Bio-Techne (NasdaqGS:TECH) FY Conference December 02, 2025 08:20 AM ET Company ParticipantsDaniel Markowitz - Equity Research AssociateChuck Kummeth - CEOJames Hippel - CFOJames HippelThank you both for being with us.Chuck KummethYeah, James, thanks for having us. Especially first thing after the turkey hangover.Daniel MarkowitzTurkey hangover. Starting off sort of high level on the one Q overview, you posted an organic decline of 1%. Can you just give us a quick overview of the quarter and, I guess, the ma ...

Core Insights - The overall growth for the quarter was reported as negative 1%, which does not accurately reflect the underlying performance of the company [2] - Core growth, excluding certain factors like cell therapy, was positive at 1% [1][2] Market Performance - Large pharma, which constitutes 30% of the company's revenues, showed strong performance with double-digit growth [3] - Concerns regarding tariffs had previously led to worries about large pharma potentially reducing orders, but this did not materialize, resulting in a positive outcome for the quarter [3]

Summary of Bio-Techne Conference Call Company Overview - **Company**: Bio-Techne (NasdaqGS: TECH) - **Date**: November 20, 2025 - **Focus**: Life Science tools and reagents, particularly in cell therapy and proteomics Key Points Financial Performance - **Overall Growth**: Reported a negative growth of 1% for the quarter, primarily due to larger companies not ordering products after receiving fast-track designations, impacting revenue by 200 basis points [2][21] - **Core Growth**: Excluding the impact of cell therapy, core growth was positive at 1% [2] - **Large Pharma Revenue**: Contributed 30% of total revenues, with double-digit growth observed [2][5] - **GMP Protein Business**: Valued at $60 million within an $80 million cell therapy business, with significant growth in previous quarters (60% and 90% in Q1 and Q2 last year) [20] Market Dynamics - **Pharma Market**: Strong performance in both the US and Europe, with a healthy growth outlook despite potential shifts due to deglobalization [6][10] - **Biotech Funding**: Noted a resurgence in funding, particularly in October, with a shift towards accelerating programs rather than building infrastructure [7][8] - **Academic Market**: Experienced a messy environment in the US but showed stabilization and improvement in Europe, with a shift in grant focus towards oncology and neurological diseases [33] Innovation and Product Development - **R&D Investment**: 8% of revenues reinvested into R&D, leading to significant innovations across various verticals [12] - **New Products**: - ProPax for protein packaging, reducing human error and contamination risk [13] - ELA cartridge for ultra-sensitivity in protein analysis, enhancing capabilities in neurodiseases and inflammation [14] - LEO instrument with four times higher capacity and precision for larger pharma [15] - Exosome-based ESR1 breast cancer marker for therapy management [16] - Oxford Nanopore-based genetic testing kit for difficult-to-sequence genes [16] M&A Strategy - **M&A as Priority**: High priority for capital deployment, with improved availability of high-quality targets in the market [17] - **Wilson Wolf Acquisition**: Ongoing interest in acquiring Wilson Wolf, with a focus on strengthening the cell therapy portfolio [17][19] Competitive Landscape - **Cell Therapy Market**: Maintained a strong position against European competitors, leveraging 49 years of experience in complex protein design and manufacturing [22] - **AI in Protein Design**: Utilization of AI to enhance protein specificity and heat stability, leading to patentable innovations [24][25] Pricing and Promotions - **Promotional Activities**: Implemented grants to support new programs in constrained funding environments, increasing customer base from 550 to 700 for GMP proteins [26][27] Future Outlook - **Market Trends**: Anticipated improvements in grant funding and a shift towards more multi-year grants, providing better visibility for labs [35] - **Budget Flush Impact**: Minimal impact expected from year-end budget flush, as 90% of revenue is from consumables and services, not instrumentation [37] Additional Insights - **Reshoring and Deglobalization**: Expected to influence manufacturing dynamics positively, with local production reducing shipping inefficiencies [10][11] - **Academic Grant Trends**: Shift towards proteomics-based spending, indicating a favorable alignment with Bio-Techne's offerings [33]

Core Insights - The company reported double-digit growth in the pharma end market for the third consecutive quarter, which constitutes approximately 30% of its total revenue [3] - The ProteinSimple franchise showed strong performance with double-digit consumable growth for the third or fourth straight quarter, indicating robust demand [3] - The spatial biology franchise is showing signs of recovery, particularly in academic and small biotech sectors, which have faced significant pressure [4] Financial Performance - The company highlighted strong quarterly performance in Q1, with specific emphasis on growth metrics in key franchises [2] - Continued momentum was observed in instrument sales towards the end of the quarter, particularly in October, suggesting positive market trends [3] Market Trends - The pharma market remains a critical growth area, contributing significantly to overall revenue and demonstrating resilience amid broader market challenges [3] - The recovery in the spatial biology franchise is noteworthy, as it is closely tied to academic and small biotech markets, which are currently under pressure [4]

