Q2 2021 Maravai LifeSciences Holdings Inc Earnings Call

August 10, 2021

1 on your telephone keypad, if Amy wants you to require assistance during the conference. Please press Star zero.

I would now like to turn the conference over to Deb Hart head of Investor Relations. Please go ahead.

Thank you Alexander and good afternoon, everyone. Thanks for joining us on our second quarter 2021 earnings call. Our press release and the slides that accompany today's call are posted on our website and are available at investors <unk> com under financial information quarterly results on today.

Carl will cover our financial results and the business highlights and will provide updated financial guidance for 2021.

As you can see on slide to Carnival first provide you with a business update and Kevin will review, our financial results and guidance, we will open the call for questions. Following the prepared remarks on slide 3 we remind you that forward looking statements that we make during this call, including those regarding our business goals and expectations for the financial performer.

At the company are subject to risks and uncertainties that may cause actual events or results to differ.

Additional information concerning these risk factors is included in the press release, we issued earlier today as well as those that are more fully described in our various filings with the SEC.

Today's comments reflect our current views, which could change as a result of new information future events or other factors and the company does not obligate or commit itself to update these forward looking statements except as required by law.

During this call we will be using non-GAAP measurements of certain of our results and it provided guidance reconciliations of GAAP to non-GAAP financial measures are included in the press release that we issued this afternoon, which is posted to <unk> website and at Www Dot FCC Dot Gov via Edgar.

The metrics, we will be discussing in today's call include net income adjusted EBITDA income tax expense and adjusted earnings per share. These adjusted financial measures should not be viewed as an alternative to GAAP measures, but are intended to better enable investors to benchmark. Our current results against historical performance and the performance of art.

Now I'll turn the call over to Carl.

Well, thank you Deb and good afternoon, everyone. We appreciate having you join us for our call today.

Let's start with our surface.

Our second quarter results on slide 4.

<unk> always had a very strong second quarter in fact, the largest and most profitable quarter in our history bye for.

Today, we reported $217.8 million in revenue.

Growing 364% compared to the prior year.

The up 47% sequentially over quarter 1.

Our adjusted EBITDA of $164.7 million grew 841% over the prior year and 62% sequentially.

Our topline performance and outstanding adjusted EBITDA resulted in adjusted EPS of 44 cents per share and record free cash flow generation.

We've seen an incredible first half in our first full calendar year as a public company.

It is clear that momentum continues to build across our global customer base.

Mrna research and development moves to the forefront of modern medicine.

Turning now to slide 6.

Growth in our nucleic acid production business in particular remains very robust.

Click acid production had record revenue of $192.5 million.

533% year over year.

55% sequentially.

Demand for clean cap mrna continues to accelerate in all areas.

Caf reagents themselves <unk>.

<unk> manufacturing services and <unk>.

Justin mrna construct.

Full regulatory approval by the FDA of the first mrna COVID-19 vaccine.

Currently being used under emergency use authorization.

Is now expected to occur around labor day, and should further expand demand for the vaccine and clean cap in late 2021 and beyond.

Pfizer and beyond took just announced that they have already shipped over 1 billion doses of COVID-19 vaccines.

All of those continuing clean cap.

Pfizer has further said that they plan to increase COVID-19 vaccine production.

1 third in 2020 to.

Going from 3 billion doses this year to 4 billion doses next year.

In addition, the development of new generations of COVID-19 vaccines continues apace.

These nextgen vaccines, either offer specific protection against emerging virus variants, such as the Delta variant.

Or the enhanced overall immune responses by offering booster doses of the first generation vaccine formulations.

On the public health front, we are beginning to see nations, such as real France, and Germany offered third.

<unk> of mrna vaccines as a booster to older or immunocompromised citizens.

Others, such as the U K.

Additionally, recommending the recipients of single dose vaccines from J&J and Astrazeneca.

<unk> and mrna dose at their next immunization.

It also seems that each week, we learn of new investments being made in mrna technology.

As it represents the future of vaccine development efforts due to its flexibility scalability and effectiveness.

Slide 7 shows some of these headlines.

Sanofi announced a $477 million annual investment through 2025 to accelerate the clinical development of their entire mrna portfolio.

Sanofi has stated that they hope to have a minimum of 6 mrna candidates in the clinic by 2025.

And last week, they announced their intention to acquire translate bio for $3.2 billion to accelerated vaccine programs and to further explore other therapeutic areas for mrna.

They specifically cited a goal to unlock the potential of mrna and other strategic areas, such as immunology oncology and rare diseases. In addition to vaccines.

This comes on top of the previously announced commitment made by Pfizer to increase R&D spending in 2021 by $600 million for additional mrna based development programs.

Glaxosmithkline and said that they now have over 200 scientists working on mrna and are making large scale investments in mrna manufacturing.

Beyond Tech recently announced their new project to develop an mrna based malaria vaccine.

Their goal is to start a clinical trial by the end of 'twenty 'twenty 2.

Beyond Tech is already collaborating with the Bill and Melinda Gates Foundation on HIV and tuberculosis programs.

For TB beyond Tech plans to begin clinical trials for testing a vaccine candidate also in 2022.

Currently they are their partners are developing vaccines against 9 different infectious diseases and.

And the company continues to pursue 15 oncology programs and the clinical and preclinical phases based on 4 different drug classes, including mrna.

Novartis has also indicated that they are considering entering the mrna market.

Chairman your greenheart come in a recent interview that quote.

The mrna technology has proven to be an attractive option in this situation.

And of course every research company is questioning whether they should invest more in this area.

Close quote.

And <unk>, a leading pharmaceutical company in Korea announced their plans to develop a next generation mrna vaccine platform.

We are currently seeing the impact of all of this increased enthusiasm and investment on our own business.

To illustrate this point, let me share with you some clean cap supply agreements statistics.

At the start of 2021, we had executed 5 supply agreements for clean cap in place and another handful of agreements under discussion today.

Today, we have 13 supply agreements signed.

<unk> more than active late stage negotiations.

25, more with term sheets under review.

This underscores the incredible enthusiasm that exists for mrna generally.

And clean cap specifically.

Even more encouraging is the fact that this customer population spans the entire spectrum from large pharma to innovative biotechs to new and potentially transformative manufacturing platforms.

From our perspective mrna and clean cap or clearly here to stay and a durable and meaningful way and Moreover is right in the middle of it.

We are also increasing our investment in mrna innovation as we scale, our R&D operations facilities and quality systems.

We believe that an appropriate level of investment in R&D long term will approximate 5% of our revenue and we would expect to reach that level of investment within the next 3 years.

That investment will be comprised of people.

Laboratory facilities and equipment.

Program management resources.

And external collaborations.

We will also begin pursuing specific technologies and new opportunities identified by our new scientific Advisory Board, which we are currently in the process of forming.

We will have more information on the SAP be available for you during our next earnings call.

Now turning to slide 8 and our biologics safety testing business, which supports high growth markets and cell and gene therapy vaccines and biologics drug manufacturing.

Here, we set the gold standard in wholesale protein and process related impurity analytics.

Along with offering innovative viral clearance solutions that ensure the safety of biopharmaceutical products.

Our second quarter revenue of $18.2 million in DST.

<unk> a record high up 47% from last year and up 3% sequentially.

This growth was driven by 3 main factors.

First continued high end user demand for our products through both direct and distributor channels. As a result of expanding COVID-19, and <unk> associated virus or AAV vaccine and therapeutic programs and their unique analytical needs.

Second strong sales across the full breadth of our product line that are routinely used in a number of commercialized cell and gene therapies, <unk> vaccines innovative biologics and biosimilars.

And finally, the continuously expanding biopharma product development pipeline.

We saw strong demand for all categories of kits during the quarter.

From generic wholesale protein assays to other Elisa impurity detection kits and 2 orthogonal mass spectrometry based services that promote the use of our HCP kits.

Additionally, a number of clients entered into agreements with us to develop custom wholesale protein assays to support their proprietary biologics.

We plan to continuously innovate and scale, our offerings and our biologics safety testing business to ensure superior technical support to offer the highest quality services and products.

And to offer the most comprehensive catalog of products to meet our customer needs.

Turning now to slide 9.

Our protein detection business saw 71% revenue growth versus the prior year.

Which where the pandemic impacted revenues.

Sequentially revenue was up 6% driven both by our custom and catalog business.

Vector now represents only 3% of our revenue and 2% of our EBITDA.

Our current assessment is that there are multiple significant market opportunities and our nucleic acid production and biologic safety testing businesses to win.

Will require incremental investments and management attention in order to support our hyper growth in these strategically important markets for more volume.

So as you will see on slide 10, we announced earlier today that we have entered into an agreement with Thomson Street capital partners to sell Victor laboratories for a purchase price of $124 million in cash.

Vector operates in a different market with a different growth profile that being research immuno histochemistry versus cell and gene therapy than the rest of tomorrow volume and focuses on different customers, primarily traditional academia versus biopharma.

While we have seen a good recovery in the protein detection business from the pandemic lows. Our view is that vector will require material investments in commercial capabilities.

And our commitment to bolt on M&A in order to ensure its long term competitiveness and this pure research segment.

The combined effect of such investments would be to increase our financial exposure to a noncore segment.

We prefer to maintain a laser like focus on nucleic acid production and biologic safety testing as we see those markets being significantly higher growth and far more strategic tomorrow volume.

We wish lease of sellers and the entire vector team nothing but tremendous success going forward. We're confident the Thomson Street is a great partner for vector and this divestiture will allow <unk> to focus on our core technologies and cell and gene therapy, while supporting our biopharma customer base.

