Q1 2021 Cryoport Inc Earnings Call
[music].
Thank you for standing by this is the conference for welcomed to the Cryo Port first quarter 2021 earnings call.
As a reminder, all participants are in listen only mode and the conference is being recorded.
After the presentation, there will be an opportunity to ask questions to join the question queue. You May Press Star then one on your telephone keypad.
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I would now like to turn the conference over to Todd Fromer, managing partner of K CSA for opening remarks. Please go ahead.
Thank you operator before we begin today I would like to remind everyone that this conference call contains certain forward looking statements all statements that address our operating performance events or developments that we expect or anticipate occurring in the future are forward looking statements. These forward looking statements are based on management's beliefs and assumptions.
Not on information currently available to our management team our management team believes that these forward looking statements are reasonable as and when me. However, you should not place undue reliance on any such forward looking statements because such statements speak only as of the date when made we do not undertake any obligation to publicly update or revise any forward looking statements.
Whether as a result of new information or future events or otherwise except as required by law. In addition forward looking statements are subject to certain risks and uncertainties that could cause actual results events and developments to differ materially from our historic low experience and our present expectations or projections these risks and.
These include but are not limited to those described in item one a risk factors and elsewhere in our annual report on form 10-K filed with the Securities and Exchange Commission and those described from time to time and the other reports, which we file with the Securities and Exchange Commission. It is now my pleasure to turn the call over to Mr. Joe.
Shelton Chief Executive Officer of Cryo Court, Jerry the floor is yours.
Thank you Todd good afternoon, ladies and gentlemen, we appreciate your joining our earnings call today.
With me. This afternoon is our Chief Financial Officer, Robert Jovanovich, Our Chief Scientific Officer, Dr. Mark Sawicki, and our Vice President of corporate development and Investor Relations Thomasine zone.
As a reminder, we have uploaded on our first quarter 2021 in review document to our website and can be found under the Investor Relations section in the events and presentations section. This document provides a review of our recent financial and operational performance and general business outlook.
If you have not had a chance to read it I would encourage you to go to the website and download it.
Now for a brief general update followed by your questions regarding our first quarter results.
Following on a major accomplishments in 2020, we entered 2021 for an unrivaled leadership position with market, leading temperature controlled supply chain solutions for our Biopharma pharma animal health and reproductive markets.
Our global platform now consists of 32 locations and our family of companies that provide a mutually reinforcing solutions services and products.
As anticipated on a new platform delivered outstanding performance for the first quarter with revenue growing to a record $53 3 million.
Our recent strategic acquisitions of the biological solutions and Cryo PDP contributed significantly to this performance as we navigated ongoing integration of these two excellent teams.
Since closing the MBE biological solutions and crowd PDP acquisitions, we have sharpened each team's focus on the cell and gene therapy market and made investments to fuel their growth positioning us for excellent growth in 2021 and beyond.
As a part of for large companies, neither cryo PDP nor in the biological solutions, we're focused on the high growth regenerative medicine markets.
Now as a part of the crowd port we can leverage our deep expertise and resources to accelerate growth and market capture.
In the short time since closing these acquisitions, we have made significant strides in defining strategic focus aligning resources identifying synergies and Stoke and their respective innovation pipelines of each of these businesses. One example is the recent joint launch of Comport systems and crowd PDP as new Global Logistics Center.
Soccer, Japan.
Which will further support an accelerated growth in the Asia Pac region.
As I have previously expressed we anticipate achieving over $100 million of revenue and cost synergies over a five year period of time that clean <unk> PDP and crowd for it systems and that is well underway.
Excuse me.
At MBE biological solutions, our production facilities are running at full capacity breaking records monthly as it benefits from the newly invigorated strategic direction revenue growth rates for both MBE biological solutions and crowd PDP were significantly higher than their historical growth rates and we believe these.
These first two quarters as a part of crowd for our an early indicator of the growth potential of both of these operating units.
We anticipate continued strengthening from both PDP and MBE throughout 2021.
Okay.
Cloud for US overall organic revenue also increased by 35% year over year through our dedicated teams ongoing investments in an expanded footprint. We now have a very broad reach within the industry and are dedicated to continuously scaling our business with focus on purpose.
