
Repligen 3Q23 Better Than Expected Among Backdrop of Biopharma Challenges; Optimistic Signs for Improvement in 2024
10-31-23 (by: Scott Gleason) Repligen recently reported results for its fiscal third quarter that were better than anticipated. total reported revenue for the third quarter was $141.2 million, marking a 30% decrease compared to the same period in 2022. Base business revenue excluding COVID-19 declined 18%. The street was forecasting revenue of $140.6 million. The company noted on the call that orders were up 16% on a sequential basis throughout the quarter and its book-to-bill rate was 1.07 in the quarter boding well for future performance. Management also noted that gene therapy revenue (now 20% of total), grew 11% year-over-year. The company noted challenges in China with total revenue declining 58%, consistent with commentary from other life science tools providers.
The company highlighted its recent acquisition of Metenova AB, a pioneering innovator in mixing technologies expanding the company’s Fluid Management offerings. Metenova is expected to generate revenue of $24 to $25 million in CY2023 and is expected to grow 20-25%. Additionally, in collaboration with Sartorius, Repligen unveiled an integrated bioreactor system featuring Repligen’s XCell® ATF technology. This innovation simplifies intensified seed train and perfusion processes, enhancing efficiency in bioprocessing.
Non-GAAP operating income was $5.2 million for the third quarter of 2023. Adjusted earnings per share in the quarter were $0.23, well ahead of street forecasts of $0.16. Repligen maintained a solid cash position with cash, cash equivalents, and short-term investments amounting to $630.8 million at the end of September 2023, compared to $623.8 million at the close of 2022. The company highlighted ongoing restructuring activities, initiated in July 2023, aim to streamline and rebalance operations, providing the foundation for future margin expansion. Management lowered its anticipated adjusted operating expense spend downward by $8 million for the year based upon these initiatives.
The company now expects total 2023 revenue of $635 to $645 million reflecting a base business decline of 9%. The company guided to sequential growth in the first half of 2024 compared to the second half of 2023 showing the worst may be behind Repligen.
“Our order book strengthened by mid-quarter, delivering an overall book-to-bill of 1.07 by quarter end. In particular, orders from our Pharma customer base rebounded,” noted Tony J. Hunt, Chief Executive Officer of Repligen. He highlighted that many projects initiated in the second quarter have now transitioned into purchase orders. This growth was complemented by ongoing momentum in the gene therapy sector and a successful quarter for the company’s Analytics business. Repligen views the third quarter as a pivotal transition period and holds a cautious optimism for the future.