Yes.

As you might imagine we are actively evaluating additional acquisition opportunities across the entire cell and gene therapy space.

Proceeds from this transaction will further improve our cash position and enhance our ability to execute quickly on meaningful acquisition targets.

I'd now like to turn to slide 11, and give you a quick update on our facilities and our plans for additional capacity expansion to support our exceptional revenue and profit growth.

As you will have seen we chose entered into a lease agreement to develop a new expanded San Diego facility for the nucleic acid production business.

We refer to this as the Flanders side.

Our current water ridge facility in San Diego is already close to reaching capacity in certain areas.

Although we have yet to maximize the total output of water Ridge has as measured in sales dollars. We will soon be in need of additional space for offices.

Our house, receiving and storage and for certain laboratory operations.

Our objective then is to create a center of excellence, where our existing water Ridge facility will continue to be the manufacturing center of excellence for all mrna technologies are.

Moving some of our operations to the new Flanders site, we will further increase capacity for commercial clean cap production expand the rest of our small molecule platform.

Enhance our research and development capabilities.

And add GNP API manufacturing capacity.

The Flanders site will house 2 centers of excellence for Us 1 for innovation.

And 1 for oligonucleotides in chemistry that will enable the R&D expansion for chemistry, and small molecules and mrna technology.

Spoke about earlier.

Similarly, we've entered into a new lease for our biologics safety testing business in North Carolina.

Groundbreaking for the new site is scheduled for late 2021, and we anticipate occupancy in Q3 of 2022.

The state of the air facility will more than double our operational square footage.

Supporting current and future growth.

The fully customized design will provide room for our mass spectrometry center of excellence and specialized so culture facilities.

It will significantly increase our cold storage capacity, while providing other R&D laboratory and automation upgrades.

Extensive process flow analysis has been incorporated in the design of the facility to optimize and enhance both our manufacturing and packaging operations.

Not only are extremely excited about the additional capacity of these new facilities will provide for Moreover, we are pleased with the continued success of our employee recruitment efforts.

We ended the second quarter of 2021 with over 500 employees 507 to be exact for the first time in our history.

To put that in perspective, we have increased our workforce organically by nearly 40% in the last 12 months.

I'm extremely proud of our human resources team and all of our supervisors and leaders for their commitment to achieving amazing financial results, while remaining dedicated to advancing the human capital capabilities of Moreover, during these unique times.

Now moving to slide 12.

I'd like to ask Kevin to cover our second quarter and first half performance.

P&L impact of the vector transaction and the capital expectations for our facility expansion program, along with our updated guidance for 2021, Kevin.

Thank you Carl and good afternoon, everyone I'm happy to review our financial results for the second quarter and the first half of 2021 and to provide our revised financial guidance for the balance of the year, let's start on slide 13.

As you've seen in our press release. This afternoon, our record Q2 revenues of $217.8 million represented 364% reported growth from Q2.2020.

Our GAAP based net income before the amount attributable to Noncontrolling interests was $134.3 million for the second quarter 2021, now turning to slide 14.

Adjusted EBITDA, a non-GAAP measure was $1.164.7 million for Q2 compared to $17.5 million for Q2, 2020, and $101.9 million in Q1.2021. This represents an 841% increase year over year.

62% sequential quarterly increase from Q1.

Our EBITDA margin was 76% in the quarter up from both the 37% in Q2.2020 and the most recent 69% EBITDA margin in Q1.2021.

Increase in adjusted EBITDA was primarily driven by our overall sales volume increases and margin improvements from our nucleic acid production business.

On slide 15.

We percent basic EPS fully diluted EPS and adjusted fully diluted EPS basic and PFS EPS as net income attributable to our class a shares divided by the weighted average class a shares.

Fully diluted EPS equals net income prior to noncontrolling interests divided by the weighted average for both class a and B shares in other dilutive securities such as equity Awards.

Our adjusted fully diluted EPS equals adjusted net income divided by the weighted average of both class a and B shares in other dilutive securities Coincidentally, both our basic and fully diluted EPS for the quarter were <unk> 44.

Adjusted diluted EPS was also 44 per share.

Moving to slide 16.

We continue to have an exceptionally strong balance sheet and adjusted free cash flows our cash and cash equivalents, which are GAAP measures totaled 375 million at June 32021.

Our strong EBITDA performance led to robust adjusted free cash flow for the quarter of $165 million.

Adjusted free cash flow is a non-GAAP measure that we define as adjusted EBITDA less capital expenditures.

So with $547 million in long term debt $375 million in cash and a trailing 12.

EBITDA of $389 million, we had a record low and 0.4 times net debt to adjusted EBITDA ratio and only 1.4 times gross debt to adjusted EBITDA ratio is strong balance sheet and debt capacity allows us the financial flexibility to make both organic and inorganic investments that will drive innovation capacity.

City address customer needs and contribute to long term growth now to provide some more insight into our business segments financial performance for the quarter.

Turning to slide 17.

As Carl mentioned earlier, our nucleic acid production business fueled the most significant portion of the revenue growth for the first quarter nucleic acid production represented 88% of the company's total revenue in the quarter and generated $156.7 million and adjusted EBITDA in the quarter.

<unk> adjusted EBITDA margin in this business is a record for nucleic acid production and reflects increasing value of our unique products as well as the productivity gains and efficiencies from our state of the art water rich manufacturing facility.

In addition, I will tell you, we're very pleased with our global supply chain and logistics efforts under the leadership of our Vice President Steven Mccusker, an industry veteran we have substantially professionalized. Our efforts here. These efforts have resulted in supply chain agreements in place for our major raw material inputs for which we have seen stable or even improved pricing.

Based on volume increases we.

We have also diversified our supply chain to ensure we have multiple high quality qualified vendors and geographical diversity. We also continued to improve our global logistics with our partners like Fedex and several best in class boutique freight partners to provide excellent logistics services.

Our overall pricing availability diversification quality service levels and on time delivery metrics are all reviewed regularly and are trending favorably.

Clean cap revenues from COVID-19 vaccine customers were approximately $156 million in the second quarter of 2021.

Sequential increase of $65 million or 71% from Q1.2021, our non COVID-19 related nucleic acid protection revenue grew 11% sequentially.

Biologics safety testing business contributed 8% of the company's revenue in the second quarter, our Cigna branded products, which comprised virtually all of this segment's business grew to a record $18.2 million in the quarter, representing 3% growth over Q1 of 2021.

Yeah.

This growth was driven by the increasing number of biologic and Biosimilar development programs as well as the new customers gained in the quarter attributed to high quality and breadth of menu for herself protein Elisa kits. This included strong growth from our HEK kits used in vaccine and gene and cell therapy programs as well as increasing contributions from our protein.

A leachate gets used to purified monoclonal antibodies and our endonuclease offerings.

Further we saw a strong quarter for our E coli products using many biosimilar programs.

Our biologics safety testing business delivered $14 million adjusted EBITDA in the quarter.

Our protein detection business represented a smaller part of our overall business accounting for only about 3% of revenues for the second quarter and about 2% of our adjusted EBITDA has crossed commented we will be divesting this business to Thomson Street later this quarter.

Corporate expenses that are not included in this segment adjusted EBITDA totals I just spoke up were $9.7 million in the quarter relatively flat from the Q1.2021 levels of $10 million.

Now moving to slide 18, and our updated 2021 guidance.

Today, we are raising our 2021 full year revenue guidance to $745 million to $770 million up from our prior guidance of $680 million to $720 million, a $58 million increase at the midpoint, even factoring in the removal of roughly $10 million performance of proteins.

<unk> revenues that was include included in our previous full year guidance.

Included in our overall total revenue range is our estimate for 2021 clean cap revenues directly attributable to our COVID-19 vaccine customers, which we are estimating at $490 million to $510 million up $45 million at the midpoint from our prior guidance.

This total revenue guidance for the full year of 2021 reflects the expectation of mid 20% growth for the annual annual growth for our biologic safety testing business coming off record last quarter for this business. We continue to see very solid market dynamics across the segment and geographies fueling growth in biologics that combined with new customer.

Wins that build on the already strong base of repeat customers is clearly supporting a more bullish outlook for this business segment in 2021.

This guidance also reflects the divestiture of the protein detection business and the loss of that modest revenue contribution we see protein detection contributing approximately $18 million tomorrow on a reported basis in 2021 for the months of our actual ownership of this business, which we anticipate to be 8 months given the relatively small contribution of <unk>.

<unk> as a whole we're not planning on presenting pro forma results with and without this segment.

This updated guidance at the midpoint implies that our nucleic acid production segment revenues will be around $670 million for 2021.

Also subtracting the mid point of our COVID-19, clean cap revenue guidance Youll see that our base nucleic acid business is shaping up to be roughly $170 million for the year that would represent growth of roughly 60% versus the comparable total in 2020.

We continue to see good momentum and traction across our offerings with strong screencap demand coming from outside of the major COVID-19 players as well.

Including initial orders for non Covid vaccine development.

Furthermore, our blue chip customer base that <unk> seen.

<unk> seen in cell therapy companies represents exciting mid to long term opportunity is the validation of mrna as a development platform is fueling rapid segment growth. We're extremely busy here and we're very excited about our role as a key contributor to these new mrna platforms for the foreseeable future.

Turning to the quarterly gating of revenues for the rest of 2021 as we expected our second quarter was incredibly strong, particularly in nucleic acid production at this stage, we see the second half of 2021 total revenues roughly evenly split between a third and fourth quarters based on our total revenue guidance of 745 to 770.

