Cryoport Inc. Q1 2023 Earnings Call
In Frederick, Maryland, with a 70000 square foot.
Warehouse adjacent to its existing facility for the purpose of centralizing as raw material storage and testing.
As industry manufacturing capacity has increased to meet demand <unk> is in an excellent position to benefit from the anticipated growth in the cell and gene therapy industry with our advanced therapy, our advanced temperature controlled supply chain solutions as well as our continued investment in new technology and facilities to support this.
Demand.
Turning to animal health revenue increased 30% year over year. This growth was driven by the rising animal population increased demand for animal protein and increased ownership of companion animals in developed and emerging markets.
These favorable trends are driving greater demand for therapeutic innovation in this industry.
We're seeing higher activity from top global animal health pharmaceutical companies and crowd port is well positioned to serve the supply chain needs of this industry.
We believe animal health is a solid market and has significant growth potential for the future.
We also see significant growth potential in the reproductive medicine.
Area.
Which grew 12% for this quarter. This market is primarily driven by IVF technology advancements in a rising number of fertility clinics supporting increasing fertility across the globe due to demographic and environmental challenges to childbearing.
<unk> is strengthening its presence here and our growth. During this quarter was primarily driven by our continued progress in contracting with key reproductive clinic networks as highlighted in our recent announcements regarding our support for inception fertility and Boston IVF.
Yes.
<unk> systems reproductive medicine solutions, which are sold under the brand name <unk>.
<unk> store.
<unk> excuse me.
Our financial performance for the first quarter reflected the strength and dedication of our team around the world. The saying goes you're only as good as your people and at <unk>, We believe that.
The results also reflect the breadth of our diversified operations the depth of our technologically advanced supply chain solutions as well as the strength and potential of the end customers we serve.
Looking to looking to the months ahead, recognizing current manufacturing capacity constraints for cell and gene therapies and macroeconomic headwinds we plan to continue our momentum through the remainder of 2023, we expect to benefit from attractive trends in medical advancements that are driving growth in the <unk>.
Gene therapy industry.
As of the end of the first quarter crowd Port supported 10 commercial therapies and a total of 652 clinical trials globally with 82 of these in phase III.
We expect up to an additional 18 anticipated application filings 10, new therapy approvals and an additional 11 label or geographic expansion approvals in 2023.
We are a clear leader in the development of advanced therapy in advanced temperature controlled supply chain solutions for the life Sciences industry, and we intend to further enhance our competitive advantages by remaining at the forefront of innovation.
Along those lines, we recently launched the crowd portable version two logistics management system.
Crowd portal version two <unk>.
ISP E gap.
<unk> validated.
Solution and provides many new features and enhancements in fact to our knowledge. It is the first ISP E. Five validated logistics management system.
System, serving the life Sciences industry.
This month, we began rolling out our next generation cloud for elite shipper line, beginning with the elite ultra coal the elite crowd sphere will follow with introduction near year end.
These cutting edge advanced therapy shippers will provide additional derisking longer term hole lager temperature hold times.
More advanced communication features and new security controls for our customers. We're pleased with the early feedback on the launch of the elite Ultra coal customer feedback has been quite positive.
Skydrive condition monitoring system of revolutionary condition monitoring system is scheduled for release by year end. This sophisticated technology platform as a generational leap to an advanced condition monitoring system that supports temperature ranges from control room temperatures to crowd genic temperatures inclusively.
<unk>.
Turning to crowd PDP, we continue to build out one of the world's most advanced <unk>.
Global Viropharma logistics networks. This include this includes increased build out in the United States and further expansion in India, Ireland, Japan, the Philippines, Poland and Spain.
Additionally, crowd gene or bio storage operations, we'll be expanding into the San Antonio in Philadelphia regions. During the course of the year.
In addition to these activities. We also continue to increase our growth prospects through other means such as our partnerships with <unk>, which will which provides.
Before integration with our new Integra sale platform.
This platform that is integra sale is intended to supply autologous and allogeneic cell therapies, a standardized apheresis collection process.
And in crowd preservation services for a leukapheresis derived therapies.
We are very excited about integra sale and believe it has potential to be transformative for the cell and gene therapy industry.
In summary through our many actions our teams our team work.
[laughter].
