Core Viewpoint - Repligen Corporation reported second-quarter earnings that were in line with expectations, with solid revenue performance and positive outlook for future growth [1][2]. Financial Performance - Second-quarter sales reached $154.1 million, closely matching the consensus estimate of $154.12 million [1]. - Adjusted EPS for the quarter was 33 cents, consistent with consensus but down from $0.53 reported in the same quarter last year [1]. - First-half revenue totaled $305 million, achieving the year-to-date sales target [2]. Future Outlook - Repligen anticipates 2024 revenues between $620 million and $635 million, slightly lower than the previous guidance of $620 million to $650 million, but still in line with the consensus estimate of $636.6 million [2]. Market Reaction - Following the earnings announcement, Repligen shares increased by 5.3%, trading at $169.16 [3]. - Analysts adjusted their price targets post-earnings, with JP Morgan raising its target from $190 to $200 while maintaining an Overweight rating, and UBS lowering its target from $205 to $185 while keeping a Buy rating [3].

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited condensed consolidated financial statements for June 30, 2024, show decreased revenue and net income, with slight asset growth and improved operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased slightly to **$2.86 billion** as of June 30, 2024, with total liabilities rising to **$875.6 million** and equity reaching **$1.986 billion** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $1,158,918 | $1,111,043 | | **Total Assets** | **$2,861,924** | **$2,824,411** | | **Total Current Liabilities** | $174,307 | $158,162 | | **Total Liabilities** | **$875,562** | **$853,208** | | **Total Stockholders' Equity** | **$1,986,362** | **$1,971,203** | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Net income significantly declined to **$3.3 million** for Q2 2024 and **$5.4 million** for the six-month period, driven by reduced revenue and higher SG&A expenses Key Performance Indicators (in thousands, except per share data) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $154,073 | $159,169 | $305,419 | $341,829 | | **Income from Operations** | $1,487 | $19,399 | $3,518 | $50,655 | | **Net Income** | $3,321 | $20,064 | $5,415 | $48,893 | | **Diluted EPS** | $0.06 | $0.35 | $0.10 | $0.86 | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity increased to **$1.986 billion** by June 30, 2024, primarily due to net income and stock-based compensation, partially offset by translation adjustments Reconciliation of Stockholders' Equity for Six Months Ended June 30, 2024 (in thousands) | Description | Amount | | :--- | :--- | | **Balance at December 31, 2023** | **$1,971,203** | | Net income | $5,415 | | Stock-based compensation expense | $17,990 | | Translation adjustment | ($6,812) | | Other (stock issuance, tax withholding, etc.) | ($1,434) | | **Balance at June 30, 2024** | **$1,986,362** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to **$86.9 million** for the six months ended June 30, 2024, while investing activities used **$15.8 million** and financing used **$14.7 million** Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $86,898 | $45,622 | | **Net Cash (Used in)/Provided by Investing Activities** | ($15,762) | $55,400 | | **Net Cash Used in Financing Activities** | ($14,747) | ($18,388) | | **Net Increase in Cash** | **$57,823** | **$80,198** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, acquisitions, restructuring, and debt, highlighting **$2.4 million** in restructuring charges, **$4.4 million** in CEO transition stock compensation, 2019 convertible notes maturity, and the Tantti Laboratory Inc acquisition - The company initiated a restructuring plan in July 2023 to streamline operations, recording pre-tax charges of **$1.0 million** and **$2.4 million** for the three and six months ended June 30, 2024, respectively. The plan is expected to be completed by the end of Q3 2024[243](index=243&type=chunk) - The transition of the CEO to Executive Chair resulted in a Type III accounting modification for his unvested stock awards, leading to the recognition of **$4.4 million** in incremental stock-based compensation expense for the three and six months ended June 30, 2024[65](index=65&type=chunk)[66](index=66&type=chunk) - The company's 0.375% Convertible Senior Notes from 2019 matured on July 15, 2024, and were settled with **$69.6 million** in cash and **100,942** shares of common stock[104](index=104&type=chunk) - On July 29, 2024, the company announced a definitive agreement to acquire Tantti Laboratory Inc., with the transaction expected to close in Q4 2024[105](index=105&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a **10.7%** revenue decline due to weak demand and COVID-19 related sales, compressed gross margins, and increased operating expenses, while maintaining strong