My name is Mike Ryskin. I'm on the Bank of America Life Science Tools and Diagnostics team, and I'm excited to host our next session. We're joined by Danaher and joined by Rainer Blair, CEO. Rainer, thanks so much for being here. Good morning. Thanks for having us, Mike. Last session of the conference, but certainly not, you know, last but not least. I also want to thank everyone for all your events this week and all your participation this week. It means a ton to myself and to the entire B of A team. Really appreciate it. I hope you found the conference helpful. We know that we have the [II vote] coming up soon, so I'm going to have one plug. I saved it for the last one, so we greatly appreciate your support in the II vote. Let's jump in, Rainer. I want to kick things off. You know, a lot of questions on policy, a lot of questions on changes in the last couple of weeks. Since we reported one Q earnings, it's been certainly busy in the market. Can you give us an update on sort of some of the developments over the last couple of weeks? What's been going on? Sure. First of all, thanks again for having us. You know, we're really encouraged by our strong start of the year. We had a nice beat here related particularly to bioprocessing, that came in nice and strong and we upped our full- year guide as a result of that. I think after the first quarter, as you say, it's been a very dynamic situation, and we've tried to characterize that dynamic situation by talking about the tariffs, framing those up and pointing out to investors, our customers, and associates that we're going to address those tariffs and we're going to put those aside. We knew from the outset that those tariffs would be dynamic, and they continue to be, as we've heard from more recent announcements and negotiations, and those negotiations continue. From our perspective, we continue to focus on countermeasuring those tariffs with a number of countermeasure tools that we have on the one hand, and on the other hand, driving our business, keeping our head down and getting it done. What does that mean? It means that we are deploying certainly surcharges. We' re also adjusting our supply chain. We are moving manufacturing, and not losing sight of making sure we drive towards our guide. As a result of all these changes, we have not changed our guide. Okay. Maybe I'll just pick up there on the tariffs. The big update this week was some de-escalation of the U.S.-China trade war, with the tariff rate being moved down significantly to 30% and 10%. Those countermeasures, those mitigation factors you put in, are you going to be able to, or will you toggle them down and adjust accordingly, meaning, you know, what you called out on the one Q call of, tariffs are here and here's how we'll respond? If tariffs are lower, are you going to maybe pull back on some of those countermeasures, or will you still, you know, enact them to the full degree? I think we start with a proposition that we will countermeasure the tariffs, whatever they are. Should they be lower, that's certainly a short-term thing that we see here, although that's not been decided permanently, then that's fine. If they should be higher, then we are going to countermeasure those. One thing's for sure, we are keeping our head down and we are focused on executing on the countermeasures that we talked about, and delivering on our guide. Okay. Other question I want to touch on, you kind of called out in your initial remarks was bioprocessing, strong start to the year. I think that was certainly encouraging to see you adjusted your full year bioprocessing guide. Can you talk about what you saw in the quarter, how it played out relative to your expectations, both for consumables and instruments, and how that, you know, frames your outlook for the rest of the year? Yeah, we were really pleased with what we saw here in the first quarter. On the back of seven quarters of sequential orders growth, we had printed a high single-digit bioprocessing growth in the fourth quarter, and we followed that up with the second print of high single-digit growth in the first quarter here. That, together with the orders momentum, really gave us the perspective that we could increase that guide to high single digits for the full year. That was really led by low double-digit growth in our consumables business. We see really a strong uptake here in the consumables side of that business, and we expect that to continue here for the remainder of the year. Okay. You talked about, you know, the difference in terms of what you've seen from consumables and instruments. Instruments was a little bit weaker on the revenue side, but you had certainly expected that. Can you talk about your expectations for equipment and bioprocess for the rest of the year, in terms of what you saw as orders last year? Sure. We really think on the equipment side, orders bottomed out last year. As a result of that, that's why we're seeing with lead times on execution of equipment between, let's call it six and 12 months, we're seeing that weaker phase in revenue this year. Now, on the other hand, we're starting to see an improvement in our order patterns in equipment, and that will play out here in the future. While not up to normal levels, the equipment orders are improving, and that will play out here in the next six to 12 months. We're also encouraged by that. Lastly, we really saw robust uptake in bioprocessing by our larger pharma customers and larger CDMOs that are manufacturing commercialized drugs, phase III drugs. That is really a strong underwriting of this industry, and how well these