And our commitment to make sure that <unk> can deliver the best solutions supporting <unk>.
Temperature control supply chain solutions for the life Sciences, which in turn support lifesaving cell and gene therapies Cryo port is stronger than ever before I want to thank you and open the floor for questions. Operator, Please open the lines.
Thank you.
I'd like to ask a question. Please press star one on your telephone keypad now.
Thank you and your order received.
Are you prepared to ask your question when prompted.
Again, if you have a question.
One on your phone.
Our first question today comes from Cuda with BBB Securities.
Yeah, Hi, guys. Thanks for taking my question so.
First one on MB and CRO PDP I don't know if you provided that pause is that.
Of that number.
And just given the sort of evolving macro environment here in biotech funding.
Is there any change to the sort of the low teens I believe for MBE and PDP growth expectations for this year.
Are you seeing any change in the demand in the business therefore, the cryogenic.
Products, there as well.
Shipping services.
Yes.
This is.
Yes.
Good questions and look we are not immune to macroeconomic headwinds and so we see some mixed activity going on and nothing nothing that I can a finger on and put and tell you that.
Definition that.
Theres anything disruptive or so forth, but we are not immune to those general conditions in the he is returning to normal.
Mix in normal production.
Production levels Cryo PDP is also.
It is current currently working at its current production normal production levels, what we had forecasted and crop port systems is moving along very nicely as is <unk> so across the board.
We have our fingers crossed we are.
We are optimistic that our guidance will be continue to be as exactly what it is and what we've reiterated this quarter.
Okay.
It's helpful and.
But maybe if I could just follow up on.
Overall, the biotech funding environment has been tougher just wondering what your conversations have been on the.
<unk> <unk> and that might be seeing some of this and directly with the emerging biotechs.
In past, you've called out some headwinds related customers trying to preserve.
Capital.
We saw some attrition here in phase one trials in the quarter as well. So just curious to hear what you are hearing with the earlier stage biotechs and.
Maybe a question for Mark if he's there it's more on business development activities can you give us sort of what youre hearing from the customers. Thank you.
I'll start off and then turn it to mark but.
Look the things that we've said before we continue in what I just said to you earlier question. The macroeconomic environment is unclear if anyone has clarity on it I would certainly like to hear it because I don't have it and I don't see it so.
That is how do you face it so in some places youre doing well some places youre not doing so well, sometimes you get encouragement, sometimes you get discouragement, it's not it's just.
Probably a magnification of normal business times, but.
No.
As I said earlier in the year has returned.
Normal mix of products and.
Our discussions with customers that you.
But you asked about I think.
Indicate there is some some reservation about starting new trials, perhaps but you know most of our retract contraction was in phase two it wasn't in phase one.
At this time so.
It is mixed and so I'll turn it to Mark who is closer to the marketplace.
Anthony overall, I think what Youre seeing is the folks are really focusing on their winners and really driving those programs that have the highest probability to monetize as quickly as possible.
And so we do see a consistent progression of programs through the pipeline.
We see phase one's going to phase II phase III is going to phase three we see a robust filing.
Activity.
And we anticipate continuing to see robust.
The robust activity throughout the balance of the year. So.
I don't think it's necessary.
Negative environment I think the environment is really focused around around putting their cash against those programs will have the quickest return on investment.
We've seen from the market.
Our contract partners.
All have very very optimistic view of this LNG space.
Overall, so I don't think that that from the contract research manufacturing standpoint, Theres any reservation around the around the <unk> space right now.
I'd just add one other thing in here for you for some more color.
Okay.
The Q1 review piece you may not have had a chance to go.
But in Q1 of the 37 trials that popped out 21 of those trials were completed.
Versus 16 terminated so that's a good sign because those trials can move on to the next phase. So thats. The maturation that mark was talking about and the number of ads. We had in the first quarter was 35 and the number of ads. We had in the fourth quarter of last year was 31. So we are still seeing new trials come in a neutral.
While starts and the good news is the pipeline keeps maturing alright.
Activity is still there theyre just theyre just focusing it.
Got it that's helpful and if I could just squeeze.
Last one and our own commercial.
We're hearing about capacity expansion efforts for capacity expansions around cell therapy.
