Q1 2024 Maravai Life Sciences Holdings LLC Earnings Call
At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session where participants are requested to limit themselves to one question and one follow-up.
If you want to ask a question during this time, press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press Star 1 again. Thank you.
I would like to now turn the call over to Debbie Hart, Head of Investor Relations, you may begin.
Good afternoon, everyone. Thanks for joining us on our first quarter, 2004 earnings call. Our press release and the slides that accompany today's call are posted on our website and available at investors.maravai.com.
Yeah.
Speaker Change: Good day, ladies and gentlemen, and welcome to the first quarter 'twenty 'twenty for Margo by Life Sciences earnings Conference call.
As you can see on our agenda for today on slide two, Cray will first provide you with a business update, and Kevin will review our financial results and guidance.
Speaker Change: As a reminder, this call is being recorded.
Speaker Change: At this time, all participants are in listen only mode.
Speaker Change: Later, we will conduct a question and answer session group participants are requested to limit themselves to one question and one follow up if you want to answer and during this time press star followed by the number one on your at that phone keypad. If you would like to withdraw your question Press Star One again, thank you all.
Drew Birch, President of nucleic acid production, and Becky Buzzio, our chief commercial officer, will join the call for the question and answer session following the prepared remarks.
During today's call, management will make forward-looking statements and refer to gap and non- GAAP financial measures. It is possible that actual results could differ from management's expectations.
Speaker Change: I'd like to now turn the call over to that'd be hard.
Investor Relations: Investor Relations you may begin.
Investor Relations: Good afternoon, everyone. Thanks for joining us on our first quarter 2024 earnings call. Our press release and the slides that accompany today's call are posted on our website and available at investors <unk> com.
We refer you to slide three for more detail on forward-looking statements and our use of non- GAAP financial measures.
Our just-issued press release provides reconciliations to the most directly comparable GAAP measures .
Speaker Change: As you can see on our agenda for today on slide two.
Please also refer to Maravai's SEC filing for additional information on the risks and uncertainties that may impact our operating results, performance, and financial condition.
Speaker Change: I will first provide you with the business updates and Kevin will review, our financial results and guidance.
Speaker Change: Jeff Berkes, president of nucleic acid production and Becky <unk>, our chief commercial officer will join the call for the question and answer session. Following the prepared remarks.
Now I'll turn the call over the tray.
Thank you, Deb, and good afternoon, everyone.
We appreciate having you join us for our call today.
Speaker Change: During today's call management will make forward looking statements and refer to GAAP and non-GAAP financial measures. It is possible that actual results could differ from management's expectations.
Let me briefly recap the quarter, highlight some innovative new products we are introducing, and provide a few business updates before turning the call over to Kevin.
Let's start with our first quarter results on slide 5.
Speaker Change: We refer you to slide three for more detail on forward looking statements and our use of non-GAAP financial measures.
Today, we reported $64 million in revenue for Q1, $8 million in total adjusted EBITDA, and a loss of 2 cents in adjusted fully diluted EPS for the quarter.
Speaker Change: Just issued press release provides reconciliations to the most directly comparable GAAP measures. Please also refer to <unk> SEC filings for additional information on the risks and uncertainties that may impact our operating results.
Q1 revenue results exceeded the range of expectations that we shared with you during our fourth quarter conference call.
Our nucleic acid production segment had revenue of $46 million in Q1.
Speaker Change: Rates and financial condition.
Speaker Change: Now I'll turn the call over to Jay.
The biologic safety testing revenue was $18 million in the first quarter, and this was our first quarter of growth for BST since Q1 of 2023.
Jay: Thank you Deb and good afternoon, everyone.
Speaker Change: We appreciate having you join us for our call today.
Speaker Change: Let me briefly recap the quarter highlight some innovative new products, we're introducing and provide a few business updates before turning the call over to Kevin.
Kevin will go into more detail on these results later in the call.
Slide 6 shows that our adjusted free cash flow in the quarter was $4 million. Cash on hand at the end of the quarter was $562 million, down $13 million from year-end as we continue to progress with the build-out and equipment installation for our two new Flanders G&P facilities.
Kevin: Let's start with our first quarter results on slide five.
Kevin: Today, we reported $64 million in revenue for Q1, 8 million and total adjusted EBITDA and a loss of <unk> <unk> and adjusted fully diluted EPS for the quarter.
Debt is $532 million gross, thus we maintain a $30 million net cash position.
Kevin: Q1 revenue results exceeded the range of expectations that we shared with you during our fourth quarter conference call.
This puts us in a great position to fund our long-term growth strategy through organic investments while simultaneously pursuing external partnerships and or M&A.
Speaker Change: Our nucleic acid production segment had revenue of $46 million in Q1.
Speaker Change: The biologic safety testing revenue was $18 million in the first quarter and this was our first quarter of growth for BSG since Q1 of 2023.
We continue to see multiple potential strategic opportunities in our space where we will endeavor to responsibly deploy our capital.
Speaker Change: Kevin will go into more detail on these results later in the call.
As we sit here today, we remain focused on our return to growth strategy.
Speaker Change: Slide six shows that our adjusted free cash flow in the quarter was $4 million cash on hand at the end of the quarter was $562 million down 13 million from year end as we continue to progress with the build out and equipment installation for our two new flavors GMP facilities.
To enable long-term sustainable growth for our business, we expect to continue to expand our product portfolio, advance our market leadership in the MRNA space, and accelerate the introduction of scientific innovations in ways that support our customers rapidly evolving needs.
Speaker Change: That is $532 million gross.
To the first point on product portfolio expansion and our focus on innovation, let's turn to slide seven and some updates in our nucleic acid production segments.
Speaker Change: Thus, we maintained a $30 million net cash position.
Speaker Change: This puts us in a great position to fund our long term growth strategy through organic investments, while simultaneously pursuing external partnerships <unk> M&A.
In our enzyme product portfolio, I'm happy to announce that our toolkit now consists of the majority of enzymes used in the MRNA IVT process.
Matt: We continue to see multiple potential strategic opportunities in our space, where we will endeavor to responsibly deploy our capital.
incorporating alpha-zyme enzymes into the Trilink MRNA workflow, which we trademark as CleanScript, provides our customers with industry-leading high-purity MRNAs with increased activity and reduced toxicity.
Matt: As we sit here today, we remain focused on our return to growth strategy two.
Matt: To enable long term sustainable growth for our business, we expect to continue to expand our product portfolio and advance our market leadership in the mrna space and accelerate the introduction of scientific innovations in ways that support our customers' rapidly evolving needs.
We recently launched over 20 new catalog MRNA products from our TriLink Discovery Group.
This project leverages our decades of RNA experience through the incorporation of our industry-leading capabilities in capping, base modifications, and MRNA manufacturing workflows in addition to the enzymes manufactured at AlphaZine.
Matt: So the first point on product portfolio expansion and our focus on innovation, let's turn to slide seven and some updates in our nucleic acid production segments.
As many of our discovery customers look to advance their programs from MRNA design to L&P or other delivery system optimization, they need to catalog MRNAs to rapidly advance their projects.
Matt: And our enzyme product portfolio I'm happy to announce that our toolkit now consists of the majority of enzymes used in the mrna IBP process.
Matt: Incorporating alpha <unk> enzymes into the trailing <unk> workflow, which we trademark as clean script provides our.
With that in mind, we've launched these new catalog MRNA offerings with Clean Cap M6 and N1 methyl pseudoridine.
Speaker Change: Our customers with industry, leading high purity, mrna's with increased activity and reduced toxicity.
This enables customers to use the best chemistry from the outset of their programs.
In addition, we've refreshed the entire catalog using the latest version of our CleanScript IVT production process.
Speaker Change: We recently launched over 20, new catalog mrna products from our trailing discovery group.
Clevescript allows us to deliver the highest purity products that have reduced double-stranded RNA levels and can enhance in vivo protein expression.
Speaker Change: This project Leverages, our decades of R&D experience through the incorporation of our industry, leading capabilities in camping based modifications and mrna manufacturing workflows.
The innovation doesn't stop with these newly announced catalog discovery products. We intend to launch many additional MRNA products as we move forward, and we are engaging more deeply with customers as we support their research programs with custom constructs.
Speaker Change: Addition to the enzymes manufactured it out design.
Speaker Change: As many of our discovery customers look to advance their programs from mrna design, two LNP or other delivery system optimization, they need to catalog mrna to rapidly advance their projects.
Turning to slide eight.
We continue to bolster our market leadership in the MRNA space through strategic partnerships.
Speaker Change: With that in mind, we've launched these new catalog mrna offerings with clean cap and six and one metal pseudo surety.
Trilink entered into a non-exclusive license and supply agreement with LONSA for CleanCAP analogs for use in LONSA's global MRNA development and manufacturing services from preclinical through Phase 3 programs.
Speaker Change: This enables customers to use the best chemistry from the outset of their programs.
Speaker Change: In addition, we've refreshed the entire catalog using the latest version of our clean script IGT production process.
Lonsa is one of the world leaders for producing biologic drugs. They've elected to bring Clean Cap into their portfolio to enable many more customers to benefit from the advantages of Clean Cap. And we see this as an important partnership for us to seed the market with our technologies.
Speaker Change: Please script allows us to deliver the highest purity products that have reduced demonstrated RNA levels and can enhance in vivo protein expression.
Speaker Change: The innovation doesn't stop with these newly announced catalog discovery products, we intend to launch many additional mrna products as we move forward and we are engaging more deeply with customers as we support their research programs with customer cost strokes.