I'd like to emphasize that our business units reported record revenue year over year growth on a pro forma basis as well as the sequential growth over our record for fourth quarter 2020, the Biopharma pharma market was the primary driver for our growth and represented approximately 80% of our total revenue for.
The first quarter 2021.
And we continue to build out our pipeline of potential commercial customers with total number of regenerative medicine clinical trials supported by crowd for reaching a record 543 trials compared with 465 at the end of the first quarter 2020.
Commercial revenue was generated primarily from our global agreements supporting the continued market introduction of Novartis as Kim Ryan and Gilead <unk> Carter.
In addition, Bristol Myers <unk> has received FDA approval for its cell therapy <unk>.
Bluebird bio and BM S have received FDA approval for their car T cell therapy of that amount.
A first of its <unk> car T cell therapy for treatment of multiple myeloma.
These therapies mark crowd for sixth and seventh long term agreements supporting the global commercial launch of the cell and gene therapy.
We expect these agreements to begin to contribute to our revenue in the second quarter of 2021 and ramp throughout the remainder of the year driving additional growth in our commercial revenue in 2021.
A total of three cryo port supported.
As for BLA as were filed in the first quarter of 2021 based on internal information and forecast.
From the alliance for regenerative medicine, and looking forward, we anticipate up to 18, MAA or BLA submissions for <unk> supported products during 2021.
In addition to our organic growth rate.
I'm sorry in addition to our organic growth and due to increasing demand for support in the APAC region, we supplemented our Osaka opening.
Hiring critical transport solutions, Australia, a market leader focused on premium healthcare logistics management services specializing.
And in time.
Sure.
Excuse me specializing in time and sensitive critical solutions for the Biopharma pharma and medical industries in Australia.
As a part of the crowd ports crowd PDP business unit Cts will also support crowd port systems in Australia.
<unk> is expected to have strategic impact on our APAC initiatives as the number of clinical trials and the region continues to increase the acquisition of Cts is an important step in our APAC strategy as with the addition of <unk>.
We will be able to serve the domestic Australia market more effectively as well as providing robust temperature controlled supply chain solutions for the international clients, who need support throughout the APAC region.
Now I would like to request that the operator open the lines for questions.
We will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you will share our atone acknowledging your request. If you are using a speakerphone. Please pick up your handset before pressing any Keith.
Withdraw your question. Please press Star then two.
We will pause for a moment as callers join the queue.
Yes.
The first question comes from Brandon Couillard with Jefferies. Please go ahead.
Hey, guys just from add on for Brandon. Thanks for taking my questions for.
First to start for maybe for Jerry.
You talked about the 100 million plus of synergies over five years mentioned again today, continuing to work to identify them and execute on them and they remain on schedule as you saw for any additional color.
On the process Youre going through key areas of focus and maybe what youre. Most excited about across the portfolio as you look at those synergies for the next few years here.
Well.
I can't give you a.
A lot of specifics that I can point to the joint.
Operations that I mentioned in the in my commentary.
Matt where we opened up.
Senator between crowds EU carport systems I can also tell you that much of the freight that is.
Debt was going to third parties is in process of.
Think of coming on.
Our way through crowd PDP.
And then we have a joint operations in Singapore as well. So so there are a number of things that are going on it's hard for me to categorize them are to go through all of them at one time.
But I can tell you that those initiatives are well underway.
Do you want to add anything to that Mark I think on the cost side on a dairy was mentioning more on the operational or product side, so to speak but on the cost side also we have.
Lot more power as it relates to spend management through third parties.
Scheduling freight on airlines and others.
Consolidated platform between <unk>.
Systems, and PDP provides the ability to leverage better pricing and discounting structures with <unk>.
Transportation Partners for example.
So that's just another example on the spend side for you.
Thanks, that's helpful. And then I guess shouldn't really be a surprise given your strategic partnership with Liza, but we noticed you added some language in the most recent 10-K that both <unk> and <unk> are engaging your services exclusively in conjunction with their contract service platforms in order to service clients.
Cross your mutual client base, so and it looks like you also added Sydney ourselves here on <unk>. So can you talk about the expectations for these type of relationships going forward and the ability you guys have to kind of accelerate this in.
And expand upon them to include cryo ports expanded portfolio of services.
