Repligen(RGEN) - 2021 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements This section presents Repligen Corporation's unaudited consolidated financial statements and detailed notes on accounting policies, acquisitions, and financial components Consolidated Balance Sheets 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 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] - Net income more than tripled from $9.8 million in Q1 2020 to $29.5 million in Q1 2021[11] Consolidated Statements of Stockholders' Equity 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 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] - 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] Notes to Unaudited Consolidated Financial Statements 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 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] - No material changes were made to significant accounting policies disclosed in the Form 10-K[23] - 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] 2. Fair Value Measurements 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] 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] 3. Acquisitions 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][33][34] - 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][44][45] - EMT Acquisition (July 13, 2020): Acquired for $28.5 million, adding single-use silicone assemblies and components, complementing existing single-use product offerings[51][52][53] 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 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] 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] 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 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] 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] 6. Consolidated Balance Sheet Detail 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 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] 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] 8. Stockholders' Equity 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] 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] - 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] 9. Commitments and Contingencies 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] - A long-term supply agreement for NGL-Impact® and other ligands is in place with Purolite Life Sciences[88] - Successfully co-developed an affinity ligand targeting the SARS-CoV-2 spike protein for COVID-19 vaccine purification[88] 10. Accumulated Other Comprehensive (Loss) Income 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] 11. Income Taxes 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][139] - The CARES Act had no material effect on the company's financial position or results of operations[92] 12. Earnings Per Share 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][99] - The company intends to settle the par value of the 2019 Notes in cash and any excess conversion premium in shares[98][99] 13. Related Party Transactions 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] - Rent expense related to these leases was $0.2 million for both the three months ended March 31, 2021, and 2020[102] 14. Segment Reporting 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] 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] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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] - The company operates as one bioprocessing business, serving upstream and downstream processes in biological drug manufacturing[111] - Growth strategy includes internal innovation, commercial leverage, and targeted acquisitions[111] 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][113] - Non-Metallic Solutions (NMS, acquired October 2020) manufactures fabricated plastics and custom containers, expanding single-use systems and streamlining the supply chain[114][115] - Engineered Molding Technology (EMT, acquired July 2020) specializes in single-use silicone assemblies and components, complementing Repligen's single-use product offerings[116][117] Critical Accounting Policies and Estimates 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] - Detailed information on critical accounting policies is available in Note 2 to the consolidated financial statements in the company's Form 10-K[118] Results of Operations 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 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] - Acquisitions (EMT, NMS, ARTeSYN) contributed $10.9 million (7.6%) to total revenue in Q1 2021[123] - Process analytics business revenue increased by $3.0 million due to higher demand for SoloVPE systems[123] Costs of product revenue and operating expenses 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] - R&D expenses included $1.0 million from the ARTeSYN acquisition in Q1 2021[130] - SG&A costs included $3.2 million from the 2020 acquisitions (EMT, NMS, ARTeSYN) in Q1 2021[133] Other expenses, net 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] - Other expenses increased due to realized foreign currency losses[138] Income tax provision 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] Non-GAAP Financial Measures 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][141] - Adjustments exclude acquisition and integration costs, intangible amortization, inventory step-up charges, loss on debt conversion, and non-cash interest expense[142][144][145] 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 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] - The company believes current cash balances are adequate for at least the next 24 months, absent additional acquisitions[158] - Future capital requirements include purchases of property, plant and equipment, acquisitions of complementary businesses/technologies, and continued investment in intellectual property[158] - 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][151] - The company has no special purpose entities or off-balance sheet financing arrangements[161] Cautionary Statement Regarding Forward-Looking Statements 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] - 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][167] - The company undertakes no obligation to publicly update or revise forward-looking statements[166] Item 3. Quantitative and Qualitative Disclosures About Market Risk 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] - Primary foreign currency exposures are the Swedish krona, Euro, and British pound[170] - The company currently does not hedge its foreign exchange risk[170] Item 4. Controls and Procedures 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] - No material changes in internal control over financial reporting occurred during the three months ended March 31, 2021[172] PART II - OTHER INFORMATION Item 1. Legal Proceedings 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] Item 1A. Risk Factors 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] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities to report for the period - No defaults upon senior securities occurred during the period[176] Item 4. Mine Safety Disclosures This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[177] Item 5. Other Information There is no other information to report under this item - No other information to report under this item[178] Item 6. Exhibits 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] 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]