Washington, D.C. 20549 FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION | OR | | --- | | ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | For the transition period from to | | Commission File Number 000-14656 | | REPLIGEN CORPORATION | | (Exact name of registrant as specified in its charter) | | Delaware 04-2729386 | | (State or other jurisdiction of (I.R.S. Employer | | incorporation or organization) Identification No.) | | 41 Seyon Street, Bldg. 1, S ...

Financial Data and Key Metrics Changes - The company reported record revenue of $186.5 million for Q4 2021, representing a 72% increase year-over-year, and $670.5 million for the full year, reflecting an 83% growth [32][35] - Adjusted net income for Q4 2021 was $46.9 million, a 64% increase compared to Q4 2020, and for the full year, it was $175.3 million, up 97% from 2020 [42] - Adjusted EPS for Q4 2021 increased to $0.81, a 56% rise from $0.52 in Q4 2020, while the full year adjusted EPS was $3.06, an 85% increase from $1.65 in 2020 [42] Business Line Data and Key Metrics Changes - The filtration franchise was the major growth driver, with over 100% growth in Q4 and over 130% for the full year [26] - Gene therapy revenues increased by 85% in Q4 and approximately 40% for the year, indicating strong market traction [20] - The chromatography business grew by 29% for the year, with OPUS revenues increasing by 22% [24] Market Data and Key Metrics Changes - Revenue from Asia-rest of world increased by 136%, Europe grew by 94%, and North America grew at 58% for the full year 2021 [37] - COVID-related revenues accounted for 33% of total revenue in Q4 and 28% for the full year, with expectations of $200 million to $220 million in COVID revenues for 2022 [21][45] Company Strategy and Development Direction - The company aims to build out capacity to support growth, integrate recent acquisitions, launch new products, and continue traction in cell and gene therapy [28] - The total addressable market (TAM) increased from $3.7 billion to over $8 billion, largely due to COVID impacts and strategic acquisitions [11][63] - The company is focused on sustainability initiatives, including a commitment to renewable energy and diversity and inclusion [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the bioprocessing market and expects to achieve revenue guidance of $800 million to $830 million for 2022, representing growth of 19% to 24% [45][70] - The order book for cell and gene therapy remains robust, with no observed slowdown, indicating a healthy pipeline [60][71] Other Important Information - The company spent approximately $71 million in capital expenditures in 2021, with 80% allocated to capacity investments [33] - Adjusted gross margin for the full year 2021 was 58.9%, a 120 basis point improvement year-over-year [38] Q&A Session Summary Question: Outlook for filtration growth - Management expects filtration growth of 25% to 35% in 2022, driven by traction in flat sheet cassettes and ATF technology [51][52] Question: Growth in cell and gene therapy - The company anticipates adding new customers at a similar pace as in 2021, with a focus on late-stage approvals to drive momentum [56][58] Question: Impact of market volatility on pipeline - Management noted that the impact is more on early-stage research, with solid order activity observed in the base business [70] Question: Inventory levels in the channel - The company acknowledged a trend of slowing inventory build, which may not significantly impact operations until the second half of the year [73] Question: Capacity expansion details - The average capacity increase across product lines is estimated to be around 4x, with significant increases in hollow fiber capacity [76][77] Question: Initial response to new resin products - The response to new AAV manufacturing resin products has been positive, with expectations for customer evaluations to lead to orders in the future [84][86]

PART I - FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Unaudited interim financial statements show significant growth in assets, revenue, and net income, with strong operational cash flow despite cash used for acquisitions [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $2.24 billion as of September 30, 2021, driven by acquisitions, with a corresponding rise in liabilities and stockholders' equity Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$2,241,397** | **$1,902,887** | | Cash and cash equivalents | $621,098 | $717,292 | | Inventories, net | $156,163 | $95,025 | | Intangible assets, net | $340,163 | $287,100 | | Goodwill | $833,559 | $618,305 | | **Total Liabilities** | **$526,132** | **$373,737** | | Noncurrent contingent consideration | $79,962 | $0 | | **Total stockholders' equity** | **$1,715,265** | **$1,529,150** | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) The company reported significant year-over-year growth in revenue and profitability for both the quarter and nine-month period ended September 30, 2021 Financial Performance (in thousands, except per share data) | Metric | Q3 2021 | Q3 2020 | % Change | Nine Months 2021 | Nine Months 2020 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $178,216 | $94,060 | 89.5% | $484,013 | $257,612 | 87.9% | | Income from Operations | $45,194 | $20,961 | 115.6% | $129,817 | $52,404 | 147.7% | | Net Income | $33,498 | $14,552 | 129.9% | $99,181 | $40,228 | 146.5% | | Diluted EPS | $0.58 | $0.27 | 114.8% | $1.74 | $0.75 | 132.0% | [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity increased to $1.72 billion, primarily driven by net income and common stock issuance for the Avitide acquisition - Key drivers for the increase in stockholders' equity during the first nine months of 2021 were net income of **$99.2 million** and stock-based compensation of **$20.5 million**[15](index=15&type=chunk) - The company issued **271,096** shares of common stock valued at **$77.6 million** as part of the consideration for the acquisition of Avitide Inc[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations increased, but significant cash used in investing activities, primarily for acquisitions, led to an overall decrease in cash and cash equivalents Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $69,396 | $47,754 | | Net cash used in investing activities | ($158,893) | ($43,097) | | Net cash provided by financing activities | $730 | $7,078 | | **Net (decrease) increase in cash** | **($96,194)** | **$15,895** | - Cash used