Sure this ties into an overarching strategy as it relates to putting together a comprehensive supply chain platform. So we're doing this on a couple of different ways, obviously through acquisitions and organic related to build out of services and competencies, but the other side of this is through partnerships and obviously.
Don't have an interest in moving into the manufacturing side, but in a manufacturing component is a very very key element of managing the overall supply chain workflow for these types of products. So.
An example, London recognizes this particular need and they don't want to.
Build this asset out themselves so they view it as.
Advantageous for themselves as well as our mutual client base to establish strategic relationships that tie together.
And provide a unified business platform for our mutual clients to engage.
Our respective parties and so this happens in a number of different ways that happens through and obviously integration of our activities in our in some of our systems with Alonso for example, we're on our CD modes and the second thing. It does is it also is on the business format. We integrate some of our business profile. So that for example.
All.
Alonza can directly offer our product offerings in part of their contracting process.
That's just a couple of examples on how this occurs for.
For them they view it as a value add for their client base as well as the risk reduction element for them.
Thanks, that's helpful I'll jump back in queue.
The next question comes from Andrew de Silva with B Riley. Please go ahead.
Hey, good afternoon. Thanks for taking my questions and also congrats on the progress on strong quarter.
So just to start within Biopharma can you just give us a sense of maybe what percent of sales are tied to the regenerative medicine or cell and gene therapy space, specifically versus other kinds of biologics or small molecules that might be relevant but some of the more recent acquisitions.
Asked a question for Mark Andrew Yes.
Yes, it's a little bit complex.
You know.
Primarily if you look at the historical business the vast majority of the systems business as regenerative medicine focused.
Whereas the plurality of the business within the PDP organization as it has traditionally been a little bit more pharma focused or biopharma focused.
And so that obviously will shift over time.
But I can't give you exact numbers at this point.
Okay fair enough.
And I have been getting a couple of questions about this I believe it's been renewed but I'm not 100% sure as it relates to Novartis has a relationship with you or was it just gilead, thus far that's renewed their original contract terms.
And then coal contracts were renewed last year.
Okay, Okay, and I was doing some.
On some digging with some of your customers.
Correct to say well when you sign a contract.
They are effectively your customers are typically committing to the overwhelming majority of all.
Treatments utilizing your logistics platform and while it might not be 100 percentage approaching 100% in many instances that is that a fair statement.
Yes.
Okay.
Perfect.
And then as it relates to BMS has recently approved car T.
Were they a contributor during the quarter.
And do you expect on sale to be a material contributor to legacy credit Port systems sales.
They were not a contributor to Q1 revenue they will be a significant contribution in the next series of quarters from our perspective.
Okay. Okay, that's good to hear.
And could you Robert maybe just.
Let us know what was the reason for the significant quarter over quarter improvement in Mbe's gross margins.
Yes, certainly.
We can tell you.
Yes.
If you look at the overall results for for the quarter, we had record revenue for for all business units.
Obviously, including MBE with significant revenue growth.
Compared to their Q4 and compared to their historic.
Growth rates, we would expect that debt.
To continue with that you had of Austria.
Obviously, a higher overhead absorption.
Debt contributed to the margin.
We've talked about in the past debt there.
There is less.
Elasticity on the margin side of the profiles and particular action with cryo PDP on over time, Youll see that as they move towards.
The cell and gene therapy part of the life Sciences industry on those margins improve they've seen a sequential improvement on margins as well, but youre absolutely right. The most significant improvement.
And thats really mostly related to the low.
For all increase in revenue flow.
Sure.
Okay useful context last question for me just on animal health.
Couple of quarters ago, you mentioned.
Maybe it's <unk> us ask.
<unk> Si partner would be be likely.
Is that part of the reason for the.
Substantial increase in animal health, even quarter over quarter or is it just really all tied to recent M&A.
This is really related to the historic.
Business that <unk> brought to the table on animal health. There has been an increase on the corporate systems side as well for animal health.
But not to that level in terms of all the opportunities that you just highlighted.
Those opportunities are still in play.
Been pushed to a degree because of COVID-19 related restrictions on travel as it relates to validating and qualifying given facilities to support that work.
Okay, Okay great.
That's good color and looking forward to see some of those new partners are going to come on that.
Is it for me I'll hop back in queue best of luck going forward.
Thank you. Thank you.
The next question comes from Paul Knight with Keybanc. Please go ahead.