That implies second half revenues of around $380 million to $400 million or around $190 million to $200 million per quarter down slightly from the <unk> level of $218 million, but still reflecting second half revenue growth over of over 6% at the midpoint of guidance versus the first half of 2021, even without the protein.

Detection revenue contribution.

As discussed on our last call. Our revenue guidance is in large part based on our largest customers rolling forecast that extend out for several quarters and that are supported in the shorter term by binding <unk> many of which go out several months on top of that with our forecasted funnel for our GMP suites that are used to mainly support bills for our customers to click acid therapeutics programs.

Based on these factors our fiscal year 2021 revenue guidance comes with a considerable degree of forward visibility, but will also be subject to some quarterly fluctuations.

Based on these revenue expectations, we have updated our internal forecast and guidance for other key financial metrics.

We expect our non-GAAP adjusted EBITDA to be in the range of $515 million to $535 million, which at the midpoint of that range represents growth of 207% an implied adjusted EBITDA margin of 69% at the midpoint of our 2021 revenue range.

Our full year margin has moderated versus the most recently completed quarter.

That's a record clean cap revenue contributions for.

Furthermore, as Carl mentioned, we are continuing to look to make organic investments in our R&D and commercial organizations and we continue to expand our employee base to meet record customer demand.

Adjusted fully diluted EPS, a non-GAAP measure is expected to be in the range of $1.30 to $1.36 per share.

The increase in our guidance here is directly tied to our revenue growth and overall projected full year margin expansion on the heels of our strong second quarter results.

As with our updated total revenue guidance, we anticipate the adjusted EPS for the third and fourth quarter to be relatively even implying EPS for each quarter of around 34 per share at the midpoint of this guidance range.

Turning to slide 19.

Adjusted fully diluted EPS is based on the assumption that all class B shares are just are converted to class a shares resulting in a forecasted fully diluted share count of 260 million shares for the full year the.

Net income included in the adjusted fully diluted EPS has been adjusted to eliminate any net income or loss attributable to noncontrolling interests. As a result of the assumed full conversion of class B shares for class a shares. Additionally, our adjusted fully diluted EPS, including certain adjustments that do not reflect our core operations are based on adjusted effective.

Tax rate range of 23% to 24% effective tax rate, reflecting some forecasted improvement based on the geographical distribution of our growing revenue base.

As it relates to certain other adjustments needed to get to our non-GAAP adjusted EBITDA range. We see the following items in 2021 interest expense of between 30 and $33.35 million depreciation and amortization also between $29 million to $32 million adjusted tax rate of between 23, and 24% equity based compensation, which we show as a rep.

Concerning items from GAAP to non-GAAP to be 10 million to $12 million in 2021.

For 2021, we also expect to invest approximately $15 million to $25 million for capital expenditures or around 3% of total revenues.

We'll be further evaluating this total and associated spending timeline over the next quarter given our commitment to the 2 new facilities that will come online midyear 2022 at this stage, we estimate the overall capital for those new facilities to be roughly $25 million spread out over the next 4 quarters.

A reconciliation of net income to GAAP EBITDA and from GAAP EBITDA to adjusted EBITDA is presented in our press release that we issued earlier today.

In addition, our segment related information will be detailed in our form 10-Q, which we plan on filing in the coming days.

It was a very strong financial quarter from our line by just about every metric our business has never been stronger and very excited about the increasing demand it expanding applications for our unique products, which demonstrate the value of that hold for our customers.

Commitment to fund, even more innovation and capacity via new facilities and growing our human capital is clear evidence of how we're investing in the future strategically applying our strong cash flow, while also focusing our business on our highest growth potential markets.

Now I'll turn the call back to Carl for some final remarks.

Well, thanks, Kevin so to wrap up we had an incredibly strong first half of 2021, and our first calendar year as a public company.

We feel great about the momentum we're seeing across our business and we're pleased to be adjusting our guidance upwards significantly to reflect stronger demand expectations persisting for the remainder of the year and beyond.

From COVID-19 vaccines to vaccines for influenza malaria and TB.

To cell and gene therapy are battling cancer.

The transformative impact mrna will have on global human health is only accelerating.

And Moreover are proud of the key role that our customers partners and employees are playing in making that happen.

We will continue to focus on operational excellence innovation and people as our 3 strategic pillars for generating above market growth.

I would now like to turn the call back over to Alexander to open the line for your questions Alexander.

Thank you at this time I would like to remind everyone in order to ask a question. Please press star 1 on your telephone keypad.

It is star 1 to ask a question.

We have your first question from Mac Sykes with Goldman Sachs. Your line is open.

Hi, good afternoon, everybody and congrats on the quarter.

Thanks, Bob.

No problem.

Just to kind of a clean up question. When you. Thank you very much for providing that detail on the progress you've made on the supply agreements I'm, sorry, if I missed it but did you break that out between Covid and non COVID-19 in terms of what those supply agreements with a mix of events or are you going to break that out.

We did not but the majority would be non COVID-19.

Okay, Great and then and then just on.

On the balance sheet I mean, obviously, some great progress that you've made and the net debt to EBITDA is pretty impressive.

Just as you look across the space and you balance organic versus inorganic and you look at the valuations on the inorganic side can you can you accomplish what you want to accomplish part ways organically or is there really some areas that you really want to add onto Inorganically and you'll just have to deal with evaluations as they are in the market today.

Well, Kevin do you want to take a shot at that.

Yes, sure Matt look I think that there is.

We see some nice opportunities again.

Some of the assets that we're looking at are certainly things that are very close what we've done historically.

From that perspective, I think we have a little bit of a unique opportunity.

And trying to sell in manners that make lot of sense financially, but also a very high quality as far as the quality of the products and there are certain things that we looked at that don't executive pass our test when we do our diligence as well and certainly keep that in mind I think that we do have the flexibility the know how the leadership I would say.

Do a lot of things organically and you see that with the investment in our capacity expansion and we do have a lot of opportunities from our existing customer base on things that we are not precluded from from an intellectual property perspective, so that will be something we can control I'm.

Certainly valuations are at the top end of historical ranges, but from our perspective, we're looking at things that are unique to our customers might bring added capabilities or intellectual property access if we need them or accelerate.

Our ability to provide more of those products to our customers in a manner that might be much quicker than trying to do it organically. So it's a balance but I think we can execute both and we're very active and as you can see in both things here and focusing on organic growth and investment as well as several several different opportunities inorganically in that we think would be demonstrable customer center overall Andre.

Great and just 1 last question when you when you issued the release on the Chiller packaging Center relationship you mentioned that you are having talks with other other folks in the APAC region is that an area of an expansion for you and are you, making good progress there.

Covid and maybe even non COVID-19 as you kind of expand.

Yes, it definitely is and we're seeing more and more opportunities come up I think particularly in the Covid area.

Different countries are making their own investments similar say to operation Warped speed here in the United States. So we do expect that trend to continue.

And we also continue to see very strong growth in biologics safety testing in Asia Pac, particularly both in the China market Korea and to a lesser degree in Japan.

Yes, thanks, guys.

Yes, just for your information sales in Asia Pac, we're about 14% of revenues for this most recent quarter.

And China was about 3.5% of revenues for the most recent quarter.

Great. Thanks.

But.

We have your next question is from Hs <unk> with Morgan Stanley. Your line is open.

Hey, Collyn team good afternoon.

Just to kick things off.

I hear your comments on the Delta that and then the building consensus so the need for <unk>.

But given the vaccine hesitancy, we've run into here in the U S and to a certain degree in pockets in Europe are you seeing that start to filter through in any way in terms of the orders at all from Pfizer.

No we see no no diminution of their ordering pattern or the statements about future demand as I mentioned.

Theyre talking about Pfizer, specifically is talking about increasing their capacity by 1 billion more doses or 33% compared to what they expect to finish this year at.

Got it helpful.

And on a somewhat related note.

Do you have any visibility on whether you'd be specced into there.

The vaccine I think they are starting first in human trial at some point in the third quarter and sort of similar note on the other biopharma customers. You mentioned is investing aggressively in mrna development programs.

Any any sort of early read on.

Showing up and winning that business.

Yes.

On the first point I can't really Europe constrained by confidentiality as to what I can say about my customers programs. If they haven't said anything about it.

So im limited in how it can respond to that but suffice it to say that the platform.

That is being used by Pfizer and beyond for their major programs has been proven.

COVID-19 vaccines and it would be extremely unusual to make a change in the 11th hour, especially on a program that you were trying to rapidly accelerate through regulatory approval. So I think it's fair to say the quarter in a good position there, let's just leave it at that and then on the.

Expanding demand for mrna either components themselves or for the molecules themselves.

We have seen an incredible level of activity of our commercial organization and I think it's fair to say that all of the companies whose names are being bandied about wanting to expand in the field have at some point or another given us a call.

Very helpful.

And then 1 final 1 on <unk>.

Vaccinia capping enzyme announcement from al that Brian.

Morning, He talks about sort of a tenfold increase in production efficiency for VC.

In your opinion does this make enzymatic a more competitive alternative to clean cap. Although you do have a simpler workflow and on a related note I mean, just given the purchase by Danaher.

Do you expect any shift in competitive dynamics.

To the degree that you overlap with them.

Yeah, that's an interesting question.

When I finally saw the press release, you were referring to this morning, I actually I think it was from Ginkgo bio works about their.

Their relationship with <unk> I have to admit that I wondered quote all the fossils about so.

From Genco, which I think is still a private company for a little while yet.

That's projecting what something like $150 million in total revenue in 2021.