for acquisitions, net of cash acquired, was **$121.0 million** in the first nine months of 2021, a significant increase from **$28.4 million** in the same period of 2020[18](index=18&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies, recent acquisitions, asset composition, convertible notes, and segment reporting [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong financial performance to robust demand and strategic acquisitions, maintaining a strong liquidity position despite significant investment outflows [Acquisitions](index=36&type=section&id=Acquisitions) Repligen completed key acquisitions of Avitide and Polymem in 2021, expanding capabilities in affinity ligand development and hollow fiber manufacturing - **Avitide, Inc. Acquisition (Sep 2021):** Acquired for its leading technology in affinity ligand discovery and development, aiming to expand Repligen's proteins franchise to address purification needs of gene therapies and other emerging modalities[133](index=133&type=chunk)[134](index=134&type=chunk) - **Polymem S.A. Acquisition (Jul 2021):** Acquired to expand the portfolio of hollow fiber systems and consumables, substantially increasing membrane and module manufacturing capacity and establishing a center of excellence in Europe[135](index=135&type=chunk)[136](index=136&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Revenue for the nine months increased by 87.9% to $484.0 million, driven by strong product demand, while operating expenses also rose significantly Revenue Breakdown (in thousands) | Period | Product Revenue | % Change YoY | Total Revenue | % Change YoY | | :--- | :--- | :--- | :--- | :--- | | **Q3 2021** | $178,177 | 89.5% | $178,216 | 89.5% | | **Nine Months 2021** | $483,834 | 87.9% | $484,013 | 87.9% | - Product revenue growth was driven by robust demand for filtration and proteins products, accelerated demand related to COVID-19 vaccines and therapeutics, and increased demand for gene therapy and monoclonal antibody manufacturing[147](index=147&type=chunk) Operating Expense Changes (Nine Months 2021 vs 2020) | Expense Category | % Change YoY | | :--- | :--- | | Cost of product revenue | 81.8% | | Research and development | 86.9% | | Selling, general and administrative | 58.3% | [Non-GAAP Financial Measures](index=41&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP financial measures are provided to offer a clearer view of operational performance by excluding specific non-recurring or non-cash items Reconciliation of GAAP to Non-GAAP Adjusted Net Income (Nine Months Ended Sep 30, 2021) | Description | Amount (in thousands) | Per Share | | :--- | :--- | :--- | | **GAAP net income** | **$99,181** | **$1.74** | | Inventory step-up charges | $1,868 | $0.03 | | Acquisition and integration costs | $11,593 | $0.20 | | Intangible amortization | $16,001 | $0.28 | | Non-cash interest expense | $8,592 | $0.15 | | Tax effect of non-GAAP charges | ($8,904) | ($0.16) | | **Non-GAAP adjusted net income** | **$128,337** | **$2.25** | Adjusted EBITDA (in thousands) | Period | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | **Adjusted EBITDA** | **$60,516** | **$29,416** | **$168,939** | **$78,032** | [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with $621.1 million in cash, sufficient for future needs despite significant cash outflows for acquisitions - The company held **$621.1 million** in cash and cash equivalents at September 30, 2021, down from **$717.3 million** at December 31, 2020[172](index=172&type=chunk) Cash Flow Summary (Nine Months Ended Sep 30, 2021, in thousands) | Activity | Cash Flow | | :--- | :--- | | Operating activities | $69,396 | | Investing activities | ($158,893) | | Financing activities | $730 | - The company believes its current cash balances are adequate to meet cash needs for at least the next **24 months**, absent further acquisitions[187](index=187&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rates and foreign currency exchange, with no hedging currently employed for foreign currency exposure - The company has no investments in commercial paper, government securities, or corporate bonds as of September 30, 2021, thus a hypothetical **100 basis point** interest rate increase would have no effect on its cash position[195](index=195&type=chunk) - Primary foreign currency exposures include the Swedish krona, Euro, and British pound. The company does not currently use hedging instruments to manage this risk[197](index=197&type=chunk) [Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with the assessment of internal controls excluding recently acquired businesses - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of the end of the quarter[198](index=198&type=chunk) - The scope of the assessment of internal control over financial reporting for Q3 2021 does not include the recently acquired Polymem and Avitide businesses[199](index=199&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material legal proceedings or claims that would adversely affect its operations or financial condition - As of the filing date, the company reports no **material** legal proceedings[201](index=201&type=chunk) [Risk Factors](index=50&type=page&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors from the annual report are reported - No **material** changes to risk factors from the Form 10-K for the period ended December 31, 2020 are reported[202](index=202&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued unregistered common stock valued at $77.6 million for the Avitide acquisition, exempt under Rule 506(b) of Regulation D - As part of the Avitide acquisition, the company issued **271,096** unregistered shares of common stock valued at **$77.6 million**[203](index=203&type=chunk) [Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including certifications and XBRL data files [Signatures](index=52&type=page&id=Signatures) The report is duly signed by the President and CEO, and the CFO, on October 28, 2021

Repligen Corporation (NASDAQ:RGEN) Q3 2021 Earnings Conference Call October 28, 2021 8:30 AM ET Company Participants Sondra Newman - Head of Investor Relations Anthony Hunt - President and Chief Executive Officer Jon Snodgres - Chief Financial Officer Conference Call Participants Daniel Arias - Stifel, Nicolaus & Company, Inc. Julia Qin - JPMorgan Chase & Co. Puneet Souda - SVB Leerink LLC Jacob Johnson - Stephens Inc. Paul Knight - KeyBanc Capital Markets Inc. Christine Rains - William Blair & Company Matt ...

