Repligen Corp 0 Earnings Call

Good day, ladies and gentlemen, and welcome to the Repligen Corporation acquisition of BioLife Solutions conference call. My name is Elizabeth and I will be your Coordinator. Please note that there will be a question and answer session following the company's formal remarks. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. The company would like to note that there will be limited timeframe for Q&A and as such, management kindly requests that each individual ask one question to try to accommodate all. I would now like to turn the call over to your host for today's call, Jacob Johnson, Vice President of Investor Relations for Repligen. Please go ahead. Thank you, Elizabeth, good morning, everyone.

Thanks for joining us on short notice. Earlier today, we announced a definitive agreement to acquire BioLife Solutions. In addition to the press release this morning, we have published a presentation which we will reference in our remarks. The presentation is available on our investor relations website. Joining us on the call today are Repligen's President and Chief Executive Officer, Olivier Loeillot, and our Chief Financial Officer, Jason Garland. As a reminder, the forward-looking statements that we make during this call, including those regarding our business goals and expectations for the financial performance of the company, are subject to risks and uncertainties that may cause actual events or results to differ.

Additional information concerning risks related to our business is included in our quarterly reports on Form 10-Q, our annual report on Form 10-K, our current reports, including the Form 8-K that we are filing today, other filings that we make with the Securities and Exchange Commission. Today's comments reflect management's current views, which could change as a result of new information, future events, or otherwise. The company does not oblige or commit itself to update forward-looking statements except as required by law. During this call, we are providing non-GAAP financial results, unless otherwise noted. Reconciliations of GAAP to non-GAAP financial measures are included in the press release that we issued this morning, which is posted to Repligen's website and on sec.gov. These adjusted financial measures should not be viewed as an alternative to GAAP measures, but are intended to best reflect the performance of our ongoing operations.

With that, I'll turn the call over to Olivier.

Good morning, everyone. Thank you so much for joining us today as we share some very exciting news about an important milestone in Repligen's journey. We're thrilled to announce that we have signed a definitive agreement to acquire BioLife Solutions for a total consideration of $1.5 billion, using 36% of cash, 64% of Repligen common stock. The transaction is well aligned with our strategy and financially compelling. Before we discuss the acquisition further, I wanted to quickly confirm that our business continued to execute diligently, and we delivered another excellent quarter. We released select preliminary highlights from our second quarter results, headlined by delivering approximately 12% reported and 13% organic revenue growth. We have also continued to operate incredibly well and show strong year-over-year margin expansion. We continue to deliver and execute on the strategy we have shared.

This includes meeting or beating consensus revenue for the past 12 quarters. As we have always been, we will remain transparent about the trends within our business. As evidenced by our Q2 organic growth, we clearly have momentum. We remain excited about the back half of the year. We look forward to discussing our second quarter results and our promising 2026 outlook in more detail on our earning call next Tuesday, July 28th. We are delivering on our strategy and see strong momentum across the business. We'll share more next week. Separate from this transaction, our team recently went through our annual strategic planning process. We remain excited about the growth opportunities that exist across all of our franchises.

We're highly confident in our current portfolio and continue to see a path to our expectation of doubling the size of our company over the medium term while expanding margins. We believe BioLife will complement this momentum. It represents a unique opportunity for us to add a scaled, highly complementary business that is accretive to our financial profile, while strategically enriching a new platform for future growth in one of the most attractive end markets in the bioprocessing ecosystem, cell therapy. Before we discuss the rationale and benefits of this exciting acquisition, as Jacob mentioned, we posted an investor presentation that I will reference during our prepared remarks, starting on slide four. This morning, we announced we have signed an agreement to acquire BioLife Solutions for $31 per share, or a total enterprise value of approximately $1.5 billion.

The consideration is comprised of 64% in Repligen common stock and 36% in cash. The boards of both companies have unanimously approved the acquisition. We expect the deal to close in the fourth quarter, subject to regulatory requirements and a BioLife shareholder vote. For those less familiar with the company, BioLife is headquartered in Bothell, Washington, with sites across the U.S. and Canada. As we performed due diligence, it became apparent the Repligen and BioLife teams have a shared culture of innovation and customer centricity. We are very excited to have BioLife's talented associates join our team upon closing. BioLife generated $96 million of revenue in 2025, which represented 29% pro forma growth. This growth is driven by BioLife's differentiated offerings, most notably their cryopreservation media, CryoStor, which represents 80%-85% of the business.

In addition, BioLife offers other consumables, including HypoThermosol to preserve cells at refrigerated temperatures, HPL growth factors, CellSeal bags, and vials. Further, BioLife's capital equipment revenue include their Signata feeding machine and ThawSTAR automated thawing system. We see this acquisition as a one-step adjacency. Our combination with BioLife will add a complementary set of products and customer solutions to our offering in this fast-growing new modality without drifting from our bioprocessing core. Jason will share more details, but the transaction is very attractive financially. We expect it will improve our revenue growth trajectory and margin profile. With that, we believe will be a straightforward integration, including the realization of at least $20 million in year 1 synergies. We expect to deliver immediate adjusted EPS accretion in year 1.

