Mac Etoch

Mac Etoch asked for an update on the interest and revenue generated from Bio-Techne's organoid offerings, particularly in light of the FDA's focus on reducing animal models. He also inquired about Bio-Techne's M&A strategy, including current valuations, pipeline, and specific areas of interest for potential acquisitions, as well as an update on the Wilson Wolf acquisition.

Answer

Kim Kelderman, President and CEO, stated that organoids are a $50 million run rate business, growing at mid-teens, and Bio-Techne is aligning its portfolio to capitalize on this trend, including the launch of Cultrex Synthetic Hydrogel. She emphasized M&A remains a core focus, with interest in novel antibodies, cell therapy, and proteomic analysis capabilities. She confirmed the Wilson Wolf acquisition is on track to be finalized by the end of calendar 2027, noting its 20% organic revenue growth and 70%+ EBITDA margins in the last quarter.

Mac Etoch of Stephens Inc. asked for more detail on the puts and takes within the cell and gene therapy end market given current funding challenges. He also inquired about the potential size of the opportunity for Simple Western instruments within cell and gene therapy workflows.

Answer

President & CEO Kim Kelderman explained that despite a depressed biotech funding environment, later-stage cell and gene therapy companies are continuing to invest, driving the portfolio's resilient 20% growth. While not quantifying the specific opportunity, he and CFO James Hippel noted that interest in Simple Western and Maurice platforms for downstream applications, including cell therapy, is clearly growing, particularly among both large pharma and later-stage biotech customers.

Mac Etoch asked for Azenta's expectations for top-line performance in Q2 and the cadence from Q2 to Q3, given the Q1 performance and the anticipated second-half ramp.

Answer

Executive Vice President and CFO Lawrence Lin indicated that while Azenta does not guide quarterly, they expect an uplift in Q2 revenue compared to Q1, with the majority of growth weighted towards the second half of the year. President and CEO John Marotta reiterated the company's focus on a longer-term view rather than quarterly management, emphasizing that growth investments in sales, marketing, and R&D will continue to ramp and drive gross margin improvement as North America comes online.

Mac Etoch asked for Azenta's expectations regarding top-line performance in the second quarter and the anticipated cadence from Q2 to Q3, given the first quarter's results and the projected second-half ramp.

Answer

EVP and CFO Lawrence Lin stated that Azenta does not provide quarterly guidance but indicated an expected uplift in Q2 revenue compared to Q1, with the majority of growth anticipated in the second half of the year. President and CEO John Marotta reiterated the company's focus on a longer-term view rather than quarterly management, emphasizing that ongoing growth investments in sales, marketing, and R&D are expected to drive gross margin improvement as North America's performance accelerates.

Mac Etoch from Stephens Inc. asked for an update on the macroeconomic backdrop's impact across Azenta's various customer bases, specifically concerning chemical equipment. He also sought clarification on the various factors contributing to the low single-digit growth expectation for the Multi-Omix segment in fiscal 2026.

Answer

CEO John Marotta highlighted strength in pharma spending and project repositioning, while noting tight CapEx in biotech and a slowdown in academic/government due to the shutdown. John Marotta and CFO Lawrence Lin attributed the Multi-Omix outlook to the normalization of Next-Generation Sequencing (NGS) volumes and pricing, expecting mid-single-digit NGS growth, and noted stabilization in Gene Synthesis.

Mac Etoch asked for an update on the macroeconomic backdrop's impact across Azenta's customer bases, particularly regarding chemical equipment. He also sought clarification on the various factors contributing to the low single-digit growth expectation for the Multi-Omix segment in fiscal 2026.

Answer

CEO John Marotta noted strength in pharma spending, some project repositioning, and clarity in biotech, while academic and government sectors slowed due to the shutdown. He characterized the current environment as primarily a 'pharma story.' EVP and CFO Lawrence Lin added that the Multi-Omix guidance reflects a normalization of Next-Generation Sequencing (NGS) growth to mid-single digits after strong double-digit performance in fiscal 2025.

Mac Etoch inquired about the expected gross margin cadence for the remainder of the year, given the Q1 performance and ongoing investments in the business.

Answer

Adam Laponis, CFO of Twist Bioscience, reiterated that the 52% gross margin in Q1 validated their manufacturing engine. He explained that while gross margin improvements are expected throughout the year, they will be moderated due to strategic investments in CapEx, infrastructure, and personnel to accelerate growth. He emphasized the long-term goal of building a multi-billion-dollar business with 50%+ gross margins and the unwavering commitment to achieving Q4 Adjusted EBITDA break-even.