PART I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Repligen Corporation's unaudited interim consolidated financial statements, including balance sheets, income statements, equity statements, cash flow statements, and related notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$2.016 billion**, driven by cash, receivables, and inventories, while liabilities rose to **$412.9 million** and equity to **$1.603 billion** Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $983,830 | $902,382 | | **Total Assets** | $2,015,965 | $1,902,887 | | **Total Current Liabilities** | $332,342 | $318,956 | | **Total Liabilities** | $412,896 | $373,737 | | **Total Stockholders' Equity** | $1,603,069 | $1,529,150 | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Total revenue for Q2 2021 increased **86.3%** to **$163.0 million**, with net income reaching **$36.2 million**, and for H1 2021, revenue grew **87.0%** to **$305.8 million**, yielding **$65.7 million** in net income Financial Performance (in thousands, except per share data) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $162,960 | $87,462 | $305,797 | $163,552 | | **Income from Operations** | $48,240 | $19,537 | $84,623 | $31,443 | | **Net Income** | $36,233 | $15,861 | $65,683 | $25,676 | | **Diluted EPS** | $0.64 | $0.30 | $1.16 | $0.48 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities for H1 2021 increased to **$46.9 million**, while net cash used in investing activities rose to **$26.2 million**, primarily for capital expenditures Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $46,913 | $26,265 | | **Net cash used in investing activities** | $(26,198) | $(9,517) | | **Net cash provided by financing activities** | $852 | $5,402 | | **Net increase in cash** | $17,035 | $22,957 | [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) These notes detail significant accounting policies, fair value measurements, recent business acquisitions, revenue recognition, goodwill, intangible assets, convertible senior notes, stock-based compensation, income taxes, segment reporting, and subsequent events - The company acquired ARTeSYN for approximately **$204.0 million**, NMS for **$16.1 million**, and EMT for **$28.5 million**, significantly expanding its single-use technology portfolio. These acquisitions were accounted for as business combinations[36](index=36&type=chunk)[47](index=47&type=chunk)[56](index=56&type=chunk) - The **0.375%** Convertible Senior Notes due 2024 became convertible at the option of the holders during Q3 2021, as the company's stock price exceeded the conversion price threshold. The company intends to settle the par value in cash[78](index=78&type=chunk)[97](index=97&type=chunk) - Subsequent to the quarter end, on July 1, 2021, the company closed the acquisition of Polymem S.A., a French manufacturer of hollow fiber membranes, to expand its manufacturing capacity in Europe[106](index=106&type=chunk)[107](index=107&type=chunk) Revenue by Geographic Region (Six Months Ended June 30) | Region | 2021 | 2020 | | :--- | :--- | :--- | | North America | 42% | 47% | | Europe | 39% | 39% | | APAC/Other | 19% | 14% | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strong financial performance, driven by robust demand for bioprocessing products, highlighting **87.0%** revenue growth, improved gross margins, increased operating expenses, liquidity, capital resources, and non-GAAP financial reconciliations [Overview and Acquisitions](index=26&type=section&id=Overview%20and%20Acquisitions) Repligen, a global life sciences company, strategically expanded its bioprocessing portfolio through acquisitions of ARTeSYN, NMS, and EMT in 2020, and Polymem S.A. in July 2021, enhancing single-use systems and manufacturing capacity - The company's strategy involves both organic growth and targeted acquisitions to enhance its bioprocessing product platform[111](index=111&type=chunk) - Acquired ARTeSYN in December 2020 for **~$200 million** to add a suite of single-use systems for chromatography, filtration, and continuous manufacturing[114](index=114&type=chunk)[115](index=115&type=chunk) - Acquired Polymem S.A. in July 2021 to substantially increase membrane manufacturing capacity and establish a center of excellence in Europe[112](index=112&type=chunk)[113](index=113&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Total revenue for H1 2021 grew **87.0%** to **$305.8 million**, driven by strong demand, leading to improved gross margin of **60.2%** despite increased operating expenses from acquisitions and growth investments Revenue Growth (H1 2021 vs H1 2020) | Metric | H1 2021 | H1 2020 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Product Revenue** | $305,657 | $163,492 | $142,165 | 87.0% | | **Total Revenue** | $305,797 | $163,552 | $142,245 | 87.0% | - Revenue growth was driven by accelerated demand for products used in COVID-19 vaccine and therapeutic manufacturing, as well as in gene therapy and monoclonal antibody production[128](index=128&type=chunk) - Gross margin for H1 2021 was **60.2%** (**60.7%** excluding inventory step-up charges), up from **57.9%** in H1 2020, due to higher revenue and favorable product mix[132](index=132&type=chunk) - SG&A expenses for H1 2021 increased by **53.9%** to **$83.4 million**, partly due to the addition of EMT, NMS, and ARTeSYN, which contributed **$6.8 million** of the increase[138](index=138&type=chunk) [Non-GAAP Financial Measures](index=30&type=section&id=Non-GAAP%20Financial%20Measures) The company presents non-GAAP financial measures, including adjusted income from operations of **$102.3 million**, adjusted net income of **$83.6 million** (**$1.47** per diluted share), and adjusted EBITDA of **$108.4 million**, to provide a clearer view of operational performance Reconciliation of GAAP Net Income to Adjusted EBITDA (H1 2021 vs H1 2020, in thousands) | Metric | H1 2021 | H1 2020 | | :--- | :--- | :--- | | **GAAP net income** | $65,683 | $25,676 | | Adjustments (Interest, Taxes, D&A, etc.) | $25,956 | $18,225 | | **EBITDA** | $101,051 | $43,929 | | Other non-GAAP adjustments | $7,371 | $4,687 | | **Adjusted EBITDA** | $108,422 | $48,616 | Reconciliation of GAAP to Non-GAAP Adjusted Net Income (H1 2021 vs H1 2020, in thousands) | Metric | H1 2021 | H1 2020 | | :--- | :--- | :--- | | **GAAP net income** | $65,683 | $25,676 | | Non-GAAP adjustments | $17,947 | $13,592 | | **Non-GAAP adjusted net income** | $83,630 | $39,268 | | **Non-GAAP adjusted diluted EPS** | $1.47 | $0.74 | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2021, the company held **$734.3 million** in cash, with **$46.9 million** from operations, and believes its liquidity is sufficient for the next **24 months**, despite **$26.2 million** in capital expenditures and new facility leases - Cash and cash equivalents stood at **$734.3 million** at June 30, 2021[153](index=153&type=chunk) - Cash provided by operating activities for H1 2021 was **$46.9 million**, driven by **$65.7 million** in net income, offset by increases in accounts receivable and inventory[159](index=159&type=chunk) - The company entered into a lease for **~64,000 sq. ft.** in Hopkinton, MA for a new assembly center, with base rent commitment of **$17.7 million** over the lease term expiring in 2034[157](index=157&type=chunk) - The company believes current cash is adequate for at least the next **24 months**, but may seek additional financing for strategic acquisitions[164](index=164&type=chunk)[165](index=165&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk primarily stems from interest rate and foreign exchange fluctuations, with no commercial paper or bond investments, and unhedged exposure to the Swedish krona, Euro, and British pound - The company has no investments in commercial paper, corporate bonds, or other debt securities as of June 30, 2021, thus a **100 basis point** change in interest rates would have no effect on its cash position[170](index=170&type=chunk) - The company is exposed to foreign currency fluctuations, primarily from the Swedish krona, Euro, and British pound, and does not currently hedge this risk[173](index=173&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with ongoing phased implementation of a new ERP system and completed consolidation system leading to modifications in internal controls over financial reporting - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of the end of the quarter[174](index=174&type=chunk) - The company continued the phased implementation of a new ERP system and completed a new consolidation system, leading to modifications in internal controls over financial reporting[175](index=175&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material legal proceedings or claims that would adversely affect its business, financial condition, or results of operations - The company reports no material legal proceedings[177](index=177&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the period ended December 31, 2020 are reported - No material changes to risk factors from the Form 10-K for the period ended December 31, 2020 are reported[178](index=178&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[179](index=179&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1) and XBRL interactive data files[183](index=183&type=chunk)

Repligen Corp, Inc. (NASDAQ:RGEN) Q2 2021 Earnings Conference Call July 27, 2021 8:30 AM ET Company Participants Sondra Newman - Global Head, IR Anthony Hunt - CEO, President & Director Jon Snodgres - CFO Conference Call Participants Daniel Arias - Stifel, Nicolaus & Company Puneet Souda - SVB Leerink John Kreger - William Blair & Company Julia Qin - JPMorgan Chase & Co. Jacob Johnson - Stephens Inc. Matthew Hewitt - Craig-Hallum Paul Knight - KeyBanc Capital Markets Raghuram Selvaraju - H.C. Wainwright & C ...

