Bio-Techne(US:TECH)2025-09-09 14:07Summary of Bio-Techne Conference Call Company Overview - Company: Bio-Techne (NasdaqGS: TECH) - Date: September 09, 2025 - Key Speakers: CFO Jim Hippel, Dave Clair from IR Industry Insights End Markets - Pharmaceuticals: Accounts for approximately 30% of revenue, showing a return to double-digit growth after a period of pipeline reshuffling due to IRA legislation [5][6] - Biotech: Represents about 20% of revenue, experiencing low single-digit growth amidst significant funding declines, reaching almost eight-year lows [6][7] - Academia: Also around 20% of revenue, facing declines particularly in larger purchases and instrumentation, with core reagents holding steady [7][8] Geographic Performance - Europe: Solid mid-single-digit growth, largely unaffected by U.S. political dynamics [8] - China: Experienced double-digit growth, attributed to pull-in purchases due to tariff concerns, but overall performance was relatively flat [9][10] - Rest of Asia: Similar trends to China with slight low single-digit growth [11] Financial Performance - Fourth Quarter Growth: Achieved 3% organic growth, with pharma returning to normal growth levels [3][5] - Outlook for Fiscal Year 2026: Anticipated low single-digit growth, with analysts aligned on this expectation [16][17] Challenges and Risks - Pharma Uncertainty: Concerns regarding potential headwinds from MFN pricing and tariffs, leading to a cautious outlook [12][13] - Biotech Funding: Ongoing challenges due to reduced funding, making recovery difficult [14][15] - Academic Market Sentiment: Low sentiment among U.S. academic customers, with expectations for improvement in the next 12 months [45][46] Growth Drivers - Instrumentation: Strong performance driven by pharma's return to health, with instrumentation growth outpacing consumables [25][26] - GMP Reagents: Over 30% growth in fiscal 2025, driven by the importance of cell therapy and an expanding customer base [27][28] - Acquisition Strategy: Focus on M&A opportunities, particularly in private companies, with a professionalized corporate development team in place [41][42] Strategic Initiatives - Margin Management: Aiming for margin expansion despite a low-growth environment, with a focus on productivity initiatives and cost management [37][38] - Investment in Growth Pillars: Continued investment in cell therapy, proteomic analysis, and organoids, while divesting from non-core areas like exosome diagnostics [39][40] Conclusion - Opportunities: Optimism for recovery in academic and pharma markets, with potential for biotech to stabilize [45][46] - Challenges: Biotech remains a significant concern, with potential impacts from the health of pharma and academic markets [46]