Lonza Contract and Revenue Ramp
Q: How will the Lonza partnership ramp up and impact revenue?
A: Management explained that the arrangement with Lonza is an enablement that will take time to build, particularly in GMP services at Lonza's high level. Contracts are typically negotiated several quarters ahead, so they expect a ramp in consumption over time. The goal is to open avenues for customers to incorporate Maravai's technologies, whether produced by Maravai or others. "

Gross Margin Outlook
Q: How should we think about gross margin progression from here?
A: Gross margins will fluctuate based on revenues and product mix. The lower overall CleanCap volume in Q1 impacted margins, as CleanCap is a higher-margin product. Management expects margins to bounce back in Q2 with anticipated higher CleanCap shipments, likely returning to levels seen in Q4 2023. "

Base Business Growth Excluding COVID
Q: Did the non-COVID Nucleic Acid Production grow sequentially versus Q4?
A: Management noted that Nucleic Acid Production was down sequentially as expected, largely due to a step down in GMP CleanCap orders. They did not provide a direct answer on non-COVID base business growth, as they are not breaking out that detail now. "

Cost Actions and Restructuring Impact
Q: How effective are your cost actions, and should we expect more in 2024?
A: They are on track with their targeted $30 million cost savings, with two-thirds tied to labor. They have rightsized operations, focusing on G&A and operations at TriLink in San Diego, and are continuing targeted investments in commercial and R&D. No additional incremental actions are planned for 2024. "

M&A Opportunities and Valuation Expectations
Q: Are there portfolio areas suited for acquisitions, and how are valuations affecting this?
A: Management is active in pursuing strategically aligned opportunities but faces challenges aligning financially due to dynamic market conditions. They focus on scientific founder-driven, category-leading companies. Seller expectations regarding valuations remain a challenge, but they continue to look for the right fit. "

Biotech Funding Impact on Orders
Q: Is increased biotech funding reflected in your conversations and orders?
A: While an uptick in biotech funding is positive, they haven't seen dramatic changes in orders yet. There may be a lag before improved funding translates into orders, as customers progress at their own pace in translating funding into clinical plans and purchasing. "

New Products Driving Top-Line Growth
Q: Which new products could significantly impact top-line growth?
A: Management highlighted CleanCap M6, launched as an RUO product a year ago, which exceeded expectations. They are now taking it to GMP within a year, which is exceptional. This product is a key example of a new offering that could move the needle on revenue growth. "

GMP to RUO Split and Trend
Q: What is the current GMP to RUO split, and how will it trend this year?
A: The discovery (RUO) business is steady and less dynamic, while GMP business is more volatile with larger orders and subject to lumpiness. Currently, the split between TriLink's discovery and GMP is relatively even, but this will change as they have upcoming GMP jobs and higher GMP CleanCap orders booked for Q2. "

EBITDA Margin Expectations
Q: What's the expected EBITDA margin trend into Q4 and 2025?
A: EBITDA margins were lower in Q1 due to revenue levels but are expected to grow. Management anticipates average EBITDA margins of about 27% for the next three quarters, returning to levels seen exiting Q4 2023, in the 25% to 30% range, particularly tied to the Nucleic Acid Production segment. "

San Diego Facility Capacity Utilization
Q: Is there a backlog for the new San Diego facility, and what's the revenue potential?
A: They have already taken their first committed orders for the facility and expect the order funnel to grow over time. They have contracted late-phase mRNA builds for the facility, indicating growing capacity utilization. "

Volume Step-Up as Customers Advance in Trials
Q: What is the revenue step-up when customers move up in clinical trials?
A: Revenue impact varies greatly as each GMP mRNA program is unique and custom-quoted. RUO purchase orders are typically in the 5 to 6 figures, sometimes 7 figures, while GMP orders start in the 6 figures and can go into the 7 or 8 figures, depending on program specifics like yield and services required.

Thermo CleanCap Partnership Impact
Q: What's the impact of the Thermo CleanCap partnership on your business?
A: The Thermo partnership enables developers to access Maravai's technology through Thermo's in vitro transcription kits, seeding the market with their technology. This RUO-only application is part of their strategy to ensure broad accessibility of their technical solutions in both discovery and GMP markets.