Putting this together, we're buying a unique and differentiated asset that helps accelerate our strategic growth with a compelling financial profile. This checks all the boxes of the M&A criteria we have previously outlined. Moving to slide five, we see four reasons why we expect BioLife to strengthen our business. First, BioLife fast-track our cell therapy leadership by adding a differentiated portfolio of products serving this rapidly growing end market. Our combination expands Repligen leadership and increases our exposure to one of the fastest-growing biologic modalities. Commercial cell therapies are projected to grow at a 23% CAGR through the end of the decade, and these therapies represent a meaningful portion of our customer's pipeline. BioLife will enhance our offering and provide us with additional opportunities for both organic and inorganic growth. Second, it adds a deeply embedded and highly trusted platform to our portfolio.

BioLife has been a partner to cell therapy developers for over a decade and is seen as a gold standard in cryopreservation. Their differentiated biopreservation media, led by CryoStor, supports 18 commercially approved therapies and the majority of U.S. commercially sponsored cell-based therapy trials. BioLife generates 46% of its revenue from commercial therapies and 98% from high-margin recurring consumable, which creates a sticky recurring revenue base. As you would expect, all of this will enhance Repligen's financial profile. Third, the future combination of our companies will bring important benefits to customers by expanding our robust offering of cell therapy workflow solutions. BioLife's critical cryopreservation solutions are highly complementary to Repligen's existing offering for the cell therapy market. This will expand our shared customer touchpoints with Repligen benefiting from BioLife's trusted customer relationship, while BioLife will benefit from Repligen's broad commercial reach, including our growing presence in Asia Pacific.

The combination will also accelerate Repligen's plan to launch an integrated solutions offering for the cell therapy market to better serve our customer base. Finally, we expect to see long-term value creation from this deal. As we have done historically, we plan to invest in BioLife to drive innovation and to enhance the customer experience. Given BioLife's margin profile and attractive end markets, this should accelerate our profitable growth. In addition, by adding a new growth vertical, we see the potential for additional creative M&A opportunities. I turn the call over to Jason to discuss how this acquisition fits with our M&A criteria.

Thanks, Olivier. I want to echo Olivier's excitement about this transaction. This is a unique opportunity for us to add a differentiated and scaled asset that serves a growing end market and is accretive to our financial profile across the board. As you can see on slide six, this acquisition fully aligns with the deal criteria we have previously outlined. First, BioLife brings a highly differentiated offering through its leading cell processing solutions. It is a trusted platform with significant regulatory recognition. This includes their leading biopreservation media platform backed by a proprietary formulation. In addition, BioLife offers a portfolio of cell processing tools like HPL and CellSeal containment solutions, which are used across the cell therapy workflow. Second, BioLife advances our strategy by strengthening our position in the cell therapy market, providing additional touchpoints and levers to add value for customers.

Third, from a financial perspective, this deal checks all the boxes. It is accretive to growth, margins, and year one adjusted earnings per share. In addition, we expect a high single-digit ROIC over the medium term. This is backed by a sizable synergy opportunity.

Thanks, Jason. Moving to slide seven, we want to share our view of how important the cell therapy modality is to the bioprocessing industry, and why we see this as such a rapidly growing end market. We recognize that development of the new modality market has not always been linear, but there are clear reasons for optimism as it relates to the cell therapy end market. If you look at the pipeline, there are more than 1,100 global cell therapies in clinical trials currently. This makes cell therapy the second-largest biologic modality behind traditional proteins and antibodies. Following acquisition close, our pro forma new modalities exposure will be approximately 25%, of which half will be cell therapy. That said, new modalities currently represent 50% of our customer pipelines. Cell therapies represent 22% of the overall biopharma customer pipelines.

We see strong growth from this end market in coming years, given commercial demand is forecasted to grow at a 23% CAGR through the end of this decade, driven by strong efficacy data, including the potential for additional approvals. In fact, there are already three cell therapies that are generating over $1 billion in annual revenue. As I previously mentioned, there is a robust development pipeline creating an additional opportunity as these customers move through the clinical trial process. Therapies are moving to earlier line of treatment, opening up larger patient populations. Some of these cell therapies are seeing approvals across a growing number of indication and geographies, further increasing volumes. This also includes a potential for larger volumes from allogeneic therapies and indication for larger patient populations. Finally, there are regulatory changes that are reducing barriers and increasing access for patients.

