Good morning, everyone, and welcome to the RBC Capital Markets 2024 Global Healthcare Conference. I'm Conor McNamara, the life science tools and diagnostics analyst, and it's my pleasure to welcome Repligen. Up on stage with me are Jason Garland, the CFO, and Steven Chehames with IR. Gentlemen, thanks for joining us today. Really appreciate it. Good morning, everyone. Thank you. So, just from a high-level perspective, Jason, you joined the company recently. Can you walk through your decision to join the company and what really attracted you to Repligen? Yeah, absolutely. So I spent about 20 years in GE across a lot of different industries, but spent the last five before Repligen in on the med tech side of healthcare and got a bit of the bug to stay within the healthcare space and wanted to understand and see more of life sciences, and really from a reputation and a growth and what the value creation that Repligen had, it was, you know, hands down one of the highlights in the space. You know, for me, I can remember the very first conversation I had with Tony saying: "We're a scrappy company," right? In terms of, you know, highly focused on innovation, roll up your sleeves, get it done, move quickly, help customers, you know, and, and, and looking for someone that wants to be a part of that, but then also know that, that we're at a, a point in our company where going from that smaller player to a bigger one requires learning new muscles, right? Mm-hmm. New levels of sophistication and processes, and that's some of the experience that I can bring and help the company. So, it's been, you know, a great transition for me. Tony and the team have been fantastic to work with and a lot of good times ahead. Great. And just continuing on that, if you look at the last decade, you know, first off, bioproduction is one of the fastest-growing markets in life science tools, and Repligen has grown above the overall market. And sometimes when, you know, when a company makes a transition from, you know, maybe growth to profitable, they bring in a new CFO. Mm-hmm. Is there any, y ou know, how do you give investors confidence that you weren't here to kind of take advantage or try and maximize a slowdown in the revenue growth versus you're here to continue the strategy of growing above the bioproduction market going forward? Those things go in concert so well, right? I think growth and profitability. So for me, it's helping the team to recognize there's absolutely leverage you get with top-line growth, right? You know, and if you manage your costs, especially your operating costs, and you always grow that at a level lower than your growth rate of your revenue, you're going to get pull-through on that. I think what my observation, and I think what the dialogue I had with Tony coming in, was when you're in hypergrowth and then throw COVID on top of that. Mm-hmm Y our whole focus as a company is, getting product out the door securing new capacity, you know, new space, and focusing on that. Managing costs is, like, tenth on the list, right? Yeah. And so now, as we, you know, sort of get back to and manage 2024, and even if 2025 isn't back to that same, you know, takes a step up to double-digit growth, but maybe not to where we were before, you know, how do you-- how do I help the team bring in a level of discipline on that cost management Mm-hmm. and get it back maybe forefront? But I think you can absolutely do that without thwarting growth, without, you know, encouraging it and, and just making sure that, it's not tenth on the list anymore. It's second or third. Got it. Okay, thank you for that. I think that that's an important part of what we need to do as a company to create value is that profitability as well. So just sticking to the growth side, Repligen built out a lot of capacity during the pandemic. Yeah. And just, you know, if you think about winning new business, maybe it's larger contracts or, you know, longer-term contracts with certain customers, you know, how well is the company positioned to leverage that capacity to re-accelerate growth as we kind of exit these headwinds? Yeah, no, very well positioned. You know, we look at really having. You know, if you think about capacity at a high level, I'd say there's three pieces. There's the footprint, right? The physical space, there's the equipment that you need to create the products, and then the workforce, right? And so for the footprint especially, we feel we're good for the next three to five years, right? I think the equipment piece, we've got absolutely have room, but where, where we need to add, that's manageable. You know, and, and I think our, our labor force, we can flex appropriately. You know, we don't we like to keep the right, I'll say expertise, right? You don't want to turn over your team completely, but we can flex there, and we can certainly add. We're still an attractive industry attractive company to hire people. So, for us, finding those, I'll say, the companies that need space, maybe starting in clinical and then being able to ramp with them. Absolutely, we can do that all day long. Thank you for that. You mentioned, you know, your experience with GE. Yeah. Your 20 years of experience. You know, if you, as you walk into Repligen, you know, when you walked in on day one, was there any low-hanging fruit that you say, "Hey, there's this that, you know, best practices, we could do this right away to kind of help margins?" Or, or, you know, whatever it may, whatever it may be. Is there anything like that that you see in. Yeah, no, it's back at the same point, we're in Repligen, we've been focused on that growth. Mm-hmm. Unfortunately, through my years, I've spent a fair amount of time on maybe the lower, the slower growers and a bit more of that running the cost, you know, sort of play. And so what I've been able to do is bring a few things on, on my playbook of, "Hey, have we thought about this?" You know, whether it's sourcing, insourcing, right? Those are, those are places that, that, again, you can get some really good wins. Mm-hmm And bringing in processes. I think the biggest thing that I'm trying to do is give the team visibility at a different level of our, you know, financial performance on our profitability and our cost structure. And that to me, I don't know that it's low-hanging fruit b ut it's an important fruit to get. And we're making a lot of great progress there. 