Among some of the larger companies, maybe or the larger companies are seeing projects from some of the smaller companies just because they have more larger resources and capacities in terms of cell therapy. So are you.
Maybe just a question for Mark are you seeing any upside from that what are your expectations for the commercial expansion of the existing sort of therapies through the year. Thank you.
So puneet I think the best thing to do is to take a look at page four in our quarter and review, there's a really good chart in there.
That really starts to it's clearly conveys the impact on volume and revenue associated with additional capacity coming online and you can see that very very clearly when kite brought their site in Maryland online.
More than double their volume and at very very short period of time, and we know that and obviously there is very active.
<unk> ongoing with with both Johansson and BMS around additional capacity, bringing that online to support their product lines as soon as that capacity comes online we wholeheartedly anticipate seeing that similar cadence.
You also may have seen just I think it was early this week or late last week.
J&J slashed Johnson slashed legend did a deal with novartis, whereby novartis is going to be making.
<unk> for J&J legend in the horizon.
How does the facility in Morris Plains correct.
Yes. The legend what goes out is referring to okay, alright, great guys. Thanks, so much.
Thanks.
Your next question will come from Brandon Couillard with Jefferies.
Thanks, This is Matt on for Brandon.
Robert maybe start on gross margins revenue was up a couple of million dollars quarter over quarter, but gross margins actually contracted EBITDA can you just provide a bit more color on what drove that sounds like youre still seeing some elevated costs tied to the supply chain and then any color around gross margin you can do the rest of the year should be the low point and when do you expect the supply chain.
Headwinds hopefully abate.
Well, that's a great question.
Do I get some.
Clarity on that because if you look at the gross margins for the quarter compared to last year's quarter.
Slight improvement for the overall gross margin when you look at the services margin, we actually have an increase from $43 1 million to 46, 8% just about three six percentage points on.
Positive so we're seeing a little bit of operating leverage on the services side, both the <unk> system as well as for cloud PDP business.
Look at the product side, that's really a one time impact please see a drop which is really unusual for the MDA business from 42% to 38% when.
And we expect to only see that in Q1, that's specifically related to.
Unfavorable manufacturing variances.
As a result of inflationary.
Pressure as well as were building up safety stock during the second half of the year.
Only partially offset by favorable product mix.
Joe was mentioning so this is something that we really expect in Q1, we expect that to normalize in Q2 and for the rest of the year.
So again positive upside on the services that you're looking at Q1 compared to the previous margin for Q1 of last year in Q4.
And really the unusual one time event or MBE related buildup.
Safety stock in the latter part of last year.
Thanks, Thats really helpful color and then I know you guys don't talk maybe as much about.
Specific companies, but you mentioned it in the <unk> recap <unk> has been Indonesia, a lot out of their potential regulatory approval, just given kind of the evolution of the portfolio.
Expand over time any chance you can provide some color on where exactly you potentially serve them today, whether it's on collection fulfillment started where you might be supporting them.
We do have a relationship with <unk>, it's not public knowledge exactly what we're doing for them.
I honestly can't tell you the extent of that relationship is I do think that it will become clearer in the next couple of months for you guys.
Okay. Thanks, and then maybe one for Jeremy as we approach the one year anniversary in June of the formal opening.
<unk> global logistics facilities in New Jersey.
Can you talk about progress with kind of the summer now that you've got a few quarters under your belt, where utilization is today.
Those services as expected.
Ben brought online there those all fully up and running.
Thanks.
Yes, yes, absolutely as their partner Crown Port system, So I'm going to defer to Mark in just a moment.
Basically their own schedule. It does take time to get facilities of this nature up to full capacity, but we're making a lot of progress Mark do you want to add to that.
Terry is absolutely right. The other facilities are fully open they are operational.
The assets are averaging over one audit a week right now which is a very very good indication of Onboarding a client activity and so if you take a look at that there's a cycle time, obviously associated with on boarding.
Based on going through the supplier approval process, but but.
That robust of an audit schedule is extremely positive.
Super Thank you.
Your next question will come from Jon <unk> with UBS.
Hi, Thanks for taking the question I think you Sir currently one allogeneic therapy.
For a couple of additional approvals here throughout.
Throughout the year, just any color. If you look back on just currently where you're serving on some of those additional revenue opportunities there given some of the allogeneic therapy, how do you see that potentially playing out here over the next year.