biologic drugs are being taken up by patients around the world. In terms of that, you know, low double-digit and consumables, equipment orders getting better, sounds like bioprocess is, you know, on track for normalization, return to normal. This, you know, it's been a multi-quarter recovery cycle. Do you have increased confidence that, you know, that recovery continues on track? Especially as we progress through this year, you know, bioprocess will be sort of back to normal, you know, your long-term LRP, I think is high single digit for bioprocess. You still feel like that's supported by the current data? We do. We see that all indicators are showing that that long-term growth rate of high single digits is coming back into view. That' s supported, again certainly by the consumables. Once again, we see that improvement also in equipment, along with new product launches that are occurring around the world for monoclonal antibodies and other protein-type therapies, where we have a particular strength. That is such an important part of the industry and the business. Okay. You touched on, you saw strength in the first quarter from larger pharma, large CDMO. One of the questions we've gotten a lot is, was there any pull forward or timing effects in the quarter from the perspective of your customers, maybe those pharma and CDMO customers trying to get ahead of tariffs themselves, and maybe sort of ramping up, pulling forward some consumables on bioprocess? Just how do you react to that? We really did not see anything meaningful there. We monitor that very closely, as you can imagine, based on what has transpired over the previous years around inventory builds. We continue to be very close to our customers here. While they are certainly looking at their own manufacturing footprint in terms of all the discussions that you hear in the marketplace and policy environment, we do not see any meaningful pull forward. In terms of that manufacturing footprint from the pharma side, the other topic is a little bit more long-term in terms of reshoring or maybe nearshoring their manufacturing capabilities, again in light of tariffs. What would the impact to Danaher be in that case? Can you walk us through how that could be implemented, where you would see it? Yeah. I mean, we're very encouraged by the number of announcements that are being made for the increase in manufacturing capacity, which is necessary really in two ways. One, there of course is the current reshoring theme. Two, the volumes, when you're growing at high single digits, do require continued investment in capacity over time. There's been a lag in capacity construction here over the last years during the post-pandemic reset. We're just starting to see an improvement. This reshoring discussion is very positive, although it is early days, and it does take time to build new plants. We think we're particularly well- positioned there. We have well over 100, 120 flex factories. Those are really end-to-end factories that we've constructed with our customers and pharma partners around the world. That positions us very well for fast execution of high-performance manufacturing lines for our pharma partners as this reshoring unfolds. In the shorter term, we're also seeing this improvement in equipment orders based on the need for more capacities, just out of the base business that continues to grow. It is really encouraging, and we think we're really well- positioned there. If and when that does come to pass, I take it you would see it in the equipment orders first, right, as they're building out the facilities. What's sort of the lag time between that, when you see the revenues and when you see the consumables roll through? What visibility do you have? It really depends if these reshoring efforts are based on brownfield capacity extensions, which those can take, call it six, 12, 18 months, depending on the scale, because all the permitting is in place already in brownfield investments. As you think about greenfield investment, and there are those as well, that's a multi-year process. What we could imagine as we go forward here is over time, an extended equipment growth as this reshoring strategy unfolds over the next years. Okay. Maybe sticking with biopharma a little bit longer. The other key theme over the last just couple of weeks has been most favored nation status, potential for price reductions or price reform for pharma companies. How should we think about flow through to Danaher from that? I t seems like tools are certainly caught up in that concern. This pricing discussion from the MFN executive order and the press conference that was held, first of all, it's very early days, and it's unclear where that all ends up. It' s very important to note that Danaher is hardly exposed to the topic of pharma pricing. Why do I say that? If you look at our revenue exposure overall, about 35% of that is to pharma. Of those 35%, 500 basis points are related to research and development. I'll come back to that. A full 30% are related to the manufacture of biologic drugs. This is related to the manufacturing of drugs rather than research and development. The whole point of what we do at Danaher is to help our customers build those products at higher yields, get them to market more quickly, so that they can get those to patients more quickly. Of course, this helps their business model immensely as well. We do not really see, for that 30% our pharma exposure, a significance to the pricing discussion. Any discussion that increases the volume of drugs ultimately consumed because they are more accessible, would be a