Cryoport (CYRX) 7 Nov 242024 Q3 Earnings call transcript

Good afternoon, and welcome to the Cryoport Second Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this call is being recorded. I will now turn the call over to your host, Todd Fromer from KCSA Strategic Communications. Please go ahead.

Thank you, operator.

Just a quick correction. Quarter for Third Cryoport's is Conference XXXX. Call This

events team. would remind certain and to on or management everyone we operating statements. begin statements. this anticipate beliefs to forward-looking I today, performance, our future address currently contains information our Before occurring that in we are management's like conference not statements statements available are that assumptions developments on the and or that All forward-looking expect forward-looking These call based

Our that reasonable believes management and as are team statements forward-looking these when made.

whether undue by should not of information new on you law. We statements any required obligation However, events as forward-looking future when update or statements, because date statements place do otherwise, a as reliance only result publicly except any any as undertake revise to speak of such or not made. such or the forward-looking

forward-looking In limited Shelton, and Commission These report which to in turn Factors with Securities results, on is and uncertainties Executive our pleasure my is subject described uncertainties actual the call risks of Commission. It to Chief now certain yours. cause file but the Officer the risks from addition, historical Form could floor Securities time XA, Item the those to with the and XX-K from we elsewhere materially in annual Exchange developments described those Cryoport. reports Jerrell Mr. and statements filed time other Jerry, and over Exchange that not in or are projections. are differ include, present expectations our and and events to, and to Risk to our experience

Thank earnings third today. Thank you, call gentlemen. you joining for our Good quarter Todd. ladies afternoon, and

Relations, Chief Dr. Officer, Heinzen. our Joining Thomas Robert Sawicki; Financial Investor Corporate of Stefanovich; Chief and us Development Scientific and is Officer, our Vice President Mark our

of a we've website. can quarter of document general found outlook. a provides Cryoport, to a performance operational It Inc. the As financial uploaded This website. and main our be XXXX and the our review third business document our in-review on page reminder,

it, If I you brief it. visit we'll you I business, website our with read and provide now haven't to questions. our on your you encourage then to and update would had take a download a chance will

Services improvement to with earlier anticipating million, Sciences substantial we we have by continued end XX% for guidance margin X% the revenue Services realignment $XXX our Science substantial Life our over cost a Life we Product that to third been reduction on you Science third last performance progress, year. to and Life of XX% our address the the $XXX maintaining revenue with full quarter are in and Our to This Reflecting our was business. million Services showed our for through BioStorage made ongoing we current Life growth acknowledging business cost with service We've year market business. To growth our gross on quarter, year. coupled shared softness the increasing executing are and year. Sciences increase in in BioServices these revenue of compared dynamics, while on the the adjustments course actively strategies this complete in

Our EBITDA positive and actions our are results improvements by flow through as the showing quarter. in gross margin, cash positive shown adjusted

return to measures XXXX. will As closer these our moving during us EBITDA positive planned, the profitability, that lead believe us to of and these strategies -- a of are we adjusted objectives sustainable to

solution commitment -- we with launched continue and chain addition we we platform as will commercialization focus on campus. our our end-to-end current with to market underway to of October, facility those plans integrating temperature-controlled IntegriCell of committed plans provide therapies. the the global this This our cryopreservation new with profitability, Cryoport's to state-of-the-art conditions. In Houston profitability cryopreservation achieve our new service development growth a seamlessly we standardized with In cell-based balance supply leukapheresis service advance on our to material, have support cryopreservation

addresses high-quality, more in of cryopreserved supply aspect commercialization yet consistent starting Our development through IntegriCell another optimizing offering critical the chain material. therapies the cell-based for and

have business, opening which our cord other repository. there its been Antonio, CRYOGENE's biorepository a recent exciting client, developments in and its addition, the of Texas In major across successful first onboarding operations of San blood includes major