'Cause you, in order to take the right decisions, you have to have visibility You have to have a measurement system around that, and that's really where I've been focused. Okay. Great. Thank you for that. And then, if you look at your revenue exposure. Obviously, there's been, you know, the mAbs have been a big contributor, and you've talked a little bit about some of the cell therapy and gene therapy opportunities out there. Just, you know, can you give kind of your revenue exposure to each therapeutic class and how that's expected to change over time? Yeah, so we're, you know, still 80% mAbs. We're about 20% in what we call our new modalities. So that would be inclusive of cell and gene therapy, mRNA, which mRNA I'd say the gene therapy side is probably half of that 20%. The mRNA is 30% of that. But the way we think about that new modality space is really the focus on our, you know, top 20-25 customers that are over $1 million of revenue for us, and that's where we've been really focused on helping them grow, helping them work through, you know, the stages, either through clinical or up, you know, Phase I, II to III. That's really where you see your picku, you know, in terms of growth for us. But obviously then, you know, the company's getting closer to that commercial stage. But so that's where we'll continue to focus. I think we bring a lot of great solutions to the space, and again, in the context of better yields and more efficiency, and there's a high interest. And I think, again, where we play best is entering into that clinical ssort of phase and then being able to grow with them through as they progress. Right. So if you just look at the total number of programs, you know, I understand from a revenue perspective, mAbs is a higher percentage, but, you know, from a program, absolute programs and revenue opportunity, you know, so if you look at the company in five, 10 years, do you think it'll be shifted to some of these new modalities? Yeah, I don't know if we've shared the total number of programs, but absolutely, we see that mix changing, right? So we were I think we said we were, 15%. Was it two years ago? Yeah, it was in that 14%-15%. Went to 18% last year and then implied guidance for this year. Okay is about 20%. So we'll keep growing that mix of the, the cell and gene therapy. Again, we think we, our products fit that, fit well, but in terms of pure number of programs, I don't, I don't think we've shared that. Okay. But typically there's a revenue step-up for you guys. There is. You know, it's 3, maybe 3-5 x Yep. from Phase I Absolutely. Okay. And then even more into that commercial space. Okay, so just even without winning new business in those new modalities, you see some growth, pretty good growth opportunity? Yeah, 'cause if you look at the company overall, we're still 65% clinical, you know, 35% commercial. So again, you get some inherent tailwind as you move along through the through the stages down, or phases. And certainly, some things will fall out, right? But if you have enough swings, right, you're going to get a lot of great hits through that progression. I think it was 9 programs in 2023, late-stage programs that you guys brought on board. Just what's,y ou know, how do we think about the revenue opportunity there? When you say late-stage opportunity, I was under the impression that a lot of this gets spec'd in early, early on in a clinical trial. How are you able to come in and win that business? Yeah, so we talked about nine programs in our ATF portfolio specifically. You know, if you think about if it's commercial, because we said it's nine late-stage and commercial, that's where if you have a next gen right, or a biosimilar sort of next gen process, that's where you can come in. To your point, if it's, an ongoing, you know, production that's not the, you know, an easy entrée. And then on the clinical piece, you know, companies can still make decisions, certainly Phase III, to bring in our product, and especially when it comes to the ATF side, where really, that's really all about, you know, faster production higher yield. So again, as a customer may say, "All right, now, as I'm progressing, what do I need to do to improve my overall efficiency on this product?" That's where an ATF can come in and help them and improve. And so again, getting in, kind of, you know, to your point, kind of just at the last minute, it works and then we can be spec'd in, and then we grow into the commercial side. So on the new modalities, things like gene therapy and cell therapy, do you get spec'd in earlier than that, or is it, you know, kind of up for grabs once you get? Yeah, I mean, I think a lot of times the customers may be looking at different products and different processes, and that's certainly in the early stages, to figure out what's going to be best for them. To spec in probably is probably a stretch in the term, right? We wouldn't necessarily be, quote, "spec'd in" yet, but we're a part of that development, and then it's through what we're demonstrating and the value we can bring, then it allows us to move on Phase II, and then at some point then being spec'd in. Okay. You've got to be a part of the, you know, the early trials to demonstrate the value you can bring. Does that give you pricing power because you're already in there, you know? When do those pricing conversations start? You know, is that in the preclinical, or is it when you kind of get to that next phase? Look, I think in any kind or any