tailwind for Danaher. Now, coming back to the 500 basis points where we have R&D exposure, even there, the majority of that revenue is related to assays, tests that are required for regulatory purposes in toxicology tests, DMPK and other sorts of very specialized tests that are required in the drug approval process. Once again, as it relates to this MFN discussion, that is really tangential to the positioning of our business. Okay, T hat's helpful. Going back to that, you know, you called out the 30% of your 30 out of 35 within pharma is manufacturing, bioproduction specifically. Can you help us think through how to think about, you know, what Danaher sees versus what pharma sees on the revenue side or maybe on the COGS side? You know, are we starting with pharma gross margins going down to COGS line, going down to your bioprocessing composition of that? Sure, I've talked about this before. As you think about what Danaher and more generally the industry does in bioprocessing is, we typically represent about 8%-12% of the cost of goods sold. If you want to look at what that implies then for a pharma company, have a look at the gross margins. Many people will do that. Let's take an average gross margin of roughly 70% to say a number. You can see that puts you into the low single- digit percentage of the total revenue of pharma. That's the relevance and the input we have on the P&L of a pharma company on the one hand. Please keep in mind, the entire function that we have is to help improve yields, accelerate time to market, and to reduce the ultimate total cost of ownership of manufacturing for pharma companies. We're really part of the solution, and that's how we engage with our customers as they face whatever headwinds there are, which is, how can we help you in making processes more efficient, yields better, quality more precise? We think we're on the right side of that discussion. Okay. No, that's really helpful. Maybe just to round out biopharma, let's talk about smaller biotech, that, you know, just from the funding data and from what you and others have commented on in the last couple of quarters, hasn't been stellar. Remind us, what are your expectations for that part of the market for the rest of the year? What's your exposure? Our exposure in the bioprocessing business is about 10%-15% for what we call emerging biotech. Those are biotechs that do not have a commercial product, or these small CDMOs that also are not yet in commercial production. What we see there is a high concentration, a high focus on compounds, on biologics that have excellent data in, first in toxicology in phase I and then moving on to phase II. That is really where the focus is. Other programs that are not showing that data, there is less intensity around those or in some cases, they get canceled. When you bring that all together, what we are seeing is stability, sort of at a lower activity level in that part of the business. What it will take here going forward is a sustained funding improvement as we move forward. Okay, a nd so you're not expecting any of that in your current assumptions? No, I mean, we think it's stable at the current level. As equipment improves, that's another tailwind that is helpful. The smaller segment that we just talked about, that will require more funding to get to the next level. Okay, a ll right. Let's pivot a little bit to China, especially let me start with VBP. You talked about this a lot at the end of last year and earlier this year, kind of gave us a roadmap for how VBP is going to play out this year. You know, we're halfway through May. Is it sort of consistent with your expectations? Any surprises there [in the next couple of months]? It is. Volume-based procurement, along with the reimbursement changes that we saw very late last year, you recall we characterized those as a $150 million headwind for 2025. That characterization remains intact. That is essentially what we saw play out here in the first quarter. There is no additional news as it relates to that. That is in full implementation in China. We continue to see strong patient volumes in China, and the business is developing there as we expected. Okay. Outside of VBP, maybe sort of remind us what your expectations are for the year. If we take what happened with the tariff situation being scaled back, could that be a possible tailwind outside of tariffs, but just sort of to the underlying China business, if maybe it helps the economy a little bit, helps the markets recover a little bit in the new tariff environment? For China and our guide, we're assuming China still to be down this year, about mid to high single digits. That's on the basis of this volume-based procurement. The underlying business is growing based on patient volumes. The bioprocessing business is starting to show growth, similarly to consumables growth, then equipment growth, but nonetheless encouraging. The life science business, we see stabilizing, where the demand contraction is offset by some of the government support that we see, some of that stimulus. All in all, we see China probably down mid to high single digits for the year. Now, as it relates to the change in the tariffs, it's very clear that China is recognizing that putting tariffs on inputs to their own healthcare, increases the cost to their own government programs as well as to the private payers in their country. They are looking to reduce the impact of that. While that is certainly favorable here in the short term, that can change at any time. As a result of that, we continue, as I mentioned, with our tariff countermeasures per the original