They basically said is that they helped to 1 customer I'll dove wrong to scale up 1 manufacturing process for 1 enzyme by 10 X.

There was no data in the release that I saw on the quality of the performance of the enzymes in question either before or after the scale up there was no indication that this 1.

The scale difference would actually expand total capacity in the industry given the scarcity of some of the needed raw materials that are out there and there was certainly no claim made that this would significantly reduce costs for all dove wrong. So hard.

For us to see how that statement.

It is much more than a press release for a young company accustomed to trying to get attention and I don't really know what to make of it with respect to the competitive dynamics post the Danaher acquisition, we have an immense amount of respect for danaher and the way that the Dvs's applaud.

For all of the areas, including sales and marketing and we will view them as a competitor or a supplier just.

Just like many other people are in the industry.

Fair enough and then congrats on the good quarter guys. Thank you. Thanks.

Thanks, so much.

We have your next question from Dan Arias with Stifel. Your line is open.

Afternoon, guys. Thanks for the questions Carl maybe just a general 1 on a level of visibility that you have on the orders coming in for the mrna vaccine guys. I mean do you have you been able to gain insight additional insight from your supply conversations with them when it comes to just whether or not they're stocking going on for.

A booster pediatric usage or expansion into the third world or do do orders generally look the same as other orders the way that they did earlier on in the process.

Yeah, that's interesting Dan.

I guess, what I would say is that.

We haven't seen any.

Let me start stop and say it differently.

Those issues.

The increased demand possible for each of those initiatives you mentioned have been discussed by our customers with those as they're thinking about their forecasting.

They have I think resulted in clearer.

12 month out forecasts of what their expectations are.

And to us they reflect the kind of public statements that are being made that we have to expand our capacity say by a third in the case of the fires or program. So I think all of that is going in the right direction and we're not seeing anybody back off in any way if thats what youre getting at.

Yeah. That's helpful. I guess I was just trying to understand whether you have sort of a line of deciding what the specifics of what Pfizer or another party might be trying to do but I think I get your point there.

Okay, and then maybe just secondly, I guess a bit of a technical question, but nothing crazy I mean, as we start to think about expanded usage beyond COVID-19 vaccines and the investment that you referenced should.

Should we consider the performance benefits of clean cap kind of being similar to what you're experiencing today. When you when you compare legacy or alternative capping approaches tier I mean in other words I think there was like a 3.

<unk> benefit on yield and the cost was a third of legacy methods. When we were going through the process is that generally translatable across the board and you think about some of these non until the projects.

Well look I think any 1 program or another it can have significant differences in what they need to consume in the way of components just based on the process from Hudson that they're using so I wouldn't say it will always be static.

And I think that it's fair to say that the benefits the clean cap has versus enzymatic capping are similar across multiple different programs whether for vaccines for therapeutics were in the process of working out a.

Finishing our paper that will be submitted for publication that shows our experience with these various methods and show some of those benefits, which probably will be released sometime later this year.

Okay very helpful. Thank you you.

You bet. Thanks.

We have your next question from Matt <unk> with William Blair. Your line is open.

Hey, good afternoon.

In regards to discuss the visibility you have in here.

Just curious in terms of the new facility in San Diego, you mentioned, how much capacity increase.

The biologics safety customer sponsor, but how much in capacity and total increasing with the investments San Diego and how much visibility do you have in terms of soaking up that capacity you're building out.

Yes, Matt I don't think I can give you.

Numerical answer to that yet its still little bit early but think of almost a new facility here in San Diego as being overflow for us. So the functions that we move out of our water rich facility here.

Then free up additional space that will be readily converted 2 additional manufacturing capacity. So that's kind of the right conceptual way to think about it and then we will have these other support functions laboratories innovation centers as well.

Well as some limited pilot plant manufacturing capacity and the new facility, so probably a little bit too early to tell you until we've scoped it all out and got it down on a piece of paper, but I'd say, we may be able to comment more next quarter.

Okay Fair enough and then.

Kevin just on the gross margin.

We're very strong end of the quarter end.

Protein packaging business, you divest in Arizona that low margin. So just wanted to know kind of an updated thinking around the gross margin line long term you've already today to some additional opex spending on R&D.

Yes.

R&D at would be R&D I mean, our gross margins are very strong as you noted and and should continue to be certainly in the second quarter. We had a record production level of output at least sort of to some degree challenged ourselves to see what we could do within the quarter just from a production perspective.

And I think that was a very good experience for us.

We did a record level of output and it certainly supports some of the previous comments, we made with how we could annualize this business too.

And you know north of the $1 billion of output out of San Diego and then you layer in additional ability to expand that as we were just talking to and the last question as weak as we kind of move out some of the other research and other areas here to expand what we did here just for pure production. So we feel really good about that the additional operating costs that will hit the Cogs line.

For these new facilities is it isn't much we're talking probably about $5 million on an annualized basis for nucleic acid production and maybe a million and a half for the new facility for biologics safety testing. So those those those things will not have a huge impact on the gross margin going forward and as I spoke to you we feel really good about commodity costs right now.

Our supply chain team is doing a great job so.

To the extent the mix stays relatively the same we're going to continue to see strong margins certainly benefited a little bit by the <unk>.

High revenues in the second quarter and the unique production that we produced but overall very stable margins going forward on the gross margin line with just some of those added costs, which can be pretty small.

Yes.

Okay, congrats on the quarter. Thank.

Thank you.

Thanks, we appreciate that.

We have your next question, Tom Katie try Hain with credit Suisse. Your line is open.

Hi, Thanks for taking my question on the plasma DNA can you provide an update on how that is ramping are tracking relative to expectations.

Is it still largely to support internal operation or have you begun marketing that more sort of customers.

And then we've seen several investments there on the Boston DNA landscape over the past year. How are you thinking about your competitive positioning there and expectations on investment going forward. Thanks.

Yes, thanks for the question Katy and yes. The program is tracking to the initial expectations, we will see how we finish the year here over the next 4.5 months our focus is.

Joseph entirely on supporting our mrna manufacturing customers. So that we can provide and plasma it's quicker than they can get them in the open market and so to the degree that people are putting in plasma capacity for.

General competition say without the wrong, we don't really see that directly affecting us although it certainly will ultimately make it easier for all of our customers joint customers.

To get access to plasma to quickly and reliably which is what this is all about.

Okay, Great and then maybe on the M&A side, just digging in a little deeper can you speak to some of the opportunities that youre looking at and Nevada.

What are your targeted focus areas and what was the sweet spot in terms of sizing.

Yeah look obviously, we will be focused entirely now nucleic acid production biologics safety.

As areas of investment.

They are both important I would say that we see more specific opportunities and nucleic acid testing because of the nature of the industry on the complex supply chains involved et cetera. So we're actively looking as we have always been at opportunities there.

You will see some that are focused on supply chain rationalization in securitization if that's a word.

For us and over time, you'll also see us expanding into other parts or other technologies that are used in the delivery of cell and gene therapies.

As part of a natural vertical expansion. So those are the areas generally speaking, we don't really have any size limitations or preconceived notions.

Certainly anything that would be considered a transformative.

Acquisition is handled are evaluated on a 1 off basis, you can never anticipate those and they have generally relatively low probability of coming about but.

We actively scan anybody who's got positive.

EBITDA.

Sales track record.

And we're willing to do deals for small companies and technologies that have promise all the way through to <unk>.

Who is anywhere from 50 to 1 hundreds of millions of dollars of EBITDA.

Okay. That's great. Thanks, so much.

Thank you.

We have your next question from Michael <unk> with Bank of America. Your line is open.

Thanks for taking the question guys couple of quick ones hopefully.

1 on the guide for the updated guide for 2021 is sort of the outlook for the second half.

We talked about a number of times in the past of your visibility in terms of purchase orders and some of the bigger customers, but if we look forward from <unk>, especially on the Covid clean cap side of things it does imply.

A little bit of a slowdown as you go into the second half of the year, just wondering sort of could you remind us what what are you building and what are you not building is instead of just the immediate purchase orders that you have on hand.

Sort of how much conservatism is in that outlook.

And I've got a follow up.

Yeah look I think.

There is some natural natural natural timing differences with our forecast heading into the year, we always didn't see it going.

Lately flatten that just based on what our customers are asking us to do for them and when they need the product. So look I think at this stage you know I think we should continue to see them.

Pretty pretty steady state moving forward.

It's a little bit down from the peak we saw here in the second quarter that can always change as well. This is changing pretty regularly and we pretty much have new information every month as we do our <unk> process and roll up our forward looking demand, but certainly as Carl mentioned this is a.

Pretty steady state our customers are making pretty pretty bold statements with regards to increasing their production next year.

We're looking forward in our lens.

4 to 6 quarters forward feel real good about what.

What we see feel real good about our capacity and in some of the investments that we need to continue to deliver an increasing revenues so I.

I think that.

As we sit here today.

We have a real solid book of what we see now versus what we saw 3 months ago. When we last talked about our guidance and Thats why were taking it in taking up meaningfully at the midpoint for both Covid and non COVID-19 related revenues as well as increasing it in contemplation of losing up $10 million of that protein detection business revenues as well, so a little bit of chop.

Certainly that's still really strong outlook for the remainder of the year.

And on that point can you could you remind me.

Im sure it varies customer by customer and project by project, but what sort of a standard lead time, we should think of from when when you recognize revenues for clean cap versus when.

The end customer Scott vaccine shipping out the door.

Well I think the best way to think about that is this is very much a real time operation. So there's really not much.

<unk> not much inventory in the pipeline.

So when we finished product and ship it we believe that it goes into the customers.