Mac Etoch asked for clarification on the proportion of MRD revenues in fiscal 2025, given the projected 1-2 points of growth from MRD in fiscal 2026.

Answer

Adam Laponis, CFO, stated that the MRD business is currently a relatively small percentage of the overall NGS business in 2025 but is growing significantly faster than the overall business, a trend expected to continue beyond 2026.

Mac Etoch asked for clarification on the proportion of minimal residual disease (MRD) revenues in fiscal 2025, given the projected 1-2 points of growth from MRD in fiscal 2026.

Answer

Adam Laponis, CFO, stated that the MRD business represented a relatively small percentage of the overall NGS business in fiscal 2025, but it is growing significantly faster than the overall NGS business, a trend expected to continue beyond 2026.

Mac Etoch asked about Repligen's geographical performance, specifically the 50% growth in Asia Pacific this quarter, the trends of recent investments in the region, the variables driving this performance, and the company's intent to invest additional resources given its long-term strategic focus.

Answer

President and CEO Olivier Loeillot acknowledged that Asia Pacific, representing approximately 15% of full-year sales, is currently too low compared to competitors' 20-25% benchmark. He detailed increased investments in the region, separating China from the rest of Asia Pacific. For China, the strategy involves rebuilding the team and addressing stronger local competition. For the rest of Asia, it focuses on building infrastructure, adding field personnel, and engaging directly with customers. Loeillot noted strong growth outside China for several quarters and China's return to sales growth in Q3 (though orders were softer). He confirmed further investments, including new offices in Singapore and Japan.

Mac Etoch inquired about Repligen's Asia Pacific geographical performance (up 50% in Q3), the impact of recent investments, variables driving this growth, and plans for additional resource allocation in the region.

Answer

Olivier Loeillot, President and CEO, acknowledged Asia Pacific's underrepresentation (15% of sales) and detailed strategic investments, including new leadership for Asia and China, rebuilding teams, and tackling local competition. He mentioned building infrastructure and adding field personnel outside China, noting strong growth outside China for several quarters and China's return to sales growth in Q3. He confirmed further investments, including new offices in Singapore and Japan.

Mac Etoch from Stephens Inc. asked for an update on the progress of the RUO Plus initiative and questioned if there were any abnormal ordering patterns or timing issues to note within the Clinical Solutions segment.

Answer

CEO Stephen Gunstream reported that the RUO Plus initiative is trending as expected, serving as a key bridge for preclinical customers moving toward GMP. CFO Matt Lowell added that while the Clinical Solutions segment remains lumpy due to large order sizes, the quarter's performance was within the normal range of fluctuation and showed positive long-term trends.

Mac Etoch of Stephens Inc. asked for an update on the bioprocessing market and the factors contributing to the significant sequential increase in the Life Sciences segment's backlog.

Answer

Daniel Carestio, President & CEO, stated that bioprocessing volumes have stabilized and returned to a more predictable, normal trajectory after a period of volatility. He attributed the strong Life Sciences backlog growth to the completion of a cyclical downturn in pharma capital spending, which has led to a robust rebound in customer order intake.

Mac Etoch of Stephens Inc. asked about customer feedback on Cryoport becoming more carrier-agnostic post-DHL deal and the expected long-term margin profile of the IntegraCell business.

Answer

Chief Scientific Officer Dr. Mark Sawicki reported 'extremely positive' customer feedback, citing excitement around increased flexibility. President & CEO Jerrell Shelton added that the partnership is just beginning. Regarding IntegraCell, Dr. Sawicki confirmed that its gross margin profile at maturity is expected to be in the 60% range, consistent with the company's broader services business.

Mac Etoch of Stephens Inc. asked where Stevanato is best positioned to benefit from recent U.S. onshoring announcements by pharma companies and if they are seeing incremental interest in their Fishers plant or Engineering offerings.

Answer

CEO Franco Stevanato confirmed a strategic shift by clients to increase U.S. capacity since March 2025. He stated Stevanato is well-positioned to benefit from increased demand for its Engineering technologies and by offering a U.S.-based supply chain for high-value products and devices from its Fishers, Indiana facility.

Mac Etoch from Stephens Inc. followed up on Annex One, asking if the recent addition of projects would lead to a proportional growth contribution in 2026 as they ramp up.

Answer

CEO Eric Green explained that while the growing project pipeline is a positive indicator for the future, the conversion to revenue is a multi-quarter process that can range from two to over four quarters per project. He characterized it as a multi-year ramp that began in 2024 and will continue, rather than a simple proportional increase year-over-year.