Hi, Jerry.
Clinical trial revenue growth was very strong on my math says above 60% and then approved therapy revenue was <unk>.
Down year over year could you add color around that.
Yes.
Ken.
To defer that question to Mark.
And as you guys know kite novartis.
On multiple new global manufacturing facilities over the last 18 months.
And we've been talking about this we've seen a small portion of those shipments shift from international to domestic.
This was expected and our global expansion, which you've seen in Japan, and Singapore and others is moving in lockstep with what their overall strategies.
We are seeing commercial shipping volumes increase and we are confident that we will see this trend continue and accelerate through 2021.
These guys are recent expansion of their facilities effectively tripled manufacturing capacity long term.
So just to make it clear we are still supporting all of the patient shipments for both Novartis and Gilead and with the new therapies. They get back from our Brianti into card is launching over the last couple of months.
We're very very bullish on on the <unk>.
Commercial ramp opportunity from a revenue standpoint over the over the coming quarters.
Okay.
And the.
On the trial growth.
Overall trial growth of 17%.
Phase.
One was up 14 are academics coming back online and then the phase III growth rate was 11.
Could you talk to those two items.
Yes, it's more opportunistic when these.
These companies make a determination to reinitiate based on all the data that we have all of the clinical pipeline as it relates to patient enrollment of these centers is back to pre COVID-19 levels.
So we don't think that Thats a factor whatsoever. So it's now more related to their clinical strategies.
Okay.
And the.
The.
In the E on Cryo PDP performance Jerry.
Are you getting any COVID-19 help from that.
I know you can or can't really quantify it but.
How much of COVID-19, helping us.
Qualitatively I guess, if you could talk to it.
No COVID-19 COVID-19.
Not on a significant help Paul.
So we're focused on cell and gene therapy, we do however, we're selling.
So on gene therapy come into play in terms of therapies or cures, we do support.
Trials. So we have a significant number of trials that we're supporting.
In that area and we do.
Supply.
Dry ash replenishment in some parts of the world for some of the vaccines, but it is not significant to US we are focused on cell and gene therapy.
Yes, and with Cryo PDP in the I guess labs reopening helps et cetera, I mean.
What would you attribute this really seems like strong performance too.
But on a strong performance has to do with a focus on cell and gene therapy.
And sharpening sharpening the strategies in both companies and that's just beginning that's just a process is just beginning.
Okay.
And then I guess for my last question would be regarding the.
The.
The two that you landed in the quarter at Sema on Briand Z.
I guess they were significant in the quarter of those I would assume.
And then the ramp I guess rest of the year.
That's correct.
Okay, great. Okay. Thank you.
Thank you Paul.
Yes.
The next question comes from David Saxon with Needham. Please go ahead.
Hey, guys. This is Joseph on for David.
Just wanted to maybe touch on the reproductive medicine side of the business. It looks like it grew pretty nicely in the quarter.
Concerning the backlog do you expect this to to remain fairly strong throughout 2021, and maybe beyond can you maybe discuss some of the.
Increased demand that youre seeing on your side or with your partners in that business.
Well remember, we're expanding our reach as well. So we have increased demand. We have we have evolving strategies that are much.
Consistently improving our effectiveness and we are expanding our reach and Marc I'm sure. We will have some other comments on that so I'll turn to him.
Two key factors one we built a phenomenal team from an outreach standpoint in support of the reproductive medicine space and as Jerry had mentioned this is now a global team that is really pushing into international markets and the second is a reiteration of the strategy that we put together <unk> 18 months ago to really establish key.
Partnerships with the large large clinic networks on a global basis and to establish a sole source relationships with those folks and both of those we believe are absolutely sustainable all support debt.
That significant increase in profile moving forward for reproductive medicine space.
Thank you that's very helpful.
And then maybe.
One a little bit more.
High level I guess.
In terms of your cell and gene therapy clients can you maybe give us just a little information on how some of these clients choose between your different shape areas, whether it be the the advanced Sip shipper on the high volume shippers are.
When the cryo sphere is launched.
And then to be Frank it's really dependent on their quality organizations and their product.
Packaging configurations as to what they need.
And so the good thing is is that they have a lot of flexibility of choice.
As it relates to us in everything that we have on the market as best in class.
And so.