We believe LOMS's decision to incorporate our solutions in their highly regarded development and manufacturing services is a strong endorsement that Clean Cap is the optimal way to produce MRNA, and we are excited for this partnership to unfold.
Speaker Change: Turning to slide eight.
Speaker Change: We continue to bolster our market leadership in the mrna space through strategic partnerships.
AlphaZEzyme announced a collaboration with applied DNA for scale-up manufacturing, enabling the linear RNA polymerase.
Speaker Change: <unk> entered into a non exclusive license and supply agreement with <unk> for clean cap analogs for use in Linzess global mrna development and manufacturing services from preclinical through phase III programs.
Under the terms of the agreement, AlphaZine will perform manufacturing process development, enabling the scaling of their RNA polymerase manufacturing from its current research scale to the commercial scale necessary to empower the growing demand for the company's linear IVT platform.
Speaker Change: <unk> is one of the world leaders for producing biologic drugs. They have elected to bring clean cap into their portfolio to enable many more customers to benefit from the advantages of clean cap and we see this as an important partnership for us to seed the market with our technologies.
We developed the full enzyme production process and have made breakthroughs in the manufacturing workflow for applied DNA.
We're fully able to support their forecast to demand and help enable their growth.
Speaker Change: We believe <unk> decision to incorporate our solutions in their highly regarded development and manufacturing services as a strong endorsement of clean cap is the optimal way to produce mrna and we're excited for this partnership to unfold.
We also continue to foster key academic partnerships to enhance innovation and accelerate market adoption of the latest technology.
We currently have active research collaborations with five top-tier academic institutions to address a wide range of disease indications and custom nucleic acid applications, demonstrating our desire to be a technology partner to scientists developing the next generation of medicines.
Speaker Change: <unk> announced a collaboration with applied DNA for scale up manufacturing, enabling the linear RNA polymerase.
Speaker Change: Under the terms of the agreement <unk> will perform manufacturing process development, enabling the scaling of their RNA polymerase manufacturing from its current research scale to commercial scale necessary to empower the growing demand for the Companys linear IBD platform.
We believe that investing in new product innovation and partnering with leading academic and industry partners is a key driver for creating long-term value.
We are in an exceptional position to win customers early for product and technology adoption.
Speaker Change: We developed a full enzyme production process and have made breakthroughs in the manufacturing workflow for applied DNA.
Turning to slide 9 and tying innovation to our commercial strategy, which is a critical part of our return to growth.
Speaker Change: Fully able to support their forecasted demand and help enable their growth.
Again, we're in a unique position producing the process inputs used in the IVT reaction as well as the full clinical scale production of MRNA.
Speaker Change: We also continue to foster key academic partnerships to enhance innovation and accelerate market adoption of the latest technology.
Michael Raskin: We currently have active research collaborations with five top tier academic institutions to address a wide range of disease indications and custom nucleic acid applications.
As we work to improve MRNA production, we see several opportunities to drive new product and process innovations to improve the overall manufacturing workflow. This is a luxury and that it helps us move the MRNA field forward in a unique and differentiated way.
Speaker Change: Demonstrating our desire to be a technology partner to scientists developing the next generation of medicines.
Speaker Change: We believe that investing in new product innovation, and partnering with leading academic and industry partners is a key driver for creating long term value.
By winning early in the discovery process with our Clean Cap and our Clean Script technologies, our commercial team can cross-sell NTPs, enzymes, and other raw materials at earlier stages of the clinical pipeline.
Speaker Change: We are in an exceptional position to win customers early for product and technology adoption.
putting us in a position to grow with our customers to support them with their later stage development.
Speaker Change: Turning to slide nine and tying innovation to our commercial strategy, which is a critical part of our return to growth.
This can include providing either RUO or GMP materials depending on their needs.
Drew: Again, we're in a unique position producing the process inputs used in the IGT reaction as well as the full clinical scale production of mrna.
This year has started with exciting positive momentum thanks to the efforts from our commercial operations and business teams.
We have made great progress in evolving and building our commercial team and building the flywheel between our products and services activities.
Speaker Change: As we work to improve mrna production, we see several opportunities to drive new product and process innovations to improve the overall manufacturing workflow.
As we continue to expand our customer funnel for RUO and GMP offerings, it is important that we offer an unmatched customer experience from day one and for as long as the customer is with us.
Speaker Change: This is a luxury and then it helps us move the mrna field forward and a unique and differentiated way.
Speaker Change: By winning early in the discovery process with our clean cap and our clean script technologies, our commercial team can cross sell mtbe's enzymes and other raw materials at earlier stages of the clinical pipeline.
Our enhanced commercial team has the talent, tools, and processes to help build Marvai 3.0 in support of our return to growth strategy.
[inaudible]
Speaker Change: Putting us in a position to grow with our customers to support them with our later stage development.
Speaker Change: This can include providing either are you or GMP materials, depending on their needs.
As with the nucleic acid segment, we continue to innovate to bring improved products to market to support our customers.
Speaker Change: This year has started with exciting positive momentum thanks to the efforts from our commercial operations and business teams.
Cell and gene therapy development has experienced tremendous growth as the FDA and other regulatory agencies worldwide continue their efforts to enable innovators in this new class of medicines.
Speaker Change: We have made great progress in evolving and building our commercial team in building the flywheel between our products and services activities.
The FDA and other global regulatory agencies have approved several cell and gene therapy products, and we are very proud that Cigmas KISS now support all 21 of the 21 FDA-approved CAR-T cell and gene therapies.
Speaker Change: As we continue to expand our customer funnel for our <unk> and GMP offerings. It is important that we offer an unmatched customer experience from day, one and for as long as the customers with us.
We are also pleased that Marobi was recognized as among fast companies, most innovative companies in biotech in 2024 for our Cygnus MachV, RVLP kit, which detects retrovirus-like particles that can be produced during the manufacturing of biologic drug products.
Speaker Change: Our enhanced commercial team has the talent tools and processes to help build <unk> three point out in support of our return to growth strategy.
The kit, which uses a surrogate non-infectious virus-like particle, can be run without extra safety and containment measures.
This enables faster, easier, and more cost-effective optimization of viral clearance to assure biopharmaceutical safety prior to human clinical trials, regulatory approval, and commercialization.
This award adds to the many recognitions the MachV-RVLP kit has received since its introduction in 2022. We remain very optimistic about the MachV product line and our ability to disrupt the viral clearance market.
As in the NAP segment, we plan to continuously improve our offerings in BST to ensure superior technical support, the highest quality services and offerings, and the most comprehensive catalog of products to meet our customers' needs.
Stigness consistently supports and advances the technology to improve biotherapeutic safety and accelerate the movement of new therapeutic monoclonal antibodies, biosimilers, and cell-and- gene therapies through the development and regulatory approval process.
Now,
Moving to Slide 11 and our facilities update.
As many of you are aware, Flanders 1 is our new GMP manufacturing site for small molecules. I am pleased to report that we have produced our first engineering batch of GMP small molecule products in the new facility, and are quickly migrating our Clean Cap M6 to GMP quality.
As we approach the one-year anniversary of the M6 launch, customers have lined up for M6 GMP batches and are eager to move Clean Cap M6 into the clinic.
Widers 1 adds scale and mitigates operational risk, as we now have redundant capacity to manufacture small molecules.
This includes the Clean Cap analogs as well as other NTPs, such as N1 methyl suitoruduridine, which are needed as GMP-grade inputs for MRNA production.
This will not only bolster our supply chain resilience. Flanders 1 is a designated facility to aid the U.S. government in future pandemic preparedness.
We hosted our Flanders 2 grand opening in April and are now officially in the market for late-phase CGMP MRNA production.
Blenders 2 was designed to meet the manufacturing requirements of MRNA-based medicines through all drug development phases.
We have enabled MRNA clinical programs for over 10 years, from discovery through investigational new drug or IND filings.
Our new CGMP facility will serve our partners with late phase clinical and commercial MRNA drug substance manufacturing.
The 32,000-foot facility includes three Great C manufacturing clean rooms, a dedicated fill suite, and an independent buffer prep and staging area.
We have on-site quality control, EM monitoring, and release testing supporting 1 gram to 100 gram batch sizes.
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We couldn't be more excited to open our doors and help enable the life-saving medicines our customers are developing.
Many of our customers have been asking to stay with our talented team as their clinical programs advanced into phase two, phase three, and beyond. And I'm so pleased that we can now support them.
Please enter your conference I D unprecedented pound key.
In fact, we have already signed statements of work to support a phase two clinical trial and our first phase three batches.
Please state your first and last name and company name with spelling unprecedented pound key.
We believe this is a capability extension that will make it easier for drug developers to select us for phase one, or even preclinical batches at the beginning stages of their development, as they know they will have a partner who can support them through commercialization.
We have on site quality control and monitoring and release testing supporting one gram to 100 Gram batch sizes.
We have a long history of innovation in MRNA. Our significant investment in these two facilities underlines our commitment to innovate the process for producing the next generation of genomic medicines and the raw materials that enable their production.
We couldnt be more excited to open our doors and help enable the lifesaving medicines our customers are developing.
This expands our capabilities to help our customers unlock the potential of MRNA and develop life-changing vaccines and therapies.
Many of our customers have been asking just stay with our talented team as our clinical programs advance into phase II phase III and beyond.
The Water Ridge facility will continue to support the important work underway in TriLink Discovery and act as a key partner providing development expertise to our customers.
And I'm. So pleased that we can now support them in.
In fact, we have already signed statements of work to support a phase II clinical trial, and our first phase III batches.
Moving to slide 12, I'll now ask Kevin to provide more details on our first quarter performance and our expectation for the balance of the year.