design. We have our head down and we are executing against that, which does also include finalizing the localization process that we kicked off several years ago, along with the regionalization of our global footprint, so s everal billion dollars of investments here in North America, which we have talked about,. Europe has a strong manufacturing base, and the same will happen and will come to conclusion here shortly in China for us. Okay. Sticking on the diagnostic side, I want to talk about Cepheid for a little bit. One Q came in ahead of expectations, I think both on the respiratory, but also non-respiratory. Can you talk about how both of those dynamics are playing out through the rest of the year, and just sort of again, the normalization of that to a post-COVID normal? We had a strong performance at Cepheid here in the first quarter, right? We beat quite significantly here. That is really related, one, to the strong flu season that we saw, as well as the strong competitive position that Cepheid has. You may know that we have more than tripled our install base since the pandemic. We are seeing consolidation of molecular testing platforms in hospital systems, and that consolidation is skewed towards Cepheid. We are also seeing that our strategy to not only have the larger installed base, but also have more test menu available, the launches of new tests is playing out. For existing tests, you see that rather than just doing respiratory testing, you see now Strep A as one example of very many, being used in coordination with that. We have new tests such as the MVP that we launched last year for women's health taking off and showing very, very strong growth. The entire strategy of one, leveraging our respiratory position and the install base growth that we did during the pandemic, and the continued placement of the GeneXpert is really playing out. You add the expanded menu and the new menu items, and it is really a very compelling value proposition. That explains the share gain. As you think about the non-respiratory, I mentioned some of those, Strep A as well as MVP, hospital-acquired infections and so forth. These are right in the sweet spot of what the IDNs need in order to protect their patient population. The ease of use, the quick turnaround of these tests, and getting the correct answer for subsequent therapeutic intervention is exactly what they need. This is what's driving Cepheid forward, and explains the continued and sustained share gain we see there. Okay, a ll right. That's positive. Can we touch on the life sciences business a little bit, both maybe on the instrumentation and your expectations there? Maybe we can touch on some of the funding environments from the academic and government, even though it's a small part of the business, just how that's played out the last couple of weeks since the quarter ended. Sure. We were slightly ahead of our expectations in the life sciences business here in the first quarter. We did see a softening here as it relates to academic and government funding, particularly. Now, let's size that up briefly. At the overall Danaher level, our revenue exposure to academic and government worldwide is a low single-digit percentage. Our direct exposure to the NIH, as an example, is well below 1%. This is really not a large part of our business. Keep in mind, our positioning is in pharma, just as I spoke of clinical, the reference point being there, Cepheid and diagnostics and the applied markets as well. We are really focusing on a very small part of our business. Nonetheless, we did see some softening in the market, based on what you've been hearing in the news, certainly here in the United States. That is one reason why we tweaked our guide down there for the full year. Of course, that was offset by the increase in the guide that we did in bioprocessing. We see this softening here in the short term. It is contained to a very small part of our business. Of course, we are looking to see how this all plays out in the policy environment over the next months or so. Maybe on the more consumable side of life sciences, whether that's Abcam or Aldevron, and you called out some specific moving pieces, just any updates to get there on their performance? Some of the businesses there also support academic and government. Generally speaking, we're very happy with the positioning of those acquisitions, whether it's Abcam or Genomic Medicines. These are highly attractive, very well-positioned franchises. While they do have some exposure to the government and academic segments, we are very pleased with the long-term outlook for those businesses and the very, very strong competitive positioning that they have. Okay. I have a couple more topics I want to hit on. I want to touch on some of the cost outs and cost savings initiatives you called out. I think via your 10-K, you called out $150 million of cost outs or more than $150 million of cost outs this year, to sort of offset some of these broader macro challenges. For one Q, you said you already saw $50 million. If you can give us an update sort of going through the rest of the year, how are those initiatives going and just where the upside to that is coming from. Just to provide the context, we talked about in our [K], the $150+ million, so at least $150 million cost savings that we're targeting. We saw $50 million of that already in Q1, and we're well on track to deliver on those throughout the year. I would see the remaining $100+ million to be split approximately evenly over the subsequent three quarters. We're well on track there. This is also now a part of our