QA QC testing right away to prepare it for use and then our customers have disclosed at various points in time that they are running sort of a 120 days cycle time and endeavoring to reduce that.

As much as they can so that should give you a feel that it's <unk>.

Robert.

In somebody's arm 3 or 4 months later.

Okay. Thanks, and 1 last 1 kind of like it's going to add on.

The protein detection divestment just curious if you could give us a little more insight into sort of how that process came about was that something you've been thinking about for some time, just going back to the timing of the IPO I'm still relatively reasonable isn't sort of the right opportunity came up and you reevaluate it invest.

Investment needs elsewhere, and decided to sort of pull the trigger.

No. Our view was we were approached by Thomson Street about their interest in the field. They were credible because they've made other investments in India.

To chemistry.

We gave them access to some limited amounts of information and they stepped forward with what we thought was a fair valuation.

Okay. Thanks, so much.

And Alexandra reaffirmed for I think 1 more question.

Thank you we have your next question from Catherine Schulte with Baird. Your line is open.

Hey, guys. Thanks for the question and sorry, I just wanted to go to to your comment on ramping your R&D over the next several years just in terms of programs getting the most attention I guess, how much is improving and expanding upon applications for clean cap and other existing products versus pursuing new product categories.

What might those new product opportunities look like.

Well great question, we have several lines of investment and innovation going on in clean cap simultaneously they related to other construct or are they related to modifications of the broader mrna molecule produced.

Clean cap that can affect its actual.

Translation into proteins in the body and the success of those proteins and doing what they were tended to do so multiple threads exist. There another area of innovation for US is really in process development as it pertains to clean gap. So how can we produce larger and larger quantities of this more.

Additionally, and more consistently with fewer steps and Thats, a big focus for US right now both upstream and downstream from where we actually utilize the clean cap molecules, but then beyond that there is a lot of innovation that happens in our normal nucleic acid.

Independent of clean cap of me with clean cap incorporated.

We're innovating with our customers on what molecules can actually be successfully how can they be utilized and how do you modify something that hasn't worked quite as you. Initially intended so there's really a number of those things that are underway. We're also evaluating technologies that can be used for.

We're manufacturing alternative technologies and in some cases, some really innovative platforms that may extend the reach of <unk>.

Our manufacturing capacity and move it closer towards.

Patient care settings, where it's important to rapidly be able to synthesize individualized therapies I'd say those are probably the 3 major areas.

Alright, great. Thank you.

Alright, Thanks, Kevin with that Alexander will turn it back to you.

I'm showing no further questions at this time.

Hi, Please continue.

Thanks, everyone for joining us today and just to note. Please check out our events website will be presenting at several conferences during the month of September and feel free to call me. If you have any questions and we hope you have a great evening.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

[music].

Ladies and gentlemen, thank you for standing by and the Wolfcamp a in my via our life Sciences second quarter 2021earnings conference call. At this time all participants are in a listen only mode. Later, we'll conduct a question and answer session and if you would like to ask a question. During this time simply press star 1.

1 on your telephone keypad, if they don't want you to require assistance during the conference. Please press Star zero.

I would like to turn the conference over to Deb Hart head of Investor Relations. Please go ahead.

Thank you Alexander and good afternoon, everyone. Thanks for joining us on our second quarter 2021 earnings call. Our press release and the slides that accompany today's call are posted on our website and are available at investors got Mario by Dot Com under financial information quarterly results.

On today's call, we will cover our financial results and business highlights and will provide updated financial guidance for 2021.

At the company are subject to risks and uncertainties that may cause actual events or results to differ.

Additional information concerning these risk factors is included in the press release, we issued earlier today as well as those more fully described in our various filings with the SEC.

During this call we will be using non-GAAP measurements of certain of our results and providing guidance reconciliations of GAAP to non-GAAP financial measures are included in the press release that we issued this afternoon, which is posted to <unk> website and at Www SEC Gov via Edgar.

Now I'll turn the call over to Carl.

Well, thank you Deb and good afternoon, everyone. We appreciate having you join us for our call today.

Let's start with our survey scores.

Our second quarter results on slide 5 Marvel I had a very strong second quarter in fact, the largest and most profitable quarter in our history by far.

Today, we reported $217.8 million in revenue.

Growing 364% compared to the prior year.

Up 47% sequentially over quarter 1.

Our adjusted EBITDA of $164.7 million.

Grew 841% over the prior year and 62% sequentially.

Our topline performance and outstanding adjusted EBITDA resulted in adjusted EPS of 44 cents per share and record free cash flow generation.

We've seen an incredible first half in our first full calendar year as a public company.

It is clear that momentum continues to build across our global customer base.

Research and development moves to the forefront of modern medicine.

Turning now to slide 6.

Growth in our nucleic acid production business in particular remains very robust.

<unk> got some production had record revenue of $192.5 million.

533% year over year and up 55% sequentially.

Demand for clean cap mrna continues to accelerate in all areas.

Clean cap reagents themselves.

E&P manufacturing services.

And custom mrna construct.

Full regulatory approval by the FDA of the first mrna COVID-19 vaccine currently being used under emergency use authorization.

Now expected to occur around labor day, and should further expand demand for the vaccine and clean cap in late 2021 and beyond.

Pfizer and beyond took just announced that they have already shipped over 1 billion doses of COVID-19 vaccines.

All of those containing clean cap.

Pfizer has further said that they plan to increase COVID-19 vaccine production 1 third in 2022.

Going from 3 billion doses this year to 4 billion doses next year.

In addition, the development of new generations of COVID-19 vaccines continues apace.

These nextgen vaccines, either offer specific protection against emerging virus variants, such as the Delta variant.

Sure.

To enhance overall immune responses by offering booster doses of the first generation vaccine formulations.

On the public health front, we are beginning to see nations, such as real France, and Germany offered third doses of mrna vaccines.

Rooster to older or immunocompromised citizens.

Others, such as the UK.

Additionally, recommending the recipients of single dose vaccines from J&J and Astrazeneca received an mrna dose at their next immunization.

It also seems that each week, we learn of new investments being made in mrna technology.

As it represents the future of vaccine development efforts due to its flexibility scalability and effectiveness.

Slide 7 shows some of these headlines.

Sanofi announced the $477 million annual investment through 2025 to accelerate the clinical development of their entire mrna portfolio.

Sanofi has stated that they hope to have a minimum of 6 mrna candidates in the clinic by 2025.

And last week, they announced their intention to acquire translate bio for $3.2 billion to accelerated vaccine programs and to further explore other therapeutic areas for mrna.

They specifically cited a goal to unlock the potential of mrna and other strategic areas, such as immunology oncology and rare diseases. In addition to vaccines.

This comes on top of the previously announced commitment made by Pfizer to increase R&D spending in 2021 by $600 million for.

<unk> mrna based development programs.

Collections from our clients so that they now have over 200 scientists working on mrna and are making large scale investments in mrna manufacturing.

Beyond Tech recently announced their new project to develop an mrna based malaria vaccine.

Our goal is to start a clinical trial by the end of 2022.

Beyond Tech is already collaborating with the Bill and Melinda Gates Foundation on HIV and tuberculosis programs.

For TB beyond Tech plans to begin clinical trials for testing a vaccine candidate also in 2022.

Currently there is our partners are developing vaccines against 9 different infectious diseases and the company continues to pursue 15 oncology programs and the clinical and preclinical phases.

Based on 4 different drug classes, including mrna.

Novartis has also indicated that they are considering entering the mrna market.

Chairman your greenheart come in a recent interview that quote.

Mrna technology has proven to be an attractive option in this situation.

And of course every research company is questioning whether they should invest more in this area close quote.

<unk>, a leading pharmaceutical company in Korea announced their plans to develop a next generation mrna vaccine platform.

We are currently seeing the impact of all of this increased enthusiasm and investment on our own business.

To illustrate this point, let me share with you some clean cap supply agreements statistics.

At the start of 2021, we had executed 5 supply agreements for clean cap in place and another handful of agreements under discussion.

Today, we have 13 supply agreements signed.

<unk> more than active late stage negotiations and 25 more with term sheets under review.

This underscores the incredible enthusiasm that exists for mrna generally.

And clean cap specifically.

Even more encouraging is the fact that this customer population spans the entire spectrum from large pharma to innovative biotechs to new and potentially transformative manufacturing platforms.

From our perspective mrna and clean cap or clearly here to stay and a durable and meaningful way and Moreover is right in the middle of it.

We are also increasing our investment in mrna innovation as we scale, our R&D operations facilities and quality systems.

We believe that an appropriate level of investment in R&D long term will approximate 5% of our revenue and we would expect to reach that level of investment within the next 3 years.

That investment will be comprised of people.

Laboratory facilities and equipment.

Program management resources and.

And external collaborations.

We will also begin pursuing specific technologies and new opportunities identified by our new scientific Advisory Board, which we are currently in the process of forming.

We'll have more information on the SAP be available for you during our next earnings call.

Now turning to slide 8 and our biologics safety testing business, which supports high growth markets and cell and gene therapy vaccines and biologics drug manufacturing.

Here, we set the gold standard in wholesale protein and process related impurity analytics.

Along with offering innovative viral clearance solutions that ensure the safety of biopharmaceutical products.

Our second quarter revenue of $18.2 million in DST.

<unk> a record high up 47% from last year and up 3% sequentially.

This growth was driven by 3 main factors.

Second strong sales across the full breadth of our product line that are routinely used in a number of commercialized cell and gene therapies, <unk> vaccines innovative biologics and biosimilars.

