Brendan Smith

Brendan Smith asked about Teknova's strategy for emerging segments like sequencing, spatial genomics, and cancer screening, specifically how the $2 million commercial investment will target these markets and the general outreach approach. He also inquired about which revenue segments might experience faster impact from biopharma funding changes and potential upside to 2026 guidance.

Answer

Stephen Gunstream, President and CEO of Alpha Teknova, explained that the commercial investment will fund field personnel with strong customer relationships and build brand awareness. He noted that private labeling opportunities are also a key focus. Regarding biopharma funding, Mr. Gunstream identified custom biopharma products (historically 25% of revenue) as the most affected segment, typically with a 3-4 quarter lag. He mentioned that while not built into 2026 guidance, early market recovery could provide upside.

Brendan Smith inquired about Teknova's strategy for emerging market segments like sequencing, spatial genomics, and cancer screening, specifically how the $2 million commercial investment will be allocated and the general outreach approach to these areas.

Answer

Stephen Gunstream, President and CEO, explained that the commercial investment targets field personnel with strong customer relationships, brand building, and expanding private labeling opportunities. He noted that many larger customers already utilize Teknova for discovery and development, providing a natural segue for larger volumes and private labeling. Regarding the four-quarter lag in biopharma funding, Mr. Gunstream stated that the custom biopharma segment (25% of revenue) is most affected, historically showing a 3-4 quarter lag. Matt Lowell, CFO, added that while Q4 2025 biotech fundraising is encouraging for 2027, sustained increases could provide upside for 2026 guidance.

Brendan Smith of TD Cowen asked for qualitative insights from customer conversations about shifting priorities in biopharma, particularly what is driving decisions to alter program timelines and spending.

Answer

CEO Stephen Gunstream noted that while customer views on modalities vary, a key trend is the ability to raise capital, leading to a shift toward less risky areas like ADCs. He emphasized that customers with later-stage therapies are generally securing funding and executing as planned, which provides a stable base for Tecnova.

Brendan Smith asked about the underlying assumptions for the overall flow cytometry market growth, specifically inquiring about the relative end market breakdown of this growth and geographic considerations for market expansion, particularly given Cytek's strong presence in APAC.

Answer

Bill McCombe, CFO, noted consistent double-digit growth in APAC revenues, potentially outperforming the market, and estimated mid-to-upper single-digit growth for the APAC region. He identified Europe as the slowest market and the U.S. as somewhere in between, believing Cytek has outperformed the market in the U.S. and EMEA. Wenbin Jiang, CEO, concurred, adding that global market growth rates have been below most five-year estimates for flow cytometry but are expected to rebound.

Brendan Smith asked about the underlying assumptions for overall flow cytometry market growth, specifically inquiring about geographic considerations for market expansion, particularly given Cytek's strong performance in the APAC region.

Answer

CFO Bill McCombe and CEO Wenbin Jiang explained that APAC has shown consistent double-digit growth, with an estimated mid-to-upper single-digit market growth in that region. They noted Europe has been the slowest market, with the U.S. in between, and believe Cytek has outperformed the overall market in the U.S. and EMEA. They anticipate a rebound in global market growth rates, which have recently been below long-term estimates.

Brendan Smith inquired about expectations for the upcoming December user group meeting and whether any significant new products are on the horizon for 2025 that could impact top-line growth.

Answer

CFO William McCombe stated that formal 2025 guidance would be provided during the Q4 earnings call, following the company's usual pattern. CEO Wenbin Jiang confirmed that due to substantial R&D investment, new products will continue to be launched throughout the year, similar to the cadence of previous years.

Brendan Smith asked for more details on the cross-selling initiative, specifically what ultimate success looks like and if any contribution from it is included in the 2026 guidance or if it represents upside.

Answer

Chairman and CEO Roderick de Greef explained that the ultimate metric for success, for now, is the faster growth rate of non-BPM tools compared to BPM. He confirmed that a base assumption for non-BPM tool growth is included in the guidance, but did not provide granular details, mentioning an internal goal to track and report the number of customers using multiple products.

Brendan Smith requested further elaboration on BioLife Solutions' cross-selling initiative, specifically inquiring about the ultimate success metrics for this strategy and whether any anticipated contribution from cross-selling is already factored into the 2026 guidance or should be considered as potential upside.

Answer

Chairman and CEO Roderick de Greef explained that the non-biopreservation media (BPM) tools are expected to grow at a faster percentage rate than BPM products, partly due to a smaller base. He noted that the company aims to track the number of customers utilizing multiple BioLife products internally. Mr. de Greef confirmed that a base assumption for non-BPM tool growth is included in the 2026 guidance.

Brendan Smith from TD Cowen inquired about the specific levers within the cell processing platform that BioLife can pull to drive top-line growth in 2025. He also asked about the macro trends the company is observing and how they are being leveraged internally.

Answer

CEO Roderick de Greef identified several growth levers, including the strong performance of its top 20 customers, deepening relationships with distributors, implementing pricing opportunities to reduce legacy discounts, and cross-selling Sexton tool products into its existing biopreservation media customer base. He noted these efforts are key to capitalizing on the current market dynamics.

Brendan Smith asked for more detail on Certara's expectation to drive double-digit growth over time, including the feasible timeframe and any benchmarks for de-risking this ramp. He also inquired about software growth expectations for the next couple of years, considering peer benchmarks of 10%-15%.

Answer

CEO Jon Resnick affirmed that Certara's expectations for growth are no different from peers in the space, citing ample opportunities and significant room for execution improvement. He stated that multi-year guidance, including timing and expectations, would be provided later in the year, possibly by Q3. CFO John Gallagher added that the view to double-digit growth is predicated on end-market stability/tailwinds and improved execution, expressing optimism given Certara's market-leading position and MIDD adoption rates.

Brendan Smith followed up on Certara's potential to achieve double-digit growth over time, seeking clarification on the timeframe, necessary benchmarks, and expectations for software growth given peer benchmarks of 10-15%.

