we in everything lot it and to GMPs integrity. things auditable for it's very very, are

all do just level. lower we at that. much can now, a We we do it do so scalable it And

In being I we the Thermos. me what up a saw, Brammers I talking feel terms start guess ago. to the makes we picked by of see this well better industry the it and about And over year mean,

all Another, years be reading therapeutics we of fun just that -- the and a different by There's to reagents lot we're people my X you've it's, we of may taking get to these out this the to things that X throttled into think, market. consideration to being a up start thousand path, and therapies proteins, indicates have there's end right not GMP, the all got lack potential. I may on clearly clinicals, kind about that of facts I the When think. God,

it's we huge. anyway, We be a prudent don't going company. absolutely lot a and so large will capital ton and a we're it of this it's capital for of spend for investment not the So think size very payback

Puneet Souda

touch And if last one Okay. overall. protein on platforms could I

strong delivered have obviously growth here. You

how are just where and into further the us just comps growth coming Maybe penetration you Wes do view you overall should challenge and forward, here a give currently as to low? the currently the that of sense sort onboard penetration into stand going and technologies that strands the see give of a obviously comps Ella -- you're the us a sort you get market As where the be is broader a we have. for still tougher. Maybe look or

Charles Kummeth

Well, is starting then probably two always an so growth that that be years X% is guiding growth, especially mid-single-digit this were XX% ago, going kind which organic really fantastic, to we of to asset or back else. with for everywhere us

We Wes have for XX, blot here. of out been exceeding see concluded We've the the still of and we XX, XX% growth. XX%, and and a organic X Western a It's right and been Jess for hoping something quarters in we're there. XX% exceed been platform platform, last delight XX%-plus It's to quarters probably keep like it. up really row

for Jess So getting nice another feat for here to and system quarter XXX XX%. Wes And is us. yet another

or in mainstream definitely we starting the and of to share. the less still hit XX% we're yet we're terms So think probably market

a for by never it's just it's week technology. lapped if now for it's business plus for growing and the very now XX% great a And shows it. XX% us, is -- a that of big still to new matters probably It's this good applications Ella. new We it's sizable. in So go can it, XX% is us. still blot mean very, but solid, way important count at business got hearing then very we've about portfolio it the for going it growth, don't iCE It's there. be to to great Western recovered is then very out nicely. and that keep every that demand opportunities has mid-teens I a iCE keep we grower, long business. a but

expecting for big long we're to So come. things a from yet it time

see So is ASD do division with name. the this new is going assays. this and forward, We

we see for -- than way a future. all grower XX% So XX foreseeable in, more do the as this

Puneet Souda

Great. Congrats, guys.

Charles Kummeth

On it. part the proteins of simple

where a end excellent Luminex, Assays. but assays there XX% hard we're up, know in lately, with so Assays multiplexing, to we have well. been an grower to with strong had going the All as it's we're quarter in

is but wanted. strategy ELISA. was. So This this away, the about what growing our whole double-digit quarter-after-quarter is going our exactly ELISA includes exactly just we worried We're what portfolio

It's the So double-digit little total ASD nice to an that does still number. bit. a awful going bring be

Operator

We'll Schulte to go next Catherine with Baird.

Catherine Schulte

on could kidney you exosome can on we talk platform. see when Any if path for forward test rejection? clinical curious or trials the update about additional bladder Just for

Charles Kummeth

I say, getting we're with on in partners bladder. imminent and I patients believe samples on actually that different working such. going

open terms partnering. And going So two should expect, the we more here. we with today be can't We're we call in in company about do are do years the of from in follow EPI, administration spot same today, it said, strategy. we hopefully. we're LDT same of That business probably to for everything the than parallel kind previous of that

now on the our and the the likely pounding right of on Most around as of is a platform, and that. kidney keep a indications our first revenues blood well clinical versions part we have breast. of of well. forward rejection as for interest as And technology certainly we lot lung most business diagnostics the So for

access validation have we doing us pharma now. paying and for many right big many, money So network

all X- this a be the we're So for to to to future will here, big expecting It's pay platform. it, which piece to kind of clinical eventually. really diagnostics going especially off be of XX-year a X-

bladder, it's things First so. happening now,

Catherine Schulte

therapeutic going to forward? BioPharma And of expect these we How of agreement. more then on partnerships And on economics the this type should collaboration? should we Great. about see think Elpiscience

Charles Kummeth

businesses. access Ella. it's and there royalties and deal payback scale China, important from if things classify they and antibodies revenue with imminent for are this I'd as But big but and for with take work time nothing off they that's important probably, It's why to going some on is it's but doing as piece. hit It'll if -- to that. have be Yes, the different it not rights, shot of therapeutics there goal. these really Micropoint that, or be We'll them, pays which potentially, to there in they'll receive to it's are some get ours these for very access with material the of as

and millions such dollars later hit. tens there's milestones is of be of And So it the could if but big when payout hit. the things they