In the responded as and patients emergency on client, the BioStorage spirit Beyond was all damage focus during These of health to to CRYOGENE of international without impact team -- are third value strong that the a our of of supplies emergency of quarter manufacturing providing complaint essential produces to freezer a national CRYOPDP service a million need, Cryoport freezers for awarded the this hurricane great quickly, patient in during Mobilizing total the workers cord Southeastern the Hurricane a and provide the care situation. I'm we've growth -- ground $X reagent the team's severe BioLogistics ensuring that recovery new caused wake bloods, the in with high-value help essential provided contracts acquiring with request Cryoport. At patients X Systems' these impacting It my to advanced by the company's geographies year. assisting of opinion, on for with utilize materials Houston over of for addition Hurricane maintained patients. region. selfless customers CRYOPDP, our our real which from of was they during ] caused further examples a heroes Helene's Hospital crucial in as part and units services across hurricane the per or to team, mission cord devastation. Methodist proud overall we the blood very a that for the facility ensuring CRYOGENE capabilities Helene, consistent the demonstration market. Also, vital were hesitation. to integrity will care was of patients benefit care community [ on national

Solutions which Biological our strides We is MVE core Science Life at our business, also continued to to Products. make

to will be place implementing life to in the align team of operating in and accelerate, science the demand with and systems to our growth for therapies better contribution. supply advantage of developments Our safety position think growth the is been for industry the and we essential cell for improves, Consequently, workforce cryogenic market from products. current will the put approval especially take these reliability, therapy maximize our operations a a Cryoport designed as forecast substantial and this. MVE's integrity is of leverage. We gene better gene life-saving the as ensuring leader market a chain to us in efforts help benefit and initiatives, flow cash positive has measures the and cell

we in global XXX clinical a of trials, increase III. XX, September supported a year clinical of trials trials net last of total XX these Phase As over with clinical XX of

Looking and challenges future. into Consequently, have move sheet. we we ahead, a into as strong and near our sector-specific moved life macro the we many tools science we that the growth sharpen for balance maintaining will profitable impacted -- companies on further XXXX, continue expect to focus

and chain to high-growth long-term life concludes positioned continue my gene solutions efficacies. This trajectory. the through business be risk our integrated comprehensive to supply our anticipated the optimistic growth and and believe sciences strategically We growth about cell improve designed specifically brief We and reduce long-term in therapy the markets to update. we leverage are

So questions. your ask the will operator now for I the open lines to

Your Knight of Paul first KeyBanc. comes question Instructions] [Operator from

story. the year-over-year. label it was you guess I kind we've business, service up expansions quarter a of trial to or bit like label the Is clinical little loss a doesn't expansions the it Are that on seen market, But can you should -- when those take to hit? time. seem read Jerry, in we in they these share there's would the way gain that? you talk Because expect

Yes, about some Paul. our additional effect comments. And X XX to to may operations. have have It Mark for takes on that months

Yes.

treatment move starting of to benefit to are So us. earlier lines already

and the example, projects Squibb J&J, For Legend, Gilead are contributing. Bristol-Myers

helping from the and newer expanded with these that In contribute Difficulty]. come ramp Adaptimmune we're will CRISPR, that a Iovance, the And notable XXXX. is products Vertex guys label start the into product, Sarepta market Atara, [Technical to of to addition, revenue have supporting, also

positive So all those us. of are for

to clinical, because And referring market Looking market. based the approved year-over-year the And trials despite on demonstrated at but of data. approved that all clinical Phase But were you're I II grow. clinical we encouraged mentioned commercial. we continue every of on currently had think are you support growth see support the the side, to we therapies clinical we to phase that

So the hitting XXX it's see support that number encouraging to of II we Phase of a high trials record trials.

you that Mark? are this funding, the And trial in activity, seeing

sequentially -- in quarter. and take did versus a down financing step with the third a $XX funding billion totaling third second Biopharma first the about quarter quarter in Yes. the market took

quarter about billion. was First $XX

Second quarter was billion. $XX about

XXXX aggregate levels. notably are year-to-date and However, XXXX above

than seems context have And So a you mentioned calls, that's obviously, trial look And in we're is to strictly good quarter. see on quarter-by-quarter we've in basis. at to and broader benefit. thing the to significant seeing, the that got one obviously starting count consistent trial increases clinical activity we're as previous a stabilized, a