sort of ramp up, there's always an implied, you know, volume-price correlation, right? So, so I think the dialogue is more about not, "Okay, if we're spec'd in, here's where you're at," but: How do you see volume growing? With volume growth, then we're able to, you know, provide better pricing, you know, or maybe, you know, more discount, if you will, off of the list prices that we have. But again, you know, we're gonna price in a way that's attractive for them to trial, right and bring our process in. You know, we're gonna say, "Hey, it's a small run." As you go through the phases, you know, prices accordingly, and then with the idea that at a commercial level, the volume's gonna be a different game. Right. Now, just getting to Q1 and guidance for the year. You know, there's the book-to-bill has been talked about a lot the last five quarters, and I think you probably, before that, you guys weren't asked about book-to-bill in six years or 10 years. So just walk me through, you know, what gives you confidence? There was a small step down in book-to-bill, and, you know, should we be concerned about maybe that means there's some softness, but at the same time, you've got a lot going on between the proteins business rolling off, and then you've got the COVID business no longer there. So just Yeah. What should we think about from that book-to-bill, and what gives you confidence in hitting numbers this year? Yeah, you know, I mean, we were sharing with some of the earlier discussions this morning. I mean, we're like 0.993 or something, or, you know, so, like, we're so close to being able to round to 1. We're like, "Wow, okay." To us, point where we were, 0.99, was the same as 1, and that's how we were thinking about really the first half, and then we shared that for the first last nine months, we're 1.03. I think that all that said, I mean, really, it's book-to-bill is your orders, as you guys know, orders to your revenue. You know, the way for a higher book-to-bill could have been to have lower revenue in the first quarter right? So, and we are only sequentially, versus fourth quarter, we were down about 3%. Within orders, if you take out, really, proteins we are flat. And so for us, I thought we were comfortable with where we landed. Again, 0.99 versus 1, and I know that, you know, there was a lot of reaction to that that small difference. But I think for us now, it's about: Do we have the orders and trajectory on the orders in order to deliver the revenue guidance that we've shared? You know, for the first half, we've talked about $300-$310. So that implies, call it, you know, some, you know, around at a midpoint, call it 154-155 for sales in the second quarter. Right, so certainly, as where we stand today, you know, we have line of sight, and then really now it's the next few months of taking orders, in order to have, you know, to deliver the second half. And where that book-to-bill now lands, it, you know, for the second quarter and the third is less about, it's less about the book-to-bill and more about the absolute orders that we have in the in the backlog we're filling. So, look, we continue to, you know, push commercially with our customers, and but it's- it'll be a mix of what we can deliver as well as just that overall market demand. Right. And the headwind from the protein side, can you just walk me through, you know, the absolute number, and why is that there, and should we have confidence that that's not gonna be a headwind beyond this? Yeah, it's a great question, and I think it's fairly unique to Repligen as well as a 2024 headwind. So there's really three pieces to it. We talked about, you know, the Cytiva business that we've been a big part of that- you know, partner with them for years and years. They've also been, you know, insourcing over the last several years. That finally has now reached a point where anything we sell to them is de minimis, but we still had $10 million of revenue in 2023. So again, as you go into 2025, not a headwind. The other piece of proteins is there was one of our partners did announce the discontinuation of a couple of their products that we support. And so those move out. Again, we don't see that as a headwind. We're not aware of any other major discontinuations. And then the third piece is, you know, one of our key partners that we've really, you know, really putting our efforts into growth with, frankly, I think, built up more inventory in 2023 than they had expected, and so that's now. It's kind of another form of destocking. It's not the famous COVID destocking, if you will but an element of that, and, and again, they have line of sight to get through that inventory in 2024. So then as we go into 2025, we put behind, there's no more Cytiva headwind, you know, the discontinuation is over, and we're back to a growth. And that's why we've talked about being back to, you know, double-digit growth on the proteins franchise in 2025. Great. And can you just a ny update on, on China? That's, you know, you've got- you were really strong in the first half of 2023 from a sales perspective, so you've still got another quarter of comps, but is there any movement there or anything that you've seen out of China that gives you confidence in a rebound in that? Yeah, look, we will be. China will be about 5% of our sales in 2024. It was 7% last year, right? I think our view is that, you know, it's sort of bottomed out, if you will, in 2024. I don't know that we are bullish yet next year. But I think the headwind that we've seen this year, going from 7%-5%, certainly is less of one in 2025. I think there's still a lot of things shaking out on BIOSECURE. I don't know if everyone heard, too, but this morning, they talked about now grandfathering things into 2032. So again, more time for companies—that's the latest proposal that's being voted on, so more time for companies to sort through that. We also, again, have the advantage that if we're, you know, in