We believe this is a capability extension that will make it easier for drug developers to select us for phase, one or even preclinical batches at the beginning stages of their development as they know they will have a partner who can support them through commercialization.
Kevin.
Thanks for the handoff, Trey. Echoing Trey's remarks, we are pleased with the top line performance in the quarter and excited about the business accomplishments that are laying a solid foundation for our future.
We have a long history of innovation and mrna our significant investment in these two facilities underlines our commitment to innovate the process for producing the next generation of genomic medicines and the raw materials that enable their production.
Today, I will summarize our financial results for Q1 and then discuss our reaffirmed financial expectations for the full year.
Let's start with the Q1 finance results on slide 13.
This expands our capabilities to help our customers unlock the potential of mrna and develop life changing vaccines and therapies.
As Trey mentioned, our revenue for the quarter was $64 million. Our gap net loss before non-controlling interest was $23 million for the first quarter of 2024. This compares to a net loss of $1 million for the comparable first quarter of 2023.
The water Ridge facility will continue to support the important work underway in trailing discovery and act as a key partner providing development expertise to our customers.
Moving to slide 12, I'll now ask Kevin to provide more details on our first quarter performance and our expectation for the balance of the year.
Adjusted IvaDOT, a non-gap measure, was $8 million for Q1, 2024 compared to $24 million for Q1, 2023.
Kevin.
Our adjusted epit down margin was 12% in Q1, 2024.
Thanks to the handoff track.
Echoing <unk> remarks, we are pleased with the top line performance in the quarter and excited about the business accomplishments that are laying a solid foundation for our future.
This adjusted EBIT. margin was slightly lower internal forecast for the quarter by about a million dollars, partially tied to the timing of some operational readiness period costs for our new Flanders facility, which we are incredibly excited about.
Today, I will summarize our financial results for Q1, and then discuss our reaffirmed financial expectations for the full year.
For the trailing 12 months or last four quarters combined, our adjusted EBITDA margin was 18% on revenues of $274 million.
Let's start with the Q1 financial results on slide 13.
As Trey mentioned, our revenue for the quarter was $64 million, our GAAP net loss before non controlling interest was $23 million for the first quarter of 2024.
Overall, our adjusted EBITDA margin in any given quarter will vary primarily based on revenues given the high proportion of labor and facility-related costs and the relatively low revenue-based variable costs.
This compares to a net loss of $1 million the comparable first quarter of 2023.
As it relates to labor and are previously discussed cost reduction actions, you'll see on slide 14, we ended the quarter with 575 full-time employees, compared to 673 employees we had at the end of September of 2023 prior to our restructuring initiatives.
Adjusted EBITDA, a non-GAAP measure was $8 million for Q1, 2024 compared to $24 million for Q1 2023.
Our adjusted EBITDA margin was 12% in Q1 2024.
Adjusted EBITDA margin was slightly lower internal forecast for the quarter by about $1 million, partially tied to the timing of some operational readiness trade costs for our new Flanders facility, which we are incredibly excited about.
And we completed all of the related actions over the course of Q4, 2023, and Q1, 2024.
As we look forward, we continue to evolve our organization with an eye to the future. This includes continued investment in innovation, commercial infrastructure, and GMP operations that are at least partially funded by the targeted reductions in our GNA structure and balancing our NAP operations team to the current demand profile.
For the trailing 12 months or last four quarters combined our adjusted EBITDA margin was 18% on revenues of $274 million.
Overall, our adjusted EBITDA margin in any given quarter will vary primarily based on revenues given the high proportion of labor and facility related costs and the relatively low revenue base variable costs.
We continue to be focused on funding future growth opportunities while maintaining a cost-effective structure.
As it relates to labor and our previously discussed cost reduction actions, you'll see on slide 14, we ended the quarter with 575 full time employees compared to 673 employees. We had at the end of September 2023 prior to our restructuring initiatives and we completed all of the related actions over the course of Q.
With 575 employees, our revenue per employee metric for 2024 is just under half a million dollars in revenue per employee, which is amongst the best in life science tools.
This, coupled with the broad and expanding capabilities of Maribi, positions us well for operating efficiency moving forward. I will discuss Epidopi segment in a few slides.
For 2023 in Q1 2024.
As we look forward, we continue to evolve our organization with an eye to the future. This includes continued investment in innovation commercial infrastructure and GMP operations. There are at least partially funded by the targeted reductions in our G&A structure and balancing our napp operations team to the current demand profile.
Moving to slide 15 and EPS.
Basic and diluted EPS for the first quarter was a loss of nine cents per share compared to break-even EPS in the first quarter of 2023. Adjusted EPS was a loss of two cents per share for Q1.
Moving forward to the year-end balance sheet, cash flow, and other financial metrics on slide 16.
We continue to be focused on funding future growth opportunities, while maintaining a cost effective structure.
We ended the quarter with $562 million in cash and $532 million in long-term debt, resulting in a $30 million net cash position.
With 575 employees a revenue per employee metric for 2024 is just under half a million dollars in revenue per employee, which is amongst the best in life science tools.
Adjusted free cash flow was $4 million for the quarter. That calculation of adjusted free cash flow, a non-gap measure, is based on our adjusted EBITDA, less capital expenditures, which were $8 million and $4 million in the quarter respectively.
This coupled with our broad and expanding capabilities of mobile positions us well for operating efficiency moving forward I will discuss EBITDA by segment in a few slides.
For Q1, 2024, cash used in operations was $8 million, primarily associated with the $20 million in planned retention payments associated with the two-year anniversary of the MECM acquisition.
Moving to slide 15 and EPS.
Basic and diluted EPS for the first quarter was a loss of nine cents per share compared to breakeven EPS in the first quarter for 2023 adjusted.
Adjusted EPS was a loss of <unk> <unk> per share for Q1.
Capital expenditures net of barter reimbursements for $4 million in the quarter. We anticipate our quarterly 24 capital expenditures peak in Q2 of this year, corresponding with the final outfitting stage of our Flanders buildings.
Moving forward to the year end balance sheet cash flow and other financial metrics on slide 16.
Okay.
We ended the quarter with $562 million in cash and $532 million in long term debt, resulting in a $30 million net cash position.
Depreciation and amortization was $12 million in the quarter, which is in line with our expectations and previous guidance.
Adjusted free cash flow was $4 million for the quarter, our calculation of adjusted free cash flow a non-GAAP measure is based on our adjusted EBITDA less capital expenditures, which were $8 million and $4 million in the quarter respectively.
Interest expense net of interest income was $4 million in the quarter. Slightly better than our expectations as our interest rate cap contract maintained higher values and excess cash yields stayed high based on the evolving expectation that rates will not shift downward in 2024 as quickly as previously expected.
For Q1 2020 for cash used in operations was $8 million, primarily associated with the $20 million in planned retention payments associated with the two year anniversary of the <unk> acquisition.
Stock-based compensation, a non-cast charge, was $12 million for the quarter, also in line with our expectations.
We ended Q1 with 133 million class A shares outstanding and 119 million class B shares outstanding for total of 252 million shares outstanding at the end of March on an adjutant fully converted basis, in line with our expectations for Q1 and flat versus the same time a year ago.
Capital expenditures net of BARDA reimbursements for $4 million in the quarter, we anticipate our quarterly 2020 for capital expenditures to peak in Q2 of this year corresponding with the final outfitting stage of our Flanders buildings.
Depreciation and amortization was $12 million in the quarter, which is in line with our expectations and previous guidance.
Next to slide 17 and the discussion of segment performance in the quarter.
Interest expense net of interest income was $4 million in the quarter slightly better than our expectations as our interest rate cap contract maintained higher values and excess tax shield state high based on the evolving expectation that rates will not shift downward in 2024 as quickly as previously expected.
Our nucleic acid production segment, which includes both our discovery and GMP products and services, market under our TriLink, Lend Research, and Alphasine brands, had revenues in the first quarter of $46 million, and adjust to deep adopt $10 million, a margin of 22%.
A lower margin than previous quarters has anticipated based on the lower revenue level over our cost base.
Stock based compensation, a non cash charge was $12 million for the quarter also in line with our expectations.
Our biologic safety testing, Cigment, which includes products from our Cigna's brand, had revenues of $18 million in the first quarter and adjusted EBITDA of $14 million, a strong and consistent adjusted EBITDA margin of 77%.
We ended Q1 with 133 million class a shares outstanding and 119 million class B shares outstanding for a total of 252 million shares outstanding at the end of March on an agile fully converted basis in line with our expectations for Q1 and flat versus the same time a year ago.
As detailed in these segment results, the combined adjusted eBada of our operating segments prior to the corporate shared service expenses was $24 million for $221, 2024, a combined margin of 37%.
Next to slide 17, and the discussion of segment performance in the quarter.
Our nucleic acid production segment, which includes both our discovery and GMP products and services market under our trailing Glenn research analysis behind brands had revenues in the first quarter of $46 million and adjusted EBITDA $10 million a margin of 22%.
Corporate shared service expenses, including the impact to EBA, which includes centralized functions such as human resources, finance and accounting, legal, IT, and the incremental expenses associated with being a public company, totaled $16 million in the first quarter, down almost $2 million from the comparable first quarter of 2023.
A lower margin than previous quarters as anticipated based on the lower revenue level over our cost base.
Let's move on to our current thinking around the full year of 2024 on slide 18.
Our biologics safety testing Sigma which includes products from our Cygnus brand had revenues of $80 million in the first quarter and adjusted EBITDA of $14 million, a strong and consistent adjusted EBITDA margin of 77%.
Based on a solid start of the year and our current assessment of the likely range of revenue outcomes, we are comfortable with the existing 2024 total revenue guidance range of $265 million to $285 million in revenues.