question next Your of from BTIG. Larsen comes David

very of freezers, MVE the Any business, bit be large dewars Can helpful. about of talk color and a products would -- dewars please the piece you your there sort freezers. the shipments, smaller

sure. Yes,

on did expect demand X, order the in experienced order we positive MVE. freezer at in dewars side, an freezers. recovery X And to a the and while in what system the excluding continue North lines pickup quarter dewar look we demand see MVE, sales EMEA. we a know, be product China. think And flow primary have expected, we patterns, were may cryogenic to be from depressed market in But as we cryogenic uneven And We America -- you for better cryogenic bit and in manufacture at demand year. we we as but weaker APAC, freezer

it, I we've product able well to the the a business a already margin revenue flow as first add initiated with the to positive adjusted that think to to cost year achieve robust products the as at margin, of gross related XX% achieve rate just lower from if mentioned in And perspective, cash actions gross are still we're you half look this Maybe of the and at we number well. David, for a even side as EBITDA. a gross still able margin over to from products good structure

think your it's good BioStorage the number also you a that, I a helpful. flow Can It talk business? that of cash very for positive, mentioned Last profitable, significant still have up like still clients business. like solution. are about signed sounds That's quarter, a bit BioStorage that using you

also that helpful. color any the would Just then that IntegriCell around And is how launch, be please? progressing,

that to both amplify situations. can the be on Mark those continues case, and David,

Yes.

continues So as BioServices is improvement up under $X which and million, to increase. solid a revenue, just mentioned, XX%, we was

clinical of We have curve little but do do support opened last consistency few a X a is months. and and over great. trials doors. to board the projects on BioServices all services it early bit a the IntegriCell onboarded contribute ramps quite over and And is now, outpacing bell start area in increases revenue, consistent then just slower substantial take right those in see in most a few is activity quarters where They projects time. run in revenue, the they which business overall really will BioServices our running, are which we to its of

contribution a the we contribute first to opening As grand although start signed Belgium and that site, October in have our we'll in a some site had opening contracts already start nominally month revenue, we grand this will we'll next we early and see year. in year, to Houston month. the And and be had next having last there, mentioned,

IntegriCell, It downturn MVE me. looks a well. division doing like of like to this that's BioStorage, of stubborn all what bit sort very Sciences, facing cyclical just is It's it a seems Life they're

UBS. next from comes Your question Kyle from Crews

turning be demand the into into Could within throughout have margin been into the size on played any the to that that? comp to headwind those taken please little -- end touched And think year? XXXX XXXX? with you market would bit of you you you it in bit, touch how the a we this should cadence year? could you regards And if that And improvement, XXXX, next Could muted. cost how reduction expecting actions a upon to market a about remain see incentive year, heading that was flowing there evolving

to another think more opportunity portfolio. the IIIs, X have on commentary with in MAAs approvals We XX Yes. Jerry filings you're the We're thinking and focused business Phase the nicely. business IIs. QX, XXX XXXX. the supporting add QX we potentially the X might in BLA continues approvals But with PDUFA anticipate and Phase X the progress business. the services XXX X filed business, had we to products already some clinical thing as programs, biggest I'll or comment And in in first, in QX, another and on service dates is X about about the business more around services QX, associated

will will addition that for to -- services recently to the the of in obviously of the All the foreseeable future. side launched continue bolster business therapies,

Now, Jerry, on comment do you product? want to

Yes.

some made but it's just China, any can a has overlooked, freezers. product I in do implementing been about was we for MVE more and course, it fact does tell gets that couple strategy China place. demand you competing and in weeks, that for and I And think of will have we that. down of dewars globally, and a comments have that bit been China than I -- be in And other I the it's a little down about it sometimes lines, which has been and X -- the the earlier

a So profitable business and in It's the cash a even these a cash now things be it a running EBITDA. it is has where more ever rates. it's it's very available produce than a good when And flow leverage we're a at It's MVE look, XX% position a -- positive improve, operating produced. and good still depressed do the business. very will positive margins in It's range, will flow, business.