Answer

CEO Jon Resnick affirmed that Certara's growth expectations are no different from its peers, acknowledging significant opportunities for execution improvement. He stated that a multi-year path and clear guidance on timing and expectations would be provided later in the year, likely by early Q3. CFO John Gallagher added that the double-digit growth outlook is predicated on favorable end-market conditions, indicated by recent services business performance, combined with ongoing execution improvements, expressing optimism given Certara's market-leading position in MIDD adoption.

Brendan Smith of TD Cowen asked for more detail on new customer inquiries following the FDA's guidance on reducing animal testing, specifically inquiring about the expected cadence from initial contact to revenue recognition for these new opportunities.

Answer

CFO John Gallagher identified the QSP and Simcyp businesses as the primary initial beneficiaries of this trend, noting it's a long-term conversion but that both areas are already outperforming expectations. He stated that customer conversations are positive and that there is potential upside in these areas for the remainder of the year.

Brendan Smith from TD Cowen asked about Schrödinger's go-to-market strategy for the Predictive Tox launch, specifically whether it will primarily be an add-on for existing customers, require new touch points within accounts, or target entirely new customer accounts, and the potential impact on sales and marketing. He also inquired about the concurrent impact of the transition to hosted contracts on overall blended margins, considering the backdrop of winding down the internal pipeline and anticipated OpEx savings.

Answer

Ramy Farid, CEO, explained that the Predictive Tox launch will target both existing and new customers. It will be an add-on for existing customers, used early in discovery projects, and will also tap into new budgets from toxicology groups later in discovery and preclinical development who are not current customers. Richie Jain, CFO, added that several new products fit this profile, expanding the total addressable market, and that investments in sales and marketing were made in 2025 to support these initiatives. Regarding margins, Mr. Jain reiterated that the hosted transition has no impact on ACV or cash flows, but will cause interim variability in revenue, affecting gross margins and adjusted EBITDA without changing actual cost of goods sold or operating expenses. He projected gross margins to return to the high 70s and highlighted that the 2028 adjusted EBITDA profitability target reflects software growth, hosted transition, and operating expense reductions across the entire business.

Brendan Smith asked about the go-to-market strategy for the Predictive Tox launch, specifically whether it would primarily be an add-on for existing customers, require new touch points, or target brand-new customer accounts. He also inquired about the concurrent impact of the hosted transition on overall blended margins, considering internal pipeline winding down and OpEx savings.

Answer

Ramy Farid, CEO, stated that Predictive Tox would serve both as an add-on for existing customers (as a throughput-based hosted web service) and as a means to tap into new budgets from toxicology groups not currently customers. Richie Jain, CFO, added that new products expand the total addressable market, supported by investments in sales and marketing. Mr. Jain reiterated that the hosted transition has no impact on ACV or cash flows, but interim revenue variability will affect gross margins and adjusted EBITDA. He noted that the long-term goal is for gross margins to return to the high 70s and adjusted EBITDA profitability by 2028, driven by software growth, the hosted transition, and operating expense reductions across the business.

Brendan Smith of TD Cowen inquired whether Schrödinger has engaged with the FDA regarding its pilot study on computational models versus animal testing and if the company might be involved.

Answer

CEO Ramy Farid confirmed that the company has had informal discussions with the FDA, which is aware of Schrödinger's work on predictive toxicology. However, he stated it is premature to discuss formal FDA adoption of the technology until it is more mature and has received feedback from beta testers.

Brendan Smith inquired about the upcoming predictive toxicology model, asking about its points of differentiation versus other non-animal simulators and how it might be priced relative to existing software.

Answer

Ramy Farid, CEO, explained that the model's key differentiator is its high accuracy, achieved by integrating physics-based methods with machine learning. He noted that pricing will be determined after a beta release to select customers later this year provides feedback on its impact and accuracy.

Brendan Smith inquired about the key factors driving high customer retention and ACV growth, and how customer feedback is shaping the company's R&D investment strategy for new products.

Answer

CEO Ramy Farid attributed strong retention to the platform's tangible impact on customer projects, such as accelerating timelines and improving molecule quality, noting a lack of viable alternatives. He explained that this success and customer feedback directly guide R&D investments into high-need areas like biologics, predictive toxicology, and formulations, which also tap into new customer budgets.

Brendan Smith of TD Cowen asked about the prioritization of non-oncology programs for collaboration versus internal development and plans for building clinical infrastructure in those areas.

Answer

President of R&D Karen Akinsanya stated that while oncology remains a core focus, the company sees a significant opportunity in non-oncology areas with limited small molecule options. She confirmed that Schrodinger is equipped and plans to advance a select number of non-oncology assets into Phase I studies internally, particularly those with clear, early value inflection points.

Brendan Smith requested further details on the anticipated Q3 2026 update for ABCL635, specifically concerning patient numbers, dose ranges tested, and the duration of follow-up for both the phase I and phase II portions of the study.

Answer

Sarah Noonberg, Chief Medical Officer, explained that the Q3 readout would include the phase I portion (single and multiple ascending doses, with three doses spread four weeks apart) and the randomized, double-blind, placebo-controlled phase II part. She noted that the key proof-of-concept readout for phase II would be at four weeks, which is considered sufficient to assess pharmacology, efficacy, and safety, with efficacy readouts typical of a phase III study (frequency/severity of hot flashes, preliminary quality of life measures).

Brendan Smith from TD Cowen requested more details on the anticipated ABCL635 Q3 update, specifically asking about the expected patient numbers, range of doses tested, and the duration of follow-up for both the Phase 1 and Phase 2 portions of the study.

Answer

Sarah Noonberg, Chief Medical Officer, explained that the Q3 readout will include the Phase 1 portion (single ascending dose and multiple ascending dose with 3 doses spread 4 weeks apart) and the randomized, double-blind, placebo-controlled Phase 2 part. She confirmed that the key proof-of-concept readout will be at 4 weeks, which is considered sufficient to observe pharmacology, efficacy, and safety in a placebo-controlled cohort. Efficacy readouts will cover hot flash frequency and severity, along with preliminary quality of life measures at 4 weeks, typical of a Phase 3 study.