total view of the offsetting of tariffs. We believe that we're very well positioned. We have our head down, and we're getting after that. Okay. I want to touch on capital deployment, M&A. Danaher’s certainly been active for years and years. You’ve commented a number of times, I remember during COVID, you made a point of whenever there’s uncertainty and volatility in the market, you see that as an opportunity to strike. You see that as an opportunity to pick out weak targets or maybe businesses that are underappreciated in the market, and sort of absorb them and win from there. Certainly feels like there’s a lot of volatility in the market. Could you give us an update on sort of your balance sheet, your thoughts on that, sort of how far you’re willing to go? As you know, we pay a lot of attention to maintaining a really strong and if I can call it, action-ready balance sheet to provide us the optionality that we need in pursuing our bias and capital allocation of M&A. Whenever there are moments or periods of dislocation, we view that as an opportunity and a moment where we are on the front foot, ensuring that we take full advantage of that. In this period, of course, we're maintaining that optionality here to deploy capital towards M&A. We're observing, as we always do, with keen interest what's transpiring. We're well- positioned, as I mentioned, from a balance sheet perspective. If you look to past moments of dislocation, we have done some of our best and most attractive deals in that period of time. That's how we're viewing it, and that's how we're positioned. Feel good about it. Is there any particular vertical, whether it's bioprocessing or life sciences, diagnostics, or more private versus public, where you see more opportunities, more dislocations? We are looking to strengthen the portfolio that we have, especially along the fantastic end markets that we're positioned in. Whether the opportunity is public or private is immaterial to us. Okay. Given everything we've talked about, we touched on bioprocess, instrumentation, life sciences, diagnostics. If you could just sort of bring it all together and give us an updated view on the tools market longer term, beyond the near-term headwinds, how you see the market recovery and normalization going in 2026 and 2027, just broad comments on the LRP and the markets. I think in moments like this, we have to keep our view on the long term. There is no doubt that healthcare is a global pursuit of humanity. We are all looking together, it does not matter where we live in this world, to improve the quality of our life, to improve the quality of healthcare and the world. Certainly, the United States has been willing and will continue to invest in that pursuit. When we look at the end markets that we are positioned in, and this has been the result of a thoughtful portfolio transformation that we have been on now for several years. We have really dialed ourselves into the most attractive parts of these healthcare end markets, acquired and grown organically, some of the most attractive franchises in those markets. When you add that to our balance sheet and to really the incredible talent that we have and grow at Danaher, together with our ability to execute with the Danaher business system, we really feel very positive and very optimistic about the future. We feel we have the ability to deal with whatever the short term brings. We are very, very optimistic about the future and the long term. I mean, that's helpful, but what do you think needs to happen to get us back there? Is it really all policy? Is it really all sort of macro? If we think about, again all the near-term headwinds we talked about, how do we get past that and go back to that sort of longer-term tools? We're in a bit of a policy and geopolitical reset here, but there will be a mean reversion to stability. What that stability implies, is that we have more predictability and less uncertainty. As in the coming months and perhaps the next year, depending on how long this reset takes, as the degree of uncertainty declines, the amount of investment in these really important pursuits of curing diseases will ramp up again and start to normalize. Okay, g reat. Got about 30 seconds left. Rainer, I'll end with our customary closing question of, what do you feel is most underappreciated or misunderstood about Danaher? I would start with, that this portfolio transformation has re-rated our growth and earnings profile. That is visible and demonstrable every day. We will continue with the strength of our balance sheet, which is exceptional and differentiated, continue to invest in these end markets. I think it is also very important to note that our business models are very attractive in not just mission-critical, but non-discretionary applications. If you think of bioprocessing and speccing in there, if you think of diagnostics, which are necessary for clinical decisions, and if you think of the life science research where we are trying to get drugs to market quicker and improve that pipeline yield in the drug development industry, that is incredibly important. If that was not enough, you add what I think is the critical differentiator on top of what we talk about. That is our talent in the Danaher business system, and the culture that we continue with for 40 years to maintain and grow to execute at scale. You put that together, and that is truly a unique and exciting company. Great. Thank you so much. Thanks, Mike. We'll end it there. Thanks, everyone for joining us. That concludes the 2025 B of A Healthcare Conference. Thank you again. [Thank you, Mike].