Matthew Larew

Matthew Larew questioned the confidence in the timeline for the new automated SmartDose line. He also asked a broader question on the long-term growth impact of GLP-1s, considering the rise of oral alternatives.

Answer

CEO Eric Green affirmed that the automated line project is on schedule for validation by year-end. Regarding GLP-1s, he stated that West's forecasts have already factored in the potential impact of orals, and the company remains confident that injectables will be the primary delivery method. He also highlighted the fungibility of assets, allowing them to pivot to meet GLP-1 demand.

Matthew Larew of William Blair & Company raised a strategic question about the long-term viability of the drug delivery device business, specifically SmartDose, as a core competency given its financial challenges. He also asked for details on the new multiyear GLP-1 contract.

Answer

CEO Eric Green acknowledged the need to improve SmartDose economics and confirmed the company is evaluating all long-term options to maximize shareholder value. Regarding the GLP-1 contract, he explained it secures West's existing position as the sole elastomer component provider for a key customer over a lengthy, multiyear period, calling it a natural progression of their relationship.

Matthew Larew questioned the potential for gross margin expansion in the Contract Manufacturing segment, given its strong sequential performance. He also requested a 'state of the union' on the size and growth outlook for West's GLP-1 related business.

Answer

CFO Bernard Birkett projected that Contract Manufacturing margins would remain relatively consistent in the high-teens for the next 12-24 months, with a significant step-up being a longer-term event as the higher-margin drug handling business scales. CEO Eric Green did not quantify the GLP-1 opportunity but confirmed West's participation through both proprietary components and selective contract manufacturing, noting that existing capital investments largely support the near-term growth.

Matthew Larew asked about the commercial benefits from the RedWave acquisition one year in, including cross-selling, and whether 908 Devices has the necessary infrastructure to meet accelerating global demand. He also inquired about the progress of the manufacturing facility transition to Danbury, CT, and any updates to the projected annual savings.

Answer

Executive Kevin Knopp stated that the RedWave integration has been foundational to the company's transformation, expanding the portfolio from one to four products and enabling revenue diversification. He confirmed the 40-person sales and marketing team is well-equipped to drive growth and highlighted cross-selling wins with customers like the Washington Metro Area Transit Authority. Executive Joseph Griffith added that the Danbury facility move is progressing ahead of schedule, with completion expected by mid-year. He reiterated the expected annual savings of approximately $2 million, with benefits starting in the second half of the year.

Matthew Larew asked how Ginkgo's expanded product offerings position it to navigate macro uncertainty differently than in the past and inquired about the source of lead generation for its newer tools offerings.

Answer

Executive Jason Kelly explained that the biggest strategic shift is the Tools offering, which allows customers to engage in smaller, more flexible, arm's-length deals that are better suited for the current cautious market. He emphasized Ginkgo's resilience and adaptability. Regarding lead generation, he noted that while they leverage existing Solutions relationships, a growing number of leads for the Tools business now come from external, inbound sources, such as public data drops, which attract new customers.

Matthew Larew of William Blair sought clarification on why the 2025 guidance is considered 'conservative' and whether Ginkgo has early examples of customers utilizing multiple offerings across its portfolio, such as Automation and Data Points.

Answer

CFO Mark Dmytruk explained the guidance is conservative primarily due to uncertainty around government R&D funding, a growth driver in 2024, and a prudent approach to forecasting revenue from new tools. CEO Jason Kelly noted that while the vision is for customers to use multiple services, the immediate focus is on landing initial deals for the new offerings, highlighting interest from tech companies in automation for 'AI for science' initiatives.

Matthew Larew questioned the risk of Q1 revenue strength being due to a pull-forward of orders and asked how potential upside from the resilience of daily-use products factored into maintaining the full-year outlook. He also asked how Teknova's portfolio is positioned for shifts toward non-animal research models like organoids.

Answer

CFO Matt Lowell addressed the order patterns, stating that the company has not detected any significant pull-in activity for its strong-performing catalog business. President and CEO Stephen Gunstream added that while a shift away from animal models is speculative and not near-term, Teknova's portfolio supports non-animal models like organoids, which could present a potential tailwind for the company if such a shift occurs.