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Repligen Corporation's unaudited consolidated financial statements and detailed notes on accounting policies, acquisitions, and financial components [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets provide a snapshot of the company's financial position as of March 31, 2021, compared to December 31, 2020, showing an increase in total assets and stockholders' equity, while total liabilities slightly decreased Consolidated Balance Sheet Highlights (Amounts in thousands) | Metric | March 31, 2021 | December 31, 2020 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total Assets | $1,927,327 | $1,902,887 | | Total Liabilities | $371,111 | $373,737 | | Total Stockholders' Equity | $1,556,216 | $1,529,150 | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) The Consolidated Statements of Comprehensive Income show significant growth in revenue and net income for the three months ended March 31, 2021, compared to the same period in 2020, driven by product sales Consolidated Statements of Comprehensive Income (Amounts in thousands) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | | Total Revenue | $142,837 | $76,090 | | Income from Operations | $36,383 | $11,906 | | Net Income | $29,450 | $9,815 | | Basic EPS | $0.54 | $0.19 | | Diluted EPS | $0.52 | $0.18 | | Comprehensive Income | $19,871 | $4,236 | - Total revenue increased by **87.7% year-over-year**, primarily driven by product sales[11](index=11&type=chunk) - Net income more than tripled from **$9.8 million in Q1 2020 to $29.5 million in Q1 2021**[11](index=11&type=chunk) [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) The Consolidated Statements of Stockholders' Equity detail changes in equity components, showing an increase in total stockholders' equity from $1,529.2 million at December 31, 2020, to $1,556.2 million at March 31, 2021, primarily due to net income and stock-based compensation, partially offset by foreign currency translation adjustments Consolidated Statements of Stockholders' Equity (Amounts in thousands) | Metric | Balance at December 31, 2020 | Balance at March 31, 2021 | | :-------------------------------- | :------------------------------------ | :----------------------------------- | | Total Stockholders' Equity | $1,529,150 | $1,556,216 | | Net Income | — | $29,450 | | Stock-based Compensation Expense | — | $6,541 | | Translation Adjustment | — | $(9,579) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The Consolidated Statements of Cash Flows indicate a net decrease in cash and cash equivalents for the three months ended March 31, 2021, primarily due to cash used in investing activities and the effect of exchange rate changes, despite positive cash flow from operating activities Consolidated Statements of Cash Flows (Amounts in thousands) | Cash Flow Activity | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | | Operating Activities | $9,262 | $9,530 | | Investing Activities | $(8,997) | $(5,037) | | Financing Activities | $507 | $1,589 | | Effect of Exchange Rate Changes | $(6,746) | $(4,923) | | Net (Decrease) Increase in Cash | $(5,974) | $1,159 | | Cash, End of Period | $711,318 | $538,566 | - Cash provided by operating activities remained stable year-over-year, at **$9.3 million in Q1 2021**[17](index=17&type=chunk) - Cash used in investing activities increased significantly to **$9.0 million in Q1 2021**, up from $5.0 million in Q1 2020, mainly due to capital expenditures[17](index=17&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on the company's accounting policies, fair value measurements, recent acquisitions, revenue recognition, goodwill and intangible assets, balance sheet components, convertible senior notes, stockholders' equity, commitments, income taxes, earnings per share, related party transactions, and segment reporting, offering crucial context to the financial statements [1. Summary of Significant Accounting Policies](index=8&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the basis of presentation for the consolidated financial statements, prepared in accordance with GAAP and SEC regulations, and highlights that no material changes were made to significant accounting policies from the prior Form 10-K. It also mentions the evaluation of ASU 2020-06 regarding convertible debt, with early adoption permitted - The company's consolidated financial statements are prepared in accordance with **GAAP and SEC rules**, including Article 10 of Regulation S-X[20](index=20&type=chunk) - No material changes were made to significant accounting policies disclosed in the Form 10-K[23](index=23&type=chunk) - The company is evaluating ASU 2020-06, which simplifies accounting for convertible debt instruments, effective for annual periods beginning after December 15, 2021, with early adoption permitted[25](index=25&type=chunk) [2. Fair Value Measurements](index=9&type=section&id=2.%20Fair%20Value%20Measurements) This note describes the company's use of a three-level fair value hierarchy for assets and liabilities, emphasizing observable inputs. It specifically details the fair value of cash and cash equivalents (Level 1) and Convertible Senior Notes (Level 1), noting a significant difference between the carrying and fair value of the notes - The company uses a **three-level fair value hierarchy**, prioritizing observable inputs (Level 1) for valuation[27](index=27&type=chunk) Fair Value of Convertible Senior Notes (Amounts in millions) | Metric | March 31, 2021 | December 31, 2020 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Carrying Value of 2019 Notes | $246.6 | $243.7 | | Fair Value of 2019 Notes | $502.0 | $501.0 | - Cash and cash equivalents in money market accounts (**$544.1 million at March 31, 2021**) are valued using Level 1 inputs[28](index=28&type=chunk) [3. Acquisitions](index=9&type=section&id=3.%20Acquisitions) This note details three significant acquisitions in 2020: ARTeSYN Biosolutions Holdings Ireland Limited, Non-Metallic Solutions, Inc. (NMS), and Engineered Molding Technology LLC (EMT). Each acquisition expanded Repligen's single-use bioprocessing solutions, with purchase prices, asset allocations (tangible, intangible, goodwill), and strategic rationales provided - **ARTeSYN Acquisition (December 3, 2020)**: Acquired for approximately **$200 million** ($130 million cash, $70 million stock), enhancing single-use solutions for biologics manufacturing with downstream processing leadership[31](index=31&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) - **NMS Acquisition (October 20, 2020)**: Acquired for **$16.1 million**, expanding single-use systems and streamlining the supply chain for fabricated plastics and custom containers[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) - **EMT Acquisition (July 13, 2020)**: Acquired for **$28.5 million**, adding single-use silicone assemblies and components, complementing existing single-use product offerings[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) Acquisition Purchase Price Allocation (Amounts in thousands) | Acquisition | Total Consideration | Net Tangible Assets Acquired | Intangible Assets Acquired | Goodwill | | :---------- | :------------------ | :--------------------------- | :------------------------- | :------- | | ARTeSYN | $204,000 | $7,900 | $67,400 | $128,700 | | NMS | $16,100 | $900 | $8,500 | $6,700 | | EMT | $28,500 | $1,500 | $14,400 | $12,600 | [4. Revenue Recognition](index=14&type=section&id=4.