So these. research. of we're more of They there's lot, don't really up. where our a providing years needed, XX lot it's not from opportunities. for a shot-on-goal I'd are to just their couple really cost them of kind us end great These knowing those like products of really resource away

Catherine Schulte

last then one And for me. Great.

some peers. once your seen again results in better You had strong from of Europe what than we've

curious what seeing seeing you're of potential So stocking you Brexit? there. ahead any just Are a

Charles Kummeth

No. biting here numbers this Not there. pretty Everybody pretty I not see we under good with us the and at think and it doom they're we some kind once our We're Europe. high they've nails they're but through else But again, over all. for solid at with posting gloom they're and quarter and good came as as continuing -- quite don't more been, results. less. or they're just very for all

the it, collaboration in solutions, leverage all I leveraging full think mid-innings distributor on commercial of say. still our of acquisitions we Europe, us made. the expanding small that field across the selling We're all

going an Brexit. probably we was Brexit, let a it's there's didn't We a when to So And alone impact see Brexit, don't quite to there on going see be any well. impact. now just going be not when

Operator

We'll take Sarcone Bank. Deutsche our Michael with next question from

Michael Sarcone

This is Sarcone on for Dan Mike Leonard.

where Can speak clinical you the thinking And both about ACD. you about timing today of stand guys you're how penetration? you or on research maybe then in market are thinking just and just one there? market how to terms penetration first So

Charles Kummeth

really to Yes. kind for not Well, of it's the clinical market, our guess hard us thing. it's

of hopefully Lisen for of standard bought the into asset for mean and pathologists to penetrated. this side, has and different been didn't great technology said, this that inning always this potential, the lot -- with first and a try will iCE of molecular the to pathology who moderately working partnering is you The needed to open providers business and provide do an tool have of like That So with ready for we're office go molecular the everyday a along without mind. in tools migration I success. So potential. very different antibody therapeutic in and and the we're want and an space we tool, a providers right? this working think with which research we're do go for there were work better for researchers automation I who antibody, certainly lot have

we or to more we keep this grower. is making a have than until certainly better send saturation. more therapeutics the we a research we and nowhere is ideas. here is from can is KOLs changes that -- XX we and or XX% comment, get We're We of expect idea to to there but demand The -- team We're -- we'll on work amazing. said demand really have we coming we big platform. customers terms requests handle. So but have and we the Like going plans institutions get maturity because not where near that than think potential end up have think and hopefully my in yet to in we back this be earlier being in just this that a I

the to prioritizing getting So a game in matter growth the and get back so. it's going, this of then

Michael Sarcone

maybe opportunity it. you trajectory? partnership Got the partnership? can to how know speak Do from And you do NanoString that growth frame you the to revenue the then impacts any maybe way NanoString think

Charles Kummeth

really hesitant than when think got they a were up mean -- couple and really it's that us. And think we And of on -- -- with but together teams of their the our years comes I there's There after ago. bit I seeing a it. we'll Brad of they potential vice initially, of to technology them NanoString that together, a more and Well, upside front end they solutions. and versa. really research team ride the I up. this a our We kind -- probably do with little and the got I started Brad natural lot of we spatial is here. link has light and

on think and that the science. and works. we there wonderful We world priority. it's of prioritized to we're know of it's it's project genomics the So think team The and doing within right instrument it now, that another the more it's but handle, right -- highly up think can kind say is it's great we just than business unit I we of early again,

So we're it altogether. trying to all make work

Michael Sarcone

seeing can for end you and little Got me, the it. a markets, last you're academic the maybe maybe helpful. elaborate government one And in on That's what major just in more geographies?

Charles Kummeth

in pretty biopharma softer the in academia here more little think I Europe. with even we're it's a was Yes, It's U.S. But about timing.

up low in academia will the I a and been say mid-single-digit general, high little the lumpiness that's better I with bit funding are bit would and NIH we we we down. reports forward, we some of around watched what we In think of stay the to single-digit double-digit we've got is see. every little a going biopharma get levels and see kind and month,

Operator

next Goldman our from with question take Donnelly Sachs. We'll Patrick

Charles Steinman

for on This Charlie One on Patrick. exo. is

think last surprising is I you you XX% in a January. being NCCN quarter-over-quarter, quarter, the coming that think seeing to which test us mentioned is a online relative as line think which little to up I I was did decel get

that puts you're model the commercial So that and can you just talk against takes seeing to on your threaded side? how and the