Matthew Larew inquired about the recent softening in customer demand, asking if it was more pronounced in February and which customer segments were most affected. He also asked about the composition of the new clinical customer pipeline and whether any large, one-time orders from 2024 could impact 2025 comparisons.

Answer

President and CEO Stephen Gunstream confirmed the softening was a recent phenomenon in late January and February, primarily among smaller, capital-constrained biotechs, but reiterated confidence in 15% growth for the Biopharma segment. He noted most new customers are in preclinical or Phase I stages. Both Gunstream and CFO Matthew Lowell clarified that unlike in 2023, there were no significant one-off orders in 2024 that would distort year-over-year comparisons, with no single customer representing more than 4% of total revenue.

Matthew Larew of William Blair requested more detail on the path to long-term gross margin targets, asking for help in quantifying the drag from fixed capacity and how revenue leverage will translate to margin expansion. He also asked how the current customer engagement and sales process compare to the period before the market downturn, seeking a proxy for the effectiveness of assets and capabilities put in place over the last few years.

Answer

CFO Matt Lowell reiterated that there is substantial leverage in the P&L due to the high fixed-cost structure and that additional revenue drops through at approximately 70% margin, which can be used to model future progression. President and CEO Stephen Gunstream addressed customer engagement, noting that while customers previously delayed orders, they are now starting to re-engage. He stated that the company's value proposition of providing smaller, custom, quick-turnaround batches remains validated and well-suited for the market's future needs.

Matthew Larew asked for clarification on the tariff impact within guidance, the current and future U.S. manufacturing capacity to meet domestic demand, and the full-year outlook for vial destocking and growth.

Answer

CFO Marco Dal Lago confirmed the guidance includes a net tariff impact of approximately €4.5 million to operating profit, after accounting for price transfers and supply chain effects, with mitigation efforts ongoing. He and CEO Franco Stevanato noted that the Fishers, IN plant will increasingly offset tariff impacts as it ramps up. Dal Lago also reiterated the mid-to-high single-digit growth outlook for vials, supported by double-digit growth in order intake.

Matthew Larew from William Blair followed up on the vial market, seeking specific growth expectations for 2025, and inquired about the company's strategy and ability to profitably scale its device manufacturing operations, including Nexa and Alba products.

Answer

CFO Marco Dal Lago indicated that the company is modeling mid-to-high single-digit growth for vials in 2025, with sequential improvements expected each quarter. He also outlined the strategy to provide integrated solutions, combining proprietary IP devices with contract manufacturing services to serve as a comprehensive partner for biologic customers.

Matthew Larew from William Blair asked for an update on vial destocking visibility across different customer groups and inquired about how much of the Engineering segment's recovery is within the company's control.

Answer

CEO Franco Stevanato described the vial market as "normalizing" but still a "mixed bag," with gradual order improvements seen in smaller markets and positive forecasts from larger customers for 2025. Regarding Engineering, he and CFO Marco Dal Lago detailed an optimization plan to restore profitability, with Executive Lisa Miles confirming the execution is now "largely within our control."

Matthew Larew inquired about the potential impact of recent FDA leadership changes on the regulatory environment and asked for an update on cost savings from the recent workforce reduction and the planned AIM delisting.

Answer

CEO Maher Masoud stated that MaxCyte does not foresee any new regulatory hurdles from FDA changes and believes new leadership is supportive of cell and gene therapies. CFO Douglas Swirsky added that savings from the AIM delisting would be several hundred thousand dollars annually and that cost savings from the operational review are being realized, though Q1 cash flow was impacted by transaction expenses for the SeQure acquisition.

Matthew Larew asked about the drivers of the 2025 core business guidance, specifically the underlying growth rate excluding the SeQure Dx acquisition and what it reflects about end-market dynamics. He also requested details on SeQure Dx's revenue history, growth trajectory, and business model.