This is an incredibly exciting market, and we are well-positioned to play a larger role in the development of this innovative modality. As you follow the presentation, we'd like to now discuss how this combination will benefit customers with an expanded and broader offering for the cell therapy workflow. On page eight, we highlight how BioLife complements our existing solutions for the cell therapy market. Today, we at Repligen offer a solution for this market across our portfolio, including ATF and fluid management in filtration, resins and growth factors in proteins, and our upstream analytics capabilities. BioLife will complement these existing solutions. Further, we will continue to innovate for customers by leveraging our common scientific and commercial expertise in the cell therapy workflow. In addition, we plan to keep investing in BioLife product portfolio to best serve our customers.

While not a meaningful driver of our assumed accretion, we have identified revenue synergies from the deal. Most notably, we see cross-selling opportunities given our overlapping customer base. Repligen will benefit from BioLife's trusted customer relationship, while BioLife will benefit from our exceptional commercial team's broad reach, including a lot of opportunities in Asia Pacific. We also see this combination accelerating our plan to launch an integrated solution offering for cell therapy. As we will discuss more next week, we recently launched this initiative for the antibody drug conjugate end market. We look forward to building this capability in cell therapy as well. Finally, this acquisition gives us a platform to further expand our presence in this market. We believe this is a multi-billion dollar addressable market. We have identified multiple other areas of interest.

This includes, but is not limited to cytokines, where BioLife has announced a multi-year supply agreement with a partner. We believe the strategic fit of this transaction is undeniable. Let me hand the call over to Jason to discuss the financials of the deal. I'll be back shortly to wrap the discussion.

Thanks, Olivier. Slide nine helps frame our thinking around the overall deal terms. We believe we have structured the transaction to mutually benefit both companies. The deal values BioLife at $31 per share. The consideration will consist of $11.25 per share cash component and 0.1442 Repligen common shares per one BioLife share. This translates to $564 million of cash that would be funded with cash on hand. The equity component will result in the issuance of $7.2 million Repligen shares. This represents a $1.5 billion enterprise value, or 11 times 2027 consensus revenue. A compelling enterprise value to EBITDA multiple when fully synergized. We believe this reflects BioLife's unique value proposition, while also being accretive to our shareholders.

For Repligen, the structure allows us to preserve balance sheet flexibility for further investment, as we will have more than $300 million of pro forma cash following the deal closing, representing approximately one times net leverage. As Olivier has underscored, we believe that it is a financially compelling transaction as it's accretive to our revenue growth Our margins, and we expect to achieve one-year adjusted earnings per share accretion. On the top line, our deal model assumes BioLife is accretive to our medium-term growth algorithm. BioLife grew 25% in the first quarter, and as included in the press release this morning, BioLife has also pre-released strong second quarter revenue growth of 21%. Longer term, the cell therapy market is expected to grow greater than 20% through the end of the decade.

As our deal model only assumes limited revenue synergies, we see this as potential upside when we begin cross-selling and expanding our opportunity in Asia-Pacific. Moving to margins, BioLife will be immediately accretive to our adjusted gross margin at closing. BioLife adjusted EBITDA margin, as reported for 2025, was 26%, which excludes the burden of stock-based compensation. As recalculated to align with Repligen's presentation, adjusted EBITDA margin was 4%. When we account for year one synergies, we would expect a 2025 pro forma view of approximately 25% adjusted EBITDA margin for BioLife, and we see this growing over time as we further realize synergies and volume leverage. As it relates to synergies, we expect at least $20 million in year one, which increases to more than $30 million in year two. This is composed of public company and G&A cost savings, along with supply chain and manufacturing efficiencies.

The public company and G&A savings are straightforward. I want to spend a minute on the supply chain and manufacturing efficiencies. As BioLife has mentioned publicly, they have faced some margin headwinds associated with their manufacturing process. Given our operations experience, we have the ability to support the improvement of their yield. Beyond this, we see the opportunity to leverage our internal capabilities and collaborate with suppliers to generate further gross margin improvement once the deal closes. This represents a double-digit million annual synergy, which we expect to fully realize over three years. Putting this all together, we see at least $0.05 of adjusted earnings per share accretion in year one and more than $0.25 in year two.

Though this deal is larger than we have executed in the past, we have a clear plan to deliver the straightforward synergies we have outlined and a plan to fully integrate over the next 12 to 24 months following the deal close. We are confident we have the team and a playbook to manage a successful integration, aided by the fact that as a public company, BioLife has built strong processes and procedures. I'll turn the call back to Olivier for closing comments.