Jackie, on behalf of Brendan Smith, asked what AbCellera expects to see from the Phase I data for ABCL 575 to solidify its positioning within the competitive landscape, particularly against Dupixent and Sanofi's asset.

Answer

Carl Hansen, AbCellera's President and CEO, explained that ABCL 575's differentiation thesis centers on less frequent dosing, potentially every six months. He noted that recent data from Amlatilimab (Coast trial) showed class efficacy, albeit less than expected, and equivalent one-month and three-month dosing. Mr. Hansen stated that ABCL 575's early readouts will focus on safety, PK, and half-life to support this dosing hypothesis, with key catalysts likely coming from external readouts on the OX40/OX40 ligand class.

Brendan Smith from TD Cowen asked for details on the target dosing, formulation, and frequency for ABCL635 and how these factors might influence the future clinical and commercial strategy.

Answer

CEO Carl Hansen stated that based on preclinical work, the company believes the antibody's half-life and potency support a once-monthly subcutaneous dose. He specified the target product profile includes a high-concentration formulation of 150 mg/mL in a 2 mL dose, which will be validated in the ongoing Phase I study.

Brendan Smith from TD Securities asked for a broader view on the T cell engager (TCE) platform, inquiring what an ideal partnership would look like and how AbCellera views the strategic direction for this vertical as the TCE space evolves.

Answer

President and CEO Dr. Carl Hansen explained that amid growing excitement for TCEs, AbCellera's priority is to advance the science. He stated that an ideal first partnership would be with a team deep in the science to collaboratively understand how to best use their tools to create effective drugs. While upfront cash is a consideration, the primary goal is a strong scientific collaboration to unlock the potential of the modality over the next several years.

Brendan Smith followed up on the MAVERICK integration with ATF, asking if Repligen sees an opportunity to launch it in 2026, how it fits into the 2026 guidance, and whether it would replace the legacy product or be offered as an add-in.

Answer

Olivier Loeillot, President and CEO, stated that the launch timing for the MAVERICK-ATF combination is still under assessment by the product management team, with different options being considered. He indicated it would likely be an option for customers rather than a forced replacement, and more details on the 'how and when' would be shared in the next couple of quarters.

Brendan Smith followed up on the MAVERICK integration with ATF, asking about the opportunity for a 2026 launch, its context within the guidance, and whether it would replace the legacy product or be offered as an add-in.

Answer

President and CEO Olivier Loeillot indicated that the launch timing and strategy for the MAVERICK-ATF combination are still being assessed by the product management team. He confirmed it would likely be an option for customers, not a forced replacement, to track bioreactor activity via the ATF loop, with more details to be shared in upcoming quarters.

Brendan Smith followed up on process analytics, specifically asking for more color on the integration of the Maverick device from 908 Devices into ATF, its current status, timing, and potential impact on growth opportunities across franchises.

Answer

President and CEO Olivier Loeillot highlighted analytics as a showcase of Repligen's portfolio breadth. He noted that the launch of SoloVPE PLUS, a new generation online protein concentration hardware, led to the highest unit sales ever for CTech in Q3. With a large install base and only a small portion upgraded, he anticipates a significant tailwind for several years. Loeillot also mentioned a strong rebound in CTech consumables and services in the first two quarters. Regarding 908 Devices, he confirmed the integration is on track, with merged sales organizations and a growing funnel. R&D efforts to combine ATF with Maverick are progressing and look promising, with more details expected in the next quarter.

Brendan Smith asked for an update on Repligen's process analytics strategy, specifically the integration of the Maverick device from 908 Devices into ATF, including timing and its potential impact on growth opportunities across franchises.

Answer

Olivier Loeillot, President and CEO, highlighted the successful launch of SoloVPE® Plus, driving the highest unit sales ever for CTech in Q3 and creating a multi-year upgrade cycle. He noted strong rebounds in consumables and services for CTech. For 908 Devices, integration is on track, sales organizations are merged, and an R&D effort to combine ETF with Maverick is progressing promisingly, with more details expected next quarter.

Brendan Smith inquired about any potential impact from the FDA's recent guidance to phase out animal testing for biologics. He also asked about Repligen's manufacturing flexibility to shift production to U.S. facilities to mitigate potential tariff impacts.

Answer

Executive Olivier Loeillot responded that he has not heard anything tangible from customers regarding the FDA's animal testing guidance. On manufacturing, he confirmed that Repligen has leverage to shift production, as several product lines like OPUS and fluid management already have dual manufacturing sites in the U.S. and Europe, and the company is exploring further dual-sourcing opportunities.

Brendan Smith asked about expectations for new auto-injector partnerships, potential overlap with new ENHANZE and Hypercon deals, and how auto-injector sales will be reported, specifically if they will follow a similar model to ENHANZE with product sales during development and royalties on commercial sales.

Answer

Helen Torley, President and CEO, and Nicole LaBrosse, CFO of Halozyme Therapeutics, responded. Helen Torley indicated anticipated progress with the high-volume auto-injector this year, noting interest from both current and new partners evaluating ENHANZE, Hypercon, and Surf Bio, emphasizing the benefit of at-home delivery for patients. Nicole LaBrosse clarified that revenue from auto-injectors would be recognized as product sales from device sales, similar to API sales. If associated with licensed ENHANZE technology, royalties would also be recognized.

Brendan Smith asked about expectations for new auto-injector partnerships, whether there might be overlap with new ENHANZE and Hypercon deals planned for the year, and how auto-injector sales would be reported—specifically, if it would be similar to ENHANZE with product sales during development and royalties on commercial sales.