%20Revenue%20Recognition) This note details the company's revenue recognition policy under ASC 606, primarily from bioprocessing product sales. It disaggregates revenue by product and geographic region, highlighting significant growth in product revenue and the absence of a single significant customer in Q1 2021, unlike Q1 2020 - Revenue is recognized when control of promised products or services is transferred to customers, primarily from bioprocessing products[59](index=59&type=chunk) Total Revenue Disaggregation (Amounts in thousands) | Revenue Type | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :---------------- | :-------------------------------- | :-------------------------------- | | Product revenue | $142,737 | $76,060 | | Royalty and other | $100 | $30 | | Total revenue | $142,837 | $76,090 | - No single customer represented **10% or more of total revenue for Q1 2021**, a change from Q1 2020 where MilliporeSigma accounted for **$10.9 million (14%)**[62](index=62&type=chunk) Contract Balances from Customers (Amounts in thousands) | Balance Type | March 31, 2021 | | :-------------------------------- | :------------- | | Accounts receivable | $90,207 | | Deferred revenue | $14,253 | | Revenue recognized from beginning deferred revenue | $8,525 | [5. Goodwill and Intangible Assets](index=16&type=section&id=5.%20Goodwill%20and%20Intangible%20Assets) This note details the carrying value of goodwill and intangible assets. Goodwill, primarily from acquisitions, is tested annually for impairment. Finite-lived intangible assets are amortized over their useful lives, with a total net carrying value of $281.7 million at March 31, 2021, and expected future amortization expense provided Goodwill Carrying Value (Amounts in thousands) | Metric | Amount | | :-------------------------------- | :------- | | Balance at December 31, 2020 | $618,305 | | Measurement period adjustment - NMS | $(71) | | Measurement period adjustment - ARTeSYN | $90 | | Cumulative translation adjustment | $(807) | | Balance at March 31, 2021 | $617,517 | - Goodwill is not amortized but tested for impairment annually; no impairment was identified in Q1 2021[67](index=67&type=chunk) Intangible Assets, Net (Amounts in thousands) | Asset Type | March 31, 2021 Net Carrying Value | December 31, 2020 Net Carrying Value | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Technology - developed | $98,064 | $99,773 | | Customer relationships | $176,889 | $180,457 | | Trademarks (finite-lived) | $5,276 | $5,352 | | Other intangibles | $741 | $818 | | Trademarks (indefinite-lived) | $700 | $700 | | Total Intangible Assets, Net | $281,670 | $287,100 | - Amortization expense for finite-lived intangible assets was **$5.2 million for Q1 2021**, up from $3.9 million in Q1 2020[70](index=70&type=chunk) [6. Consolidated Balance Sheet Detail](index=17&type=section&id=6.%20Consolidated%20Balance%20Sheet%20Detail) This note provides detailed breakdowns of key balance sheet accounts: Inventories, Property, Plant and Equipment, and Accrued Liabilities. It shows an increase in raw materials and construction in progress, and a decrease in accrued liabilities primarily due to employee compensation and deferred revenue Inventories, Net (Amounts in thousands) | Inventory Component | March 31, 2021 | December 31, 2020 | | :------------------ | :------------- | :---------------- | | Raw materials | $66,893 | $48,746 | | Work-in-process | $8,203 | $8,084 | | Finished products | $34,424 | $38,195 | | Total inventories, net | $109,520 | $95,025 | Property, Plant and Equipment, Net (Amounts in thousands) | Asset Type | March 31, 2021 | December 31, 2020 | | :-------------------------------- | :------------- | :---------------- | | Total property, plant and equipment | $122,731 | $115,926 | | Less - Accumulated depreciation | $(50,488) | $(49,056) | | Total property, plant and equipment, net | $72,243 | $66,870 | Accrued Liabilities (Amounts in thousands) | Accrued Liability | March 31, 2021 | December 31, 2020 | | :-------------------------------- | :------------- | :---------------- | | Employee compensation | $14,026 | $20,288 | | Deferred revenue | $14,253 | $15,318 | | Total accrued liabilities | $42,428 | $53,085 | [7. Convertible Senior Notes](index=18&type=section&id=7.%20Convertible%20Senior%20Notes) This note details the 0.375% Convertible Senior Notes due 2024, issued in July 2019. Due to the company's stock price exceeding 130% of the conversion price, the notes became convertible at holders' option in Q2 2021. The carrying value was $246.6 million at March 31, 2021, significantly lower than its fair value of $502.0 million - The **2019 Convertible Senior Notes (0.375% due 2024)** became convertible at the option of holders in Q2 2021 due to stock price performance[76](index=76&type=chunk) Convertible Senior Notes Carrying and Fair Value (Amounts in thousands) | Metric | March 31, 2021 | December 31, 2020 | | :-------------------------------- | :------------- | :---------------- | | Net Carrying Amount | $246,561 | $243,737 | | Fair Value | $502,000 | $501,000 | - Interest expense on the notes for Q1 2021 was **$3.1 million**, with an effective interest rate of **5.1%**[78](index=78&type=chunk) [8. Stockholders' Equity](index=19&type=section&id=8.%20Stockholders'%20Equity) This note covers stock option and incentive plans, detailing stock-based compensation expense, option activity, and stock unit activity. Stock-based compensation expense increased to $6.5 million in Q1 2021 from $4.2 million in Q1 2020, reflecting increased grants and vesting - Stock-based compensation expense increased to **$6.5 million in Q1 2021** from $4.2 million in Q1 2020[80](index=80&type=chunk) Stock-Based Compensation Expense by Category (Amounts in thousands) | Category | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Cost of product revenue | $506 | $433 | | Research and development | $716 | $372 | | Selling, general and administrative | $5,319 | $3,360 | | Total | $6,541 | $4,165 | - As of March 31, 2021, **2,179,921 shares** were available for future grants under the 2018 Stock Option and Incentive Plan[79](index=79&type=chunk) - Total unrecognized compensation cost related to unvested share-based awards was **$65.4 million**, expected to be recognized over a weighted average of **3.25 years**[87](index=87&type=chunk) [9. Commitments and Contingencies](index=21&type=section&id=9.