Thanks, Jason. In closing on slide 11, we want to leave you with the following thoughts. First, the acquisition of BioLife fast-tracks our leadership position in cell therapy. This is a rapidly growing market and a meaningful portion of our customers' pipelines. Second, it adds a deeply embedded, trusted platform to our portfolio. BioLife has a highly differentiated portfolio of cell processing tools for the cell therapy market. This is a unique opportunity, a scaled asset that meets all of our deal criteria. Third, BioLife is a market leader, which provides an opportunity for us to combine our commercial relationships and R&D engine for future growth. In addition, it adds a new growth vector, which we can further add to over time. Finally, the transaction is financially compelling. It's accretive to our growth, our margins, and year one adjusted EPS with very straightforward synergies.

We're excited to announce the addition of this growth vertical to our strong foundation. We look forward to discussing our Q2 results next week. Operator, please open the line for questions.

Thank you. We will now begin the question and answer session. Please limit yourself to one question. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, please press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Mac Etok with Stephens Inc. Your line is open. Please go ahead. Hey, good morning, and congratulations on the transaction.

Just one from me. Just given BioLife's broad penetration across cell therapy programs and commercial therapies, how meaningful of an opportunity is it to use those customer relationships to expand the adoption of Repligen's existing bioprocessing portfolio?

Yeah. Good morning, Mac. That's a really excellent question. I think we said that a couple of times in the script today, is we're really going to benefit from each other contacts in the industry because where obviously Repligen has a much bigger sales organization than BioLife does. These guys have been really working with all of these cell therapy company for more than a decade now. With the track record on the regulatory side they have, they've built really a lot of trust with those big cell therapy customers, including as well the smaller ones. I think we're really going to benefit from each other quite a bit. We are really going to build a portfolio of cell therapy bioprocessing tools that's going to be really broad, Mac. We mentioned we are about to put in place an integrated solution offering for cell therapy.

When you're combining what they have and what we have, we're probably going to have one of the broadest, if not the broadest overall solution for the cell therapy market. We are going to open each other doors at some specific accounts. We are going to also combine our portfolio together. That will give us a real great story for those very important customers of both of us here.

Your next question- Operator, your next question.

Your next question comes from the line of Anna Snovkowitz with KeyBanc Capital Markets. Your line is open. Please go ahead.

Hi, this is Anna Snovkowitz on for Paul Knight. Congrats on the acquisition. Just a follow-up of the last question. On the cross-selling side, which Repligen products in particular do you think are most likely to be bundled with BioLife offerings? Would it be the specialty resins or ATF? Do you think you have now an end-to-end portfolio on the cell therapy side? If not, what gaps remain there? Thanks. Good morning, Anna. Yeah, no, I think it's really pretty much across the board.

If I would have to pick up among all the product we have in our portfolio that I mentioned earlier, I would probably pick up fluid management first. When you think about it, there is a bunch of single-use components that are being used for the manufacturing of cell therapies. In fact, I think Jason mentioned it earlier, one of the challenges BioLife had recently was switching from some of their bottled customer to bag customers where they had some specific quality issues. We're also going to be able to leverage our knowledge in the field to help on that side very heavily. For customer specifically, BioLife has done an amazing job to develop also very interesting solution like CellSeal and then a few other products.

We're going to have several single-use product opportunities to push across the entire board with those customers. It's not going to be limited to that. We're going to tell you next week a little bit more about this integrated solution business that we're putting in place. We started doing it with antibody drug conjugate a few months ago. Now that we've got both the BioLife and the Repligen offering together, we are going to speed up accelerating that integrated solution offering for customer on the cell therapy side. It's going to be about helping them, supporting them for their entire workflow. In term of the gaps we have, yeah, we still have some gaps.

We also mentioned we're going to stay tuned on potential next acquisition, which is why we love the deal we've made because we still have a lot of dry powder on the bank account that we want to potentially complement with other part of cell therapy portfolio. Whether some more cytokine, whether some more single-use solution, whether some more technologies that are specific to cell therapies, we're going to figure that out in the next few months and years for sure.

I just wanted to add too, for clarity, we mentioned that even with all these cross-selling opportunities, right now we've been conservative in our model and we've got limited sales synergy baked in. We do see this as a strong area of potential upside as we continue forward. We just wanted to give time for the teams to really build out that integration.

Your next question comes from the line of Daniel Markowitz with Evercore ISI. Your line is open. Please go ahead.

Hey guys. Thank you for taking my question and congrats on the deal. I'll try the cross-selling synergies question as well. I look at BioLife, they have really impressive participation on both the commercial therapies and also participation on the clinical trial side. I guess how would you characterize where your participation rate is today? To use that to help frame where you think these cross-selling synergies could possibly go.

Yeah, no. BioLife has been almost 100% focused- Close to where the cost synergies are?

Daniel, we lost the second half of your question. If you could repeat it, please.

Sorry. I was asking in terms of quantifying it, could this come anywhere near the size of the cost synergies or just framing what the upside opportunity could look like? Thank you. Let me start maybe with the first part and I'll let Jason tackle the second part.