Answer

Helen Torley, President and CEO, confirmed ongoing progress with the high-volume auto-injector, noting interest from current and potential new partners evaluating ENHANZE, Hypercon, and Surf Bio. She anticipates progress with the high-volume auto-injector this year, emphasizing its benefit for patient self-administration of larger volumes at home. Nicole LaBrosse, CFO, clarified that revenue recognition would involve product sales from selling the devices (similar to API sales) and associated royalties when licensed with technologies like ENHANZE.

Brendan Smith of TD Cowen asked about the next-generation pipeline assets and their potential exposure to CMS rulings, specifically how many are being developed as subcutaneous-first products. He also inquired about any coordination with Johnson & Johnson on potential CMS appeals related to DARZALEX and the IRA.

Answer

President and CEO Dr. Helen Torley stated that the majority of pipeline assets are being developed as subcutaneous-only or with a very short gap between IV and subcutaneous launches, minimizing IRA exposure. She noted that Halozyme has not discussed specific appeal strategies with J&J but highlighted that pending legislation could potentially exclude DARZALEX IV from IRA negotiation due to its multiple orphan drug designations.

Brendan Smith from TD Cowen sought confirmation that the outcome of the litigation with Merck, including both the infringement lawsuit and the Post-Grant Review (PGR), would have no impact on Halozyme's core ENHANZE business. He also asked about the potential impact of tariffs on the business.

Answer

Dr. Helen Torley, President and CEO, confirmed that the litigation involves a separate set of patents and will have "absolutely no impact whatsoever" on the core ENHANZE business, framing it as potential upside. Regarding tariffs, she stated that Halozyme has very limited exposure due to its U.S.-based manufacturing and sourcing. She also clarified that based on partner agreements and distribution, Halozyme should not see any impact on its royalty revenues from potential pharma tariffs.

Brendan Smith inquired about business development, specifically the economic impact of the new small volume auto-injector deal, how it differs from the high-volume auto-injector, and what is needed to finalize pending ENHANZE deals.

Answer

President and CEO Dr. Helen Torley explained that the small volume auto-injector adds a product sales revenue stream via a price-per-device model. In contrast, the high-volume auto-injector is linked to ENHANZE, creating both new royalty streams and product sales fees. She expressed confidence in signing new deals in 2025, stating that progress is being made by patiently navigating the internal review processes of various potential partners.

Brendan Smith from TD Cowen sought clarification on Roche's stated $2 billion opportunity for Ocrevus subcutaneous, asking if this represents new-to-brand patients or includes IV-to-subcutaneous switches. He also asked about the timeline for learning more about undisclosed Roche and Chugai pipeline drugs.

Answer

President and CEO Dr. Helen Torley clarified the $2 billion Ocrevus opportunity is market expansion on top of existing sales, which will also see conversion over time. She noted early U.S. data shows 80% of new starts are new-to-brand. Regarding the pipeline, she stated that details on the Roche and Chugai drugs cannot be disclosed until the partners make public announcements.

Brendan Smith asked for more granular details on West's 2026 goals for Annex 1 cycle upgrades, given that less than 15% of the total opportunity has been completed, and what drives visibility into these assumptions.

Answer

CEO Eric Green explained that Annex 1 is a multi-year journey, representing a subset of standard components (6 billion units out of 25-26 billion standard). Projects completed in Q4 2025 will commercialize throughout 2026 and beyond. He expects Annex 1 to drive about 200 basis points of growth in 2026, sustainable based on the pipeline of new and commercialized products.

Brendan Smith asked for more granular details on West's 2026 goals for Annex 1 cycle upgrades, given that less than 15% of the total opportunity has been completed and West met its 2025 goals. He also inquired about the visibility driving these assumptions.

Answer

CEO Eric Green clarified that the 6 billion components opportunity is a subset of standard products, with less than 15% commercialized to date. He explained that projects completed in Q4 2025 (65 projects) will start commercializing throughout 2026 and beyond, driving revenue. He projected that Annex 1 would contribute about 200 basis points to growth in 2026, which he believes is sustainable due to the pipeline of new products being added and commercialized.

Brendan Smith asked how the regionalization of Multiomics and NGS services, particularly gene synthesis, is expected to impact margins over the next couple of quarters, especially when compared to trends in Biorepositories and Automated Stores, and in the context of Azenta's overall margin expansion goals. In a follow-up, he inquired about the factors underpinning the 26% organic growth in NGS in China and whether this growth rate is expected to continue throughout 2026.

Answer

President and CEO John Marotta stated that the regionalization strategy, especially for synthesis, is well-forecasted and executing effectively. He noted that synthesis is a high-gross margin product (65%+) and while there's some North America share loss, traction in other areas, coupled with automation investments and technology, is expected to improve gross margins. EVP and CFO Lawrence Lin added that while Asia/China have lower Multiomics margins, the North America sales team reboot is anticipated to drive a significant second-half ramp and a higher overall gross margin profile. Mr. Marotta attributed China's strong NGS growth to momentum in the biotech and pharma segments, Azenta's 'China for China' strategy, and the team's strong execution. He highlighted significant investment in life sciences and biotech within China, where Azenta's team performs exceptionally well.

Brendan Smith followed up by asking for insights into what is underpinning the 26% organic growth in China's NGS, and if Azenta expects this growth rate to continue throughout 2026.

Answer

President and CEO John Marotta attributed the strong performance in China to significant momentum in the biotech and pharma segments, where Azenta is well-positioned with its 'China for China' brands and regional go-to-market strategy. He highlighted the China team's strong execution across people, structure, process, and performance, noting that China is heavily investing in its life sciences and biotech sector, which aligns well with Azenta's capabilities.

Brendan Smith from TD Cowen asked for more detail on the sales funnel visibility, which end markets might show spending strength, and the ideal buyer profile for the B Medical Systems divestiture.

Answer

CEO John Marotta confirmed strong visibility into the capital equipment funnel, stating that delays are due to pharma capital spending pauses, not competitive losses. For the B Medical divestiture, he noted significant interest from both private equity and strategic buyers and anticipates an announcement in the coming months.