So...

to maybe some reduction have a of the company. bit overall question for the then bit related the of we've just really and of resource to financial a alignments you cost talk the And change efforts profile the Yes. a about that had, little

for the that well in these underway. we earnings initiatives call QX, mentioned are we implemented As

of to have the generate end to expect The by total in We expected million $XX year. completed annualized cost initiatives the those in over savings.

And expect EBITDA and QX a performance You performance our sequential can million. have 'XX achieve -- QX and with the we positive negative see to QX $X.X we a just on of being year mentioned for based QX improvement EBITDA our performance, during adjusted XXXX. that

flow activities a to the If QX cash performance, cash million operating negative you flow in million from in $X.X positive look at $X moved from a QX.

the moving in So are things right all these direction.

the Life of Science expect maintain over then operating earlier, investments. and to revenue, short-term a million perspective, more is maintaining from a see mentioned a XX% continue margin. depressed gross for on where We product I to plus balance very with we're in And more side, side. leverage margin spite sheet the $XXX we cash gross strong And in the Services

moving where that's these gross for some already So of measures to seen margins XX%. taking services place, we've

right that's, again, So moving in the direction.

provide if full when I our and think you go into 'XX, guidance obviously more earnings. we'll we year QX discuss

anticipation And one. I'll maybe changes any then back recent jump election? the the as last And of queue. one Any of a in result

think they no of out there's I what put a common. I call changes. they of and expect, look, No, sheets lot have No. analysts mean, on what indication cheat they're pretty change those for going We to us. for know on there's this is think -- me anything on -- of and this need so repeat no but to we don't call, significance these the

comes question from Leerink Puneet Souda Partners. of next Your

was I'm on Can year-over-year? down me sequentially elaborate more you that? So just couple. if On commercial, that wrong, a correct and

Sure. Happy to.

was basically flat. So a down hair it sequentially,

commercial As we you continuously step remember, as stair the talk pattern. revenue about a

And up, we so it it goes goes jumps is what jumps it see it flat, flat. up,

some were So more really had uneven. our Others of quarters. commercial customers good

to XX%, an up like performance. of month If several -- basis. recently forecast in another patient to the X-month of BioLogistics QX you also to see and rolling their other Cryoport and do established period, look continue at increase other We to and step-up which was that contribute a at year-over-year, on services our good to a we in ramp starting which as historical X to the therapies we're accounts look strong was than per contribute revenue will launched more start business, start commercial seeing leverage therapies expect

as pattern the this And Yes. still Puneet, we in that's what start-up don't phases -- this industries. industry. for we're see start-up unusual of

last we a continued Cryoport at weakness has missed couple the result. Okay. look Unfortunately, look, That's when really, industry. question helpful. the quarters, your of is across My as has

this the can at at to And you why guide about Just you provide us us continuing what this backdrop you're understand given reiterate point? the point? today, 'XX help just can

the think for it's budget our say. completing too of early in and to process again 'XX, forecast. our I We're longer-term obviously

provide guidance expect we'll will do we We obviously, guidance. provide 'XX. for more but So growth, more

I the the think you for provide of performance at million. look guidance $XXX if to million year, full we $XXX

land as QX. we So expect indicated, that contributions even that if provided. the we within look very at that you the QX, we'll are estimate still And during additional some for a Mark there guidance -- conservative revenue

for and So the provided we full reiterating guidance comfortable we've guidance the that that are with year.

you then that for into MVE the for wondering you on thoughts your And can assumptions are if fourth could Okay. quarter? next elaborate And any what year? provide

I think again...

Growth assumptions MVE. for

for would really guidance from in expect any early right where But I for services. providing to modest in product now. MVE, general trends changes specific we the curve. -- Specifically talk and about too say, It's currently, terms very demand we are revenue

our very our a perspective, 'XX, current more we're And provide revenue bit we'll from looking little changes insight. for at So from moderate again, level.