It's a fact that BioLife has been almost 100% focused on cell therapy. We have not. As you know, we're dealing with every single market segment for the biopharma industry and so on. It's fair to assume like particularly at the earlier phase and so on, for where the technology, the process are being developed, I would imagine the BioLife team had multiple touchpoint over the last decade and so on, and we want to benefit from that very grandly. One thing I'd like to mention is BioLife is very well known for their biopreservation media. They have a lot of other very interesting products, and I just mentioned a couple of them. The HPL1, the human platelet lysate.

It's a culture supplement that is derived from human blood, that is kind of considered to be a growth factor, which is slowly but surely replacing fetal bovine serum. We're very excited about that because we know, and I've been in that business for quite a while in my past life. We know like particularly on the cell therapy side, everybody's trying to switch to this type of product. BioLife had multiple touchpoint over the last few years, early phases with those customers. That's going to be a fantastic synergy for us to come and also talk about our technology like ATF, our fluid management product line, and obviously all of our PAT technologies. As you know, we acquired 908 last year, and a big chunk of the product from 908 are probably focused on cell therapy. The synergies for us are actually obvious.

As Jason just mentioned, we wanted to and also to show you how straightforward the synergies are. We assume like limited cell synergy for the next few years, but I personally assume we have a huge amount of upside on that side. We wanted to just be a little bit careful on the potential synergies, at least in the short term here.

We obviously did an extensive due diligence, I think we need that time once the deal closes to really build out our broader knowledge and build out the innovation plan.

Your next question comes from the line of Matt Hewitt with Craig-Hallum. Your line is open. Please go ahead.

Good morning. Like others, congratulations on the acquisition. You noted, I think people understand that there's a significant opportunity to grow BioLife's products outside of the U.S. Obviously, just getting this started here, as you look at it, what is the low-hanging fruit to really drive the growth OUS? Thanks. Yeah, Matt, good morning.

I mentioned Asia a couple of times. Asia has always been close to my heart. I mentioned it several times. If there is really one geography where we can help BioLife accelerating their growth, it's definitely going to be in Asia. For multiple reasons. First of all, we've had a lot of focus on it now for the last one and a half, two years, with incredible growth, as you know it, including China since the beginning of this year. We've got a lot of team on the ground. We've got a lot of customer contact on the ground. In Asia specifically, BioLife always went through distribution. Obviously we love distributors, we're going to make sure the relationship stays very strong with those distributors who have done an amazing job.

We think we can really help each other accelerating the growth by sitting directly with some of these big accounts, particularly in China. I don't know if you all know that, out of these 1,100 cell therapy products under development, 40%, four zero, % of these drugs are being developed in China right now. There is a huge opportunity in China specifically across all of Asia as well, that's really where we are going to focus our efforts to start with very much. Again, on the distribution partner side, making sure we support those distributors as well as BioLife did, continue to grow together across the entire portfolio here.

That's great. Thank you. Your next question comes from the line of Puneet Souda with Leerink Partners.

Your line is open. Please go ahead.

Yeah. Hi, Olivier and team. Thanks for taking my questions. First one on the cell therapy end market growth. Could you elaborate your line of sight to cell therapy commercial approvals this year and next? What upside could we see to that 23% market growth expectation? I'm asking that because the commercial volumes of cell therapies are still limited, maybe mid-teen thousands or less than 20,000 annually. The cost is a significant burden on making these therapies. I just want to understand how you're thinking about scaling for something that is very costly today, but still has really good efficacy. The data has been good so far, how are you thinking about scaling? My second question is, congrats on the 13% organic growth here. That was ahead of us in the street on the quarter.

Just wondering, could you talk a little bit about any push-outs or any delays that you're seeing in the market? There was quite a bit of discussion yesterday by a larger peer on their resin portfolio. Just wondering if you're seeing anything that speaks to any push-outs in your portfolio. Thank you. Hey, Puneet. Yeah.

Let me start with the second question first. As you know, we are going to report out our Q2 results on Tuesday next week, so we're going to provide you with a massive amount of detail as we always do. I just like to start by saying we've always been very transparent, and I think hopefully people appreciate that. Last quarter, we did say we did talk about the headwind we were seeing. We are delighted to see that we delivered a fantastic quarter 2. In fact, if you see where we were in quarter 1, where we landed in quarter 2, we feel even better than we were feeling probably a quarter ago, and we think we are set for what's going to be a really good year for us across the board. Again, I'll tell you much more next week.

I just want to mention, because we didn't give the exact numbers, we had a terrific quarter on the margin side as well, which I think is a real testimony to what Jason and the entire team and myself have been doing in the last couple of years, getting fit for growth and making sure we were combining both top-line growth and margin growth at the same time. We'll give you many more details next week. Yeah. In terms of the first question, yeah, you're right. All what you said is actually right. We like cell therapy for a lot of different reasons. Let me give you first a couple of numbers that I think we didn't share with you yet. Our cell therapy business grew more than 70% last year.