liquidity with **$809.1 million** in cash [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Total revenue decreased **10.7%** to **$305.4 million** for the six months ended June 30, 2024, driven by weak demand and reduced COVID-related sales, leading to gross margin compression and a **20.2%** increase in SG&A expenses Revenue Comparison for Six Months Ended June 30 (in thousands) | Revenue Type | 2024 | 2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Products | $305,348 | $341,754 | ($36,406) | (10.7%) | | Royalty and other | $71 | $75 | ($4) | (5.3%) | | **Total Revenue** | **$305,419** | **$341,829** | **($36,410)** | **(10.7%)** | - The decrease in revenue was mainly due to weak demand in the proteins franchise, reflecting a drop-off from customer Cytiva producing in-house, and slower-than-expected inventory reduction by customers for COVID-19 related programs[205](index=205&type=chunk) - Gross margin for the six months ended June 30, 2024, decreased to **49.7%** from **52.9%** in 2023, attributed to lower sales volumes, reduced production, and an unfavorable product mix with a decline in higher-margin consumable products[114](index=114&type=chunk) - SG&A expenses for the six months ended June 30, 2024, increased by **$21.2 million** (**20.2%**), partly due to the inclusion of operations from the FlexBiosys and Metenova acquisitions and a **$4.4 million** stock compensation charge related to the CEO's transition[141](index=141&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$809.1 million** in cash and equivalents as of June 30, 2024, supported by **$86.9 million** in operating cash flow, sufficient for at least the next 24 months - The company ended Q2 2024 with **$809.1 million** in cash and cash equivalents[149](index=149&type=chunk) - Cash provided by operating activities for the first six months of 2024 was **$86.9 million**, a substantial increase from **$45.6 million** in the same period of 2023[123](index=123&type=chunk) - The company issued **$600.0 million** of 1.00% Convertible Senior Notes due 2028 in December 2023, partly through an exchange of its 2019 Notes and partly for cash, bolstering its capital structure[149](index=149&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to the company's market risk exposure were reported for the three months ended June 30, 2024, remaining consistent with the 2023 Form 10-K disclosures - There were no material changes to the company's market risk exposure during the second quarter of 2024[171](index=171&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed ineffective as of June 30, 2024, due to a material weakness in deferred income tax accounting, with remediation efforts underway - A material weakness was identified in controls over deferred income tax accounting for complex transactions, specifically related to the exchange and issuance of convertible senior notes in 2023[131](index=131&type=chunk) - Due to this material weakness, the principal executive officer and principal financial officer concluded that disclosure controls and procedures were not effective as of the end of the quarter[172](index=172&type=chunk) - Remediation efforts are ongoing, including enhanced use and oversight of third-party advisors and increased education for internal resources on complex transactions[160](index=160&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is not aware of any legal proceedings or claims expected to have a material adverse effect on its business or financial condition - The company reports no material legal proceedings[162](index=162&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported, except for a data security incident on July 9, 2024, which management does not expect to materially impact financial condition or operations - On July 9, 2024, the company discovered an unauthorized third party had accessed certain files on its information systems[175](index=175&type=chunk) - Management does not believe this data security incident will have a material impact on the company's financial condition and results of operations[175](index=175&type=chunk) [Other Items (2, 3, 4, 5)](index=40&type=section&id=Other%20Items%20(2,%203,%204,%205)) The report confirms no unregistered equity sales, no defaults on senior securities, mine safety disclosures are inapplicable, and no changes to Rule 10b5-1 trading plans by directors or officers - Item 2: No unregistered sales of equity securities[163](index=163&type=chunk) - Item 3: No defaults upon senior securities[176](index=176&type=chunk) - Item 5: No changes to director or officer Rule 10b5-1 trading plans during the quarter[177](index=177&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, executive employment agreements, and required SEC certifications - Exhibits filed include an employment agreement for CEO Tony J. Hunt, dated June 12, 2024, and certifications required by the Sarbanes-Oxley Act[178](index=178&type=chunk)