Brendan Smith asked about any signs of customer order pull-forwards to get ahead of tariffs and which segments might be most affected. He also requested more detail on Next-Generation Sequencing (NGS) ordering trends, the medium-term growth opportunity, and where the GENEWIZ business is best positioned to compete.

Answer

CEO John P. Marotta described a recent outreach to nearly 100 customers that revealed a strong focus on quality, outsourcing, and supply chain security, which he believes positions Azenta well. Regarding NGS, he stated there is no change in their view of the end market demand. He connected the customer insights directly to NGS, noting that customers are seeking partners who provide a competitive advantage through quality, delivery, and cost, which could lead to increased outsourcing.

Brendan Smith asked about Twist's target number of new diagnostic partnerships for the year and the expected materiality of these new partnerships to NGS growth and revenue expectations over the next one to two years, versus existing partnerships.

Answer

Emily Leproust, CEO and Co-Founder of Twist Bioscience, explained that FY26 NGS growth will primarily stem from existing, already-signed partners with ramping volumes. For sustained growth in FY27 and FY28, new partners are crucial, and active efforts are underway to onboard them, leveraging Twist's strong performance and supply chain excellence, though they are not needed for 2026 targets.

Brendan Smith from TD Cowen asked about Twist Bioscience's strategy for new diagnostic partnerships, including any target number of deals for the year, and the anticipated material impact of these new partnerships on NGS growth and revenue expectations for the next one to two years versus existing collaborations.

Answer

CEO Emily Leproust clarified that FY2026 NGS growth is primarily secured by existing partners with established deals. She emphasized that new diagnostic partners are critical for sustained growth in FY2027 and FY2028, highlighting ongoing active efforts to onboard them due to Twist's strong performance and supply chain capabilities.

Brendan Smith inquired about the sequential gross margin trajectory from Q4 2025 into Q1 2026 and the path to achieving the 52%+ full-year gross margin guidance for fiscal 2026. He also asked about specific customer feedback or factors influencing the upper versus lower bounds of the NGS revenue guidance.

Answer

Adam Laponis, CFO of Twist Bioscience, indicated that gross margin improvements are expected throughout fiscal 2026, primarily driven by revenue growth and continuous process improvements. He also mentioned ongoing investments in new capabilities, particularly for AI drug discovery customers, and reiterated the focus on optimizing gross profit dollars now that margins are above 50%.

Brendan Smith asked about Twist Bioscience's gross margin expectations sequentially from Q4 to Q1, and the path to achieving 52%+ for the full fiscal year 2026. He also inquired about specific customer feedback driving the upper versus lower bound of the NGS portfolio guidance.

Answer

Adam Laponis, CFO, stated that gross margin improvements are expected throughout the year, paralleling revenue growth and continuous process improvements. He noted ongoing investments in new capabilities, particularly for AI drug discovery. He reiterated a path to continued gross margin expansion beyond 2026, focusing on optimizing gross profit dollars.

Brendan Smith asked how the new adjusted EBITDA breakeven target affects profitability expectations for each revenue segment and requested color on the profitability profile of each segment given recent product launches.

Answer

CFO Adam Laponis explained that Twist manages the business in aggregate, not by segment-level profitability. He reiterated the key financial principle that 75% to 80% of incremental revenue drops to the gross margin line across all products. He expressed confidence in the growth and contribution from all three segments as the company continues to expand gross margin above 50%.

Brendan Smith from TD Cowen requested more details on the company's proprietary enzyme production initiative, including potential gross margin leverage, applicable internal processes, and timing.

Answer

An executive, likely President and COO Patrick Finn, explained that the enzymes will benefit standard internal synthesis procedures, enhance supply chain security, and drive new product innovation. He noted that any expected financial impact from this initiative is already incorporated into the company's current financial guidance.

On behalf of Brendan Smith, an analyst asked for more details on the company's new proprietary enzymes initiative, questioning the timing and strategic rationale for launching these products now.

Answer

CEO Dr. Emily Leproust explained that developing proprietary enzymes is a natural extension of Twist's core DNA synthesis platform. She highlighted that the first product, a proprietary ligase, improves sequencer efficiency, which provides direct value to customers. She noted that the ability to create differentiated workflows is increasingly important and that Twist has a strong product road map in this area.

Brendan Smith asked about the outlook for cash flow in fiscal 2026, the company's M&A strategy across core biosimulation, clinical ops, and potential new markets, and later inquired about pricing flexibility, plans to leverage AI capabilities for pricing, and how these factors are baked into the fiscal 2026 guidance.

Answer

CEO Shawn O'Connor stated that the cash flow outlook is robust and that 2026 presents an opportunity for the next acquisition in biosimulation or clinical ops, following 2025's integration focus. He explained that more aggressive pricing is tied to AI and cloud upgrades, monetized through modules and base platforms, and is baked into guidance with a discount factor, while service pricing remains competitive.

Brendan Smith asked if the 2026 guidance contemplates an extension of recent renewal trends, about cash flow expectations for fiscal 2026, interest in acquisitions, and the company's pricing flexibility, especially with AI capabilities.

Answer

Shawn O'Connor (CEO, Simulations Plus) confirmed that 2026 guidance factors in recent renewal trends and a more aggressive price increase tied to new AI and cloud capabilities, which is baked in but discounted. He noted robust cash flow and reiterated the strategy of growth through organic contribution and acquisitions in biosimulation and clinical ops, with 2026 being an opportunity for the next acquisition. He also anticipated a competitive market for services pricing.

Brendan Smith of TD Cowen asked about the expected revenue ramp as partners progress through clinical development, from preclinical to late-stage trials. He also inquired about the options available to fund the scaling to GMP, and whether the sale of the biocatalysis business might be considered to accelerate this.