Answer

Executive Maher Masoud and Executive Douglas Swirsky explained that the core growth is broad-based, driven by increased processing assembly (PA) usage and strong commercial execution, noting the guidance is conservative. For SeQure Dx, Masoud stated it is early in its commercialization, has a services-based model, and the guidance for at least $2 million in 2025 represents solid growth. Swirsky clarified that the 8% to 15% core revenue growth guidance is inclusive of SeQure Dx and will not be broken down further at this time.

Matthew Larew inquired about the drivers behind the strong Processing Assembly (PA) revenue, the company's future organic investment strategy following an inventory write-down, and the specifics of revenue recognition for CASGEVY.

Answer

CEO Maher Masoud explained that strong PA revenue is a leading indicator of market recovery and is also driven by maturing SPL partner programs. He noted that a new Head of Engineering will guide future investments with a focus on high-revenue potential projects. CFO Doug Swirsky clarified that the recognized CASGEVY revenue, while small, is part of a new process for commercial-stage partners and also includes some legacy revenue amortization.

Matthew Larew of William Blair questioned the fiscal 2026 growth outlook given new headwinds and asked about the drivers of the strong Q3 operating margin and where future leverage opportunities exist.

Answer

CFO Jim Hippel described the current market disruption as an abrupt but likely temporary 'jolt,' stating that once uncertainty resolves, the company can resume its prior growth trajectory. He attributed the strong Q3 margin to solid revenue performance combined with diligent discretionary cost control. CEO Kim Kelderman added that efficiency gains from process improvements, acquisition integration, and disciplined R&D investment are key drivers of profitability.

Matthew Larew from William Blair & Company questioned whether the biotech and biopharma recovery was driven by the return of paused projects or new work. He also asked for an assessment of the competitive standing of the Wilson Wolf G-Rex offering.

Answer

CEO Kim Kelderman stated that the momentum in cell and gene therapy is broad-based, coming from all three areas: existing customers progressing to later clinical phases with larger orders, increased order frequency from smaller accounts, and the addition of a good portion of new customers to the funnel. Regarding the Wilson Wolf partnership, Kelderman expressed high confidence in the G-Rex bioreactor's competitive advantages in scalability, cost, and performance, and highlighted the strategic importance of grant programs to seed the market and drive adoption of the combined Bio-Techne and G-Rex solution.

Matthew Larew asked for a breakdown of biopharma growth between large pharma and smaller biotech customers. He also inquired about the competitive landscape for the Lunaphore spatial biology platform and its path to profitability.

Answer

CEO Kim Kelderman and CFO Jim Hippel noted that while smaller biotech recovery is on track, the earlier-than-expected recovery in large pharma was a positive surprise. Regarding Lunaphore, Kelderman stated that the multiomic COMET platform is now rolling out and is expected to have high consumable pull-through, with profitability improving as instrument placements and reagent sales scale.

Matthew Larew asked if the company's emphasis on 'continued share taking' implies an observation of softer market conditions or customer spending, and requested commentary on broad customer behavior.

Answer

CEO Emily Leproust explained that market dynamics are segmented: academia faces funding pressure where Twist's value proposition excels, while NGS diagnostics and liquid biopsy are performing very well. In biopharma, Twist's brand of quality, speed, and cost resonates with both well-funded and budget-conscious customers. She stressed that Twist's strength lies in adapting its approach to these varied market conditions.

Matthew Larew of William Blair requested performance metrics for the Express portfolio one year after launch, such as customer conversion and wallet share, and asked about win rates against competitors' responsive offerings.

Answer

CEO Emily Leproust highlighted high customer satisfaction and the achievement of key goals: ramping revenue, expanding gross margin (with 81% of incremental revenue dropping to the margin line in Q1), and acquiring new customers. She dismissed competitive responses as having limited capacity and different pricing, stating Twist does not see them as a significant factor in the market.

Matthew Larew asked why gross margin exceeded expectations, given the revenue upside was in SynBio, and followed up with questions about initiatives for the academic market and a confirmation on the change in reporting for orders.