As detailed on these segment results the combined adjusted EBITDA of our operating segments. Prior to the corporate shared service expenses was $24 million for 'twenty Q1, 2020 for a combined margin of 37%.
Looking at the segments, our biologic safety testing business printed a strong $18 million first quarter, which we see as the high quarterly mark this year, consistent with previous years, and achieving an overall load of mid-single-digit growth over 2023 for this segment.
Corporate shared service expenses, including that impact adjusted EBITDA, which includes centralized functions such as human resources finance and accounting legal IC and the incremental expenses associated with being a public company totaled $60 million in the first quarter down almost $2 million from the comparable first quarter of 2023.
After taking this estimated range for the BST business of around $65 million to $70 million for the year, we expect the NACC segment will be roughly $200 million to $250 million for the year, 2024.
As for the cadence of estimated revenues, we estimate the first half of the year now carrying close to 50% of the year.
Let's move on to our current thinking around the full year of 2024 on slide 18.
Based on our solid start to the year and our current assessment of the likely range of revenue outcomes. We're comfortable with the existing 2024 total revenue guidance range of 265 million to $285 million in revenues.
Up from our previous expectation of 47%, which, based on the midpoint of our full-year range,
and the Q1 result would result in a second quarter revenue estimate at about $73 million or so.
So we see the top line firming up after a solid start and balancing the first and second half of the year.
Looking at the segments, our biologics safety testing business printed a strong 18 million first quarter, which we see as the high quarterly Mark this year consistent with previous years and achieving an overall load of mid single digit growth over 2023 for this segment.
We anticipate that margin will expand from Q1 with the sequential increase in revenues as we have seen in the past.
We see the range of our profitability metrics within the same range as our initial guidance, adjusted EBITDA margin expectations of 23% to 25%, and our full year adjusted EPS in the range of zero cents per share to a six cents per share loss.
After taking this estimated range for the BSG business of around $65 million to $70 million for the year, we expect the 9% when it will be roughly $200 million to $215 million for the year 2024.
Guidance also holds the following expectations in 2024. Interest expense net of interest income to be between $25 million and $30 million. Depreciation and amortization between $40 million and $50 million.
As for the cadence of estimated revenues, we estimate the first half of the year now carrying close to 50% of the year up from our previous expectation of 47%, which based on the midpoint of our full year range and the Q1 results. Good results on our second quarter revenue estimate at about $73 million or so.
Equity-based compensation, which we show is the reconciling item from gap to non-gap EBITDA to be between $45 million and $50 million.
So we see the topline firming up after a solid start and balancing the first and second half of the year.
as a fully converted share count of 254 million shares and an adjusted effective tax rate of 24%. Finally, net capital expenditures of $30 million to $35 million in 2024.
We anticipate that margin will expand from Q1 with the sequential increase in revenues as we have seen in the past.
We see the range of our profitability metrics within the same range as our initial guidance adjusted EBITDA margin expectations of 23% to 25% and our full year adjusted EPS in the range of zero cents per share to <unk> <unk> per share loss.
Overall, a solid start to the year. I'll now turn the call back over to Trey.
Thanks, Kevin. So to wrap up on slide 20, we had a solid start to the year and are tracking against the revenue guidance range that we communicated to you in March.
Our guidance also holds the following expectations in 2020 for interest expense net of interest income to be between $25 million and $30 million.
We are executing on our return to growth strategy and year-to-date have introduced significant new innovations to the market that further extend our leadership across the entire MRNA production workflow.
Depreciation and amortization between $40 million $50 million.
Equity based compensation, which we show as the reconciling items from GAAP to non-GAAP EBITDA to be between $45 million and $50 million.
as well as increasing our manufacturing capacity at our TriLink Flanders 1 and Flanders 2 facilities in these high value areas.
As a bullish converted share count of 254 million shares and an adjusted effective tax rate of 24% finally, net capital expenditures of $30 million to $35 million in 2024.
We have also strengthened our commercial team and continue to bolster our market leadership in the MRNE space through key industry and academic partnerships.
Our Trilink, Glenn research, AlphaZim, and Cygnus brands all continue to lead their fields while pushing the boundaries of innovation to offer unique and even better solutions to solve customer problems and advanced discoveries.
Overall, a solid start to the year.
I will now turn the call back over to Trey.
Thanks, Kevin.
So to wrap up on slide 20, we had a solid start to the year and are tracking against the revenue guidance range that we've communicated to you in March.
Our balance sheet remains strong, and we are well positioned to execute on opportunities for inorganic investments to bolster our market position and provide our customers with additional solutions.
We are executing on our return to growth strategy and year to date have introduced significant new innovations to the market that further extend our leadership across the entire mrna production workflow as well as increasing our manufacturing capacity at our trailing Flanders, one and Flanders two facilities in these high value areas.
We remain confident in the fundamental strength of our end markets, and the value we provide our customers for the life-changing development of drug therapies, diagnostics, and novel vaccines.
We remain committed to building strong foundation for the long-term sustainable growth of our businesses.
We have also strengthened our commercial team and continue to bolster our market leadership in the mrna space through key industry and academic partnerships.
I would now like to turn the call back over to the operator to open the line for your questions. Thank you.
Our trailing Glenn research Alpha Zyme and sickness brands all continue to lead their fields, while pushing the boundaries of innovation to offer unique and even better solutions to solve customer problems and advance discoveries.
We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press 1 on your telephone keypad to raise your hand and join the queue.
Our balance sheet remains strong and we are well positioned to execute on opportunities for inorganic investments to bolster our market position and provide our customers with additional solutions.
If you would like to withdraw your question, simply press Star 1 again. If you are called upon to ask your question and are listening by a loudspeaker on your device, please pick up your handset and ensure that your phone is not unmute when asking your question.
We remain confident in the fundamental strength of our end markets and the value we prove provide our customers for the life changing development of drug therapies diagnostics and novel vaccines.
We ask that you limit yourself to one question and one follow-up. Again, press star one to join the queue. And your first question comes from the line of Matt Uwit with with Craig Hallum.
We remain committed to building strong foundation for the long term sustainable growth of our businesses.
Please go ahead.
Good afternoon and congratulations on the strong start to the year. Maybe first up, congratulations on the lawns the contract. How should we be thinking about the ramp of that relationship? Is it something that will kind of build over time or is there an initial kind of order flow that you would expect and then kind of stabling from there? Just help us walk through that relationship a little bit.
I would now like to turn the call back over to the operator to open the line for your questions. Thank you.
We will now begin the question and answer session.
Have dialed in and would like to ask a question. Please press <unk> one on your telephone keypad to raise your hand and joined the queue.
Sure. Thanks for question. The arrangement with Lonza is similar to others we've announced where we just want to make sure that we open all avenues for customers' development programs to Clean Cap and our other technologies.
If you would like to withdraw your question, Jim do branch firewall and again.
If you are called upon to ask your question and our listening via loud speaker on your device. Please speak up your handset and ensure that your phone is Bob on mute when asking your question.
That you limit yourself to one question and one follow up.
As you might guess, it's not an instant moment where things start up. It's an enablement that will take time to build, particularly you see in
Again, Brett <unk>, who joined the queue.
And your first question comes from the line of Matt Hewitt with Craig Hallum.
Go ahead.
Good afternoon, and congratulations on the strong start to the year I mean, maybe first up congratulations on the launch of contract how should we be thinking about the ramp of that relationship is it something that will kind of build over time or is there an initial kind of an order flow that you would expect and then kind of stabling from there just help us walk through that relationship a little bit.
in GMP services and particularly at the high level, Lonsa operates, that these are contracts that are negotiated several quarters ahead of time typically.
So we would expect a ramp in the consumption. But again, the idea is to make sure that there are many avenues toward incorporating our technologies, whether we are producing or others are.
Sure.
Can the.
The arrangement with losses similar to others, we've announced where we just want to make sure that we open all avenues for customers development programs.
That's great and then maybe a separate follow-up question. I've been getting a lot of questions from investors asking about the Bioscure Act, an impact that that may or may not have on respective businesses. And I'm just curious, it sounds like there's a markup meeting next week with the House. How would that impact your business if in fact that becomes law?
Two clean cap in our other technologies.
As you might guess, it's not a mall and instant moment, where.
Startup AIDS and enablement that will take time to build particularly you see in.
Well, there's definitely a lot of conversation about this. And like you say, it's not law yet. As we've looked at things, we have...
In GMP services, and particularly at the high level Monza operates that these are contracts that are negotiated.
Several quarters ahead of time typically so.
a significant proportion of our business in the U.S. and Europe .
So we would expect a ramp in the consumption, but again the idea is to make sure that there are many avenues toward incorporating our technologies, whether we are producing or others are.
And from the perspective of CDMO services, if something like that were to go into effect, we think it would essentially lead to a new equilibrium across geographies.
That's great and then maybe a separate follow up question I've been getting a lot of questions from investors asking about the biosecurity and impact that that may or may not have on respective businesses and I'm just curious is.
And as we are a majority, US and Europe , we would be able to participate in that.
Understood. Thank you very much.
Thanks for that.
It sounds like Theres, a markup meeting next week with the house, how would that impact your business. If in fact that becomes law.
The question comes from the line of Pages Savant with Morgan Stanley .
Hey guys, good evening and thanks for the time here. I just want to follow up on that Lonza question from earlier, Trey. Can you just give us some color on how the deal came about? Was this unsolicited inbound? Did Lonza consider alternatives as they chose Marivai? And has this contract win sparked further discussions with either pharma customers or other CDMOs? And does it come with any minimum volume commitments at all?