Charles Kummeth

Yes. X,XXX at over We the X,XXX. number We tests. shipped actually noted

This X,XXX. again. impact, a leader. of there's and have, new with and activity quarter It's when deductibles that as year of beginning we get is end the a much new end with. business more I some say, most the there's see so of between there's you made the of deductible some And calendar start up should lot their really. using before We've team, bit X,XXX of and of also, a to this year seasonality the and some towards timing high regards At been changes team kicked at also but plan kind involved a down back people to of in the you the and lot little know, have with we -- in year

typically growth to January wise, X,XXX of quarter year. almost said, We That XX%. was closer lowest -- March tests seasonality almost the did growth our So being rate the quarters our over growth the March our March versus is in March.

or for so. that on though X,XXX is kind having pretty here So better step Medicare we're Medicare, without growth increase. a expecting big top with of so up it this wonderful, So right? of until think quarter Again, doesn't that X,XXX we is

Charles Steinman

Noted.

less to give the gets lot you obviously again. Quad the to gaining Tech cell But and Can pivot on of want really gene now. air side a momentum sits acquisition? just update that's Exo. admittedly, So right than on time us therapy an a market

in and So on now and future to on within update you and kind your potential market, Quad there? any synergies both your fitting the give can updated where portfolio the us Quad see within you broader of any thoughts

Charles Kummeth

the we Well, which the on talked we're a putting, along cell and for some immunoassay and quad spend component build with as money. to probably gene we that here GMP are working is editing gene whole technology initiative But bit workflow therapy includes components, some the this along whole out doing selection activation the proteins, we're Ella and with about technology we're workflow. other bioreactor as B the of components and well trying

different we're get into clinics initiative trying be, soon. we this things going we'll going That more announcing to So said, that as -- can. hopefully, going

quite proteins part, for as a models year to if but now to sizable few very bills our look today. to a that's year see is technology starts paying could to clinical part idea in and protein our And little not or cell the really we're when mentioned, going in our Remember, numbers. baked going the could X the platform nicely. gives We've that's world a business. gene ASD that a of This the we've portfolio got ramping revenues, protein our This business you is core All paying kind it's core is is also size next them hitting. I've the of X so in that. really you're a double take would is big Exo say, GMP got bills at leader really just ACD That the ramping, involved just And Quad's ramping, we've of an and Quad and got So out, therapy component. anyone's start while. research. in I years alone be our -- of very, this you company. right revenue clinicals. of

a we to going if few qualified clinicals about can would sell those So in numbers We're into a and beads. really talking it be. production, these not we're of get what of lot goes

be is well. team, going next start that didn't comes few once We you've technologies, Quad We're there, fantastic of didn't bought more You've They're about some whole set that yet, to, of to others at coming for pretty in talking it be for. and we workflow through. replacing, early, a pay together looked market, hopefully, we're in the -- today a we with steps we can saying bragging at of a are The clinicals customers It's IP. looked we quite fantastic complete to a a that up, hopefully lot replacing year, about market hopefully, this see. and are will it's more complete pretty we'll out we'll how the line in fantastic big currently but and thing. start year we And there ours because have superior. ours them lot beads This other so. see are think are lining the lot them a it

Charles Steinman

me. And last for then it. one Got quick just

X guys double-digit about we're is single-digit for year you were that think I high I talking ahead year-to-date maybe more year reasonable XX%. of on until last seem still into call the well maybe rate fiscal inching that indicate double quarters, Obviously, you're now to at the with, think, growth around growth digits.

for into XX% such the that you anything that believe So least is gives pause with the full or that would decel to leads growth that QX to expect year? mind, bar you wouldn't in there you at

Charles Kummeth

don't year, we said goal was we And better. give do guidance. give to all XX% Well, annual. be We our or

for quarter But this do still this As to horribly that. year. you XX%, not have pretty point at or really the XX% on better out reach set to we're number pretty

of kind there's diagnostics quarter, diagnostics, the quarter We very pretty we've can order next had issue, of means there's lumpy. been, of terms timing there's strong component issues, probably issue. a you In for that OEM almost the guess because quarter that's

will goes year, hoping our for forward to be this grower, in comps become to they're hopefully, the year quarter see as saw continue out, first you to things. do good to not to XX% X% our can and to do the to now going going year. we're and be is over XX% double-digit comp pretty range all well we'll going I get good XX%. this going we mean point to that that will a for be that how be from have all last we perennial year. and And a I'm goal So

I'll this think will all be year, Medicare whole that -- out in year, year of one point if revenue Now coming for Exosome. organic almost almost get it'll be the the fiscal next we