And finally, the continuously expanding biopharma product development pipeline.

We saw strong demand for all categories of kits during the quarter.

From generic household protein assays to other Liza impurity detection kits and 2 orthogonal mass spectrometry based services that promote the use of our HCP kicks.

Additionally, a number of clients entered into agreements with us to develop custom wholesale protein assays to support their proprietary biologics.

We plan to continuously innovate and scale our offerings that are biologics safety testing business to.

To ensure superior technical support.

Offer the highest quality of services and products.

And to offer the most comprehensive catalog of products to meet our customer needs.

Turning now to slide 9.

Our protein detection business saw 71% revenue growth versus the prior year.

Which where the pandemic impacted revenues.

Sequentially revenue was up 6% driven both by our custom and catalog business.

Vector now represents only 3% of our revenue and 2% of our EBITDA.

Our current assessment isn't there are multiple significant market opportunities and our nucleic acid production and biologics safety testing businesses.

Will require incremental investments and management attention in order to support our hyper growth in these strategically important markets for more volume.

Victor operates in a different market with a different growth profile that being research immuno histochemistry versus cell and gene therapy than the rest of tomorrow volume.

It focuses on different customers, primarily traditional academia versus biopharma.

While we have seen a good recovery in the protein detection business from the pandemic lows. Our view is that vector will require material investments in commercial capabilities.

And our commitment to bolt on M&A.

In order to ensure its long term competitiveness and this pure research segment.

The combined effect of such investments would be to increase our financial exposure to a noncore segment.

We prefer to maintain a laser like focus on nucleic acid production and biologic safety testing as we see those markets being significantly higher growth and far more strategic tomorrow.

We wish lease of sellers and the entire vector team nothing but tremendous success going forward. We are confident the Thomson Street is a great partner for vector and this divestiture will allow more of our focus on our core technologies and cell and gene therapy, while supporting our biopharma.

Customer base.

As you might imagine we are actively evaluating additional acquisition opportunities across the entire cell and gene therapy space.

Feeds from this transaction will further improve our cash position and enhance our ability to execute quickly on meaningful acquisition targets.

I'd now like to turn to slide 11, and give you a quick update on our facilities and our plans for additional capacity expansion to support our exceptional revenue and profit growth.

As you will have seen we.

<unk> entered into a lease agreement to develop a new expanded San Diego facility for the nucleic acid production business, we refer to this as the Flanders side.

Our current water ridge facility in San Diego is already close to reaching capacity in certain areas.

Although we have yet to maximize the total output of Wateridge has as measured in sales dollars. We will soon be in need of additional space for offices warehouse, receiving and storage and for certain laboratory operations.

Our objective then is to create a center of excellence, where our existing water Ridge facility will continue to be the manufacturing center of excellence for all mrna technologies.

Moving some of our operations to the new Philander site, we will further increase capacity for commercial cleaning cap production.

Expand the rest of our small molecule platform.

Enhance our research and development capabilities.

And add GNP API manufacturing capacity.

The Flanders site will house 2 centers of excellence for us.

1 for innovation and 1 for oligonucleotides in chemistry that will enable the R&D expansion for chemistry, and small molecules and mrna technology that I spoke about earlier.

Similarly, we've entered into a new lease for our biologic safety testing business in North Carolina.

Groundbreaking for the new site is scheduled for late 2021, and we anticipate occupancy in Q3 of 2022.

The state of the art facility will more than double our operational square footage supporting current and future growth.

The fully customized design will provide room for our mass spectrometry center of excellence and specialized so culture facilities.

It will significantly increase our cold storage capacity, while providing other R&D laboratory and automation upgrades.

Extensive process flow analysis has been incorporated in the design of the facility to optimize and enhance both our manufacturing and packaging operations.

Not only are extremely excited about the additional capacity of these new facilities will provide for Moreover, we are pleased with the continued success of our employee recruitment efforts.

We ended the second quarter of 2021 with over 500 employees 507 to be exact for the first time in our history.

To put that in perspective, we have increased our workforce organically by nearly 40% in the last 12 months.

Now moving to slide 12.

I'd like to ask Kevin to cover our second quarter and first half performance.

<unk> impacted the Vectra transaction and the capital expectations for our facility expansion program, along with our updated guidance for 2021, Kevin.

As you've seen in our press release. This afternoon, our record Q2 revenues of $217.8 million represented 364% reported growth from Q2.2020.

Our GAAP based net income before the amount attributable to Noncontrolling interests was $134.3 million for the second quarter 2021, now turning to slide 14.

Adjusted EBITDA, a non-GAAP measure was $100.164.7 million for Q2 compared to $17.5 million for Q2, 2020, and $101.9 million in Q1.2021. This represents an 841% increase year over year.

62% sequential quarterly increase from Q1.

Our EBITDA margin was 76% in the quarter up from both the 37% in Q2.2020 and the most recent 69% EBITDA margin in Q1.2021.

The increase in adjusted EBITDA was primarily driven by our overall sales volume increases and margin improvements from our nucleic acid production business.

On slide 15.

We present basic EPS fully diluted EPS and adjusted fully diluted EPS basic and PFS EPS as net income attributable to our class a shares divided by the weighted average class a shares.

Fully diluted EPS equals net income prior to noncontrolling interests divided by the weighted average for both class a and B shares in other dilutive securities such as equity awards or.

Adjusted diluted EPS was also <unk> 44 per share.

Moving to slide 16.

We continue to have an exceptionally strong balance sheet and adjusted free cash flows our cash and cash equivalents, which are GAAP measures totaled 375 million at June 32021, or.

Our strong EBITDA performance led to robust adjusted free cash flow for the quarter of $165 million adjust.

Adjusted free cash flow is a non-GAAP measure that we define as adjusted EBITDA less capital expenditures.

So with $547 million in long term debt $375 million in cash and a trailing 12.

EBITDA of $389 million, we had a record low euro 4 times net debt to adjusted EBITDA ratio and only 1.4 times gross debt to adjusted EBITDA ratio is strong balance sheet and debt capacity allows us the financial flexibility to make both organic and inorganic investments that will drive innovation capacity.

<unk> address customer needs and contribute to long term growth now to provide some more insights into our business segments financial performance for the quarter.

Turning to slide 17.

81 <unk>.

Adjusted EBITDA margin in this business is a record for nucleic acid production and reflects increasing value of our unique products as well as the productivity gains and efficiencies from our state of the art Wateridge manufacturing facility.

In addition, I will tell you, we're very pleased with our global supply chain and logistics efforts under the leadership of our Vice Presidents Stephen Mccusker, an industry veteran we are substantially professionalized. Our efforts here. These efforts have resulted in supply chain agreements in place for our major raw material inputs for which we have seen stable or even improved pricing.

Based on volume increases.

Our overall pricing availability diversification quality service levels and on time delivery metrics are all reviewed regularly and are trending favorably.

Clean cap revenues from COVID-19 vaccine customers were approximately $156 million in the second quarter of 2021.

The sequential increase of $65 million or 71% from Q1.2021, our non COVID-19 related nucleic acid production revenue grew 11% sequentially.

Our biologics safety testing business contributed 8% of the company's revenue in the second quarter, our Cygnus branded products, which comprised virtually all of this segment's business grew to a record $18.2 million in the quarter, representing 3% growth over Q1 of 2021.

Okay.

This growth was driven by an increasing number of biologics and Biosimilar drug development programs as well as the new customers gained in the quarter attributed to high quality and breadth of menu for herself protein Elisa kits. This included strong growth from our HEK kits used in vaccine and gene and cell therapy programs as well as increasing contributions from our protein.

A leachate gets used to purified monoclonal antibodies and our endonuclease offerings.

Further we saw a strong quarter for our E coli products using many biosimilar programs.

Our biologics safety testing business delivered $14 million adjusted EBITDA in the quarter.

Corporate expenses that are not included in this segment adjusted EBITDA totals I just spoke up were $9.7 million in the quarter relatively flat from the Q1.2021 levels of $10 million.

Now moving to slide 18, and our updated 2021 guidance.

Today, we are raising our 2021 full year revenue guidance to 745 million to $770 million up from our prior guidance of $680 million to $720 million, a $58 million increase at the midpoint, even factoring in the removal of roughly $10 million for 4 months of protein.

Detection revenues that was included in our previous full year guidance.

Including included in our overall total revenue range is our estimate for 2021 clean cap revenues directly attributable to our COVID-19 vaccine customers, which we are estimating at $490 million to $510 million up $45 million at the midpoint from our prior guidance.

This total revenue guidance for the full year of 2021 reflects the expectation of mid 20% growth for the annual annual growth for our biologics safety testing business.

Up record last quarter for this business, we continue to see very solid market dynamics across the segment and geographies is fueling growth in biologics that combined with new customer wins that build on the already strong base of repeat customers is clearly supporting our bullish outlook for this business segment in 2021.

In detection <unk> as a whole we are not planning on presenting pro forma results with and without this segment.

This updated guidance at the midpoint implies that our nucleic acid production segment revenues will be around $670 million for 2021.

Subtracting the mid point of our COVID-19, clean cap revenue guidance, you'll see that our base nucleic acid business is shaping up to be roughly $170 million for the year that would represent growth of roughly 60% versus the comparable total in 2020.

We continue to see good momentum and traction across our offerings here with strong screencap demand coming from outside of the major COVID-19 players as well.

<unk> initial orders for non Covid vaccine development.

Furthermore, our blue chip customer base that <unk> seen.