Answer

CEO Stephen Dilly outlined a revenue model that begins with smaller, technical collaboration fees and milestones in early phases, transitioning to simpler, volume-based revenue from direct siRNA material supply in later stages. He dismissed the idea of selling the biocatalysis business, stating it is a profitable 'engine' that reduces the company's cash need. He added that scaling can be done incrementally, staying just ahead of demand, rather than requiring a large, upfront capital expenditure.

Brendan Smith from TD Cowen asked for more details on Codexis's machine learning capabilities, including how they will be integrated across the business and their potential impact on operating efficiency.

Answer

CEO Stephen Dilly and SVP of Research Dr. Stefan Lutz detailed the strategy. Mr. Dilly highlighted that machine learning is applied to tractable problems, such as optimizing ligase selection for specific molecules, noting a new tool was developed and launched in under a year. Dr. Lutz added that these capabilities are being expanded beyond enzyme engineering into manufacturing process optimization to create a differentiated offering. Both confirmed the tool has been successfully deployed with customer assets, validating its real-world performance.

Brendan Smith asked about the remaining steps to secure a GMP scale-up partner by year-end and how such a partnership would impact Codexis's spending in 2026 and beyond.

Answer

COO Kevin Norrett stated that the final steps involve finalizing negotiations and completing feasibility testing with potential partners. He clarified that a partnership would not be a major cost center, as Codexis would tech transfer processes and supply materials, likely receiving back-end economics. President and CEO Dr. Stephen Dilly added that securing a partner accelerates their path to GMP and buys them crucial time to properly plan their own future facility.

Brendan Smith from TD Cowen asked for more detail on customer conversations in the DMPD segment and whether there has been renewed interest in Evotec's AI capabilities.

Answer

CEO Christian Wojczewski noted that the biotech sector, particularly on the US East Coast, remains cautious in its spending, while the pharma sector is more mixed. Chief Scientific Officer Cord Dohrmann confirmed heightened interest in AI/ML across drug discovery, stating Evotec is well-positioned with its omics-driven platform and that computational chemistry has long been a core company capability.

Brendan Smith asked for Evotec's perspective on the FDA's recent announcement to phase out animal testing for biologics, how the company is positioned for this shift, and if similar changes are expected from the EMA in Europe.

Answer

CEO Christian Wojczewski and executive Cord Dohrmann responded that Evotec is technologically well-positioned for this shift due to its long-standing focus on patient-centric platforms like iPSC and PanOmics. They noted that while commercial adoption is still nascent, the FDA's move is a welcome development that should increase traction in future client discussions. They also confirmed the EMA has been considering similar changes.

Brendan Smith of TD Cowen inquired about the recent FDA announcement signaling a phase-out of animal testing for biologics in favor of AI and organoid models. He asked about any related customer conversations and how Evotec is positioned to adapt to this regulatory shift in the U.S. and potentially Europe.

Answer

Executive Cord Dohrmann stated that Evotec is 'excellently positioned' for this shift due to its long-term investment in patient-centric technologies like its Molecular Patient Database, iPSC platform, and PanOmics approach, which bridge in vitro models and clinical data. While he noted that commercial adoption of these alternatives has been 'muted' so far, he said the FDA's announcement is 'extremely welcome' and is expected to create more traction in future commercial discussions. CEO Christian Wojczewski added that the company is well-prepared for this evolution.

Inquired about the company's perspective and positioning regarding the FDA's recent announcement to phase out animal testing in favor of AI models and organoids, and whether a similar trend is expected in Europe.

Answer

The company responded that it is technologically well-positioned for this shift due to its long-term investment in patient-centric platforms like iPSC and PanOmics. They welcome the FDA's announcement, as they believe it will accelerate commercial adoption of these alternative methods, which has been muted so far. The EMA in Europe has also been considering this for some time.

Brendan Smith of TD Cowen inquired about the specifics of the upcoming interim data for the TL1A program (AVS-101), including patient numbers and follow-up length, and asked for details on the formulation and dosing strategy for the ABS-201 alopecia program.

Answer

Christian Stegmann, SVP of Drug Creation, stated the AVS-101 Phase 1 study will involve approximately 40 healthy volunteers, with the interim readout expected to provide pharmacokinetic, pharmacodynamic, and initial immunogenicity data. For ABS-201, Stegmann and CEO Sean McClain detailed plans for a subcutaneous formulation intended for a six-month treatment cycle. The Phase 1 trial will use IV for the single ascending dose (SAD) and the subcutaneous formulation for the multiple ascending dose (MAD) portion.

Brendan Smith of TD Cowen inquired about the specifics of the upcoming ABS-101 (TL1A) data readout and the formulation and dosing plan for ABS-201.

Answer

SVP of Drug Creation, Christian Stegmann, stated the ABS-101 Phase 1 study will involve approximately 40 healthy volunteers, with the interim readout providing PK/PD and initial immunogenicity data. CEO Sean McClain and Christian Stegmann added that ABS-201 is planned for subcutaneous delivery with a six-month treatment cycle, using IV for the SAD portion of the Phase 1 trial and subcu for the MAD portion.

Brendan Smith from TD Cowen asked about Absci's market segmentation strategy for its androgenetic alopecia treatment, ABS-201, and which patient groups would be targeted initially.

Answer

CFO & CBO Zachariah Jonasson explained that the treatment could be efficacious across almost all segments of the androgenetic alopecia population, and the initial Phase I trial will include a breadth of ages and both genders. SVP of Drug Creation Christian Stegmann added that beyond androgenetic alopecia, the mechanism has potential in other indications like endometriosis, which they are actively exploring.

An associate for Brendan Smith asked for expectations on the data to be presented at the upcoming R&D Day for ABS-201 and in H1 2025 for ABS-301. They also questioned the manufacturing plans and anticipated R&D spending ramp for ABS-201.

Answer

Founder and CEO Sean McClain stated that the R&D Day will feature a robust preclinical data package for ABS-201, leading to a drug candidate announcement. He also confirmed efficacy data for ABS-301 is expected in H1 2025. McClain noted that ABS-201 will use the same manufacturer as ABS-101, with similar expected expenses.