Bio-Techne FY Conference Summary Company Overview - **Company**: Bio-Techne (NasdaqGS: TECH) - **Date of Conference**: November 18, 2025 - **Focus**: Discussion on financial performance, market trends, and growth opportunities Key Highlights Industry Performance - **Pharma Market**: - Continued strong performance with double-digit growth for three consecutive quarters, contributing approximately 30% of total revenue [2][10] - Recent pricing mechanisms by large pharma have appeased regulatory concerns, leading to a more optimistic outlook [11] - **Spatial Biology Franchise**: - Signs of recovery with low single-digit growth in consumables and double-digit growth in instruments [3][4] - Growth in China noted for the second consecutive quarter, with expectations for continued growth [3][17] - **Biotech Market**: - Despite a 30% year-over-year decline in funding, the market showed resilience with low single-digit growth [10][14] - Recent increases in biotech funding, with October showing an 80% year-over-year growth, indicating potential recovery [15] Financial Performance - **Operating Margins**: - Expanded by 90 basis points despite challenging market conditions, attributed to portfolio management and productivity initiatives [5] - **Customer Dynamics**: - Two major cell therapy customers received FDA Fast-Track designation, which may create short-term headwinds due to reduced material purchases but is expected to enhance long-term growth potential [4][22] Market Trends - **China's Growth**: - Regulatory environment favorable for Bio-Techne, with expectations for China to become a net contributor to growth over the next 12-24 months [17][18] - Local competition exists, but brand strength and product quality remain key differentiators [20][21] - **Cell and Gene Therapy**: - Anticipated headwinds due to customer purchasing dynamics, but long-term growth prospects remain strong with potential revenue from commercialized therapies estimated at $100 million [35][36] Future Outlook - **Growth Projections**: - Confidence in achieving low single-digit organic growth in FY2026 despite near-term challenges, driven by stabilization in pharma and academic markets [58][59] - Long-term potential for double-digit growth as market conditions normalize and cell therapy commercialization ramps up [62][64] Product Development - **Innovations**: - Introduction of advanced instruments and consumables, particularly in the spatial biology and protein sciences segments, expected to drive future growth [54][50] - Ongoing development of AI-generated proteins and integration of new technologies to enhance product offerings [30][40] Additional Insights - **Market Positioning**: - Bio-Techne's focus on quality and consistency in product offerings is crucial for maintaining competitive advantage in both domestic and international markets [20][21] - **Customer Engagement**: - Continuous engagement with customers to understand their needs and preferences is vital for product development and market penetration [20] - **Long-term Strategy**: - The company is positioned to leverage its growth pillars (cell therapy, spatial, ProteinSimple) to exceed market growth rates and achieve sustainable long-term growth [63][64]

Core Insights - Bio-Techne Corporation has entered into a licensing agreement with Monod Bio, granting exclusive commercial rights to a subset of Monod's NovoBody™ Duo molecules, which are AI-designed bispecific binding proteins [1][2] - This partnership aims to enhance scientific progress through innovative AI-powered designs, improving customization, stability, and performance for better therapeutic development [2] - The collaboration aligns with Bio-Techne's strategic growth initiatives and reinforces its position in AI-enabled innovation, a significant trend in global healthcare transformation [2][5] Company Overview: Bio-Techne - Bio-Techne is a global life sciences company that provides innovative tools and bioactive reagents for research and clinical diagnostics, generating over $1.2 billion in net sales in fiscal 2025 [3] - The company employs approximately 3,100 individuals worldwide and offers a vast portfolio of products to assist in scientific investigations and drug discovery [3] Company Overview: Monod Bio - Monod Bio is a Seattle-based biotechnology company that specializes in AI-powered protein design, creating novel protein binders and biosensors for research and diagnostic applications [4] - The company operates under a "Monod Inside" business model, partnering with leading organizations to bring next-generation products to market [4]

Core Insights - ClearBridge Investments reported that mid-cap stocks experienced growth in Q3 2025, driven by a favorable monetary policy environment and stabilizing earnings [1] - The Federal Reserve's rate cuts positively impacted small and mid-cap stocks, with value stocks outperforming growth stocks [1] - The ClearBridge Mid Cap Strategy outperformed the Russell Midcap Index, primarily due to stock selection in the consumer staples and healthcare sectors [1] Company-Specific Insights - Bio-Techne Corporation (NASDAQ:TECH) has a market capitalization of $9.57 billion and focuses on life science reagents, instruments, and services [2] - The stock of Bio-Techne Corporation saw a one-month return of -0.32% and a 52-week decline of 15.36%, closing at $61.40 on November 12, 2025 [2] - ClearBridge initiated a new position in Bio-Techne, citing its high-margin consumables and instrumentation portfolio as key factors for its appeal as a growth-oriented investment [3] Financial Performance - In Q1 2026, Bio-Techne Corporation reported revenues of $286.6 million, reflecting a 1% year-over-year decline on both an organic and reported basis [4] - Despite the potential of Bio-Techne as an investment, the company is not among the most popular stocks among hedge funds, with 37 hedge fund portfolios holding its stock at the end of Q2 2025 [4]