%20Commitments%20and%20Contingencies) This note highlights a key agreement with Navigo Proteins for exclusive co-development of affinity ligands, including NGL-Impact®, supplied to Purolite Life Sciences. It also mentions the successful co-development of a SARS-CoV-2 spike protein affinity ligand for COVID-19 vaccine purification - The company has an exclusive co-development agreement with **Navigo Proteins** for affinity ligands, including NGL-Impact®[88](index=88&type=chunk) - A long-term supply agreement for NGL-Impact® and other ligands is in place with **Purolite Life Sciences**[88](index=88&type=chunk) - Successfully co-developed an affinity ligand targeting the **SARS-CoV-2 spike protein** for COVID-19 vaccine purification[88](index=88&type=chunk) [10. Accumulated Other Comprehensive (Loss) Income](index=22&type=section&id=10.%20Accumulated%20Other%20Comprehensive%20(Loss)%20Income) This note shows the changes in accumulated other comprehensive (loss) income, which solely consists of foreign currency translation adjustments. The balance shifted from a positive $2.1 million at December 31, 2020, to a negative $7.5 million at March 31, 2021, due to a $9.6 million other comprehensive loss from translation adjustments Accumulated Other Comprehensive (Loss) Income (Amounts in thousands) | Metric | Amount | | :-------------------------------- | :------- | | Balance as of December 31, 2020 | $2,085 | | Other comprehensive loss | $(9,579) | | Balance at March 31, 2021 | $(7,494) | - The primary component of accumulated other comprehensive income (loss) is foreign currency translation adjustments[90](index=90&type=chunk) [11. Income Taxes](index=22&type=section&id=11.%20Income%20Taxes) This note reports an income tax provision of $3.7 million for Q1 2021, with an effective tax rate of 11.0%, lower than the U.S. statutory rate due to business tax credits and windfall benefits. It also confirms that the CARES Act had no material effect on the company's financial position or results Income Tax Provision and Effective Tax Rate | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Income Tax Provision | $3,655 | $861 | | Effective Tax Rate | 11.0% | 8.1% | - Effective tax rates are lower than the U.S. statutory rate of **21%** due to business tax credits and windfall benefits from stock option exercises and RSU vesting[91](index=91&type=chunk)[139](index=139&type=chunk) - The CARES Act had no material effect on the company's financial position or results of operations[92](index=92&type=chunk) [12. Earnings Per Share](index=22&type=section&id=12.%20Earnings%20Per%20Share) This note details the calculation of basic and diluted earnings per share (EPS). Diluted EPS for Q1 2021 was $0.52, up from $0.18 in Q1 2020, reflecting the impact of dilutive shares from options, stock units, and Convertible Senior Notes Earnings Per Share (Amounts in thousands, except per share data) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net Income | $29,450 | $9,815 | | Basic EPS | $0.54 | $0.19 | | Diluted EPS | $0.52 | $0.18 | | Weighted Average Shares - Basic | 54,805 | 52,139 | | Weighted Average Shares - Diluted | 56,869 | 53,109 | - The dilutive effect of Convertible Senior Notes contributed **1,092 thousand shares** to diluted EPS calculation in Q1 2021, compared to none in Q1 2020[96](index=96&type=chunk)[99](index=99&type=chunk) - The company intends to settle the par value of the 2019 Notes in cash and any excess conversion premium in shares[98](index=98&type=chunk)[99](index=99&type=chunk) [13. Related Party Transactions](index=23&type=section&id=13.%20Related%20Party%20Transactions) This note discloses that certain facilities leased by Spectrum are owned by Roy Eddleman, a related party who owns more than 5% of the company's outstanding shares. Rent expense for these leases was $0.2 million for both Q1 2021 and Q1 2020 - Roy Eddleman, a shareholder owning over **5% of the company**, is a related party due to his ownership of facilities leased by Spectrum[100](index=100&type=chunk) - Rent expense related to these leases was **$0.2 million** for both the three months ended March 31, 2021, and 2020[102](index=102&type=chunk) [14. Segment Reporting](index=24&type=section&id=14.%20Segment%20Reporting) The company operates as one reportable segment: bioprocessing. This note provides revenue disaggregation by geographic area, showing North America and Europe as primary markets, with APAC/Other growing significantly. It also addresses concentrations of credit risk and significant customers - Repligen operates as a single reportable segment: **bioprocessing**[103](index=103&type=chunk) Revenue by Customers' Geographic Locations | Geographic Region | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | North America | 42% | 48% | | Europe | 39% | 41% | | APAC/Other | 19% | 11% | | Total revenue | 100% | 100% | - No single customer represented **10% or more of total revenue in Q1 2021**, a change from Q1 2020 where MilliporeSigma accounted for **14%**[106](index=106&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Repligen's financial performance and condition for the three months ended March 31, 2021, highlighting revenue growth, operating expenses, non-GAAP measures, liquidity, and capital resources [Overview](index=25&type=section&id=Overview) Repligen is a global life sciences company specializing in innovative bioprocessing technologies for manufacturing biological drugs. The company operates as one bioprocessing business, focusing on organic growth and targeted acquisitions to expand its product portfolio and address customer needs in the growing biologics market - Repligen develops and commercializes bioprocessing technologies to increase efficiencies in biological drug manufacturing[109](index=109&type=chunk) - The company operates as one bioprocessing business, serving upstream and downstream processes in biological drug manufacturing[111](index=111&type=chunk) - Growth strategy includes internal innovation, commercial leverage, and targeted acquisitions[111](index=111&type=chunk) [Acquisitions](index=25&type=section&id=Acquisitions) Repligen completed three key acquisitions in 2020: ARTeSYN Biosolutions, Non-Metallic Solutions (NMS), and Engineered Molding Technology (EMT). These acquisitions expanded the company's single-use systems and integrated flow path assemblies, enhancing its bioprocessing product offerings and streamlining the supply chain - **ARTeSYN Biosolutions (acquired December 2020)** provides single-use solutions for biologics manufacturing, including valves, skeletal supports, and automated SU process systems[112](index=112&type=chunk)[113](index=113&type=chunk) - **Non-Metallic Solutions (NMS, acquired October 2020)** manufactures