Brendan Smith of TD Cowen inquired about the specific near-term levers the company plans to use to drive gross margin improvement and asked for an expected timeline for when US onshoring initiatives could become a significant tailwind.

Answer

CFO Sean Wirtjes identified product cost reduction, procurement savings, and manufacturing efficiencies as key near-term margin drivers, with the MilliporeSigma partnership expected to add tailwinds in 2026. CEO Robert Spignesi added that while the onshoring trend is a clear positive, the specific timing for it to translate into orders is hard to pinpoint, though the trend is active and real.

Brendan Smith from TD Cowen asked if the company could disclose the number of systems MilliporeSigma committed to purchase in the first two years of the agreement. He also inquired about any updated strategy regarding AI integration, given the automation work with customers like Lonza.

Answer

President and CEO Rob Spignesi explained that while they could not quantify the exact number of systems in the commercial agreement, the commitment from MilliporeSigma is expected to be significant starting in 2026. Regarding AI, he noted that the large amount of digital data their systems create presents an innovation opportunity for providing enhanced insights, which is on their radar and could be a point of collaboration with MilliporeSigma.

Brendan Smith inquired about the outlook for Q4 system placements, the rationale for maintaining 2024 guidance despite a strong Q3, and underlying business trends heading into 2025.

Answer

CFO Sean Wirtjes stated the guidance remains prudent due to market headwinds like elongated purchasing cycles and increased scrutiny on spending, but allows for potential upside. CEO Robert Spignesi added that compelling, high-ROI projects are still being prioritized and funded, which underpins the company's confidence for the remainder of 2024 and into 2025.

Brendan Smith inquired about Ginkgo's new ADME data generation service, including plans for proprietary AI model development, the mechanics of its 'meet or beat' pricing, and its integration with customer-sited rack systems. He also asked for details on the lowered Biosecurity guidance, specifically regarding exposure to geopolitical factors.

Answer

Founder, CEO & Director Jason Kelly explained that the 'meet or beat' pricing strategy is designed to eliminate the cost advantage of overseas CROs and onshore biotech services. He noted that while Ginkgo could develop its own AI models from ADME data, the current focus is on the more proven business of data generation for customers. Kelly confirmed the services can be deployed on rack systems at customer sites. Regarding the Biosecurity guidance reduction (from $50M+ to $40M+), he attributed the change to delays in international contracts, prompting a more conservative forecast, while highlighting the long-term potential in US biodefense.

Brendan Smith asked about the training data used for Ginkgo's AI models, specifically its source, whether it includes partner data, and the overall scalability of the company's AI strategy.

Answer

Executive Jason Kelly clarified that Ginkgo's AI models are trained using a combination of public data and its large, proprietary genomic datasets acquired over time, which are comparable in size to public repositories. He stated that while this data is a key asset, the market for selling pure AI models in biotech is still nascent. Currently, these models serve more as a compelling 'appetizer' to attract customers to Ginkgo's core 'data points' services rather than being a significant standalone revenue driver.

Brendan Smith of TD Cowen asked about the growth trajectory for Ginkgo's new AI-driven offerings, whether priorities are shifting due to market excitement around AI, and if there are potential synergies with the Biosecurity business.

Answer

CEO Jason Kelly confirmed that strong interest in AI from mid-to-large biopharma is driving demand for Data Points, as companies need to generate new, high-quality data for model training. He sees a future synergy where Biosecurity's pervasive genomic data collection could be analyzed by AI models to detect threats, but noted the immediate priority is building the data collection infrastructure.

Brendan Smith inquired about the nature of the programs advancing within the SPL portfolio, asking if they are skewed towards traditional cell therapies like CAR-T and how partners are prioritizing their pipelines.

Answer

President and CEO Maher Masoud directed attention to the company's updated corporate deck, highlighting a significant trend towards allogeneic (off-the-shelf) therapies. He noted this shift bodes well for MaxCyte's scalable platform and cited programs from partners like CRISPR Therapeutics and Caribou in B-cell hematologic malignancies as examples of this allogeneic focus.

Brendan Smith asked about the expected gross margin profile for the combined company following the SeQure Dx integration. He also inquired about potential or likely opportunities for upside to the 2025 top-line revenue guidance.

Answer

Executive Douglas Swirsky projected that the combined company's non-GAAP adjusted gross margins will remain healthy, in the low to mid-80s, as SeQure Dx has a similar high-margin profile. Both Swirsky and Executive Maher Masoud indicated the 2025 guidance is conservative and does not assume a market recovery. They suggested that any upside beyond the guided range would likely be dependent on an improvement in the broader market environment.

Brendan Smith asked about 908 Devices' strategy and criteria for potential M&A or additional business development, especially as the company approaches cash flow breakeven and settles into its new strategic focus.

Answer

Executive Kevin Knopp acknowledged that M&A has been a successful part of their strategy, citing the RedWave acquisition as a key contributor to revenue and sales force efficiency. However, he emphasized that the company is currently 'heads down' and intensely focused on executing its organic growth plan. Knopp stated that while they will remain opportunistic with tight filters for synergistic deals, the immediate priority is leveraging the existing catalysts, such as the strong product pipeline and favorable secular tailwinds, to drive growth and achieve profitability targets.

Brendan Smith of TD Cowen inquired about the development strategy for Arrowhead's CNS assets (internal vs. partnered) and the initial patient targeting strategy for the MAPT program in Alzheimer's disease.

Answer

CMO Dr. James Hamilton stated the initial MAPT study will focus on safety and PD markers, without pre-specifying AD subtypes. CEO Dr. Christopher Anzalone added that HTT is partnered with Sarepta, MAPT is being held internally for now, and the SNCA program could be partnered for the right deal. He expects a future mix of internal and partnered CNS assets.

Brendan Smith asked if Arrowhead has any plans to pursue the heterozygous familial hypercholesterolemia (HeFH) indication with zodasiran, given the development and commercial synergies with plozasiran.