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Bio-Techne 2025 Conference Summary Company Overview - **Company**: Bio-Techne (NasdaqGS: TECH) - **Event**: 2025 Steeple Healthcare Conference - **Date**: November 11, 2025 Key Points Financial Performance - **Organic Revenue Decline**: Bio-Techne reported a 1% organic revenue decline in Q1, primarily due to two large customers who had previously ordered high volumes of GMP proteins [6][10] - **GMP Proteins**: The decline was attributed to a 200 basis point headwind from these customers, who had fast-track FDA approvals and did not require new orders this quarter [6][10] - **Underlying Growth**: Excluding the impact of these two customers, the underlying growth was in the low single digits, around 1% [6][10] Market Dynamics - **End Markets**: - **Academic Market**: Challenging but showing positive signs, particularly in grants aligning with research areas [7][19] - **Biotech Market**: Constrained funding but some positive momentum due to increased M&A and licensing activity [7][8] - **Pharma Market**: Large pharma showed double-digit growth, stabilizing despite concerns over tariffs [8][10] - **China Market**: Achieved a second consecutive quarter of positive growth [8][10] Growth Projections - **GMP Growth Rate**: Expected to recover to over 20% in recovering markets, with potential for higher growth as more customers progress to commercial stages [14][15] - **Academic Market Recovery**: Anticipated mid to high single-digit growth as funding stabilizes and research activity normalizes [24][25] - **Pharma Growth**: Expected to continue double-digit growth, with Bio-Techne aiming to grow at twice the rate of pharma budget increases [28][25] Product Performance - **Spatial Business**: Experienced pressure but showed improvement, with double-digit order growth for the Luna4 instrument [30][41] - **Simple Western**: Continued strong performance with growth rates of 15%-20%, driven by demand from cell and gene therapy applications [49][51] Operational Insights - **Visibility in GMP Business**: Increased customer base expected to stabilize revenue, moving from a lumpy business model to more predictable revenue streams as customers transition to commercial stages [11][12] - **Operational Margins**: Expected expansion in operational margins despite challenges, with investments in R&D and new product development prioritized for future growth [66][69] Strategic Focus - **Investment in Innovation**: Bio-Techne is focusing on new product development, including advancements in organoids and other high-potential areas [76][77] - **Market Positioning**: The company aims to maintain a competitive edge by investing in high-quality programs and ensuring sticky revenue through strategic seeding of the market [71][72] Conclusion - **Outlook**: Bio-Techne is optimistic about future growth, with expectations of returning to double-digit growth as market conditions stabilize and improve [65][66]

Summary of Key Points Core Insights - Several healthcare and biotech stocks experienced significant gains in after-hours trading following earnings updates and guidance revisions Company Performance - **KalVista Pharmaceuticals Inc. (KALV)**: Stock rose 11.29% to $12.12 after reporting a third-quarter net loss of $49.5 million ($0.92 per share), compared to a loss of $39.1 million ($0.84 per share) in the same period last year. Net product revenue for the quarter was $13.7 million [1] - **Health Catalyst Inc. (HCAT)**: Stock advanced 13.24% to $3.23 after reporting a third-quarter net loss of $22.2 million ($0.32 per share), compared to a loss of $14.7 million ($0.24 per share) a year ago. Revenue declined to $76.3 million from $86.4 million. For Q4 2025, projected revenue is about $73.5 million with adjusted EBITDA of $13.4 million. Full-year expectations are $310 million in revenue and $41 million in adjusted EBITDA [2] - **Bio-Techne Corp. (TECH)**: Stock climbed 8.72% to $62.47. The company reported first-quarter GAAP EPS of $0.24, up from $0.21 last year, while adjusted EPS remained flat at $0.42. Revenue declined 1% year-over-year to $286.6 million [3] - **Assertio Holdings Inc. (ASRT)**: Stock gained 8.30% to $0.87 after reporting third-quarter GAAP net income of $11.4 million ($0.11 per share), compared to a loss of $2.9 million ($0.03 per share) last year. Adjusted EPS rose to $0.18 from $0.02. Net product sales reached $49.5 million, up from $28.7 million [4] - **Abeona Therapeutics Inc. (ABEO)**: Stock moved up 8.51% to $4.59. The company is scheduled to report third-quarter results on November 12, with analysts expecting a loss of $0.34 per share on revenue of $5.53 million [5]