<unk> and cell therapy companies represents an exciting mid to long term opportunity is the validation of mrna as a development platform is fueling rapid segment growth. We're extremely busy here and we're very excited about our role as a key contributor to these new mrna platforms for the foreseeable future.

Detection revenue contribution.

As discussed on our last call. Our revenue guidance is in large part based on our largest customers rolling forecast that extend out for several quarters and that are supported in the shorter term by binding <unk> many of which go out several months on top of that with our forecasted funnel for our GMP suites that are used mainly support bills for our customers to clinic acid therapeutics programs.

Based on these factors our fiscal year 2021 revenue guidance comes with a considerable degree of forward visibility, but will also be subject to some quarterly fluctuations.

Based on these revenue expectations, we have updated our internal forecast and guidance for other key financial metrics.

We expect our non-GAAP adjusted EBITDA.

To be in the range of $515 million to $535 million, which at the midpoint of that range represents growth of 207% kind of implied adjusted EBITDA margin of 69% at the midpoint of our 2021 revenue range.

Our full year margin has moderated versus the most recently completed quarter.

That's a record clean cap revenue contributions.

Adjusted fully diluted EPS, a non-GAAP measure is expected to be in the range of $1.30 to $1.36 per share. This increase in our guidance here is directly tied to our revenue growth and overall projected full year margin expansion on the heels of our strong second quarter results.

Turning to slide 19.

Adjusted fully diluted EPS is based on the assumption that all class B shares are just are converted to class a shares resulting in our forecasted fully diluted share count of 260 million shares for the full year.

The net income included in the adjusted fully diluted EPS has been adjusted to eliminate any net income or loss attributable to noncontrolling interests. As a result of the assumed full conversion of class B shares for class a shares. Additionally, our adjusted fully diluted EPS, including certain adjustments that do not reflect our core operations are based on adjusted effects.

Tax rate range of 23% to 24% the effective tax rate, reflecting some forecasted improvement based on the geographical distribution of our growing revenue base.

As it relates to certain other adjustments needed to get to our non-GAAP adjusted EBITDA range, we see the following items in 2021.

Interest expense of between 30, and $33.35 million depreciation and amortization also between $29 million to $32 million adjusted tax rate of between 23, and 24% equity based compensation, which we show as the reconciling items from GAAP to non-GAAP to be 10 million to $12 million in 2021.

For 2021, we also expect to invest approximately $15 million to $25 million for capital expenditures are around 3% of total revenues.

We will be further evaluating this total and associated spending timeline over the next quarter given our commitment to the 2 new facilities that will come online mid year 2022 at this stage, we estimate the overall capital for those new facilities to be roughly $25 million spread out over the next 4 quarters.

Sure.

A reconciliation of net income to GAAP EBITDA and from GAAP EBITDA to adjusted EBITDA is presented in our press release that we issued earlier today.

In addition, our segment related information will be detailed in our form 10-Q, which we plan on filing in the coming days.

It was a very strong financial quarter from our line by just about every metric our business has never been stronger and very excited about increasing demand and expanding applications for our unique products, which demonstrate the value they hold for our customers.

<unk> to fund, even more innovation and capacity via new facilities and growing our human capital is clear evidence of how we're investing in the future is strategically applying our strong cash flow, while also focusing our business on our highest growth potential markets now I will turn the call back to Carl for some final remarks.

Well thanks, Kevin.

To wrap up we had an incredibly strong first half of 2021, and our first calendar year as a public company.

From COVID-19 vaccines to vaccines for influenza malaria and TB.

To cell and gene therapy is battling cancer the transformative impact mrna will have on global human health is only accelerating.

And Moreover are proud of the key role that our customers partners and employees.

<unk> and making that happen.

We will continue to focus on operational excellence innovation and people as our 3 strategic pillars for generating above market growth.

I would now like to turn the call back over to Alexander to open the line for your questions Alexander.

Thank you at this time I would like to remind everyone in order to ask a question. Please press star 1 on your telephone keypad again that is star 1 to ask a question.

We have your first question form Matt sites with Goldman Sachs. Your line is open.

Hi, good afternoon, everybody and congrats on the quarter.

Thanks, Matt.

No problem just to kind of a clean up question. When you. Thank you very much for providing that detail on the progress you've made on the supply agreements I'm, sorry, if I missed it but did you break that out between Covid and non COVID-19 in terms of what those supply agreements with the mix of events or are you going to break that out.

We did not but the majority would be non COVID-19.

Okay, Great and then and then just on.

On the balance sheet I mean, obviously, some great progress that you've made and the net debt to EBITDA is pretty impressive.

Just as you look across the space and you balance organic versus inorganic and you're looking at valuations on the inorganic side can you can you accomplish what you want to accomplish part ways organically or is there really some areas that you really want to add onto Inorganically and youll just have to deal with evaluations as they are in the market today.

Well, Kevin do you want take a shot at Thunder.

Yes, sure Matt look I think that there is.

We see some nice opportunities again.

Some of the assets that we're looking at are certainly things that are very close slowdown historically.

So from that perspective, I think we have a little bit of a unique opportunity.

Do a lot of things organically and you see that with the investment in our capacity expansion.

Do you have a lot of opportunities from our existing customer base on things that we are not precluded from from an intellectual property perspective, so that will be something we can control.

Certainly valuations are at the top end of historical ranges, but from our perspective again, we're looking at things that are unique to our customers might bring added capabilities or intellectual property access if we need them or accelerate.

<unk> seen both things here and focusing on organic growth and investment as well as several several different opportunities inorganically that we think would make a difference for our customers and our overall offering.

And maybe even non COVID-19 as you kind of expand.

Yes, it does.

And we're seeing more and more opportunities come up I think particularly in the Covid area.

Different countries are making their own investments similar say to operation Warped speed here in the United States. So we do expect that trend to continue.

We also continue to see very strong growth in biologics testing in Asia Pac, particularly both in the China market Korea and to a lesser degree in Japan.

Yes.

Yes, so thanks for asking that.

Yes, just for your information sales in Asia Pac, we're about 14% of revenues for this most recent quarter.

And China was about 3.5% of revenues for the most recent quarter.

Great. Thanks.

Okay.

We have your next question from DHS 7 with Morgan Stanley. Your line is open.

Hey, Collyn Dean Martin good afternoon.

Just just to.

Thanks Al.

I hear your comments on the Delta there and then the building consensus so the need for <unk>.

But given the vaccine hesitancy, we've run into here in the U S and to a certain degree in pockets in Europe are you seeing that start to show through in any way in terms of the orders at all from Pfizer.

No we see no no diminution of their ordering pattern or those statements about future demand.

<unk>.

We're talking about Pfizer, specifically is talking about increasing their capacity by 1 billion more doses or 33% compared to what they expect to finish this year.

Got it helpful.

And on a somewhat related note.

Do you have any visibility on whether you'd be back into that.

New vaccine I think they are starting first in human trial at some point in the third quarter and sort of similar note on the other biopharma customers. You mentioned is investing aggressively in mrna development programs.

Any any sort of early read on.

It's showing up and winning that business.

Yes.

On the first point I can't really are constrained by confidentiality as to what I can say about my customers programs. If they haven't said anything about it.

I am a limited in how it can respond to that but suffice it to say that the platform.

That is being used by Pfizer and beyond tech for their major programs has been proven in the COVID-19 vaccines and it would be extremely unusual to make a change in the 11th hour, especially on a program that you were trying to rapidly accelerate through regulatory approval. So I think it's.

Fair to say the quarter in a good position there, let's just leave it at that.

And then on the expanding demand for mrna either components themselves or for the molecules themselves. We have seen an incredible level of activity of our commercial organization and I think it's fair to say that all of the companies whose names are being bandied.

About wanting to expand in the field have at some point or another given us a call.

Very helpful.

And then 1 final 1 on <unk>.

Vaccinia capping enzyme announcement from out of that Brian.

Morning, He talks about sort of a tenfold increase in production efficiency for VC.

In your opinion does just make enzymatic a more competitive alternatives opinion gap, although you do have a simpler workflow and on a related note I mean, just given the purchase by Danaher.

Do you expect any shift in competitive dynamics.

To the degree that you overlap with them.

Yes, that's fine.

Interesting question.

Finally, we saw the press release, you were referring to this morning actually I think it was from Ginkgo bio works about.

Their relationship with <unk> I have to admit that I wondered what all the festivals about so.

From Genco, which I think is still a private company for a little while yet.

Thats projecting something like a $150 million in total revenue in 2021.

They basically said is that they helped to 1 customer all dove wrong to scale up 1 manufacturing process for 1 enzyme by 10 X.

There was no data in the release that I saw the quality of the performance of the enzymes in question either before or after the scale up there was no indication that this 1.

The scale difference would actually expand total capacity in the industry given the scarcity of some of the needed raw materials that are out there and there were certainly no claim made that this would significantly reduce costs for alt of wrong. So hard.

For us to see how that statement.

<unk> is much more than a press release for a young company accustomed trying to get attention and I don't really know what to make of it with respect to the competitive dynamics post the Danaher acquisition, we have an immense amount of respect for danaher and the way that the Dvs's applaud.

For all of the areas, including sales and marketing and we will.

View them as a competitor or a supplier.

Just like many other people are in the industry.

Fair enough and then congrats on the good quarter guys. Thank you. Thanks.

Thanks, so much.

We have your next question from Dan Arias with Stifel. Your line is open.

Booster pediatric usage or expansion into the third world or do.

New orders generally look the same as other orders the way that they did earlier on in the process.

Yes, that's interesting Dan.

Guess, what I would say is that we haven't seen any.

Let me start stop and say it differently.