Answer

CFO Adam Laponis attributed the gross margin beat to the company's model where 75-80% of incremental revenue drops to gross profit, strong performance from Express Genes, and various operational initiatives. He also confirmed that going forward, Twist will only provide order disclosures for the biopharma segment. CEO Dr. Emily Leproust added that the company is focused on streamlining the academic ordering process through e-commerce integrations ('punch-outs') with university systems, which is showing positive early results.

Matthew Larew of William Blair asked about the growth cadence in Pharma, given recent choppiness from cough/cold destocking and emergency medicine strength, and requested an update on emergency medicine's sales contribution. He also sought confirmation that the Q2 guidance fully incorporates the net effect of tariffs.

Answer

President and CEO Stephan Tanda stated that emergency medicines constitute about 5% of total company revenue and acknowledged the business is inherently 'lumpy.' He reiterated confidence in the long-term 7%-11% Pharma growth target. Executive Vice President and CFO Vanessa Kanu confirmed that the Q2 guidance includes the limited net effect of tariffs, as the company is passing on costs and identifying new opportunities.

Matthew Larew asked for clarification on Pharma royalties, questioning if there were any one-time payments and how to model their future contribution. He also followed up on Injectables, asking if the business would be down in Q1 given the tough comparison and slow ramp.

Answer

President and CFO Stephan Tanda explained that royalties are tied to finished product sales from long-term development partnerships, not one-time milestones, and while lumpy, they are a growing revenue stream. On Injectables, he did not provide specific Q1 guidance but highlighted that underlying unit volume grew throughout the year, though reported results are also affected by lumpy service revenue.

Matthew Larew of William Blair inquired about the Injectables business, asking if destocking was still not an issue and when a more regular growth cadence could be expected given new capacity. He also asked about the current profitability of the Injectables segment and its potential for improvement.

Answer

CEO Stephan Tanda acknowledged some destocking in the antithrombotic area but stated the overall pipeline for Injectables is building, expressing bullishness for next year with growth drivers like GLP-1s and biologics. He expects the business to return to high single-digit to low double-digit growth. Tanda explained that Injectables' profitability is generally in line with the company average when at good capacity utilization, below the more profitable proprietary drug delivery systems. As the business grows and scales, its profitability is expected to improve.

Matthew Larew asked about the sustainability of the strong acute therapy growth, comparing the current market opportunity to a similar period of competitive disruption a few years ago. He also sought clarity on the timing of reference price updates in contracts and the company's exposure to other major branded drugs facing biosimilar competition after Stelara.

Answer

CFO Michael Shapiro clarified that while they don't expect mid-teens growth to be sustainable for the acute portfolio, they had a 'better playbook' this time to capitalize on market shifts and expect to build from this higher revenue base. He also explained that procurement and reimbursement prices generally align within a year. CEO John Rademacher stated that no other single product represents more than 5% of revenue and the company does not see significant risk from other biosimilars on the horizon.

Matthew Larew of William Blair asked about the outlook for the acute care business, considering the resolution of supply chain issues and shifts in the competitive landscape. He also inquired about the company's long-term growth algorithm, including the new adjusted EPS metric, and whether any other one-off events like the STELARA headwind could impact future performance.

Answer

CEO John Rademacher confirmed that IV solution supply chain issues have been resolved and are no longer a constraint on onboarding new patients. He stated that Option Care Health is well-positioned to capture market share due to its national platform and local responsiveness. CFO Michael Shapiro reaffirmed the long-term targets of high single-digit revenue and low double-digit EBITDA growth, adding that adjusted EPS should grow faster than EBITDA due to capital deployment. He expressed confidence in managing portfolio dynamics, citing a strong pipeline and the advanced practitioner model as offsetting factors.

Matthew Larew sought to confirm that the STELARA pricing impact is a 2025 issue, not affecting Q4 2024, and asked if growth would continue despite headwinds. He also inquired about the patient payment delays from the Change Healthcare disruption, asking if it was a one-time issue.

Answer

CFO Michael Shapiro confirmed the STELARA impact is expected in early 2025 with no impact in 2024. He highlighted strong top-line momentum and sequential gross profit dollar growth. Regarding patient payments, Shapiro noted that while they were still recovering from the Change Healthcare disruption in Q3, strong cash flow affirms they have effectively managed the situation and the ability to convert revenue to cash remains high.