Yes.
As you can see in our in our activity I mean over 30% of our portfolio is allogeneic at this point in time, which is which is a very very good ratio.
And a fairly significant number of those are in late stage clinical getting ready to initiate obviously commercialization activity as well as a.
<unk>, which we have historically supported and do support their commercial launch activity.
Okay got it I guess, if you dig in further on those commercial.
Revenues.
Adding onto what you need asked earlier I guess when you talk to your.
Crow C D Moe partners or pharma biotech partners I guess, how do you think that this is going to ramp over the next 12 months.
With some of that capacity coming online.
As it relates to the overall portfolio of allogeneic portfolio the overall portfolio.
Yes, I mean, thats directly it's directly related to the overall manufacturing capacity.
So basically a couple of different factors that play here right you've got manufacturing capacity in any of the markets that they've been launched or are there is there are they have reimbursement.
Agreements with that particular entity, it's going to be strictly a capacity play.
Obviously, when you are looking at other environmental factors, where they may not have regulatory approval, yet or they are trying to drive to an earlier line approval status.
All of those will have more complex ramp considerations, which will which will play into reimbursement as well as.
Overall patient addressable patient population.
Obviously moving for fourth line second line like BMS, just announced in Europe is a huge contributor to demand and we will absolutely drive significant ramp once that new capacity. They are building out comes online.
Yes, maybe just to add to it if you look at the commercial revenue per <unk> system. You'll note in our earnings release, we mentioned that the commercial revenue grew year over year by about 28%.
Sequentially over Q4.
19%.
Yes.
I appreciate it and then last one here on my end just any thoughts around.
Capital deployment M&A, you've done a couple of tuck in deals over the last couple of years just thoughts on what opportunities are out there what are you seeing on valuations.
We're constantly looking at acquisitions and deployment of capital for the benefit of the company but.
It's a constant thing so.
Thats about all I can say about that.
Yes.
Thanks, Amit.
Add to it.
For investors, we are really well positioned we have a very strong balance sheet.
Yes, we have convertible notes at very very good.
Good interest rates, so we're well positioned both to drive the organic growth as well as to continue we'll look at acquisition opportunities.
Thanks.
Your next question will come from David Larsen with BTG.
Hi, Congrats on the good quarter can you talk a bit about NV E and demand for large freezers.
How is that trending thanks very much.
Yes, the mix is.
Is pretty much back to normal David.
Okay.
So I mean, we saw really good growth in product revenue.
I think.
Almost 40% year over year, so the mix is back to normal.
Manned and shipments for large freezers.
Has stabilized.
Alright.
Yes.
We had a good quarter.
Okay.
Then.
Is there any impact too.
And like the public health emergency that concluding in May on the hospital side, we're seeing acute care volumes are up significantly year over year, I mean is that having any impact on your business overall.
The clinical trial sites or anything like that is that noticeable or not really.
Not really Dave yes.
Yes, we haven't we haven't noticed any impact on that.
Okay, and then just any color on the cryo portal version two logistics management platform like what capabilities will this bring.
To your business.
Any any color there would be very helpful.
So we actually launched that.
Monday of this week so the implementation is ongoing.
It's been rolling out into into our clients and.
Obviously supporting our activity moving forward. So one of the biggest theres a couple of big Big implementation changes with the V. Two so first and foremost at the camp five validated product which is a.
It basically a significantly enhances the regulatory.
Data security.
The platform itself.
And it will have a lot stronger analytics built in.
So its indexical and it has the ability to do complex assessment of the data in the system and the reason that we're doing that is is that we're seeing a significant increase in requests and of our clients that want to integrate with the platform and tie the transportation data to the patient outcomes data and so they were.
To have that count conduit and the ability to analyze that data more effectively and then the historical platform.
As well as its also going to ultimately be much more amenable to.
Mobile systems remote security considerations around product security as well as providing a wider variety of implementation on a platform basis with all the new products that we're rolling out so there's a whole host of different elements that tie into it.
Okay, Great. Thanks, and then I think Robert you mentioned something about building up safety stock on the <unk> side.
Can you just provide any more color around that like.
Are you facing any inflation headwinds on the <unk> side for the cost of raw materials for semiconductors are steel or freight and are you raising prices to help offset that.