Alright.
Well, there's definitely a lot of conversation about this and <unk>.
Like you say, it's not law, yet as we've looked at things we have.
A significant proportion of our business in the U S and Europe.
And from the perspective of CDM OS services, if something like that were to go into effect, we think it would essentially lead to.
A new equilibrium across geographies.
Great questions, Tejas. Let me hand that over to Becky, who was actually directly involved in those discussions. Becky, are you with us? Yeah. Hey, Tejas. How are you, James?
And as we are a majority U S. In Europe, we would be able to participate in that.
Understood. Thank you very much.
Thanks, Matt.
Yeah, so look, I think this is really a broader strategy that we have. We see CDMOs as a very good channel for our GMP biomanufacturing materials and to enable the adoption of Clean Cap. We realize that there are customers that have many choices and there are many choices to change.
Question comes from the line of stages Savant Mcmartin Sandy.
Hey, guys good.
Good evening and thanks for the time here.
To follow up on on that Lonzo question from earlier train could you just give us some color on how the deal came about was this unsolicited inbound did lonzo considered alternatives as they chose <unk> and has this contract win sparked further discussions with either pharma customers or other <unk>.
And certainly capacity, expertise, and desire.
you know, and different partnership structures that
And does it come with any minimum volume commitments at all.
with different CDMOs are all part of the driver of selection.
Great question Statehouse, let let me hand that over to Becky who was actually directly involved in those discussions with us.
So what we're looking to do is build enablement structures to partner with tier one CDMOs that have a desire to partner with us. And yes, we have, you know, a contract with them. And so, you know, there's typically a mutual agreement around wanting to bring
Hey, perfect How're you doing.
Yeah. So look I think this is really a broader strategy that we have.
We see <unk> as a very good channels for our GMP bio manufacturing materials and to enable the adoption of clean cap we relate that.
CleanCAP in as a platform technology and then have a wide path for customers to have the ease of use with that CDMO and really streamline activities between the two companies and make it easier.
There are customers that have many choices and there are many choices.
And certainly capacity expertise and desire.
Got it. That's super helpful, color. And then, Ray, one for you on the opening of the San Diego facility here, is there a backlog of work that's already in place there or building up the book of business is still ahead of you? Just help us think through the capacity utilization ramp at the site and what's the max sort of potential revenue that we can expect to see there over time?
And different partnership structures that.
I have with different <unk> are all part of the driver of selection shall what we're looking to do is build enablement structures to partner with share wine CMO that have a desire to partner with us and and yes, we have.
Our contract with <unk> and.
And Joe you know that.
Sure, there is definitely a buildup to be had because
There is typically a mutual agreement around wanting to bring clean cap in as a platform technology and then have a glide paths for.
you know, in no small part because we did not have the late phase clinical capabilities, you know, from an infrastructure point of view until the opening of the facility. But I will hand it to Drew, who has been living this life.
Customers to have the ease of use with that CMO and really streamline activities between the two companies and make it easier.
and give you some more color there.
Sure, good afternoon. We do have taken our first committed orders for that facility. It is, as you would expect. It's a funnel we expect to continue to grow over time, but we have already contracted late phase MRNA builds for the facility.
Got it that's super helpful color.
One for you on the on the opening of the San Diego facility or is there a backlog of work that's already in place there or building up the book of business is still ahead of you just help us ring, a think through sort of the capacity utilization ramp at the site and what's the Max sort of potential revenue that we can expect.
Got it. Thanks guys. I appreciate the time. Sure.
See there overtime.
Sure there is definitely a buildup to be had because.
Your next question comes from the line of Dan Leonard with UBS.
In no small part because we did not have the late phase clinical capabilities from.
Thank you all.
So I know it's gotten harder to unscramble the egg between what's COVID and what's non-COVID nowadays, but as best you can tell, did the base business, the non-COVID business with the nucleic acid production, did that grow sequentially versus the fourth quarter?
From an infrastructure point of view until the opening of the facility, but I will hand, it to drew who has been living this life.
And give you some more color there sure. Good afternoon. We are we do have we.
We've taken our first committed orders for that facility. It is as you would expect it to.
versus the fourth quarter.
Our funnel, we expect to to continue to grow over time, but but we have already contracted late phases mrna builds for the facility.
Yeah.
Well, and you're saying base non-COVID Q4 Q1 sequential.
Yeah, best efforts, because I know it's hard to unscramble. It is. I mean, Dan, I mean, obviously we're not breaking that out now, so I can't directly answer the question. What I would say to that generally speaking, certainly, you know, the Clay Gasproducing obviously was down versus the fourth quarter sequentially as expected.
Got it thanks, guys appreciate the time.
Sure.
Yes.
Your next question comes from the line of Ben <unk> with UBS.
Thank you all.
So I know, it's gotten harder to unscramble the egg between what's COVID-19 and what's non COVID-19 nowadays, but as best you can tell did the base business. The non COVID-19 business within nucleic acid production did that grow sequentially versus the fourth quarter.
And, you know, one component of that were these GMP orders for Clean Cap, which we had scheduled coming into this year.
And that took a step down from the run rate we had been seeing throughout the course of 2023, and that was the largest contributor to that sequential decline. I think that's the best way for me to answer that question.
Versus the fourth quarter.
Yeah.
Well and Youre, saying base non Covid Q1, Q4 Q1.
Got it. I appreciate that. Thanks, Kevin. And my follow-up, I could use a bit of help on the gross margin line. I know you said that margins came in, you know, near your plan, but I think perhaps, you know, our model wasn't dialed in appropriately. And, you know, cost of goods were higher than we expected. And they were up year over year despite lesser revenue. So how can we think about, you know, better think about the gross margin progression from here? Thank you.
Sequential.
Yes, best efforts, because I know it is hard to unscramble. It is I mean, Dan I mean, obviously, we're not breaking that out now so I can't directly answer the question.
What I would say to that generally speaking is certainly another clinic as breath business, obviously, it was down versus the fourth quarter sequentially as expected.
Yeah, certainly, Dan, certainly gross margin as well as our EBITDA margin will fluctuate predominantly based upon revenues. And when you really take that down the next layer, you know, it's within the nucleic acid production segment and even a layer lower, you know, tied to our manufacturing facilities here in San Diego where we have the most substantial amount of fixed costs and overall labor. I think another component of that that we saw here in the first quarter, which is relatively as anticipated, was just the mix. We did have a lower overall clean cap quarter versus some of the previous quarters we had seen, and that's certainly a higher margin product, particularly when we're doing it at higher volumes and in
And one component of that where these GMP.
Orders for clean cap, which we had scheduled coming into this year.
And that took a step down from the run rate we had been seeing throughout the course of 2023 and that was the largest contributor to that the sequential decline and you can think of.
Best way for me to answer that question.
Got it no I appreciate that thanks, Kevin and my follow up I could use a bit of help on the gross margin line. I know you said that margins came in near your plan, but I think perhaps you know our model wasn't dialed in appropriately in cost of goods were higher than we expected and they were up year over year, Despite lesser revenue so.
How can we think about better think about the gross margin progression from here. Thank you.
sort of bulk to some of our larger pharma customers for their needs. So you'll see that margin that flow a little bit with the overall volume of clean cap. When you look back at say the fourth quarter of 23 or the first quarter of 23, we had those larger clean cap quarters, you see those post margins higher. And then, you know, I think as we go into the second quarter, we do see a substantial
Yes, certainly Dan certainly gross margin as well as our EBITDA margin.
It will fluctuate predominantly based upon revenues and when you really take that down the next layer.
Nucleic acid production segment, and even a layer lower tied to our manufacturing facilities here in San Diego, where we have the most substantial amount of fixed costs and overall labor I think another component of that that we saw here in the first quarter, which was relatively as anticipated was just the mix.
and Clean Cap based upon those contracted shifts that we have visibility to today. So lower revenue margin predominantly. And then I mentioned a little bit start-up costs related to planters. We do have some period costs that go through for validating new equipment and putting in disposable things, tips, and gloves and chemicals and other things you need. So that was another part of it. So you'll see the margin bounced around a little bit, and that really flows down overall to the EBITDA margin as well. But as we look forward, particularly here in the second quarter, you know, we see that, you know, bouncing back and likely to be very consistent with some of what we saw in the fourth quarter of 23.
We did have a lower overall clean quarter.
Quarter versus some of the previous quarters, we had seen and Thats certainly a higher end of our two product, particularly when we're doing it at higher volumes and in sort of bulk to some of our larger pharma customers for their needs. So youll see that margin ebb and flow a little bit with the overall volume of clean cap. When you look back and say the fourth quarter of 2003 or the first quarter of <unk>.
Thank you.
Three we had those larger clean cap quarters, you see those gross margins higher.
Question comes from the line of Catherine Schulte with Baird.
And then I think as we go into the second quarter, we do see a substantial.
Hey everyone, this is Tom Peterson on for Catherine. Thanks for taking the question. Just to start, I guess we've heard from peers that there's perhaps a slower than normal budget early from pharma this year. I guess did you see any dynamics in the quarter, you know, particularly just any atypical phasing that you saw in the first quarter?
And clean cap based upon those contracted shipments that we have visibility to today.
So lower revenue margin predominantly and then I'll I mentioned, a little bit startup costs related to planners. We do have some period costs that goes through customer validating new equipment, and putting in disposable things Simpson and gloves and chemicals and other things.
Sure. With our two different segments, they are different dynamics. Typically, in BST we see our high point in Q1.
So that was another part of it. So you will see the margin bounce around a little bit and that really slows down overall to the EBITDA margin as well, but as we look forward, particularly here in the second quarter, we see that bouncing back and likely to be very consistent with some of what we saw in the fourth quarter of 2003.