Up to date, this year to date, sorry, we're growing more than 20% on the cell therapy side. That's just a first point for you to understand this business has been growing extremely nicely for us. What I think is probably more important is there have been 8 approvals last year in 2025 around the world. There have been 8 approvals this year so far in 6 months around the world as well. The good news is 2 of them are in the U.S. I know we're all very U.S.-centric and so on for a lot of good reasons. Outside of the U.S., this market is booming extremely rapidly, and we were so delighted to see a couple of approvals as well so far this year for cell therapy. That's one other checkpoint. Then, I can tell you, we did a very deep due diligence.

We've been working on that deal for several months. When I say several months, it's more than half a year. We've gone through a lot of exercise to really figuring out the data from every little angle and so on. We're actually confident that these commercial drugs are going to be growing more than 20% over the next 5 years. The BioLife team has done an amazing job to be designing in 7 of the top 8 drugs. Anything you read about those drugs is that the CAGR is going to be around 23% for the next 5 years. Then you've got the funnel of opportunity, which is the second strongest funnel in the industry right after monoclonal antibody. Yeah. I could keep on going, but the funnel of our customers, 23% of their funnel is in cell therapy.

We all came to the conclusion this is a market segment we absolutely need to have a play with, a stronger play. I would just end up by telling you with this integrated solution, we are going to answer the last part of your first question, which is, yes, there is challenges on costs. The more you're going to be able to come with those customer with a really broad solution, workflow solution, the more you're going to be able to help them fixing some of these pricing challenges they have. That's one of our mission. That's one of the things we're going to be very focused on.

Your next question comes from the line of Matt Stanton with Jefferies. Your line is open. Please go ahead.

Hey, thanks. Maybe just wanted to go to one of the comments in the deck. You noted pro forma new modalities will be about 25%, that's a tailwind for above-market growth potential. Just want to clarify, is that above market to cell and gene therapy market or the overall bioprocessing market? Maybe it's both. Olivier, would love to just get some of your thoughts on the clinical side. I think there's no doubt around commercial cell therapies. But maybe just some views around the clinical side. You have a pretty good view here given you're a strong player on cell therapy already. But what are you baking in in terms of growth on the clinical side of BioLife's portfolio as that matures in the coming years here? Thanks, guys. Yeah, absolutely. To answer to the first question, yes, it's faster than the overall growth of the market.

Yeah, absolutely. This we are absolutely, totally convinced. We've seen it, we expect it to keep on going for the next several years on that side for sure. Sorry, can you repeat the second question? Yeah. Clinical view. Oh, yeah.

Clinical view. Yeah, just I think people start to know me a little bit.

I'm trying to be cautious from all angle, and then when I say something, I want to make sure we're going to be able to deliver. As far as the clinical funnel is concerned, we've taken a bit of a haircut. I'll be very honest with you. We had very open discussion with the BioLife team and so on, and what they included in term of potential FDA approval, particularly for the next three to five years. We've taken a pretty severe haircut to that in our model here, which doesn't mean we don't think there will be FDA approval. We're absolutely convinced there will be several FDA approval. Again, there has been two happening in the first half, and I'm pretty convinced there will be a few more coming in the rest of the year.

We've been pretty careful on our assumption in term of growth coming out of the clinical trial stuff. The great news again, and big credit to Rod Troy and the entire team there is they are heavily designing. I think a couple of quarters ago, Rod mentioned they are in 80% of their phase III drugs. They are in more than 70% of the phase I, II, phase II drugs. Whatever is going to move forward is going to be extremely accretive to our future growth, and we've been very careful in our modeling for the next two to three years, particularly with those clinical trial moving forward here.

Thanks. Congrats on the deal.

Thanks. Thanks. Your next question comes from Brendan Smith with TD Cowen.

Your line is open. Please go ahead.

Great. Thanks for taking the questions, guys, and congrats on the deal, too. Maybe just following up, Olivier, on your comments about Asia-Pacific. It sounds like you see that as a real opportunity to grow BioLife business there. I guess I'm just wondering if you expect it to also help grow Repligen exposure in the region, and then I guess conversely, if there are other levers maybe in the U.S. and EU that Repligen can pull. I guess kind of zooming out, I'm just wondering if you see opportunities to drive actual share higher for the BioLife business as kind of given that they're already north of 70%, or if probably the lowest hanging fruit is really kind of maximizing geographic exposure opportunity.

Asia, absolutely, totally convinced. Again, we are extremely connected. I brought two fantastic leaders, one leader for global Asia, one leader for China, who knows those markets from A to Z, and by the China one, which is why we started to have an incredible turnaround of business since the beginning of this year. In China, we know all of the key biotech companies, and I know nobody knows about the big guys, but company is a top 5, 10 companies who are growing so fast because they are all signing licensing deal with big pharma in the U.S. We've got the introduction there, and we are really going to make sure we accelerate the pickup of the business of biopreservation media.