Matthew Larew from William Blair requested details on the expected segment growth and revenue cadence for 2025, pointing out that the annual guidance implies accelerated growth in the second half of the year. He also asked for the underlying market assumptions for the GMP versus NAP businesses.

Answer

Chief Executive Officer William Martin projected that Q1 base business revenue would be slightly up from Q4 2024, with growth accelerating in Q2 and the back half of the year. He attributed this cadence primarily to the timing of scheduled GMP programs at the Flanders facility, which is the largest driver of quarterly volatility. He also noted that the discovery part of TriLink is expected to stabilize and grow, aided by recent acquisitions.

Matthew Larew from William Blair asked about the visibility into the Proteins franchise achieving its 10-15% growth target for 2025, given its significant decline in 2024, and inquired about traction with new product launches.

Answer

President and CEO Olivier Loeillot explained that 2024 was a 'reset year' for Proteins, with demand from top OEM partners now near zero, effectively removing that headwind. He expressed confidence in returning to double-digit growth, driven by custom ligand wins, the Avitide and Tantti businesses, and new resin launches like the double-stranded RNA resin. Loeillot stressed that Repligen now has much more direct control over the franchise's future.

Matthew Larew inquired about the success with large pharma accounts through the enterprise sales strategy and sought current thoughts on the China business and the impact of the BioSecure Act.

Answer

President and CEO Olivier Loeillot credited the key account management team for gaining traction and platform wins at large pharma by presenting the entire portfolio to higher-level decision-makers. Regarding China, he noted it's a small part of revenue but hopes for a rebound. He also confirmed that some smaller CDMOs are seeing increased inquiries due to the BioSecure Act.

Matthew Larew asked if it was reasonable to expect single-cell revenue growth by Q4 2025 given the product transition, and how customer behavior in Europe, which has lower indirect cost rates, might serve as a comparison for the current US situation.

Answer

CEO Serge Saxonov used the European business as a point of comparison, noting it has performed well and indicates that research can remain robust with lower indirect rates. However, he cautioned that the sudden and significant nature of the potential change in the US is creating a high degree of uncertainty for customers, making a direct comparison difficult in the short term.

Matthew Larew asked for more quantitative detail on the single-cell volume growth mentioned in the prepared remarks. He requested the reaction volume growth rate for the quarter and year-to-date, and how that growth compares to the overall market's growth rate.

Answer

CEO Serge Saxonov declined to provide a specific quarterly reaction volume metric, stating that the company shares that data on an annual basis. However, he offered an alternative indicator: the number of cells analyzed. He noted that due to new high-throughput products, the growth in total cells processed has been "really robust and significant," indicating healthy underlying market growth and adoption of larger-scale experiments.

Matthew Larew of William Blair & Company inquired about the progress of the Aetna case rate contract, the status of renegotiating the broader Medicare Advantage book, and the company's strategy for dealing with uncooperative payers.

Answer

Chairman and CEO Paul Kusserow explained that the Aetna deal is progressing well and that changing market dynamics, with competitors being acquired, are creating capacity constraints that give Amedisys leverage. He stated they are prepared to cancel contracts with payers who don't offer reasonable terms. EVP, CFO & Acting COO Scott Ginn added that centralized intake will improve capacity management and strengthen their negotiating position.

Matthew Larew of William Blair & Company followed up on staffing, asking about current contract labor utilization and negotiating power with agencies. He also requested an update on revenue expectations for the Contessa segment for the full year and its projected growth into 2023.

Answer

CEO Chris Gerard explained that while Omicron drove high contract labor use in Q1, pricing has since decreased by 10-15%, and unfavorable terms like 40-hour guarantees are diminishing. He also highlighted increased use of internal PRN staff. CFO Scott Ginn reaffirmed the full-year outlook for Contessa, noting revenue is heavily weighted to the second half (around 80%) and a Q1 delay was due to a regulatory hold-up on a partner's acquisition.