If so are those price increases being received well by the market are you able to get price to maintain margin.
I probably can add.
Yes, Robert let me just start off with that first of all David at <unk>, We have we have.
A paradigm of.
Pricing that includes surcharges and.
And sometimes they're temporary charges and so we have price increases and we have surcharges were temporary charges and so it depends on the the cost of the element and that was at a high point earlier on it's no longer as significant.
<unk> had two.
What Robert was referring to is we have had to increase our raw material inventory because there is some overhang in the supply chain from Covid and.
So we did in order to get economics on the material and to obtain the right matures. We did increase our inventory slightly from 60 days to 90 days.
So it was an increase.
We don't really have pricing pressures there we have no resistance in the market because we explain our pricing and why we have the sub charges, we have the temporary charges or we have the price increases so.
Robert you want to add to that.
The only thing I wanted to clarify what I was referring to was really last year, the buildup of safety stock and that kind of bled into Q1, and that had an impact and kind of a like a onetime impact on margins in Q1. So that was really my reference there was really related to the second half in the fourth quarter of last year.
Okay. Okay. Thanks, very much congrats on a good quarter.
Thank you. Thank you. Thank you.
And our next question will come from Paul <unk> with Keybanc capital.
Hi, This is for Mark I believe one of these constraints I think was the FDA.
I know under <unk>.
Seven or nine but pre staffers.
Do you think that was an issue it seems like it was mark and is this getting resolved on the FDA side.
Youre talking about from an approval standpoint, yes, I mean definitely a model there was definitively a bottleneck on that side. So yes, I do think that will have a positive impact.
It takes a while I'm assuming to get this kind of rolling at the FDA right yes.
Yes, it's not instantaneous, but basically what it's doing those it's increasing the throughput right and so they're going to but that's going to take time for them to work down that backlog, but yes. The additional the additional staffing in at the FDA will assist in acceleration.
And then I believe it.
In the January presentation, and FDA did.
They had a goal to double their staff.
Where they are in that process, but they know they have to add heads to do.
Deal with not only whats there, but this wave of therapies that are trying to get through this new trial starts as well, yes, we did see for applications in the first quarter with one of them one of our additional filing after quarter end. So there is activity moving through.
Okay and then if you can talk to this issue of capacity.
We follow some CR.
<unk> well.
Is it the issue of.
Physical capacity and enough of it or is it.
The understanding on how to produce and scale.
Some of these the <unk>.
Therapies is it is it enough lab hoods or is that.
Just trying to figure out how to get it done in mass.
Yes.
Short answer is it's both right. So so wanted to just Ros physical space to manufacturer product. The second is efficiencies within the clean room environment, and so youll see that some of the biggest drivers against against capacity or are there moving from open systems to clone will close systems in a clean room environment, which really increases our ability to.
<unk> process and push additional volume through the same square footage. So so ultimately you get both benefits.
Hopefully.
Youll see allo starting.
To pick up in there you can create.
Create these therapies and vaccines.
Yes, Okay and then the last question then I would have would be.
I guess really in hindsight in the was yet another issue was stocking in the world of Destocking I guess it seems to be over.
What do you think the long term growth rate of in MBE businesses Jerry.
Paul just to correct you.
<unk> stock customers don't stock freezers, or we don't stock freezers, our doors it doesn't operate that way, but gerrick.
Yes.
Paul.
<unk> long term growth rate.
Freezers is going to be.
Related to the long term growth.
Allergy in general, particularly in the life Sciences. So.
The question is.
What rate are the life science is going to grow in their applications, because that's who we serve I mean, if you if your manufacturers samples to manufacture commercial product and then cellular you need you need MBE.
And there's no way around it so.
Our guests if there is 10% to 12%.
Got it okay. Thank you.
Your next question comes from David Saxon with Needham <unk> Company.
Great.
Everyone. Thanks for taking the questions maybe I'll start on PDP.
In the script, you talked about building out the PDP footprint.
Which I believe.
Im kind of drives a lot of the revenue synergies you talked about.
Right.
So I guess I wanted to ask what specifically drives those synergies and is that something you can benefit from later in 'twenty, three or does that take longer to capture.
Yes, so the synergies themselves.