What I really want to mention again is that this is not the entire portfolio of BioLife, and again, I think the team there has done an amazing job to build one of the most comprehensive portfolio. I already mentioned about HPL. They've got this great product called CellSeal, which is sterile containment for closed filling steps and so on, where I think there is a real need. Having spent time doing the due diligence in Basel and in Indianapolis, we've seen those product lines that are absolutely incredibly innovative and have high potential. We really, truly think we're going to be able to push that in a much stronger manner than obviously the BioLife team could do with the limited amount of commercial resources they have.

Talking about synergies on the commercial side, we're really going to be able now to push for the entire portfolio, including HPL, including all of our own products as well, as far as we present it as an integrated solution, which is our plan here.

Got it. Thanks, guys. Congrats again.

Your next question comes from Matt LaRue with William Blair. Your line is open. Please go ahead.

Hi. Good morning, everyone. This being an acquisition of a larger, more scaled, different business is very different than many of the things that Repligen has done in the past. Of course, Artes and Spectrum, I think were mid-30s or $40 million, so some scale. This is a different acquisition, and I think requires different operational muscles probably than many of the deals you've done in the past, which are more technology-focused or very early-stage, probably limited commercial organizations. Could you speak to team readiness and perhaps any experience you have with similar deals? Obviously, Olivier, your background with the life sciences, Cytiva.

To that point, maybe Jason, if you could discuss a cadence of realization of some of the synergies in year one and whether there was an attempt to be conservative in sort of the posturing to the street on the cost side in the same way you are, I say approach you're taking on the sales side. Thank you. Thanks, Matt. Good to hear from you.

You're right that it's a larger deal than what we've ever done before. If you compare some of the deals that were done in the past versus the size of the company at that time, in fact, it's probably a little bit smaller than some of the deals that were done initially when Repligen was a much smaller company. Anyway, you're absolutely right. It's a very big deal. It's a very unique deal as well, and that's really what I want to emphasize here again. It's a very unique deal because it's a very scaled asset, and it's accretive to every single financial. I tell you, I've been in that industry for 30 years.

This is the first time in my entire career that I see a deal that is accretive across the board from a top-line growth point of view. We're combining the two real growth engine in the industry because we thought we were very good, but these guys are very, very good in term of growth. That's the first piece. Second piece, very accretive from a gross margin point of view. These guys are about 10 points higher than we are on the gross margin side. Finally, obviously, this is going down to EBITDA margin and EPS. I can tell you on the EPS side, we're delighted to make a deal that is accretive already year one. I don't think I've seen many of these deal in my past life. Again, that's very interesting from a financial point of view.

What I think is probably also very important, Jason will give you more details about that, it's a very straightforward deal from two angle. It's very straightforward in term of synergies, it's also very straightforward in term of integration. Again, big credit to Rod and the team here, as they've put in place very good ways of running the business, very well-established processes that will make it really a simple integration for us. Before I hand over to Jason on the synergies here, more specifically, you heard us talking about getting fit for growth, you heard us about putting in place the transformation office. I think you heard us saying one of these projects on the transformation office is to improve our integration capabilities. This we've been working on for the last three to six months.

I can guarantee you, we are very well-ready to integrate those guys. Jason, do you want to add on synergies?

Yeah. The only other thing I'd add on the readiness for integration and fit for growth journey is we have an incredibly experienced operating team. Our COO and all of his team, which again, I think will bring a great benefit and drive some of those cost of goods sold synergies that we outlined. In term of cadence, think about with OpEx being about 75%, a lot of that's going to be driven by public company cost savings and G&A. Again, as you can imagine, there's going to be redundancy in structure with the consolidation into a single public company. We've already worked and aligned well with the BioLife leadership team. The good news is a lot of that will be really day one.

From a cadence, we'll continue to execute that through to 2027 and grow those synergies into the following years. In terms of conservative on cost, yeah, absolutely, we've shared our view that we've got clear line of sight, certainly, we think there's going to be other opportunities that as we dig in and spend more time with the team after closing, that we'll be able to identify and find other efficiencies. I think, Brendan, probably some of those happen more year two-ish time as we have more time to really dig in. We think we've built out a straightforward synergy plan, both timing-wise and amount, that allows for upside as we continue to learn more.

Your next question comes from Michael Pollack with Wolfe Research. Your line is open. Please go ahead.