Financial Data and Key Metrics Changes - Revenue in Q2 2024 was $154 million, a sequential increase of approximately $3 million but a year-over-year decline of 3% [84] - Adjusted gross profit for Q2 2024 was $76 million, down $4 million year-over-year, resulting in a 49.6% adjusted gross margin [85] - Adjusted net income for Q2 2024 was $19 million, a decrease of $11 million compared to the previous year [86] Business Line Data and Key Metrics Changes - Pharma revenues in Q2 were up about 15% sequentially and 20% year-on-year, with orders up 5% sequentially and 40% year-on-year [73] - CDMO sales in Q2 were down as anticipated, but orders increased by over 20% both sequentially and year-over-year, with a book-to-bill ratio of over 1.4 for the quarter [73] - Consumables maintained momentum with revenues up double digits versus Q1 and orders up 30% year-over-year [73] Market Data and Key Metrics Changes - North America represented approximately 50% of global business, while Europe accounted for 36%, and Asia Pacific and the rest of the world made up 14% [84] - China orders and sales were down 38% year-over-year, now expected to represent around 4% of total sales in 2024 [84][85] - Overall, orders were up 20% year-over-year and up 30% if excluding proteins [95] Company Strategy and Development Direction - The company is focused on innovation and has launched a new protein A resin in partnership with Purolite, expecting a solid rebound in the proteins franchise in 2025 [75] - The acquisition of Tantti is seen as strategically important, allowing the company to combine technologies to disrupt the market [75] - The key account management strategy is being expanded, covering 20 of the top accounts, which is expected to drive growth in 2025 and beyond [98] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 11% growth ex-COVID in the second half of 2024, indicating a positive outlook for 2025 [1][23] - The company noted that while there is a lag from improving biotech funding to orders, they expect to see a turnaround in the markets [30] - Management acknowledged challenges in China but remains optimistic about overall market recovery and growth potential [84][85] Other Important Information - The company is implementing a further 7% cost reduction in the second half of the year, focusing on productivity and insourcing [31][84] - Adjusted EBITDA margins are expected to be in the range of 17% to 18% for the year, reflecting ongoing cost optimization efforts [89] Q&A Session Summary Question: Why did the non-China revenue guide not increase despite an improving funnel? - Management indicated that the guidance drop was primarily due to a decline in China, with overall consistency in performance expected [23][24] Question: What is the order growth assumption in Q3? - Management stated that the order assumption for the second half of the year is 4% order growth, with a revenue growth target of 5% [37] Question: How does the company view the competitive landscape post-COVID? - Management noted that while there is more capacity available, their unique innovations set them apart from competitors, allowing them to capitalize on growing demand [9][10]

Core Viewpoint - Repligen reported quarterly earnings of $0.33 per share, matching the Zacks Consensus Estimate, but down from $0.53 per share a year ago [1]. Financial Performance - The company posted revenues of $154.07 million for the quarter ended June 2024, missing the Zacks Consensus Estimate by 0.16%, and down from $159.17 million year-over-year [2]. - Over the last four quarters, Repligen has surpassed consensus EPS estimates only once and topped consensus revenue estimates two times [2]. Stock Performance - Repligen shares have declined approximately 23.3% since the beginning of the year, contrasting with the S&P 500's gain of 14.5% [4]. - The current Zacks Rank for Repligen is 4 (Sell), indicating expected underperformance in the near future [7]. Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.38 on revenues of $161.78 million, and for the current fiscal year, it is $1.46 on revenues of $637.24 million [8]. - The trend for estimate revisions ahead of the earnings release was unfavorable, which may impact future stock movements [6][7]. Industry Context - The Medical - Biomedical and Genetics industry, to which Repligen belongs, is currently in the top 33% of over 250 Zacks industries, suggesting a favorable industry outlook [9].

Core Insights - Repligen Corporation reported second quarter revenue of $154 million, a decrease of 3% compared to $159 million in the prior year, with first half revenue totaling $305 million, aligning with expectations [1][5][13] - The company announced a definitive agreement to acquire Tantti Laboratory Inc., enhancing its Proteins and Chromatography segments [3] - The transition of CEO Tony J. Hunt to Executive Chair and the appointment of Olivier Loeillot as the new CEO will take effect on September 1, 2024 [5] Financial Performance - Cash, cash equivalents, and short-term investments increased to $809 million as of June 30, 2024, up from $751 million at the end of 2023 [4] - GAAP income from operations was $1 million, down from $19 million, while adjusted income from operations was $16 million compared to $29 million in the prior year [8][34] - GAAP net income decreased to $3 million from $20 million, with adjusted net income at $19 million compared to $30 million [26][36] Margins and Guidance - Adjusted gross margin for Q2 2024 was 49.6%, slightly down from 50.2% in Q2 2023, while operating margin dropped to 10.1% from 18.5% [10][27] - The company narrowed its revenue guidance for fiscal year 2024 to a range of $620 million to $635 million, reflecting a year-over-year decline of 3% to 1% [18] - Adjusted earnings per share guidance remains unchanged at $1.42 to $1.49 for the full year [18] Business Highlights - The company experienced a 5% year-over-year increase in sales for new modalities, with a book-to-bill ratio greater than 1.1 [15] - New product launches, including the DurA Cycle affinity resin, are expected to strengthen the Proteins business [6] - Continued strength in pharmaceutical demand and a resurgence in CDMO activity were noted as positive indicators for future growth [5]