And that has to do, I think, mostly with calendar, budget, pharma program planning, and really, you know, consequentially CDMO program planning.
Okay.
In NAP, we did see a little bit of that. I'll hand that over to Drew specifically.
Question comes from the line of Catherine Schulte with Baird.
Okay.
Hi, everyone. This is Tom Peterson on for Catherine Hi, Thanks for taking the question.
Yeah, I would say we saw a couple of different dynamics. It's a little tough to disentangle. I think we've seen some rationalization, both among big pharma and small pharma. That said, we also saw some situations where people who are continuing to push pipelines ahead, and we saw a stronger funding environment in the public and the venture capital markets. So, you know, a little bit cross-current. I don't think in our business we see any discernible trends from that. We assume it's probably going to take a bit of time before that those funding dynamics, the strengthening and funding shows up in orders.
Just to start I guess, we've heard from peers.
Perhaps a slower than normal budget early from pharma. This year I guess did you see any of these dynamics in the quarter, particularly does any atypical phasing that you saw in the first quarter.
Sure.
With our two different segments they are.
Different dynamics typically in DST, we see are our high point in Q1.
And that has to do I think mostly with calendar budget.
Pharma program planning and really.
Consequentially CMO program planning.
Hi.
And we.
But I guess that's how it characterize the environment.
We did see a little bit of that I'll hand that over to Peru, specifically.
Okay, that's helpful. And then maybe just one for Kevin on some of the cost actions and restructuring.
Yes, I would say we saw a couple of different dynamics are a little tough to disentangle I think we've seen some some rationalization.
You know, how right sides do you feel that the corporate and cost structure is today, given some of the comments around some of the commercial focus on today's call? Should we be thinking about any kind of incremental actions in 24, you know, in either direction? And should we still be thinking about kind of 26 million, the net benefit from the cost actions here in 24?
Among big pharma and small pharma.
That said, we also saw some situations where people are continuing to push pipelines ahead, and we saw a stronger funding environment in the public and the venture capital markets. So.
Little bit Crosscurrents, I don't think in our business, we see any discernible trends from that we assume its probably going to take a bit of time before that those funding dynamics the strengthening in funding shows up in in orders, but I guess.
Yeah, I think absolutely. I think that, you know, the
The cost actions about, you know, which we're talking about $30 million with about two-thirds those tied to labor. You know, those have all happened. You know, so with that inflexing the headcount and some of the metrics that I spoke of. You know, and we will continue to, as we spoke of, make targeted investments in commercials. We'll continue to see, I think that line and our R&D line, particularly continue to see incremental investments throughout the course of the year. And, again, I think the right way to sort of look at this, as we tried to frame in last call, is if you have 200 units of cost, we weren't necessarily going from 200 units to down to 170 units. It was more like as opposed to going from 200 units to where it would naturally have been something like 240 or closer to 210. You know, we sort of.
That's how I would characterize the environment.
Okay.
Okay. That's helpful and then.
Just.
One for Kevin on some of the cost actions and restructuring.
How right side do you feel that the operating cost structure at today, given some of the comments around some of the commercial focus on today's call should we be thinking about any kind of incremental actions in 'twenty, four and either direction and should we still be thinking about that $26 million of net benefit from the cost actions here in 'twenty four.
took some of that out of our run rate, but we also wanted to make sure we were still investing in R&D for innovation safe. And we talked a lot about that progress in commercial, we talked a lot about that progress, as well as in Alpha Ziman and Cygnus, which continued to show, you know, good momentum and good growth. So our focus was really in taking those costs specifically out of GNA and specifically about right-sizing, you know, the operations at trialing here in the Sand-Ago facility and then kind of also converting some of that labor and making them plungeable to move over and take care of some of the increasing demand will be seeing that will be driven by plant workers too. So again, again, it's a very focused effort. We're very happy with how we've executed that
Yes, I think I think absolutely I think that the.
<unk>.
The cost actions.
Which we're talking about $30 million with about two thirds of those tied to labor those are all happened.
So with that and flex and the head count and some of the metrics that I spoke of and we will continue to as we spoke of make targeted investments in commercial. So we'll continue to see I think that line in our R&D line, particularly continue to see.
Incremental investments throughout the course of the year again, I think the right way to sort of look at this as we tried to frame in last call.
200 units of cost, we weren't necessarily going from 200 units to down to 170 units it was more or less.
As opposed to going from 200 units to where it would naturally been something like 240 for closer to two times.
and we're on track to realize all those savings that we articulate.
Sort of took some of that out of our run rate, but we also wanted to make sure we were still investing in R&D for innovation safe.
Your next question comes from the line of Matthew Sykes with Goldman Sachs.
And we talked a lot about that progress and commercial we've talked a lot about that progress as well as in our design and in sickness, which continued to show good momentum and good growth. So our focus was really taking those costs, specifically out of G&A and specifically about right sizing.
Hi, this is Evian for Matt. Thanks for taking my questions. Could you walk through the current GMP to RUO split and how you see that trending throughout this year with the new facilities coming online?
Have a good time.
The operations at at Trialing here on the San Diego facility, and then kind of convert also converting some of that labor and making them fungible to look over it and take care of some of the increasing demand will be seeing that will be driven by plant acres too. So again again, it's it was a very focused effort, we're very happy with how we've executed that.
No.
Yeah, I could take that. It's not something that necessarily broken out, but I would say that when we look down and through our business, particularly nucleic acid production, we look at it in different ways. We obviously have our business units that we look at that represent both our Alphazine business, which continues to grow and perform well, our Glenn Research business unit, which is part of the structure, but tied more predominantly to diagnostic sequencing in some of those applications, which continues to perform extremely well. And then we have within what we brand as our Tri-Link products, really the bifurcation between discovery
And we're on track to realize all of those all of those savings that we articulated.
Okay.
Your next question comes from the line of Matthew <unk> with Goldman Sachs.
Hi, This is <unk> on for Matt Thanks for taking my questions.
and that kind of RUO business, if you well, on the research side. And then we have GMP. And certainly, you know, as the course of the year, I would say, the discovery has been
Could you walk through the current GMP <unk> split and how you see that trending throughout this year with the new facility is coming online.
Heather.
fairly steady in that it'll it'll have some of the volatility that we see in GMP, meaning you have ongoing purchases, lower ticket items, more recurring purchases and a longer tail of customers there. So that's a unique dynamic and why we're managing it slightly differently. But with GMP, that's where we will see sort of the spikiness in our business as we have large bulk orders for Clean Cap or as we do those GMPRNA
Yes, I can take that.
It's not something we necessarily broken out, but I would say that when we look down through our business, particularly nucleic acid production. We see we look at it in different ways. We obviously have our business units that we've looked at those represent both our alpha client business, which continues to grow and perform well or Glenn research business unit, which is par.
The structure, but tied for predominantly the diagnostic sequencing and some of those applications, which continues to perform extremely well and then we have within what we brands as our trailing products really the bifurcation between discovery.
jobs.
And certainly those are the areas as we go throughout the course of the year with the Flanders capabilities and moving into next year we see the opportunity to grow the business. So I would say we're focused on discovery, a little less dynamic historically, and then GMP is the one that could be a lot more dynamic. And right now when we look at the quarter, you know, the two within Trilink were relatively evenly split this quarter. I think that dynamic will change next quarter even as we grow because we're aware of some of the GMP jobs. and commitments that we have there as well as the uplift in the GMP clean cap orders that we already have both the second quarter.
And that kind of are you low business. If you will on the research side and then we have GMP and certainly.
As the course of the year I would say the discovery has been fairly steady in that it'll it'll ebb and flow a little bit, but it won't have sort of some of the volatility that we see in GMT, meaning you have ongoing purchases lower ticket items more recurring purchases and a longer tail of customers. There. So that's <unk>.
<unk> dynamic and why we're managing it slightly differently.
I think that's well said. We expect that discovery business to be
But with GMP, that's where we will see sort of the spiking us in our business as we have large bulk orders for clean cap or as we do those GMP mrna jobs and certainly those are the areas as we go throughout the course of the year with the Flanders capabilities and moving into next year, we see the opportunity to grow the business. So I would say we're <unk>.
much broader, diversified, and like Kevin said, lower ticket item, which means probably less lumpy, which is a term you're hearing thrown around a lot this season. GMP will, of course, be more of the late phase of...
pharma lumpiness. So we tend not to look at the business that way necessarily. As Kevin said, we
Speaker Change: <unk> on discovery and a little less dynamic historically and then GMP is the one that can be a lot more dynamic and right now when we look at the quarter you know the two within trailing we're relatively evenly split this quarter I think that dynamic will change next quarter, even as we grow because we are aware of some of the GMP jobs and commitments that.
have, we operate trialing discovery and trialing GMP differently, but because GMP is so subject to those large order swings, the, you know, the proportion can ebb and flow quite a bit. It's something that has to be tracked over probably longer periods.
Investor Relations: We have there as well as the <unk>.
Investor Relations: Uplift in the GMT clean cap orders that we already have booked for the second quarter.
Okay, definitely that makes sense. Thank you. And then second, on the EBITA margin, could you talk about what an exit rate might look like compared to last year? I know there's a lot of puts and takes with less COVID volume, but also taking into consideration some of the cost savings. So I guess just thinking about like cadence, especially as we get it to like Q4 and then into 2025.
Investor Relations: I think thats, well said, we expect the discovery business to be.
Speaker Change: Much broader and.
Speaker Change: Diversified and like Kevin said lower ticket item.