Hi, good morning. Thank you for taking the question. I have two topics, one on the topic of commercial and clinical mix for BioLife. The deck says 46% of revenue is commercial today. Where might that be in three to five years as you roll out more approvals and the pipeline matures? That's question one, the commercial-clinical mix. Question two is, as I look at their specific products, obviously 80%-85% of revenue is CryoStor, five other products, collectively 15%-20%. What's the total opportunity for those other five? Are they smaller as a portion of BioLife because they're newer to BioLife, and so they're just in earlier stages of the ramp, or are they smaller because the competitive landscape is different or they just address the cell therapy workflow in a different way.

I'm trying to understand in three to five years' time, is CryoStor half of this revenue and these other products are the other half because they're going to grow a lot faster? No, that might not be the case. Thank you. Hey, Michael. Thanks for the question.

As far as commercial versus non-commercial, indeed, you're right. They mentioned 46%. Rod also mentioned he's thinking probably by the end of this year, it's going to be closer to 55% there. I don't know. We're going to learn much more about the business, obviously, between signing and closing and even more after closing. What I've been exposed to in the bioprocess arena I've been now for the last 20 years plus or so, is typically you're going to move towards being 70/30, maybe 75/25 at some point. Whether it's in three years, four years, five years from now, difficult to say, but I wouldn't be surprised that's what's going to happen for us in the next 3-5 years.

As far as the product portfolio, of course, biopreservation media is the biggest chunk of business right now. We are very excited about the rest as well. I already mentioned earlier about the HPL product, about CellSeal. I didn't talk so much about Signata and ThawSTAR, which are two pieces of hardware that they have. Signata is a benchtop closed fluid management system to automate the liquid handling for cell therapy. ThawSTAR is helping with the thawing step. I don't think we've really started scratching the surface, to be honest, with some of these products. Again, among a lot of reasons why we're excited, we really think with the integrated solution team we're going to put in place and combine with our own commercial organization, we're going to be able to duplicate efforts on all of these new products.

I wouldn't be surprised we see higher growth for those products than we do for the bulk. It's a good problem to have where we know biopreservation media is going to be growing very nicely, that the growth on that side is going to be accretive to our own Repligen growth. I would really think that the rest of the portfolio could grow even faster with us putting much more focus than BioLife Solutions had the chance to do so far.

Your next question comes from the line of Dan Leonard with RBC. Your line is open. Please go ahead.

Thank you very much. Just a clarification on those 2030 targets, Olivier. The goal to double revenue by 2030, this BioLife deal is included in that target and not incremental, correct? That's the clarification. Separately, could you just comment on the durability of BioLife's growth rate beyond 2030? You gave the growth of the market through 2030, but longer dated, and some of that clinical pipeline is in vivo cell therapies, and presumably, that would require different workflows. I'd just love a few thoughts on the longer-term outlook. Thank you. Yeah, Dan, great question.

As far as the 2030 doubling target is concerned, this is excluding that deal. That deal will be incremental to us doubling the business. You might remember we talked about the doubling last year for the first time, and we said with modest M&A. Obviously, we don't consider this one to be a modest M&A. This would definitely be incremental towards doubling the business mostly organically with maybe a couple of bolt-on. That's the first answer. In terms of the growth of BioLife, again, I mentioned I'm careful. You talked about in vivo, and that's a great question. Obviously, there are a lot of talks happening right now about in vivo. I tell you I'm very, very confident about that. You might have heard me repeating several times, we see all of these new modality growing in two phases.

You've got really the first phase where a new modality come and everybody's bullish about it, get the same consultant telling them, "Oh, you need to switch 100% to that new modality because nothing else will stay alive for the next decade." This is why a new modality starts growing very nicely. After three years come the hangover period where people realize, "Oh my God, it's extremely expensive. It's difficult to run clinical trial. It doesn't work as well as we thought it would," and so on. You go through that hangover period that can sometimes last like three years, five years, 10 years, depending on the case and so on. You finally enter into the second phase.

We are acquiring BioLife at the time I personally think that we have entered into the second phase of cell therapy for probably about a couple of years. As far as in vivo is concerned, we are just at the early beginning of the first phase. I think there are only 40 preclinical drugs developed mostly in China right now, by the way, and I think for four drugs in phase I. That's it. It's very fair to assume it's at least a 10 if not 15 years journey before you're going to start to see in vivo becoming really sizable. I can guarantee you by then you will still have monoclonal antibody, you will still have antibody drug conjugates, you will still have cell and gene therapy, and so on. We were actually very confident about that.

Got it. Thanks for that perspective. Appreciate it. We have reached the end of our question and answer session.

I will now turn the call back to Olivier Loeillot for closing remarks.

Hey, thank you. Well, thanks for joining us at very short notice. You hear us, we are extremely excited. We think it's a fantastic opportunity for the company and for both companies, I should say. We are really looking forward to welcoming the BioLife team as fast as possible. We're also very excited about talking to you again next week for our Q2 earning call. Have a great day. Thanks.

This concludes today's call. Thank you for attending.