Dependents on whatever they are quality organization mandates as how they typically make that determination remember Joseph we're a solutions company. We are agile and we have the tools in which to fulfill the clients' needs and so.
So they do vary and we vary in the way we fulfill those needs.
And I guess, maybe a little bit more specifically do commercial.
Clients use the high volume share barrier or is that more towards.
Academic preclinical research what have you.
It's heavily dependent on whether it's on autologous or allogeneic therapy, if its an autologous therapy, they're traditionally using debt high volume format, because it needs a wider net opening for the blood cassettes that are being used for blood draws allogeneic therapies typically use our smaller unit, which has a much smaller net opening because of the.
They're typically packaged in a vial based format.
Straightforward from that perspective.
Great. Thank you that's helpful and that's all from me.
Okay.
The next question comes from Jon <unk> with UBS. Please go ahead.
Thanks for taking my question and congrats on the quarter.
For my calculations it looks like MBE Biopharma revenues were strong up around 12% sequentially.
Can you talk about any trends youre seeing there in terms of pent up demand coming out of COVID-19 do you see this business continuing to accelerate throughout the year and are you comfortable with double digit growth for the year for can be.
Well, we don't give guidance about about growth.
And about our numbers.
But it's safe to say that.
The growth of <unk> will.
Continue to exceed what it has been historically.
And we certainly supply storage.
Some storage.
Through our distributor network for.
For the COVID-19.
Vaccines in over.
And the work in that area.
And as I said.
And the in crowd port system that we support a number of trials as well.
<unk>.
There is nothing there is no pent up demand per se in that sense I mean.
We are focused on we are refocusing the company on sharpening our strategy towards cell and gene therapy.
And thats it.
It will continue to service all of the markets, we do serve traditionally.
And of course, it's strong in animal health is strong in biologics in general is strong and.
And it will get stronger in cell and gene therapy R&D is strong, but it's focused just hasnt been there.
And you'll see continued growth in MBE.
Got it that's helpful. And then I know you announced the <unk> deal on the quarter and expanding in Australia can.
Can you talk any about the deal on any future M&A outlook, including expanding into areas such as China.
Well, we will we definitely will be on China, and we're developing that strategy now it's been under consideration for some time and we absolutely will be there. We are there now I mean, we have shipments in and out of China today, but we will have a bigger presence there because Asia Pac is going to grow we have in Asia Pac Strat.
Jim we're filling out that Asia Pac strategy in terms of acquisitions. It will be the traditional things that I've talked with you about in the past it will be in the categories of certainly in the logistics area and the Courier area.
It certainly will be in packaging and especially on information technology.
And we have a robust pipeline, we're looking at a lot of things it does take a buyer and a seller.
But there are a lot of things that we do have our eye on and we'll continue to supplement our organic growth rate.
With with acquisitions. Our focus however is on is not on acquisitions, primarily primarily our focus is on organic growth the acquisitions will be supplementary and they will come along.
That's helpful and I guess lastly, I know that the company doesn't provide guidance, but organic growth was strong in the quarter I think.
Beat consensus by around 14% on revenues.
It looks like current consensus is around $200 million for the year are you comfortable with that number or do you see any upside I know it's early in the year.
Well.
We feel comfortable that number and we did we did beat.
The consensus and we're very happy about that and we.
We think we think we're on a good track right now, yes, and again just to remind you obviously the market that we're primarily focused on the cell and gene therapy market is really poised for for accelerated growth you'll see that we're already now supporting seven commercial launches. So there's certainly upside potential too.
To where where the analysts have pegged right now.
Okay.
Got it I appreciate it thanks for taking my questions.
The next question comes from Puneet <unk> with SBB Leerink. Please go ahead.
Hi, Gary and team this is Scott on for Puneet. Thanks.
Thanks for taking the questions.
Well congrats on the nice quarter ahead of our estimates on both kind of the legacy cryo part and the recent acquisitions.
I wanted to get into a little bit if youre seeing any of that kind of early synergies that you identified kind of come through on the revenue side on MBE and PDP kind of what could you talk a little bit more to what the strength was there is this the kind of recovery out of the pandemic.
Could just provide a little more color on <unk> in PDP strength that'd be great.