Speaker Change: It means probably less lumpy, which is a term youre hearing thrown around a lot. This season GMP will of course be more of the late phase.
Yeah, sure. Certainly, you know, with the revenue being at a low mark here in the first quarter versus what we've seen, that translates into the lower EBITDA margin that we've seen, in the lowest we've seen, looking back certainly over the last five quarters. You know, and we certainly see that growing. I think it'd be just low, I'll just refer to the midpoints of our guidance for simplicity. You know, that'll see as printing revenue numbers on average of around $71 million for the next few quarters, you know, and EBITDA probably around on average $19 million or so to get to the middle of. that range, you know, that would be 27-inch percent on average, even though, even margins for the next three quarters. There'll be some of the flow there, certainly, again, tied to some of these, some of these spikes and quarterly sequential moves on clean
Speaker Change: Pharma Lumpiness so we.
Speaker Change: We tend not to look at the business that way necessarily.
Speaker Change: As Kevin said we.
Speaker Change: We operate Trialing discovery of trailing G&P differently, but because GMP is so subject to those large order swings.
Speaker Change: The proportion can ebb and flow quite a bit.
Speaker Change: The thing that has to be tracked over probably longer periods.
Speaker Change: Okay definitely that makes sense. Thank you.
Speaker Change: And then second on the EBITDA margin could you talk about what an exit rate might look like compared to last year I know, there's a lot of puts and takes with less covered volume but also.
Speaker Change: Taking into consideration some of the cost savings. So I guess, just thinking about like cadence, especially as we get it.
cap and some of our higher market products. But I think you'll see, again, those sort of on average numbers.
Jay: Q4, and then into 2025, yes, sure certainly with the revenue being in a low mark here in the first quarter versus what we've seen and that translates into lower EBITDA margin that we've seen in the lowest we've seen looking back certainly over the last five quarters.
Kind of moving again with revenue again as we see it right now you see we're saying that the second quarter here will likely be up in that You know in the low 70s that'll probably carry a much higher margin and then we'll kind of revisit the rest of the years to get into it But you know I think as we're looking at the business right now getting back into the type of margins we saw exiting Q4 Certainly up in the you know the 25 to 30 range is what we're looking to do And certainly that will be tied to the revenue profile of the business particularly within the NAP segment.
Kevin: And we certainly see that growing I think it would be just look I'll just refer to the midpoint of our guidance for simplicity.
Kevin: <unk> printing revenue numbers on average of around $71 million for the next few quarters.
Kevin: And EBITDA, probably around on average $19 million or so to get to the middle of that range that would be 27, 6% on average EBITDA margins for the next three quarters there'll be some ebb and flow there certainly tied to some of these some of these spikes in.
Your next question comes from the line of Matt Laroo with William Blair.
Speaker Change: Quarterly sequential moves on clean cap and some of our higher margin products, but I think youll see again, those sort of on average numbers.
Hey, good afternoon. First question, Trey, you talked about, you know, a litany of
Speaker Change: Kind of moving in with revenue again, as we see it right now we see we are saying that the second quarter here will likely be up in that in the low seventies that'll probably carry a much higher margin than then we'll kind of revisit the rest of the year as we get into it but I think as we're looking at the business right now getting back into the type of margins, we saw exiting Q4.
new product and service offerings, which sort of has been the theme of the last year,
Obviously, the top line impact maybe hasn't been apparent just because of the broader headwinds.
your business is facing. Could you maybe help us point to one or multiple of those products you see as the service offerings?
Speaker Change: Certainly up in the <unk>.
you see as the most, you know, potentially needle moving in terms of helping to inflect the top line.
Speaker Change: 25% to 30 range is what we're looking to do.
be it from traction you're seeing with customers, most promising funnel building, maybe where you have the most apparent right to win, just because there's so much sort of new that's going on, maybe to help us focus in on what you see as most meaningful.
Speaker Change: Certainly that will be tied to the revenue.
Speaker Change: The revenue profile of the business, particularly within the <unk> segment.
Speaker Change: Yes.
Speaker Change: Your next question comes from the line of Matt <unk> with William Blair.
Yeah, absolutely. That's a good way to look at it, actually. And it sort of dovetails into the previous question about the business dynamics that are different between the discovery business, which is where those R&MRNA catalog products be announced here.
Matt: Hey, good afternoon.
Matt: First question you talked about.
Speaker Change: Litany of.
Speaker Change: New product and service offerings.
Matt: Chuck has been.
Matt: The theme of the last year, but.
Matt: Obviously, the topline impact maybe hasn't been apparent just because of the broader headwinds.
they sit in Discovery slash RUO versus, of course, GMP services where we do contract MRNA production for people, but also where GMP Clean Cap and other process inputs sit.
Matt: Your business is facing could.
Speaker Change: Could you maybe help us.
Speaker Change: 0.2.
Matt: One or multiple of those product or service offerings.
Matt: He is the most potentially needle moving in terms of helping to inflect the top line.
I would say probably the most needle-moving and most exciting over the past year. We are, I guess, about to hit the one-year anniversary of the launch of Clean Cap M6, which was an RUO product.
Matt: Yet from traction you're seeing with customers most promising funnel building and maybe where you are most apparent right to win just because theres. So much sort of new that's going on maybe help us focused in Hawaii. She is most meaningful.
I would say that that product exceeded our initial expectations pretty significantly. And as we just announced, taking that to GMP, where we've already run an engineering batch, you know, we're going to hit...
Speaker Change: Yes, absolutely.
Speaker Change: That's a good way to look at it actually and it sort of dovetails into the previous question about the business dynamics that are different between the discovery business, which is where those RNA mrna catalog products, we announced here they say.
We're going to hit GMP M6 within a year of the launch of the RUO product and that's pretty exceptional
Matt: And discovery Slash our U.
And of course, the historical participation of this company in
Speaker Change: Versus of course, GMP services, where we do contract.
pandemic vaccines and other things comes from the G&P reagent space. So those are definitely needle movers.
Speaker Change: Mrna production for people, but also where GMP clean cap and other process inputs.
So I would say that probably the most exciting in needle moving of the NPI is a great example because it was an RUO from almost exactly a year ago and now will be a GMP going to be shortly here.
Speaker Change: I would say probably the most needle moving and most exciting over the past year.
Speaker Change: We are I guess about to hit the one year anniversary of the launch of clean cap and six which was an <unk> product.
Okay, thank you. And then
One for Kevin, just sort of on the cadence of GNA, you referenced on the last call, GNA being down about 5% for the full year, and we so we modeled it down sequentially.
Speaker Change: I would say that that product exceeded our initial expectations pretty significantly and as we just announced taking.
Speaker Change: Taking that to GMP, where we've already run in engineering batch.
Speaker Change: We're going to hit.
You may have referenced some one timers, but I think just to start hitting that upper 20s, you put the margin.
Speaker Change: If we're going to hit GMP M. Six within a year of the launch of the <unk> product and that's pretty exceptional and of course the.
you know, range, particularly the gross margin emergency outline, there would seem to be that require like a significant step down sequentially in G&A in the second quarter and then beyond that. Is that still right? And just maybe remind us again on the moving pieces from Q4 to Q1 and Q1 to Q2.
Speaker Change: The historical participation of this company in.
Speaker Change: Pandemic vaccines and other things comes from the GMP reagents space. So those are definitely needle movers. So I would say that probably the most exciting and needle moving or the <unk>.
Yeah, I think that one of the things you have to obviously carve out of there are, you know, the non-epidopatine-packing items. You know, that's certainly part of that, that view. So when you look at that, you know, you have the, I guess I would say, the, you know, the stock.
Speaker Change: <unk> is a great example, because it was in <unk> from.
Speaker Change: Almost exactly a year ago, and now will be a GMP shortly here.
Speaker Change: Okay. Thank you and then.
Speaker Change: One for Kevin just talked about the cadence of G&A.
which is going up fairly materially this year versus last year.
Kevin: From the last call G&A being down about 5% for the full year.
with what we're seeing in the GNA line as far as the trends there and so I think that that's you know when you peel back that we are seeing that that decline and that's added contribution to the overall epididom margins you know when I look at our adjusted just GNA expense
Kevin: So we had modeled but down sequentially.
Speaker Change: You have referenced some one timers, but I think just to start hitting that upper twenty's EBITDA margin.
Speaker Change: Our range, particularly with the gross margins you outlined there would seem to be that require like a significant step down sequentially in G&A in the second quarter and then beyond that is that alright, and just maybe remind us again on the moving pieces from Q4 to Q1 in Q1 and Q2.
for the first quarter here versus where we were a year ago, you know, that is down, gosh, let's just look at this real quickly. It's down just under 20% year over year on on the expense to hit the EBITDA line. So I think we're very happy with the progress we're making there and have made and see that as a steady run rate to achieve that's full year savings.
Speaker Change: Yes, I think that one of the things you have to obviously carve out of there or the non EBITDA impacting items. That's certainly part of that that view. So when you look at that you have.
Speaker Change: I guess I would say the stock.
Speaker Change: Which is going up fairly materially this year versus last year.
Your next question comes from the line of Michael Riskin with Bank of America Securities.
Speaker Change: Okay with what we're seeing in the G&A line as far as the trends there.
Speaker Change: And so I think that Thats when you Peel back that we are seeing that decline and thats added to contribution to the overall EBITDA margins when I look at our adjusted G&A expense.
Hi, this is both channel on from Mike. Thanks for taking the questions. So I wanted to pick back up on the kind of biotech funding line of questioning. Understandably, an uptake in biotech funding isn't going to immediately become revenues for Merivai. I'm interested in your thinking around
Speaker Change: For the first quarter here versus where we were a year ago that is down gosh, let's just look at this real quickly.