fabricated plastics and custom containers, expanding single-use systems and streamlining the supply chain[114](index=114&type=chunk)[115](index=115&type=chunk) - **Engineered Molding Technology (EMT, acquired July 2020)** specializes in single-use silicone assemblies and components, complementing Repligen's single-use product offerings[116](index=116&type=chunk)[117](index=117&type=chunk) [Critical Accounting Policies and Estimates](index=26&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section refers to the company's Form 10-K for a detailed description of critical accounting policies and estimates, which are crucial for portraying financial condition and results and involve significant management judgment - Critical accounting policies involve significant management judgments and estimates, particularly in areas with inherent uncertainty[118](index=118&type=chunk) - Detailed information on critical accounting policies is available in Note 2 to the consolidated financial statements in the company's Form 10-K[118](index=118&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Repligen experienced substantial growth in Q1 2021, with total revenue increasing by 87.7% year-over-year, driven by strong product adoption, accelerated demand from COVID-19 customers, and contributions from recent acquisitions. Operating expenses also increased due to higher product volume, R&D investments, and expanded administrative infrastructure [Revenues](index=26&type=section&id=Revenues) Total revenue for Q1 2021 surged by 87.7% to $142.8 million, primarily from product sales. This growth was fueled by increased adoption of chromatography and filtration products, accelerated demand from mAb, gene therapy, and COVID-19 customers, and contributions from the EMT, NMS, and ARTeSYN acquisitions Total Revenue (Amounts in thousands) | Revenue Type | March 31, 2021 | March 31, 2020 | $ Change | % Change | | :---------------- | :------------- | :------------- | :------- | :------- | | Products | $142,737 | $76,060 | $66,677 | 87.7% | | Royalty and other | $100 | $30 | $70 | 233.3% | | Total revenue | $142,837 | $76,090 | $66,747 | 87.7% | - Direct sales accounted for approximately **80% of product revenue in Q1 2021**, up from 76% in Q1 2020[121](index=121&type=chunk) - Acquisitions (EMT, NMS, ARTeSYN) contributed **$10.9 million (7.6%)** to total revenue in Q1 2021[123](index=123&type=chunk) - Process analytics business revenue increased by **$3.0 million** due to higher demand for SoloVPE systems[123](index=123&type=chunk) [Costs of product revenue and operating expenses](index=27&type=section&id=Costs%20of%20product%20revenue%20and%20operating%20expenses) Total costs and operating expenses increased by 65.9% to $106.5 million in Q1 2021. Cost of product revenue rose 86.8% due to higher sales volume and recent acquisitions. R&D expenses increased 61.9% due to the ARTeSYN acquisition and new product development. SG&A expenses grew 42.2% from expanded customer-facing activities, administrative infrastructure, and acquisition-related costs Costs and Operating Expenses (Amounts in thousands) | Expense Type | March 31, 2021 | March 31, 2020 | $ Change | % Change | | :-------------------------------- | :------------- | :------------- | :------- | :------- | | Cost of product revenue | $59,747 | $31,982 | $27,765 | 86.8% | | Research and development | $7,612 | $4,702 | $2,910 | 61.9% | | Selling, general and administrative | $39,095 | $27,500 | $11,595 | 42.2% | | Total costs and operating expenses | $106,454 | $64,184 | $42,270 | 65.9% | - Gross margin was **58.2% in Q1 2021** (59.3% excluding inventory step-up amortization), slightly up from 58.0% in Q1 2020, driven by increased revenue and favorable product mix[127](index=127&type=chunk) - R&D expenses included **$1.0 million** from the ARTeSYN acquisition in Q1 2021[130](index=130&type=chunk) - SG&A costs included **$3.2 million** from the 2020 acquisitions (EMT, NMS, ARTeSYN) in Q1 2021[133](index=133&type=chunk) [Other expenses, net](index=28&type=section&id=Other%20expenses,%20net) Net other expenses increased significantly to $(3.3) million in Q1 2021 from $(1.2) million in Q1 2020. This was primarily due to a sharp decrease in investment income caused by lower interest rates and realized foreign currency losses Other Expenses, Net (Amounts in thousands) | Expense Type | March 31, 2021 | March 31, 2020 | $ Change | % Change | | :-------------------------------- | :------------- | :------------- | :------- | :------- | | Investment income | $52 | $1,364 | $(1,312) | (96.2%) | | Interest expense | $(3,106) | $(2,976) | $(130) | 4.4% | | Other expenses | $(224) | $382 | $(606) | (158.6%) | | Total other expense, net | $(3,278) | $(1,230) | $(2,048) | 166.5% | - Investment income decreased significantly due to lower interest rates following the Federal Reserve's rate cuts in response to COVID-19[135](index=135&type=chunk) - Other expenses increased due to realized foreign currency losses[138](index=138&type=chunk) [Income tax provision](index=29&type=section&id=Income%20tax%20provision) The income tax provision for Q1 2021 was $3.7 million, with an effective tax rate of 11.0%, an increase from $0.9 million and 8.1% in Q1 2020. The lower-than-statutory rates are attributed to business tax credits and windfall benefits from stock option exercises and RSU vesting Income Tax Provision (Amounts in thousands) | Metric | March 31, 2021 | March 31, 2020 | $ Change | % Change | | :-------------------------------- | :------------- | :------------- | :------- | :------- | | Income tax provision | $3,655 | $861 | $2,794 | 324.5% | | Effective tax rate | 11.0% | 8.1% | | | - The effective tax rate is lower than the U.S. statutory rate of **21%** due to business tax credits and windfall benefits on stock option exercises and RSU vesting[139](index=139&type=chunk) [Non-GAAP Financial Measures](index=29&type=section&id=Non-GAAP%20Financial%20Measures) Repligen provides non-GAAP adjusted income from operations, adjusted net income, and adjusted EBITDA to offer a more accurate comparison of financial results by excluding acquisition-related costs, intangible amortization, inventory step-up charges, and non-cash interest expense. These adjustments aim to reflect the performance of ongoing operations - Non-GAAP measures (adjusted income from operations, adjusted net income, adjusted EBITDA) are used to provide a more accurate comparison of financial results between periods[140](index=140&type=chunk)[141](index=141&type=chunk) - Adjustments exclude acquisition and integration costs, intangible amortization, inventory step-up charges, loss on debt conversion, and non-cash interest expense[142](index=142&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) Non-GAAP Adjusted Financial Measures (Amounts in thousands) | Metric | March 31, 2021 | March 31, 2020 | | :-------------------------------- | :------------- | :------------- | | GAAP Income from Operations | $36,383 | $11,906 | | Non-GAAP Adjusted Income from Operations | $45,694 | $18,337 | | GAAP Net Income | $29,450 | $9,815 | | Non-GAAP Adjusted Net Income | $38,768 | $16,760 | | GAAP Net Income (for EBITDA) | $29,450 | $9,815 | | Adjusted EBITDA | $48,753 | $21,231 | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) Repligen's liquidity is primarily supported by product sales and past equity/debt offerings, with $711.3 million in cash and equivalents at March 31, 2021. The company expects current cash balances to meet needs for at least 24 months, but anticipates increased operating expenses and potential additional financing for future acquisitions and R&D investments. The 2019 Convertible Senior Notes are now convertible, with the company intending to settle the par value in cash - Cash and cash equivalents (excluding restricted cash) were **$711.3 million at March 31, 2021**, a slight decrease from $717.3 million at December 31, 2020[147](index=147&type=chunk) - The company believes current cash balances are adequate for at least the next **24 months**, absent additional acquisitions[158](index=158&type=chunk) - Future capital requirements include purchases of property, plant and equipment, acquisitions of complementary businesses/technologies, and continued investment in intellectual property[158](index=158&type=chunk) - The **2019 Convertible Senior Notes** are convertible at the option of holders in Q2 2021; the company intends to settle the par value in cash and any excess conversion premium in shares[150](index=150&type=chunk)[151](index=151&type=chunk) - The company has no special purpose entities or off-balance sheet financing arrangements[161](index=161&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=32&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section advises investors that the report contains forward-looking statements, which are not guarantees of future performance and are subject to various risks and uncertainties. These risks include the impact of the COVID-19 pandemic, success of collaborations, ability to grow the bioprocessing business, regulatory approvals, intellectual property protection, competition, and the ability to raise additional capital - Forward-looking statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially[166](index=166&type=chunk) - Key risk factors include the impact of COVID-19, success of collaborative relationships, ability to grow the bioprocessing business (including through acquisitions), regulatory approvals, intellectual property rights, competition, and capital raising[166](index=166&type=chunk)[167](index=167&type=chunk) - The company undertakes no obligation to publicly update or revise forward-looking statements[166](index=166&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, specifically interest rate risk and foreign exchange risk. As of March 31, 2021, the company had no investments in marketable securities, limiting its interest rate exposure. It acknowledges foreign currency exposures, primarily to the Swedish krona, Euro, and British pound, but currently does not hedge this risk - As of March 31, 2021, the company had no investments in commercial paper, U.S. Government/agency securities, or corporate bonds, thus limiting interest rate risk[168](index=168&type=chunk) - Primary foreign currency exposures are the **Swedish krona, Euro, and British pound**[170](index=170&type=chunk) - The company currently does not hedge its foreign exchange risk[170](index=170&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the principal executive and financial officers, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2021. No material changes in internal control over financial reporting were identified during the quarter - Disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level as of March 31, 2021[171](index=171&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended March 31, 2021[172](index=172&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently aware of any legal proceedings or claims that are expected to have a material adverse effect on its business, financial condition, or results of operations - No material adverse legal proceedings or claims are currently known to the company[173](index=173&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors previously identified in the company's Form 10-K for the period ended December 31, 2020, and subsequent filings. No material changes to these risk factors were reported in this quarterly report - No material changes to the risk factors described in the company's Form 10-K for the period ended December 31, 2020, were reported[174](index=174&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds occurred during the period[175](index=175&type=chunk) [Item 3. Defaults Upon Senior Securities](index=34&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report for the period - No defaults upon senior securities occurred during the period[176](index=176&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[177](index=177&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) There is no other information to report under this item - No other information to report under this item[178](index=178&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, compensation policies, certifications, and XBRL interactive data files - Exhibits include Restated Certificate of Incorporation, Certificate of Amendment, Third Amended and Restated Bylaws, Non-Employee Directors' Compensation Policy, Rule 13a-14(a)/15d-14(a) Certifications, and XBRL Instance Document[178](index=178&type=chunk) [Signatures](index=35&type=section&id=Signatures) The report is duly signed on May 4, 2021, by Tony J. Hunt, President and Chief Executive Officer, and Jon Snodgres, Chief Financial Officer, certifying its submission - The report was signed on **May 4, 2021**, by Tony J. Hunt (President and CEO) and Jon Snodgres (CFO)[182](index=182&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-14656 REPLIGEN CORPORATION (Exact name of registrant as specified in its charter) Delaware 04-2729386 (State or other jurisdic ...

Repligen Corporation (NASDAQ:RGEN) Q4 2020 Earnings Conference Call February 24, 2021 8:30 AM ET Company Participants Sondra Newman - Global Head of IR Tony J. Hunt - President and CEO Jon K. Snodgres - CFO Conference Call Participants Dan Arias - Stifel Unidentified Analyst - J.P. Morgan Paul Knight - KeyBanc Capital Jacob Johnson - Stephens, Inc. Matthew Hewitt - Craig-Hallum Puneet Souda - SVB Leerink Brandon Couillard - Jefferies Inc Raghuram Selvaraju - H.C. Wainwright Operator Good day ladies and gent ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-14656 REPLIGEN CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware 04-2729386 (State or Other ...