Repligen(US:RGEN)2022-11-01 17:17Financial Data and Key Metrics Changes - Quarterly revenue reached $201 million, despite $11 million in foreign exchange headwinds and a decline in COVID-related revenue [10][27] - Revenue for the first nine months was $615 million, reflecting a 28% organic growth, accounting for a 9% decline in COVID revenue and 5 points of FX headwinds [10][27] - Adjusted net income for Q3 was $44.4 million, a slight decrease of $0.3 million compared to the same period in 2021, with adjusted EPS at $0.77 per fully diluted share [40][41] Business Line Data and Key Metrics Changes - Filtration and chromatography businesses were the main growth drivers, with filtration up 15% organically and chromatography up over 35% [19][21] - Gene therapy revenue growth exceeded 50% year-to-date, with over 20 accounts generating more than $1 million annually, a 70% increase from the previous year [11][29] - The proteins business remained flat for the quarter, with expectations of a 10% decline for the year [22] Market Data and Key Metrics Changes - Cell and gene therapy accounts represented 14% of year-to-date reported revenue, with significant growth in approvals contributing to market optimism [30][88] - Asia/rest of world growth led at 78%, while North America grew at 10% and Europe declined by 7% [35] Company Strategy and Development Direction - The company entered two strategic collaborations to enhance its analytics and proteins franchises, including a 15-year agreement with DRS Daylight Solutions [15][16] - The company is focusing on expanding its filtration systems business, particularly for gene therapy and mRNA applications [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a transition in the industry post-COVID, with changes in order patterns and inventory levels [52][56] - The company anticipates a modest growth rate for the base business in 2023, projecting a range of 15% to 20% [61][62] Other Important Information - The company tightened its full-year revenue guidance to $795 million to $805 million, reflecting a 19% to 20% growth [43][44] - Adjusted operating income guidance was slightly lowered to a range of $231 million to $235 million [46] Q&A Session Summary Question: Impact of destocking in the bioprocessing industry - Management noted that destocking is occurring primarily in COVID accounts, with a shift in order patterns observed [52][56] Question: Guidance for base business strength in 2023 - Management indicated that while COVID-related revenue is decreasing, the base business is expected to grow modestly, aligning with historical growth rates [61][62] Question: Fungibility of product portfolio between COVID and non-COVID work - Management clarified that while there are pockets of inventory, the product lines are not strictly dedicated to COVID, allowing flexibility in usage [82] Question: Chromatography resin availability for 2023 - Management reported improvements in resin availability, with expectations for full capacity by the second half of next year [68][69] Question: Pricing environment and inflationary pressures - Management has implemented price increases to offset inflation, with expectations for net achievable price increases above 5% [105] Question: Long-term partnerships and expansion into mAb fragments - Management expressed confidence in the long-term partnership with Purolite, emphasizing the strategic importance of expanding into mAb fragments [111][112]