Our tighter around a couple of things. One is one is density and the ability to to be able to support high touch White glove service right. So all of the activity that systems. Historically has had as high touch service, it's not it's not a fedex where you stick it in a box and throw it and throw it into a Q and it shows up three days later these are these.
Our tracked they are basically.
There needs to be a custody of the product at all times based on the value of it in this in the sensitivity of it and the timelines are extremely tight as it relates to managing that product lifecycle. So as we're building out the asset and competency of cryo PDP in the states. Those all of those elements have to be met for any geos.
Repeat that they step into so we're actively working on that we are actively building out staff are building out capacity, we are building out infrastructure and informatics to be able to support that.
And it is having bearing scribed PDP is getting written into an increasing number of filings that we support.
On an accelerating basis, so as that continues to build out that number will continue to accelerate.
Got it that's super helpful.
Lots been asked on <unk> as it relates to the freezer portfolio. So I wanted to ask on the door side, how is demand trending there.
So the trend is doing very well on the <unk> side the neurosciences.
The manufacturing and the <unk> plant, which is at record production and in fact, we have an expansion going on at that plant now.
Okay got it and then maybe last one for me can you just talk about Capex for the year, how should we think about cash burn and kind of the path to cash flow.
Profitability. Thanks, so much we don't we don't look at it as cash burn we don't look at it we don't look at.
Anything in that way, we look at it as investment and we are investing in the future and our Capex has been substantial for the last two to three years and it will continue to be.
This year, so nothing nothing unusual in the Capex area all of these projects that we have going on.
We'll have industry impact.
We recently looked at our income statement because it gets distorted because of some of the projects that we have going on we did appeal back.
Firm that our core business was strong and it is.
And then we re affirmed the <unk>.
Financials and the returns around each of the projects we have going on.
<unk> heard about a few of them the crowd tracks you've heard about cryo sphere, you've heard about the elite line you've heard about.
Sure.
The crowd portable version two.
We just launched those kinds of things that we continue to work on you also could go to the <unk> you could go to the infusion.
Capital investment will.
Well, we have a secret project called project Kona.
Our undertaking but all these things are industry moving and you can you can you can depend on us investing in projects, where we get a return.
A great return.
Just just to add to it I mean, obviously, where we're trying to seize the opportunity that lies ahead of us.
We have some really strong wells within supply chain for cell and gene therapies, we're building out the supply chain capabilities within our companies to really capture additional revenue like I mentioned on the services side, you see a little bit of operating leverage in terms of increase in gross margins and we're trying to balance that we look at adjusted EBITDA adjusted.
EBITDA was positive <unk>.
Increased both over Q1 of last year as well as over Q4, yes, we have positive net cash from operating activities for the quarter. So we are trying to balance that but like I said, we are at the same time, making investments and building out our capabilities and capacity to handle the increase in commercial.
The available therapies.
Great. Thank you.
As a reminder, if you'd like to ask a question. Please signal by pressing star one.
And we'll go next to Jacob Johnson with Stephens.
Hey, good afternoon, everybody I feel like I should ask about project Kona, but I'm guessing you wouldn't answer that question.
So I would ask you about the secret.
Yeah Yeah.
Jerry you opened the door.
Maybe just one.
Starting on China.
And some of the airports last couple of weeks some weakness on that region, just curious kind of what youre seeing there.
On China.
Yes.
Yes, okay. So.
I just wanted to clarify.
If you look look China is a different part of the world. It's a different economy. It has occurred around it so to speak not the iron curtain, but it has somewhat of a curtain around it we operate very successfully in China.
Out of our China operations.
We serve the domestic market as well.
Foreign markets.
And we also manufacture components and accessories in that in that plant, but we do very well.
The operation is doing very well and we will expand our presence in China and all of our areas of business at some point.
Okay. Thanks for that Jerry and then just going back to kind of the macro and the growth drivers this year.
Gerry you mentioned kind of a challenging macro solid start to the year here, but to get to the guidance for the year.
Revenues have to continue to improve sequentially throughout the year and I guess is there anything that kind of LTE, which from stabilized. This quarter can you just talk about some of the key growth drivers on here that gets you to the guidance for the year.