Are you seeing this reflected in your conversations or how should we kind of think about the lag between an improvement in the end market and then that translating into your order book and eventually revenues?
Speaker Change: Its down just under 20% year over year on the on the expense to hit the EBITDA lines. So I think we're very happy with the progress we're making there.
Yeah, I think we touched the idea that the, let's call it the sawing of that environment will be beneficial going forward. Definitely not an immediate thing, but maybe, Drew, if you have some color or anonymized examples.
Speaker Change: Sure and have made and see that as a as a steady run rate to achieve that full year savings.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Your next question comes from the line of Michael Raskin with Banc of America Securities.
Yeah, sure. Look, I think every customer has their own journey and kind of translating through their new funding where they have achieved such into new clinical plans, putting those to work, purchasing raw material inputs.
Bulk Channel: Hi, This is bulk channel on for Mike. Thanks for taking the questions. So I wanted to pick back up on the kind of biotech funding line of questioning.
Bulk Channel: Understandably by an uptick in biotech funding isn't going to immediately become revenues for <unk>, but I'm interested in your thinking around are you seeing this reflected in your conversations or how should we kind of thinking about the lag between an improvement in the end market and then that translating into your order book and eventually revenues.
or purchasing the MRNA, you know, it's going to be a variety of time. I think, look, we landed where we expected to land for Q1 or maybe a little bit stronger. We haven't seen, you know, any kind of dramatic change as a result of the funding in aggregate, but every customer journey is maybe a little bit disposed.
Speaker Change: Yes, I think we touched.
Speaker Change: The idea that.
Speaker Change: <unk>, let's call it the thawing of that environment will be beneficial going forward definitely not an immediate thing, but maybe drew if you have some color.
Bye-bye.
Got it. Appreciate the color there. And then
Pippening a bit. I noticed through the presentation you mentioned your openness to MNA a couple of times. I'm wondering if there are any areas of the portfolio that you see is particularly suited to inorganic additions.
Speaker Change: Anonymised examples.
Drew: Yeah sure look I think every every customer has their own journey.
Drew: Kind of translating through their new funding, where they have achieve search into new clinical plans, putting those to work purchasing raw.
Then what are you seeing in terms of seller expectations in terms of regarding valuation now that the broader sector has started to catch a bit?
Speaker Change: Our raw material inputs.
A very insightful question. We have definitely been active, and one of the tricks with all of this is that we can't really...
Speaker Change: Or purchasing mrna, it's going to be it's going to be a variety of time I think look we landed.
Speaker Change: Where we expected to land for Q1, or maybe a little bit stronger.
talk about it until it's official. But one of the things I would say is we have seen a tremendous number of things that are strategically aligned. And obviously that's what we look for first. The challenge is,
Speaker Change: We haven't seen any kind of dramatic change as a result of the funding in aggregate.
Speaker Change: But every customer journey is moving a little bit.
Speaker Change: Yeah.
to date has been finding strategically aligned opportunities that are also financially aligned.
Speaker Change: Okay.
Speaker Change: Got it I appreciate the color there and then.
Speaker Change: Opening a bit.
Speaker Change: I had noticed through the presentation you mentioned Europe in this M&A, but a couple of times I'm wondering if there are any areas of the portfolio that you've seen is particularly suited to inorganic additions. Then what are you seeing in terms of seller expectations in terms of regarding valuation now the broader center has sort of catch a bit.
You know, at the, our specialty at Marvai has been scientific, founder-driven category leading companies.
We think that's a very good niche that we fill, and there's certainly plenty of opportunities to do that, but your comment is correct about expectations. This has been such a dynamic environment.
Speaker Change: Very insightful question, we have definitely been active in one of the tricks with all of this is that.
with the pandemic, with the pandemic fall off, with interest rates,
Speaker Change: We can't really.
Speaker Change: Talk about it until it's official but one of the things I would say is we've seen a tremendous number of things that are strategically aligned and obviously, that's what we look for first.
with funding. It has been headspending, to be sure. The challenge, I would say, for us has not been a challenge of finding strategically aligned opportunities, more so financially aligned.
Speaker Change: The challenge.
Speaker Change: Dave has been finding strategically aligned opportunities that are also find.
But we continue to look for that right fit and we're definitely still very active in that area.
Speaker Change: Financially aligned.
Speaker Change: At the.
Speaker Change: Our specialty at <unk> has been scientific founder driven category leading companies.
Your next question comes from the line of Connor McNamara with RBC Capital Market.
Speaker Change: We think thats a very good.
Speaker Change: That's a very good niche that we fill and there is certainly plenty of opportunities to do that but your comment is correct about expectation.
Hi, this is Desa Ricardo on for Connor. Thanks for taking the call. I just wanted to touch on what the step up in volume and revenue is for customers as they move up in clinical trials.
Speaker Change: Expectations. This has been such a dynamic environment.
Speaker Change: With the pandemic with the pandemic fall off with interest rates.
Okay. For your planners to come up.
Speaker Change: With funding.
Speaker Change: It has been head spending to be sure. The challenge I would say for US has not been a challenge of finding strategically aligned opportunities more so.
Okay, yeah, I mean this comes back a little bit to the prior theme where in RUO you have PO sizes
Speaker Change: Financially aligned.
you know, in the five to six figures, sometimes in the seven figures.
Speaker Change: But we continue to look for.
Speaker Change: For that right fit and we are definitely still very active in that area.
In GMP, you typically start in the six figures and go into the seven or even eight figures, but it's completely programmed dependent. When you sell a GMP reagent, for example, it's simply a function of scale.
Speaker Change: Your next question comes from the line of Gardner Mcnamara with RBC capital markets.
But when you do a
Speaker Change: Yeah.
Speaker Change: Hi, This is David <unk> on for Con Ed. Thanks for taking the call I just wanted to touch on what the step up in volume and revenue is for customers as you move up in clinical trials.
when you do a contract MRNA service under GMP,
Each and every program is unique, bespoke, and it completely depends on yield, purity, analytical services, all sort of a litany of things. They're all custom-quoted. So there's not, unfortunately...
Speaker Change: Okay.
Speaker Change: For your plan is to come up.
Speaker Change: Okay, Yes, I mean this comes back a little bit to the prior theme. We're in are you will you have.
If I understand your question correctly, there's not necessarily a standard
expectation there. Those are big line items and they're big projects but they're all very different.
Speaker Change: Oh sizes.
Speaker Change: In the five to six figures, sometimes it can take years.
Speaker Change: In G&P you typically start in the six figures and go into the seven or even eight figures, but it's completely program dependent.
Cool, thank you. Could you also provide some color on the impact of the thermo clean cap partnership that you announced in relation to the M message?
Speaker Change: When you sell a GMP reagents for example, it's simply a function of scale.
Speaker Change: But when you do a.
What was the last part of that, sorry? The thermal partnership.
Speaker Change: When you do a contract mrna service under GMP, each and every program is unique bespoke and it completely depends on you.
the thermal including your M-Cap in there in Vitcher Jinkets.
Yeah, okay. So that's another example, I would say, of our wanting to make sure that we are seeding the market with our technology, whether the discovery market or the GMP market.
Speaker Change: Yield purity analytical services, all sort of the litany of things, they're all they're all custom quoted so theres not.
Speaker Change: Unfortunately.
Speaker Change: If I understand your question correctly theres not necessarily a standard.
So we, that's another public license where Thermo is licensed to incorporate clean cap chemistries in their in-vature transcription kits. This is one of the many ways that that...
Speaker Change: Expectation there.
Speaker Change: Those are those are big line items, and they are big projects, but they're all very different.
Developers will get MRNA in their own hands. In that case, they might have the template themselves and run the IVT process on the bench. That's an RUO only application.
Speaker Change: Thank you could you also provide some color on the impact of the thermo clean cap partnership you announce in relation to the message.
But that's, I think, just another of the broad examples of our trying to make sure that we have broad accessibility for all of our technical solutions in the market.
Speaker Change: What was the last part of that sorry.
Speaker Change: Gotcha.
Speaker Change: The thermo, including year end cap in there.
Speaker Change: In vitro and kits.
Speaker Change: Yes, Okay. So thats. Another example, I would say of our wanting to make sure that we are seeding the market with our technology, whether the discovery market or the G&P market.
That concludes our Q&A session. I will now turn the conference back over to Debbie Hart.
Great. Well, thank you everyone for joining us today. We'll be attending several conferences in the coming months, so I encourage you to look at our events section of our website, and hopefully we can catch up with you in person at one of those events. Feel free to connect with us with any further questions, and we hope you have a great evening. Good night.
Speaker Change: So that's.
Speaker Change: Another public license, where thermo is licensed to incorporate clean cap chemistries in there.
Speaker Change: In vitro transcription kits. This is one of the many ways that debt.
Speaker Change: Developers will get mrna in their own hands in that case, they might have a tin plate themselves and run the IBP process on the bench that's in our UO only application, but thats I think just another of the broad examples of.
Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
Speaker Change: Our trying to make sure that we have broad accessibility for all of our technical solutions in the market.
Speaker Change: Okay.
Speaker Change: Right.
Speaker Change: That concludes our Q&A session I will now turn the conference over to Debbie Hearts.
Debra Hart: Great well. Thank you everyone for joining us today, we will be attending several conferences in the coming months I encourage you to look at our events section of our website and hopefully we can catch up it.
Debra Hart: Catch up with you in person at one of those events feel free to connect with us with any further questions and we hope you have a great evening Goodnight.
Speaker Change: Okay.
Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.
Speaker Change: Please wait the conference will begin shortly.
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