So it's nice to padding. be a going

hoping really get we're to that. So

the do will of it like a some get calculation whenever That it, was which step the we know of get forward. is We but recognition revenue reinvigoration for exo in be organic ACD. up from has poor going to We terms comps alone. going

to our growth numbers going that's help So organically.

issues. keep most others, be things for At great, don't portfolio And fiscal things do the so. there because think to next is is in doing a for going promising been there's is year. going rate, being India to timing in us, for all years Europe up to decent has see. it perennial material. Japan X down, in, to going very be end, has double-digit the and we're be So to India are year funding be we're be years, we have and misfires in issues, finally like that from to but the us we'll going are a there XXX% to slump on China going for I may X that growing there's year, us. XX% towards here but grower looking be good we're hoping to

or here at they XX% like get do, all the other So have ever that better we've really make quiver continually never arrows hits you -- once. that's a When one, help a to portfolio, got you because XX%. because in this why right, us quarter nothing

Operator

take our group. question capital [Operator from Craig-Hallum with We'll Instructions]. next Alex Nowak

Alexander Nowak

just topic here. EPI the So staying of on

with time some here line color the NGS. on provided for reimbursement You

out then clarify draft Or go mentioned June. want at in you September? issue NGS you which are would LCD a expecting that. anticipate come a you Do file to September, here? final in So a to the to date meeting Just in LCD later

Charles Kummeth

we know in the way in May okay? it is the open in agenda. Well, the it whether June, be We'll is meeting understand will

that. agenda the hit We be time in we there's the have hit able day, frame to XX that, whatever process. to be that's in a If to

June from So If it that complete And finalized think that's activated. another why September the it's we we're be talking still. meeting is I quarter. be when to then on August August be and would miss there's and well probably

So them. tell we we don't us not anything. to don't talk don't They they're know, --

solution discussion help. discussion in that's do, We're know that will in at come we do. to to we There's us out best nothing So for homework and no the going left top there's done hoping we've There's data in the everything be for provide. the we're to the also we're guidelines no as us. supposed And to to tier that know soon. very in guidelines,

to record years. as be all X And sail out in that completed. like the pointed reimbursement and clip on us to usually our we're out, ago quarters NCCN that think, in these we I if to on this of got get milestones the get things terms for our guidelines. couple And can, it'll still a out, personally we've hitting record to I'd of with wind Medicare, the before And X even timing. we're try a expect points point August is you we like my our a takes to team so, So

really is to this and we of using really data it. more works, patients a platform need is we it and there are get good, benefiting the know that So really

these move see. So institutions bless we'll hopefully will So on and us it let

Alexander Nowak

the quiet on Yes. Understood. outside here front Thanks there. for of recently. M&A partnering you've color the been

down back expect see acquisition? in a market and So new we to make when do Bio-Techne go to the

Charles Kummeth

see our paid so back got those a for. our have say, X complete of and we with just constituents get and the Exosome. money dry that of we lot leverage we like went would this I kind stool think big integration Yes, a bit kind integration of of in are through I ACD We would on little legs us to really recently shareholders just powder. under Xx so track,

in So workflow. We've now, got pipeline. and got for we're XXX And gene we've I mentioned, cell deals over this always hunting, think a I therapy staring we're good as looking at. especially things

So we in see school science few looking some very the you see. have Exosome we're in and that create know. new a another you new area, company We're terms of diagnostics at a We're looking hopefully of got for soon some know, and never -- business or and open we'll But healthy want -- we to things becomes not available. for ACD expect portfolio life tools we'll what stool in a we're quite announcements to right there, now. so leg that just a

to on As then not deal and buy and more big we you in ROIC don't There beneficial for private usually well the process. years. us for public seeing participants hunting are XX% know, and whoever are X that's always in a as us for can things building we the it auction relationships can't as get a get we're we owns we what

so sides out. fourth get to agree of due lot count work a price hard both takes both sides don't diligence, relationship us find it define that So building and value, and that lot a allows to to to a

Alexander Nowak

buildout expect do might in complete to to And question, you I facility here the follow-up Minneapolis? a this. just a missed Understood. previous GMP When have

Charles Kummeth

All in about a year.

Operator

for any I'll And additional closing to remarks. or turn gentlemen, and Ladies Chuck this back time Kummeth

Charles Kummeth

Well, I about another -- quarter. this by record we again, calling had the think a count

great It for for a So thank was your us. you quarter interest.

Bio-Techne. worked We happy never it. or Never have People an committed. all outstanding we're from benefiting team here are and at harder

So Thank next talk the I quarter. we'll appreciate to in interest you and you. your

Operator

Ladies your does conclude you and gentlemen, teleconference. participation. this for We thank today's

now disconnect. may You

Bio-Techne (TECH) 30 Apr 192019 Q3 Earnings call transcript