Cryoport(CYRX) - 2019 Q4 - Annual Report

Logistics and Supply Chain Solutions - Cryoport supports over 430 clinical trials in the regenerative medicine space and has logged over 300,000 shipments to more than 100 countries[41] - The company expanded its services by acquiring Cryogene, enhancing its biostorage capabilities with a 21,000 square foot facility in Houston, Texas[36] - Cryoport's logistics solutions include the Advanced Therapy Shippers™, designed specifically for human-based therapies, ensuring traceability and compliance[23] - The Cryoportal Logistics Management Platform provides near real-time shipment tracking and monitoring, enhancing regulatory compliance and quality assurance[20] - Cryoport's solutions are classified as non-hazardous, unlike traditional methods using dry ice or liquid nitrogen, which are considered dangerous goods[38] - The company has established strategic alliances with major integrators like FedEx, DHL, and UPS, collectively holding over 87% of express logistics aircraft[46] - Cryoport's fleet management services aim to reduce clients' costs through optimized resource utilization and equipment loss minimization[30] - The company has developed customized packaging solutions using 'Design-of-Experiment' and 'Quality-by-Design' processes to meet client specifications[31] - World Courier integrated Cryoport's temperature-controlled solutions into its global network, enhancing supply chain programs for biopharmaceutical clients[48] - The partnership with Be The Match BioTherapies aims to deliver end-to-end supply chain services for cell and gene therapies, integrating their software platforms[50] - The collaboration with Vineti is expected to deploy its supply chain orchestration platform in over 300 clinical centers worldwide within the next year[53] - Lonza has designated Cryoport as its preferred partner for managing transport and delivery of patient tissues globally, focusing on personalized therapeutics[54] - The Cryoportal is designed for time-and temperature-sensitive shipments, focusing on cryogenic temperatures (-150℃) and ambient (20-25℃) logistics, ensuring samples remain within a safe temperature range[72] - Cryoport Express Shippers can maintain cryogenic temperatures of -150℃ or below for over 10 days, utilizing liquid nitrogen in a vacuum insulated vessel[75] - The SmartPak™ Condition Monitoring System provides near real-time tracking of shipments, including internal and external temperatures, humidity, and shock, ensuring the integrity of temperature-sensitive products[85] - Cryoport's Chain of Compliance™ solution offers comprehensive traceability of equipment and processes, enhancing supply chain intelligence and minimizing risks[90] - The Global Logistics Solutions segment offers temperature-controlled logistics solutions for biopharma, reproductive medicine, and animal health markets, shipping biologic materials globally[102] - Cryoport Express Advanced Therapy Shippers™ are specifically designed for the Regenerative Medicine market, ensuring traceability and preventing cross-contamination[81] - The company provides 24/7 logistics support with validated shipping lanes in over 100 countries, ensuring secure and timely deliveries[98] - Cryoport continues to advance its technology applications for temperature-controlled logistics and expand the functionality of its Cryoportal Logistics Management Platform[101] Financial Performance and Market Trends - Novartis reported $278 million in revenue from its CAR-T cell therapy KYMRIAH in fiscal year 2019, up from $76 million in 2018[64] - Kite Pharmaceuticals generated $456 million in revenue from its CAR-T therapy YESCARTA in fiscal year 2019, compared to $264 million in 2018[66] - The global cold chain logistics market for life sciences is projected to grow from $15.0 billion in 2018 to $18.6 billion by 2022, a 24% increase[60] - The total targeted enrollment for regenerative medicine clinical trials worldwide was reported as 59,757 patients as of January 2019[59] - The global IVF services revenue market generated $12.5 billion in 2018 and is projected to reach $26.4 billion by 2026, growing at a CAGR of 9.8% from 2019 to 2026[132] - The global animal health market is projected to reach $73.6 billion by 2027, with a CAGR of 5.8% from 2016 to 2027, driven by rising zoonotic and food-borne diseases[133] - In the U.S., 68% of households now own a pet, up from 58% in 1988, indicating a growing market for companion animal support[133] Company Strategy and Operations - The company continuously evaluates and expands its service offerings in response to market needs and client demand[35] - The company currently owns approximately 4 issued patents and is pursuing about 14 pending patent applications globally[113] - The company plans to expand its sales and marketing efforts globally, particularly in the Americas, EMEA, and Asia-Pacific regions, by hiring additional personnel[135] - The company aims to broaden its platform of solutions, including the introduction of shippers of varying sizes and temperature ranges based on market requirements[143] - The company anticipates that advancements in biotechnology will increase the demand for temperature-sensitive logistics solutions[136] - The company emphasizes the importance of maintaining sufficient capital to support its growth strategy and may need to raise additional funds in the future[159] - The company faces competition from firms like Thermo Fisher Scientific and specialty couriers, but believes its comprehensive solutions provide a competitive edge[142] - Future revenue growth is heavily dependent on timely market introduction of new solutions and services, necessitating significant investments in engineering and development[169] - The lengthy adoption cycle of target customers may hinder the company's ability to quickly increase revenues[170] - The company may pursue acquisitions to remain competitive, but such transactions carry risks that could adversely affect its business[189] - Integration of acquired businesses, such as Cryogene, may disrupt operations and create additional expenses, potentially affecting expected synergies[194] Risks and Challenges - The COVID-19 pandemic poses an uncertain risk to the company's financial condition and operational results, particularly in logistics and component procurement[179] - The company faces potential expenses related to exiting distribution agreements and must comply with various laws, which could impact revenue growth[164] - Retaining key professionals is critical for the company's growth and competitive position, as losing them could adversely affect operations[166] - The company currently maintains general liability insurance of $1 million per occurrence and product liability insurance with a $1 million annual coverage limitation, which may not fully protect against potential liabilities[184] - The company relies on third-party manufacturers for components, and any delays in procurement could lead to customer dissatisfaction and harm its reputation[178] - Claims for liability related to damage of customer specimens could expose the company to financial or reputational harm[201] - Compliance with various regulations for shipments can limit activities and increase operational costs[213] - The company does not currently have FDA or other regulatory approvals, but future regulations could impose additional expenses[216] - Cybersecurity threats pose risks to the company’s operations, and the absence of cyber security insurance could lead to significant costs in the event of a successful attack[212] - The company’s technology infrastructure is subject to potential damage or interruption from various sources, which could materially harm operations[212] - The company may face claims of patent infringement that could result in substantial defense costs, even if the claims are without merit[206] Financial Condition - As of December 31, 2019, the company reported a net loss of $18.33 million, compared to a net loss of $9.56 million in 2018, with an accumulated deficit of $159.3 million[157][158] - Approximately 80.2% of the Global Bioservices segment's net revenues came from one customer, although it was less than 10% of total revenues for the year ended December 31, 2019[121] - Two customers accounted for 24.1% and 12.8% of total revenues for the year ended December 31, 2019, while one customer represented 18.2% of revenues for the year ended December 31, 2018[121]