Wall Street expects a year-over-year increase in earnings on higher revenues when Repligen (RGEN) reports results for the quarter ended September 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report. On the other hand, if they miss, the stock may m ...

Dublin, Oct. 14, 2024 (GLOBE NEWSWIRE) -- The "Peptide Therapeutics - Global Strategic Business Report" has been added to ResearchAndMarkets.com's offering. The global market for Peptide Therapeutics was estimated at US$42.1 Billion in 2023 and is projected to reach US$56.2 Billion by 2030, growing at a CAGR of 4.2% from 2023 to 2030. The development of peptide therapeutics has been greatly accelerated by technological advances, enabling the creation of more stable, potent, and targeted therapies. Peptides, ...

Core Insights - Repligen Corporation has opened the Repligen Training & Innovation Center (RTIC) at its Waltham headquarters to enhance customer engagement and support [1][3] - The RTIC showcases a comprehensive range of Repligen's bioprocessing technologies, including upstream and downstream products, and serves as a hands-on training facility [2][3] - The company is committed to innovation and aims to meet growing customer expectations in the biologics market as it anticipates a return to growth by 2025 [3] Company Developments - The RTIC spans approximately 7,500 square feet within a 55,000 square foot expansion project, which took 20 months to complete [3] - Repligen has also expanded its presence in Europe with a new 80,000 square foot facility in Jüri, Estonia, which serves as a Customer Center of Excellence [4] - The Estonia facility is LEED Silver certified and supports various functions including R&D, engineering, manufacturing, and technical support [4] Product and Technology Focus - The RTIC features a variety of Repligen's bioprocessing technologies, including XCell® ATF, KrosFlo® TFDF® devices, OPUS® pre-packed chromatography columns, and Spectrum® hollow fiber filters [2] - The center will also highlight process analytics technologies such as CTech™ SoloVPE® and FlowVPX® [2] - Repligen's focus areas include Filtration and Fluid Management, Chromatography, Process Analytics, and Proteins, catering primarily to biopharmaceutical developers and CDMOs [5]

Financial Restatement - The restatement will result in an overstatement of Q1 2023 product revenues by $17.3 million and an understatement of Q4 2023 product revenues by $10.7 million, leading to an aggregate overstatement of $6.6 million for the year ended December 31, 2023[8]. - The anticipated financial impact of the restatement includes an understatement of Q1 2024 product revenues by $1.8 million and Q2 2024 product revenues by $4.8 million[8]. - The company will restate its consolidated financial statements for the year ended December 31, 2023, and for the quarterly periods ended March 31, 2023, June 30, 2023, and September 30, 2023[10]. - The company has not yet finalized the quantification of the income tax expense/benefit impact of the restatement for each respective quarterly or annual period[8]. Revenue Guidance - The company reaffirms its full year 2024 revenue guidance, updating the range to $627 million to $642 million, which includes the previously understated $6.6 million in the first half of 2024[9]. Internal Controls - The company identified a material weakness in internal control over financial reporting related to revenue recognition under ASC 606[11]. - The company is undergoing an internal review to assess the effectiveness of its internal controls and may identify further required changes[11]. Operational Impact - The restatement does not impact the company's overall business operations or previously reported cash and cash equivalent balances[5]. - All open purchase order product units were fully delivered to the customer by June 30, 2024, indicating no anticipated impact of the revenue recognition change beyond this date[7]. One-time Payment - The company received a one-time cash payment of $17.3 million in April 2023 due to the cancellation of two COVID-related non-cancellable product purchase orders[6].

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 [3] - The company primarily serves biopharmaceutical drug developers and contract development and manufacturing organizations (CDMOs) worldwide [3] - Key focus areas include Filtration and Fluid Management, Chromatography, Process Analytics, and Proteins [3] - 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 [3] Upcoming Events - Repligen Corporation will present at the Wells Fargo Healthcare Conference from September 4-6, 2024, in Boston [1] - Olivier Loeillot, President and CEO, will participate in an analyst-led discussion on September 6 at 8:45 a.m. ET [1] - A live webcast of the conference presentation will be available on Repligen's Investor Relations website and will be accessible for replay for a limited time after the event [2]

The bioprocessing market is preparing for a recovery. The bioprocessing market is about to recover. That's the conclusion from Repligen's (RGEN -1.00%) secondquarter earnings report released earlier in the week and the reason for the stock's 17.7% ascendancy in the week to Friday morning. Repligen and Danaher are seeing budding shoots of recovery A positive view of Repligen's recovery is supported when examining Danaher's recent results, released a week earlier. Danaher is a much larger company selling life ...

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].