Revenues have to continue to improve sequentially throughout the year and I guess is there anything that kind of LTE, which from stabilized. This quarter can you just talk about some of the key growth drivers on here that gets you to the guidance for the year.
Yes.
Well there.
There the markets primarily in cell and gene therapy cell therapy market is forecast to grow at 25% per year for the foreseeable future depending on who you are.
Who and what you want to look at but.
Our confidence is based on a careful analysis of all of our businesses and we budget from the bottom up so we've got visibility on all of our revenue streams Jacob we think.
Our cell and gene therapy revenue will step up we're launching new products and services in.
They will bring in new revenue and we're confident frankly that our company will grow across the world.
Okay and maybe just last question just you mentioned in CAGR Sal.
In your prepared comments, but we haven't really talked much about it during Q&A, just curious kind of any color on how that effort is Kelly.
That effort is in its infancy and it takes a while to build.
Our platform like Integra sell out.
We have to.
Two plants being built one in <unk>.
Belgium, and one in Houston, Texas.
They are they.
They are not quite yet validated but they will be this year.
But it will take it will take a couple of years to roll it out and Mark you may have some more comments on that.
So.
As Jerry had mentioned that we're nearing completion of the construction phase we have to go through validation activity to get them, obviously GMP approved.
We anticipate that will happen sometime in <unk>.
At the end of this year and that will we'll be starting to contribute revenue nominal revenue very late this year and increasing revenue into 2024.
But this is a law as Jerry said this is a long term place in one of the areas and we've been talking a lot about capacity as the manufacturing capacity comes online you're going to have you're going to have a significant barrier as it relates to patient patient availability and the ability to collect material that it's going to go into the manufacturing process, So having a scalable.
Competency to collect material to support all of this capacity coming online is going to be a critical consideration and so we have to build this in order to support all of that expansion in the future. So that's why we're that's one of the reasons that we're obviously doing this and we're doing it.
In.
<unk>.
In advance of that capacity coming online, so it's ready and waiting for before that capacity as it starts to emerge.
All right I'll leave it there thanks guys.
Thanks.
Thank you.
And our next question will come from <unk> <unk> with B Riley financial.
Good afternoon. Thank you for taking our questions and congrats on a good culture maybe.
Maybe how missed it is can you clarify if you guys are opening new logistics centers in the U S rapidly replicating what do you have down in New Jersey and Texas.
Yeah. So on the system side, there is not any new sites being opened up in the states other than what we currently have we are upgrading the facility in California too.
A full logistics center.
Our global supply chain center, which will have bio services and we will have prior preservation as well as our logistics competencies, which will open sometime in 2024.
But beyond that there's nothing additional in the U S. At this time, we are focused on building out rest of world.
We have the Paris site that were building going to be building out later this year as well as we're looking and evaluating expansion into the UK right now.
Got it that's very helpful. I think most of the question that hasn't been asked before but one of the thing we care about is while your customer Lodge and we'll update highly anticipated <unk> sales therapy at a medical conference this year dosing because that product will be.
A near term growth driver for your logistic services.
Yes.
It will absolutely contribute to revenue growth.
100%.
Thank you.
Not just dependent on one customer or one therapy, we have a broad base of customers that have commercial therapies that are ramping and we anticipate more therapies coming to market.
Our broad base of revenue that we have.
Sure.
Got it. Thank you that's all our questions.
Thank you.
Once again, if you would like to ask a question. Please signal by pressing star one now.
And we'll pause for just a moment to allow everyone an opportunity.
And it appears there are no further questions at this time I'd like to turn the conference back to our host for any additional or closing remark.
Thank you for your questions.
And our discussion as always a pleasure.
In summary crowd port delivered another strong quarter with double digit revenue growth across all markets.
We also continued to invest in innovation and introduce new products and take strategic actions to support our company's long term growth as we move forward in 2023.
While being mindful of global macroeconomic headwinds, we anticipate that favorable industry trends will continue to help drive our future growth.
At the same time, we're always looking at strategic opportunities to increase our footprint and supply chain support.
Sciences, our team is dedicated to be the essential supply chain company, serving the life Sciences.
Thank you for joining us today, we appreciate your continuing support of our company.
And we look forward to updating you on our progress again next quarter. We hope you have a good evening.
This concludes today's conference call. Thank you for attending.
The host has ended this call goodbye.