So the biggest thing that we've talked about in terms of synergy promises for $100 million of synergies between crowd PDP and crop port systems over the over the next five years and marks on a good position to make a few comments on that.
So that's obviously been a focus of ours and we are starting to see some contribution from that perspective.
And we feel firm and confident in that $100 million Targa.
Target over the next for years.
That would that there is a clear line of sight towards that.
Gerry had mentioned earlier in the Q&A that we are actively moving pipeline from a third party.
Situations to the potential of the PDP situation, obviously, you have to go through the quality and the.
Vendor approval processes, which take some time, but those are very very active at this point in time.
In terms on your question about.
About MBE those are those are more subtle and there definitely are synergies there and primarily comes from a different view of the market two different views of the market and their supplementary and so they are more subtle.
Okay got it that's helpful. Thank you guys for that.
I also wanted to touch on.
Our competitive landscape, we've been seeing a few partnerships from CMO companies such as Cadillac.
They are employing sterling ultra cold.
For the pending acquisition by Biolife.
And kind of just building out a little bit more on the cryogenic side, just there cryogenic capabilities could you guys speak to this is there anything new kind of in the competitive environment is it a change in.
Kind of attitude from the <unk> just any any color you can provide there that'd be great.
No. There is no change on the competitive environment and in fact, catlin as a partner and customer in there.
<unk>.
Of course use on crop port systems are used.
<unk> products and.
And we see their build out is normal for cell and gene therapy manufacturing company and they have to have storage and that's that's what they're doing so we see all of that is very positive.
Okay.
Last one for me last year in 2020, it was an incredible year for Celgene therapy funding almost doubling 2019 levels by our estimates.
Any of that flow and slowdowns.
Slowdowns on new clinical trial formation, yet are you guys seeing that.
More importantly are you seeing kind of a new customer funnel for new customers kind of expand with all those new funding that we saw last year. Thanks for taking the questions guys.
That's a question for Mark.
So if you think about it from two perspectives the existing companies that have been in cycle for a period of time are extremely well funded.
And obviously the activity last year will continue to augment that clinical and commercial activity in the coming quarters, but there is a substantial number of new startups also that have cropped up over the last 12 months. We have listed a couple of those on our most recent.
On quarter on review.
And we anticipate additional startups to be very very active in the coming quarters as well because this is a very bullish space for the pharmaceutical industry in general.
Okay.
The next question comes from Richard Baldry with Roth Capital Partners. Please go ahead.
Thanks.
We think about MBE running at full capacity, maybe two concepts one.
Would that argue that the level of revenue you're seeing out of them should be sort of sustainable at these levels needed incrementally higher.
Build more capacity out and then.
How expensive is it.
<unk> been turned on cost or time to increase its capacity its growth rate does sort of tick up culture into the growth rates.
The biologic area Youre focused on.
Yes, rich we bought MBE.
Growing it in mind, so none of this is new new.
To us it's all on our plans and so at this stage.
We have a fantastic team that could I can't I couldn't have asked for a better team that.
We have it.
<unk> and its a matter of optimization, we have three plants, we have a plan and should do China in new project.
Soda and an embargo on Georgia, So we will be optimizing and we are optimizing those plants at this time and that will continue for a while and certainly we'll have the.
Plant additions and maybe have a new location at some point.
Promise you that right now, but that's certainly a possibility, but but theres plenty of lead time to keep up with demand.
And then if you look below the line sort of comparing Q4 with Q1 SG&A.
The SG&A side whats from 26% to 21.
Which of those numbers seems more sustainable sort of going forward were there any one time acquisition.
<unk> fell into Q4, because Q1 feel like this is a good baseline to build off of as we look forward.
Yes, I think I think you can.
It's a good baseline I think if you look at the remainder of the year you can see some increase there just related to building out additional resources.
But I think it is typically at year end Q Q4, even though we excluded from the acquisition related costs.
Some of those were in there plus you have some year end entries that you typically make so Q1 is a good starting point again assume some gradual increase just on building on what additional resources.
And maybe similar question on R&D, you've gone from.
Basically doubled it over the last six months from on a $2 million ish per quarter to for this first quarter numbers start to feel like a fully operationalized system or building.
Building up from this point forward moderately quickly.
Rich it's too early to tell you that thats a stabilized number.
We are we are very keen on our research and our development and our engineering staff and we do have.