Those issues AMD increased demand possible for each of those initiatives you mentioned have been discussed by our customers with us as they are thinking about their forecasting.

They have I think resulted in clearer.

12 month out forecasts of what their expectations are.

And to us they reflect the kind of public statements that are being made that we have to expand our capacity you say by a third in the case of the fires or program. So I think all of that is going in the right direction and we're not seeing anybody backhaul in any way if thats what youre getting at.

Yeah. That's helpful. I guess I was just trying to understand whether you have.

Alignment deciding what the specifics of what Pfizer or another party might be trying to do but I think I get your point there.

Should we consider the performance benefits of clean cap kind of being similar to what you're experiencing today. When you when you compare legacy or alternative capping approaches to yours I mean in other words I think there was like a 3.

Well look I think any 1 program or another it can have significant differences in what they need to consume in the way of components just based on the process of methods that they're using so I wouldn't say it will always be static.

And I think that it's fair to say that the benefits the clean cap has versus enzymatic capping are similar across multiple different programs whether for vaccines therapeutics were in the process of working out.

Okay very helpful. Thank you you.

You bet. Thanks.

We have your next question from Matt and Darin.

Blair Your line is open.

Hi, good afternoon.

You've obviously discussed.

Do you have in here.

Just curious in terms of the new facility in San Diego, You mentioned, Alex capacity has been increased.

The biologics safety customer exposure, but how much of your capacity in total increasing with the investments San Diego and how much visibility do you have in terms of soaking up that capacity you're building out.

Yes, Matt I don't think I can give you.

We'll then free up additional space that will be readily converted 2 additional manufacturing capacity. So that's kind of the right conceptual way to think about it and then we will have these other support functions laboratories innovation centers as well as some limited pilot plant.

Manufacturing capacity and the new facility, so probably a little bit too early to tell you until we've scoped it all out.

Got it down on a piece of paper, but I'd say, we may be able to comment more next quarter.

Okay Fair enough and then.

Kevin just on the gross margin.

The team very strong end of the quarter and the.

Protein packaging business Youre divesting low margin. So just wanted to know kind of an updated thinking around the gross margin line long term you're already today to some additional opex spending on R&D.

Yes that would be.

R&D that would be R&D I mean, our gross margins are very strong as you noted and should continue to be certainly in the second quarter. We had a record production level of output at least sort of to some degree challenged ourselves to see what we could do within the quarter just from a production perspective.

And I think that was a very good experience for us.

We did a record level of output and it certainly supports some of the previous comments, we made with how we could annualize this business too.

North of $1 billion of output out of San Diego and then you layer in additional ability to expand that as we are just talking to it and the last question as weak as we kind of move out some of the other research and other areas here to expand what we did here just for pure production. So we feel really good about that the additional operating costs that will hit the Cogs line for.

These new facilities is it isn't much we're talking probably about $5 million on an annualized basis burdened flake asset production and maybe a million and a half for the new facility for biologics safety testing so those.

Those things will not have a huge impact on the gross margin going forward and as I spoke to we feel really good about commodity costs right now our supply chain team is doing a great job. So.

To the extent the mix stays relatively the same we're going to continue to see strong margins certainly benefited a little bit by the.

Okay.

Okay, congrats on the quarter. Thank.

Thank you.

Thanks, we appreciate that.

We have your next question from Katie <unk> with Credit Suisse. Your line is open.

Hi, Thanks for taking my question on the plasma DNA side can you provide an update on how that is ramping are tracking relative to expectations.

And this will largely to support internal operation or have you begun marketing that more sort of customers.

Yes, thanks for the question Katy and yes, the program is tracking to the.

You'll expectations, we'll see how we finish the year here over the next 4 or 5 months, our focus isn't as rich suggested entirely on supporting our mrna manufacturing customers. So that we can provide and plasma it's quicker than they can get them in.

In the open market and so to the degree that people are putting in plasma capacity for.

General competition say without the wrong, we don't really see that directly affecting us although it certainly will ultimately make it easier for all of our customers joint customers.

To get access to plasma to quickly and reliably which is what this is all about.

Okay, Great and then maybe on the M&A side, just digging in a little deeper can you just speak to some of the opportunities that youre looking at and what what are your targeted focus areas and what was the sweet spot in terms of sizing.

Yes look obviously, we will be focused entirely now nucleic acid production biologics safety.

Areas of investment.

They are both important I would say that we see more specific opportunities and nucleic acid testing because of the nature of the industry on the complex supply chains evolve et cetera. So we're actively looking as we have always been at opportunities there.

You will see some that are focused on supply chain rationalization in securitization if that's a word.

For us and over time, you'll also see us expanding into other parts or other technologies that are used in the delivery of cell and gene therapies.

As part of a natural vertical expansion.

The areas generally speaking, we don't really have any size limitations or preconceived notions.

Certainly anything that would be considered a transformative.

Acquisition is handled are evaluated on a 1 off basis.

Can never anticipate those and they have generally relatively low probability of coming about but.

We actively scan anybody who's got positive.

EBITDA in our sales track record.

And we're willing to do deals for small companies and technologies that have promise all the way through to <unk>.

Who is anywhere from 50 to 1 hundreds of millions of dollars of EBITDA.

Okay. That's great. Thanks, so much.

Thank you.

We have your next question from Michael <unk> with Bank of America. Your line is open.

Thanks for taking the question guys couple of quick ones hopefully.

1 on the guide for the updated guide for 2021 is sort of the outlook for the second half.

<unk> talked about a number of times in the past sort of your visibility in terms of purchase orders and some of the bigger customers, but if we look forward from <unk>, especially on the Covid clean cap side of things it does imply order.

Sort of a slowdown as you go into the second half of the year.

Wondering sort of could you remind us whats what are you building and what are you not building instead of just the immediate purchase orders that you have on hand.

Sort of how much conservatism is in that outlook.

And then I've got a follow up.

Yes.

There is some natural natural natural timing differences with our forecast heading into the year, we always didn't see it going I am completely flat not just based on what our customers are asking us to do for them and when they need the product. So look I think at this stage I think we should continue to see.

A pretty pretty steady state moving forward.

Certainly as Carl mentioned this is a.

Pretty steady state our customers are making pretty pretty bold statements with regards to increasing their production next year.

We're looking forward in our lens.

4 to 6 quarters forward feel real good about.

What we see feel real good about our capacity and some of the investments that we need to continue to deliver on increasing revenue. So.

I think that.

As we sit here today.

I think we have a real solid book of what we see now versus what we saw 3 months ago. When we last talked about our guidance and Thats why were taking it in taking up meaningfully at the mid point for both Covid and non COVID-19 related revenues as well as increasing it in contemplation of losing off $10 million of that protein detection business revenues as well so.

A little bit of Choppiness, certainly, but still really strong outlook for the remainder of the year.

Okay.

On that point can you could you remind me.

I'm sure it varies customer by customer and project by project, but what sort of a standard lead time, we should think of from when when you recognize revenues for clean cap versus when the.

The end customer and Scott vaccine shipping out the door.

I think the best way to think about that is this is very much a real time operation. So there's really not much.

<unk> not much inventory in the pipeline.

So when we finished product and ship it we believe that it goes into the customers.

QA QC testing right away to prepare it for use and then our customers have disclosed at various points in time that they are running sort of a 120 days cycle time and endeavoring to reduce that.

As much as they can so that should give you a feel that is.

Robert.

In somebody's arm 3 or 4 months later.

Okay. Thanks, and 1 last 1 kind of like it's linked to that on the protein detection divestment. Just curious if you could give us a little more insight into how that process came about was it something you've been thinking about for some time just going back to the timing of the IPO still relatively reasonable just sort of the right opportunity came up and you reevaluated invest.

Investment needs elsewhere, and decided to sort of pull the trigger.

No. Our view was we were approached by Thomson Street about their interest in the field they were credible because they've made other investments.

To chemistry.

We gave them access to some limited amounts of information and they stepped forward with what we thought was a fair valuation.

Okay. Thanks, so much.

At Alexandria planned for I think 1 more question.

Thank you we have your next question from Patrick Lynch <unk> with Baird. Your line is open.

Hey, guys. Thanks for the question. So just wanted to go to tier 2.

Comment on ramping your R&D over the next several years just in terms of programs getting the most attention I guess, how much is improving and expanding upon applications for clean cap and other existing products versus pursuing new product categories, and what might those new product opportunities look like.

With clean cap that can affect it.

Actual.

Translation into proteins in the body of the success of those proteins and doing what they were intended to do so multiple threads exist. There another area of innovation for US is really in process development as it pertains to clean cap. So how can we produce larger and larger quantities of this more.

Our normal nucleic acid business independent of clean cap with clean cap incorporated in it.

We're innovating with our customers on what molecules can actually be synthesize successfully how can they be utilized and how do you modify something that hasn't worked quite as you. Initially intended so there's really a number of those things that are underway. We're also evaluating technologies that can be used.

For manufacturing alternative technologies and in some cases, some really innovative platforms that may extend the reach of.

Our manufacturing capacity and move it closer towards.

Patient care settings, where.

It's important to rapidly be able to synthesize individualized therapies I'd say those are probably the 3 major areas.

Alright, great. Thank you.

Alright, Thanks Heather.

That Alexander will turn it back to you.

I'm showing no further questions at this time.

Hi, Please continue.

Thanks, everyone for joining us today.

And now please check out our events website will be presenting at several conferences. During the month of September feel free to call me. If you have any questions and we hope you have a great evening.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Q2 2021 Maravai LifeSciences Holdings Inc Earnings Call

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