Answer

An executive responded that the company is not planning to pursue HeFH with zodasiran. They explained that while an unmet need exists, there is no clear regulatory pathway to target the specific patient population without conducting a full development program, likely including a CVOT, which they deemed not to be a worthwhile investment.

Brendan Smith asked how the recent financing affects plans for additional partnerships, particularly a commercialization partner in 2024. He also inquired if Phase I data for ARO-CFB is still expected this year and about next steps for the program.

Answer

President and CEO Dr. Christopher Anzalone stated that while partnerships are a priority with active discussions, he could not predict the timing of any new deals. Dr. James Hamilton, Chief of Discovery and Translational Medicine, confirmed they should be in a position to release ARO-CFB data later this year and noted the study will also enroll patients with IgA nephropathy.

Speaking on behalf of Brendan Smith, Jacqueline Kisa asked if OmniAb intends to develop additional computational or AI-driven platforms as stand-alone SaaS offerings and what areas of white space the company sees for such tools.

Answer

Matthew Foehr, President and CEO, and Bob Chen, VP of Discovery Systems, addressed the question. Foehr emphasized the intentional integration of existing platforms like OmniDeep (in silico tools) and OmniHub (data sharing). Chen elaborated that exploration is a key data generator for these AI tools, creating a feedback loop where large-scale functional data from exploration feeds AI models, and AI-selected sequences can then be tested using exploration, enhancing the entire discovery process.

Jacqueline Kisa, on for Brendan Smith, asked about any beta testing for the OmniHub platform, potential cloud provider partnerships, and for more detail on the three new Q3 licenses, including therapeutic interests and program size.

Answer

CEO Matt Foehr explained that OmniHub is a natural extension of their ongoing digital interactions with partners, effectively serving as its beta test, and is currently a homegrown platform. He detailed the new partners: 92Bio (cancer, multi-specifics), Memorial Sloan Kettering (cancer research), and Queen Mary University of London (cancer prevention, diagnostics), all of whom will utilize a range of OmniAb's technologies.

Brendan Smith of Cowen asked about the expected impact of the FDA's updated animal testing guidance on Recursion's internal and partnership strategies.

Answer

Co-Founder and CEO Christopher Gibson stated that Recursion was built for such an evolving regulatory framework. He explained that the company's platform, which generates large-scale datasets and builds foundation models, is shifting from a 'test at scale' to a 'predict and validate' approach for preclinical studies, positioning Recursion to lead in this new environment.

Jackie, on for Brendan Smith of TD Cowen, inquired about expectations for the company's analyst event next year, specifically whether new pipeline programs would be confirmed. She also asked if Novavax plans to have other wholly-owned assets in the clinic within the next 18 months.

Answer

CFO James Kelly indicated that an Investor Day is likely to occur sometime in 2025, after the Q4 earnings report at the end of February. He noted that more of the company's strategic thinking would be unveiled in the coming months. The question about other clinical assets was not directly addressed, though earlier commentary from management pointed to RSV and pandemic flu programs moving toward IND-enabling studies.

Brendan Smith of Cowen inquired about the GM1 program's dose escalation plan, asking if patients have been identified for the higher dose, what biomarker or functional thresholds are being targeted, and the necessary follow-up duration for a potential pivotal study.

Answer

Chief Medical Officer Mark Forman confirmed that dozens of families have expressed interest, making them confident in recruiting for the higher dose cohorts. He explained that while the necessary enzyme activity is unknown, they are using CSF GM1 ganglioside levels as a key marker with the goal of normalization. CEO Will Chou added that a minimum of six months of clinical follow-up would be needed to observe developmental changes.

Brendan Smith of Cowen and Company inquired about Passage Bio's dose escalation plan for the GM1 program, asking if patients for the higher dose have been identified, what specific biomarker or functional thresholds are being targeted, and the anticipated follow-up duration needed for a pivotal study.

Answer

CMO Mark Forman explained that there is significant interest from dozens of families, making them confident in recruiting for the higher dose cohorts despite revised inclusion criteria. He stated that the primary pharmacodynamic marker is CSF GM1 ganglioside levels, with the goal of normalization. He also noted that a minimum of six months of follow-up would be required to observe developmental changes.

Brendan Smith of Cowen inquired about the mechanism of action for Passage Bio's ALS gene therapy, the timeline for preclinical data, and the strategy to ensure deep brain structure penetration for the Huntington's disease program.

Answer

CEO William Chou expressed excitement for the preclinical programs. Chief Medical Officer Mark Forman detailed the ALS approach as a "knockdown and replace" strategy for the C9orf72 pathology. Regarding Huntington's, Chou stated the company will share more data on their administration route's effects in the coming year.

Brendan Smith of Cowen and Company inquired about the planned format for releasing upcoming data for the Krabbe and GM1 programs, asking if it would be via a press release or at a medical meeting. He also asked for the rationale behind pausing clinical development for the MLD program.

Answer

Interim CEO Edgar Cale responded that the company is still evaluating the best method for data release, considering scientific conferences or a press release depending on timing. Regarding the MLD program, Cale clarified that the decision to pause development was based on a strategic evaluation of financial resources and program prioritization, not due to any issues with the asset itself.

Brendan Smith, on for Yaron Werber at Cowen, asked about the Krabbe disease program, seeking information on the historical incidence of hydrocephalus and how the updated screening criteria might narrow the eligible patient pool. He also questioned if these new protocols might be applied to other pediatric studies and requested details on the clinical plan for the metachromatic leukodystrophy (MLD) program.

Answer

President and CEO Bruce Goldsmith acknowledged that while there are case reports of hydrocephalus in Krabbe disease, its incidence is not well-defined. He stated the new screening aims to identify at-risk patients early and that, at present, there is no reason to apply these protocols to other studies, though the situation is monitored. Regarding the MLD program, Goldsmith explained that the company will share the full trial design, including stratification and timelines, only after completing the IND review process with the FDA to ensure the information shared is final.