Core Viewpoint - Repligen Corporation has announced a definitive agreement to acquire Tantti Laboratory Inc., enhancing its bioprocessing technology portfolio with Tantti's innovative macroporous chromatography bead technology for the purification of large molecule biologics [2][3]. Company Overview - Repligen Corporation is a global life sciences company focused on developing and commercializing bioprocessing technologies that improve the manufacturing efficiency of biological drugs [11]. - Tantti Laboratory Inc. specializes in biomaterials engineering and has developed bioprocessing solutions, particularly the DuloCore technology for purifying large biomolecules [6][10]. Acquisition Details - The acquisition is expected to be completed by the end of 2024, pending regulatory approvals [3][9]. - The deal is anticipated to be breakeven on adjusted margins and adjusted earnings per share (EPS) in 2025, and accretive to adjusted margins and adjusted EPS in 2026 [9]. Technology Synergy - Tantti's DuloCore technology combines high throughput performance with rapid mass transfer in a bead format, which is expected to enhance purification processes when integrated with Repligen's existing AVIPure affinity ligands and OPUS pre-packed chromatography columns [1][3]. - The technology aims to address downstream bottleneck challenges and scalability concerns faced by manufacturers in the bioprocessing industry [1][3]. Leadership Statements - Repligen's CEO, Tony J. Hunt, emphasized that the acquisition will strengthen their portfolio in the new modality space and is expected to deliver high throughput and high-capacity purification products [3]. - Tantti's CEO, Joe Yang, expressed excitement about combining their bead technology with Repligen's capabilities to establish DuloCore as a market standard for new modality purification [3].

Company Overview - Repligen Corporation is a global life sciences company focused on developing and commercializing innovative bioprocessing technologies and systems that enhance the manufacturing efficiency of biological drugs [5] - The company serves primarily biopharmaceutical drug developers and contract development and manufacturing organizations (CDMOs) worldwide [5] - Key focus areas include Filtration and Fluid Management, Chromatography, Process Analytics, and Proteins [5] - Corporate headquarters are located in Waltham, Massachusetts, with manufacturing sites in the U.S. and additional locations in Estonia, France, Germany, Ireland, the Netherlands, and Sweden [5] Upcoming Financial Results - Repligen Corporation will report its second quarter 2024 financial results on July 30, 2024 [4] - A press release will be issued before the market opens, followed by a conference call at 8:30 a.m. ET to discuss business updates and financial results for the three- and six-month periods ended June 30, 2024 [4]

WALTHAM, Mass., July 16, 2024 (GLOBE NEWSWIRE) -- Repligen Corporation (NASDAQ:RGEN) today announced that the Company will report its second quarter 2024 financial results on Tuesday, July 30, 2024. The Company will issue a press release before the market opens and will host a conference call at 8:30 a.m. ET to discuss business updates and financial results for the three- and six- month reporting periods ended June 30, 2024. Repligen Corporation is a global life sciences company that develops and commercial ...

Company Overview - Repligen (RGEN) shares increased by 4.4% to $125.32 in the last trading session, following a significant volume of shares traded, contrasting with a 24.4% loss over the past four weeks [1] - The company announced the promotion of Olivier Loeillot to president and CEO, effective September 1, 2024, which may have contributed to the recent share price increase [1] Earnings Expectations - Repligen is expected to report quarterly earnings of $0.33 per share, reflecting a year-over-year decline of 37.7% [2] - Revenue projections for the upcoming quarter are $154.32 million, down 3.1% compared to the same quarter last year [2] Stock Performance and Trends - The consensus EPS estimate for Repligen has remained unchanged over the last 30 days, indicating a lack of upward momentum in earnings estimate revisions [3] - The stock currently holds a Zacks Rank of 3 (Hold), suggesting a neutral outlook [3] - In the same industry, AnaptysBio, Inc. (ANAB) also holds a Zacks Rank of 3 (Hold) and saw a 4.9% increase in its last trading session [3][4]

Repligen Corporation (RGEN) announced that it has promoted Olivier Loeillot, its current chief commercial officer (CCO), as its new president and chief executive officer (CEO), effective from Sep 1, 2024. The company's current CEO, Tony J. Hunt, will step down from his role and will transition to executive chair with effect from Sep 1, 2024. Shares of RGEN fell 11.9% on Jun 13 following the announcement of the news. Olivier Loeillot joined Repligen as president and CCO in October last year. Prior to joining ...