my And HV-X And could. update can that Okay. the mushrooms for replacement the last you using current cycle Have then looks an like? you shippers? if provide on you one, I HV-X that? the to what provide us the Has started? started Could shipper

so middle we're manufacturing in Puneet, Yes, right now. the of

So out it is vendor. at our

through first engaged this at the around clients the for units that They're quality timing, client. on their depends in-house. qualification already commercial That transition. the We're final it available of year. It checks. end be manufactured market of our going many and have We will with

just depends fantastic. organization. They It product. processes sites Some their and the we've receptivity on sat down the are own to talking talked clinical the talking the love But well. to that X X love been are All as product their quarters, inside quarters. has X quality some

think we adoption So to going is robust. extremely be

comes Your Matt Instructions] [Operator question Stanton next Jefferies. from of

the ] up fair think next This commercial, I about on is assumption XXXX, Appreciate XX%, guiding commercial XX% guess Matt. that to as Is following on as not go-forward year? about Jack on you're a [ decent rate. a but side you've we question. for understanding talked the

with we're top-down budgeting client mentioned, the we of process. the right on demand able based new a launch we quarterly is on expansions. on to middle well their as do had the associated do bottom-up oversight now, to more we provide good schedules be product and that label in as that forecast What the it's and/or As and the forecasts products We'll a -- clarity commercial call. have budget in next

should It outlook, we're be commercial a XX when positive you supporting though, in, today. therapies factor

more of X year, end XXXX for XXXX. filings XX dates another lot X January approved and have the before and could You of possible a with PDUFA the more in throughout

trend the grow moving is revenue continue the for right direction. a long So in commercial The time. to should

mentioned looks had very good. we Yes. And QX

nice should we So QX. see step-up a in

quarter level would The step-up. than the about visibility it's speak Right, then and comfort third more Could of just the reaffirmed the $XX It some right. sequential as quarter you moving full your a million. be in versus high And we I month a may looks guide. appreciate to of into color. like Yes. sit talk things I you year, that have single-digit improve guess implied that quarter? step-up, it the maybe to level fourth

Yes.

for $XXX guide million. million year to is the itself $XXX again, think, I the

in we'll be range. that So we believe

of little look product expectations. short revenue bit at in you a If came QX, the

we anyone taking side. the on growth of for conservative don't product more wants greater elasticity are it. we -- view is in in side to services if to terms expect else do the side. know the on and robust, But I QX a So expectations add product

I has The the I challenges. a think therapy near-term concern space understand cell took hit, that challenging and we we've us. to sciences adapt for mean, this time look, life year answer. been and a to the gene and changed tool that's No, the

industry. today, and that like the for ramp its it's over while. gene spot the of that therapy And kind a hit billion annually And it's soft so sort a and of $XXX a of biologics growth is cell and reality And expansion. business the sputtered

So...

clinical space look, with we revenue the we're support the number commercial that think, significant have and the up we trials confident on client I that commercial growth. in support visibility pick will we that with the gene of based clients its that -- cell back and that base, pace quite really of

the actually of the we're so And aspects cell gene and bullish about growth longer-term therapy. quite commercial

I'll to just Just one that. guess I add last on add -- comment

approvals we As and we've approvals revenue the quarter, mentioned, we did commercial a earlier had commercial commercial X in in side, year. the the have of couple another

are contribute will revenue of All ramp. to starting and those continue to

the product line had you expansion addition, for In Sarepta.

increase the that will from see so. and line all is count, lines, obviously seeing benefits You last product that patient some the And of expansion releases on some BMS had you week their the which by the we are earnings over product of evidenced or of that. can

are would further There remarks. closing questions no over I call ahead. the hand go for at Please Shelton time. this to Jerry

reflecting you In stable, questions with economic seen our year. actions we've issues our We're and longer-term expectations, adjusting throughout and for our in business fundamentals. your industry-related this thank discussions. were strong is results closing, and driven third Well, our our by line quarter

demand Sciences While remains Life subdued, in growth continue the to see we Services Life our business business. Products Sciences further in

date to EBITDA capital afternoon. goal strategies, flow. We continue returning support you for growth, realignment margin, We reduction in this to our We're of adjusted appreciate and gross focusing implement We have our to your again you EBITDA hope a XXXX. our during on next progress forward you By joining led profitable our on interest looking adjusted quarter. will good reach us Thank improvements company. and updating intend positive you. evening. to thank continued which have to and cost we We cash our in to

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