We do have some big plans in a very robust.
Our innovation pipeline.
And a couple of things.
Surfaced in.
You know that the cryo sphere will be introduced in the last half of this year.
Several other things.
A fusion.
800, 811 that will be introduced in the last.
Probably the last part of this year first or the first part of next year. That's a smaller fusion product that will open up a tremendous segment of the market to us.
Especially.
In areas that.
Small facilities and don't have plumbing for a cryogenic temperatures net sort of thing for cryogenic.
Sourcing so.
And there are a number of other things on our innovation pipeline. So we will keep you posted on that number as we move along but I wouldn't tell you that that's something that today that is totally stable it'll be in that neighborhood, but.
It could go up slightly and it could.
I just can't tell you right now.
Okay.
Since you don't give guidance for just a very general concept around the quarter with your adjusted EBITDA is stepping up to $7 million are there any thoughts.
Thoughts that there is any one time or cost savings or revenue generating factors in Q1 that we shouldnt consider consistent through the rest of the year can you talk about new products coming online with commercial approvals.
Arguably drive the service revenue side higher so I'm curious if that new adjusted EBITDA high as sustainable or if there are any sort of seasonal things we need to keep in mind when we.
Re forecast on our own.
Yes, just addressed it I wouldnt say theres anything seasonal in particular.
On the onetime elements, we've already eliminated all of that adjusted EBITDA. So thats a pretty clean number now as you move forward again in this dynamic market you will see us going online with our supply chain centers in Houston, and New Jersey that includes the bio services. So it's all those things.
We will weigh into the adjusted EBITDA into the bottom line temporarily as they start seeing the full business volume come through.
But I think it's a good number to use to project forward.
And you'll just have in mind, and then layer on top of the building out of the organization.
Last question again for very high level, I guess Youre adjusted EBITDA now is higher than your total revenue in the first quarter of 19, not that long ago. So.
Does that put you in a position to be more aggressive.
Maybe in terms of acquisitions.
On a go forward basis to scale up the business or do you think it's more on par to stay disciplined in how balance sort of top and bottom line.
Well.
Rich I think it puts us in a fantastic position, but but we are disciplined and we take very seriously shareholder funds.
We don't even use the word.
Spending we use the word investment more than we use any other term around <unk>.
Port So we will be disciplined, but we also will be aggressive to as we grow. This market is growing very rapidly and we intend to continue to be the market leader and to grow our reach and to grow our grasp and two to continue to develop.
Supply chain solutions that are compelling and the more comprehensive debt meet this industry thats evolving and growing so rapidly.
Great Thanks, and congrats on a great quarter.
Thank you. Thank you.
The next question comes from Jacob Johnson with Stephens, Inc. Please go ahead.
Hey, guys.
On for Jacob maybe just one quick one from me.
Just to expand a little bit on M&A and from a high level.
Should we think of this is more focused on the services side or the product side is there any area within either that interest you right now that you could shed some light on.
Yeah.
Although the information side interest me.
Very much and if we found a.
On acquisition that made sense met our criteria of being a well run company being accretive to the company and being synergistic to our endeavor in the services or the product sector, we would be we'd be talking with them.
So, but we I can't say that we have a preference on either place what we have a preference for continuing to execute on our strategy.
Got it thank you guys.
Yeah.
This concludes the question and answer session I would like to turn the conference back over to Jerrell Shelton for any closing remarks.
Thank you operator, and thank you all for your questions. It was a terrific dialogue.
We just had and I appreciate we appreciate the questions and closing our first quarter was on.
First quarter was very successful.
And starting the year following a strong fourth quarter in 2020, we achieved significant growth in the first quarter with a growing number of clinical trials supported continued outsized growth of Crown Port systems in crowd gene outstanding performance from <unk> biological solutions and Cryo PDP.
And in January the closing of a $287 million follow on public offering to further strengthen our financial position and support future growth.
Our unique global capabilities widened our competitive moat and positioned us to extend our support of the life sciences industry, and especially clinical and commercial stage regenerative medicine therapies around the world. We anticipate that our continued development of our operating platform and highly differentiated solutions will continue to drive access.
<unk> and our growth is the fee on the biology continues to develop.
We want to thank you today for joining our call and until the next earnings call. We bid you a very good evening.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
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