the process, even if the production leaves China, it and ends up in another country, another company, you know, we'll still likely follow within . the production side. So right now, our view is that there's still gonna be long-term opportunity, but whether that shakes out much in 2025, right now, we wouldn't be basing a lot of growth, you know, in our outlook for 2025. Great. Thank you. With just over five minutes, this is a chance. I don't know, you know, if you weren't here last year, but I like to have a little bit of fun with you guys. For the last five minutes, I'm going to test your problem-solving skills, your ability to multitask Oh, my goodness, great! under pressure. So you, you get to work on this Rubik's Cube while I continue to ask you questions. Okay, great, So you can finish that in five minutes. So This takes me to my days in the 1980s. So let's see how far you get in five minutes. Oh, my goodness. And so now the most common question I get about Repligen is how is Repligen able to grow so much faster than the bioproduction market? Yeah, it's the speed of innovation, right? I mean, it's back to what you asked me, why did I come to Repligen? It's that ability to be scrappy, to focus and prioritize innovation, and that allows us to get new products out, again, demonstrate benefit. I'm not finding a good side here to actually get done here, but, By the way, good leadership skill is the ability to delegate. There you go, Steven. Sorry, Steven. That's a great job. But that innovation cycle again gives us room to grow faster than the market. And frankly, you know, which, again, at the end of the day, is taking share by bringing by, again, that higher efficiency, higher yield that we can help our customers through innovation. Did you figure it out? Making some progress over there. Capital deployment over the next, you know, near and medium term, you guys have a clean cash position. How much M&A is required? It sounds like you guys are in good shape as far as capacity build-out, so how should we think about capital deployment? Yeah, look, you know, the M&A strategy the team's executed the last several years is has been amazing. And I think the one thing, again, as a new set of eyes to the company, is I think Repligen is second to none in the way we integrate the technology within the products of the companies that become a part of the family. And even as I've talked with Tony, the discipline on ensuring that we can bring value to a company versus, "All right, it's a high grower, it's accretive to margin, let's buy it," and you know, It's a, "No, what can we do to help it grow? And or help it, you know, integrate with our products, and so that is our focus. We're still, you know, very active. We have an active pipeline and always interested to see. But we're not going to settle, I think, to that point about discipline, we're not going to settle for something shiny and new. We're going to continue to look for the right, right companies that can be a part of the portfolio. We have the balance sheet to execute a lot of that, especially the tuck-in, you know, sort of bolt-on, size companies that we've done. On pricing, you guys took, y ou know, obviously, during the pandemic, there was a lot of pricing that you guys were able to take. Nothing yet? Yeah. How are you doing over there, Steven? Struggling. You know, where does pricing stand now? You know, how are your customers, you know, willing to give price, and how should we think about price this year? Yeah. So we've shared that we're assuming flat price for 2024 What that really means is a lot of ups and downs within the portfolio and with our customer base. So there's still going to be products that are up, others that will be down. We did increase our prices, you know, our price lists and sort of, you know, pricing in at the end of the year. Some of that will fall through, but we've also been, I'll say, prudent in that as we continue to build out on our key account strategy, r ight? We recognize that to move the needle on growth for us, you know, we need to be partnered with the big players in the industry. And we've added a new commercial team, you know, brought in experienced leaders in that space. Oftentimes, that will come at the cost of more volume for lower price. So that's why, especially also in an environment where the market is still, I'll say, you know, recovering or stabilizing, that's now's not the time to go out and be, you know, super aggressive on pricing. So that's why we've taken a prudent view of flat overall, but we certainly will be achieving prices in some places. And then, you know, you mentioned some of the, the key accounts. If you look at the new modalities versus the mAbs, is there an opportunity for more bundling? Or, you know, are those modalities going to require more products from you guys or, you know, are they going to look to, to more vendors? And how important is the ability to bundle and offer, you know, kind of the complete bioproduction line on some of those modalities? Well, yeah, I think one of the biggest tailwinds of COVID from Repligen was just demonstrating how we could supply in that space, particularly mRNA. And that's what we can bring to advantage. And so it's that demonstration, plus the relationships we have with big players on the mAbs space, that give us the credibility to say, "Okay, you're entering in, you know, new modalities. You know, we can be a part of that and can help you." And so that relationship and credibility and demonstration of what we've done really sort of forms the foundation of that. Great. Well, I think that brings us to the end of our time. Steven, how's it going? Steven, did you get anything? Not even a side? You didn't even finish the sides. Oh, my goodness! Disappointing. All right. It's been a while. Well, you guys got to work on that. But thanks for your time. We appreciate you having you guys here. All right. Thanks a lot. Thanks. Everyone.