Bio-Techne Corp at Jefferies Global Healthcare Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Tycho Peterson - Jefferies LLC - Analyst : <_ALACRA_META_ABSTRACT>Maybe kick off with a little -- just a quick look back on the fiscal first quarter, some gives and takes, but you did talk about kind of core growth of 1%, maybe setting aside the cell therapy kind of noise here will impact that in a minute, but just talk a little bit about what you saw in the quarter. James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance Tyco, thanks for having us. Yeah, the overall growth for the quarter was negative 1%, a little bit -- a result that doesn't really reflect our underlying performance because you already mentioned we were 1% positive if you take two larger companies that receive their Fast Track Designation and therefore, didn't order this year compared to last year, and that really drove a negative 200 basis points on the top line. But underlying, if you think about the end markets as well as our four growth verticals, the end markets did do a little bit better than we had expected was definitely large pharma, 30% of our revenues, and we continue to be in the double digits performance there. And last year, we actually -- or last quarter, we were actually a little worried about the rhetoric with some of the tariffs and most pricing that we were worried that they would tap the brakes, but they didn't. And that was a positive for a quarter. Overall, we saw some stabilization in the academic and the biotech markets as well. And then from a four growth verticals in cell therapy, other than dynamics we just mentioned, we had a very nice number of customers we added to the pipeline. We LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.

Question: Tycho Peterson - Jefferies LLC - Analyst : And maybe we could just unpack the pharma strength geographically, anything to kind of call out there? And how is the kind of the -- how have the discussions evolved on the back of some of the ongoing announcements? James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance For large pharma?

Question: Tycho Peterson - Jefferies LLC - Analyst : And any geographic color? I mean, obviously, you've had kind of this out-licensing trend from China. So how about pharma globally, where are you seeing the strength? James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance Yeah. It is actually on both sides of the ocean in Europe and US, very healthy. We will see what the deglobalization and or the investments in the US particularly will bring. That might shift this dynamic a little bit. But for now, we saw healthy growth on -- in the US as well as in Europe. And then on the biotech side, it was definitely a return to solid growth in China.

Question: Tycho Peterson - Jefferies LLC - Analyst : Got it. Obviously, a lot of talk on reshoring here that's maybe a little bit further out and a little more large pharma than biotech. But just talk a little bit about how you think you're positioned over the next couple of years as maybe more capacity comes back to the US? James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance Yeah. The reshoring will certainly be of influence. I mean, I call it deglobalization because it's not only coming to the US, but overall, you see that region for region manufacturing is becoming more common. And knowing that there will be more manufacturing coming to the US is obviously a good thing. We have good sales coverage. We are -- we have a good brand name in the US. And we have been taking share in Europe and in Asia. So no reason to not also do that in the US. Overall, I look at it as a -- the deglobalization, if you have one large manufacturing plan that you obviously run it really, really efficiently. And your inefficiency sits in the fact that you will have to ship globally and through different borders and more paperwork. And that is not revenue or spend that comes into the life science tools direction. However, if you manufacture locally, now your shipping lines are shorter, but you have several manufacturing plans. And that will have some inefficiencies in that you will have duplication of instrumentation that you will have a more QA, QC as well as validation runs. And that inefficiency will sit more in the life science tool spend. So overall, I think it's a positive for the industry.

Question: Tycho Peterson - Jefferies LLC - Analyst : And then maybe we could segue to inorganic, too. You did Lunaphore, I think, two and a half years ago. Just talk a little bit about -- you said M&A remains a priority. You obviously mentioned Wilson Wolf Talk a little bit about current backdrop for LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.

Question: Tycho Peterson - Jefferies LLC - Analyst : And I guess does the optionality around Wilson Wolf kind of limit your ability to do bigger deals? How do you think about that? James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance Yeah. To the contrary, actually, it's obviously latest, it will be December of 2027 that the asset become ours unless there are milestones hit, and then it will be earlier. Nonetheless, we, of course, did our homework in what would be our capacity

Question: Tycho Peterson - Jefferies LLC - Analyst : Maybe we can just touch on GMP proteins. You've had some headwinds tied to a small number of customers there. Just talk about the size of that G&P business today. What headwinds are kind of baked in for the year? And how is the business growing outside of those few customers? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.

Question: Tycho Peterson - Jefferies LLC - Analyst : And any change on the competitive front with newer entrants coming into the market? James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance In cell therapy? No. It's pretty much the same. There are two European players that were ahead of us in this market, and we've competed with successfully. We have really carved out a stronger position in the Regen Med area where the more complex proteins are of importance. And we have 49 years of experience in designing, but also manufacturing very complex proteins in very consistent ways. So that's really where we carved out our strength, and we are market leaders there. And I see that with -- especially with the new efforts in AI designs, enabled further design of proteins that we can continue to have that advantage. And that's also where the market is heading. So we feel very comfortable with the competitive landscape.

Question: Tycho Peterson - Jefferies LLC - Analyst : Interesting. Maybe on pricing, you did notice or call out some promotional activity on the protein science side of the business in the recent quarter. Can you maybe just talk, was this to take share, protect share and how broad across the portfolio was this? James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance Yeah. It was in the protein sciences where we did promotions. You can see them on in a different websites and LinkedIn, you can see our promotions that are typically grants. So a company would start a new program or an academic institution. They start a new program. And we could -- we assign a 10-K grant or so in which they get to use our proteins. For us, with this proteins being super high margin, it's not very expensive. It's better than just lowering your prices across the Board. That's not very specific. We believe that in constrained funding environments, fewer programs get started, but the programs that do get started are usually of high quality because they obviously have something special to them. And that could be the clinical indication or application scalability or -- but it can also just be -- that it's something that has a high NPV. And therefore, we want to be part of those programs. And as you know, the moment you start generating data are utilizing certain ingredients like proteins or the G-Rex, right at the moment you start generating data, utilizing those. You -- it's -- just -- the further you get into those clinicals the stickier it becomes, right? The customer usually wouldn't want to swap any ingredients anymore once they have clinical data. So we feel that it is seeding the market more so than just dumping price. And you can see that last quarter, we had 550 cell and gene therapy customers for our GMP proteins, and it's now bumped up to 700, and much of that is through those grants. And we hope to see these high-value programs right now so that when the funding gets better, these companies will continue utilizing our ingredients.

Question: Tycho Peterson - Jefferies LLC - Analyst : And maybe just on that, just touch on the academic backdrop. I mean, grants have been flowing despite the shutdown more consumables than instruments, obviously. But just talk a little bit about what you're seeing in the current environment and how you're thinking about the calendar year ahead? James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance The shutdown, government shutdown. --

Question: Tycho Peterson - Jefferies LLC - Analyst : And does the push toward more multiyear grants make things better? I mean, you talked about better funded research and maybe better projects getting funded. So if labs have visibility for a couple of years now? Fewer grants, but maybe better visibility? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.

Question: Tycho Peterson - Jefferies LLC - Analyst : And we got just over a month left in the year. Any thoughts on kind of budget flush in the biopharma side in the year-end? James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance Yeah. Well, it's likely it could be -- it could definitely happen. We don't talk a lot about it because at the end of the day, only 10% of our revenue is related to instrumentation, 80% is consumables, 10% of service. So the service and the consumables, so 90% of the company are not influenced by budget flush. So there for, it's not a big theme for us. DISCLAIMER LSEG reserves the right to make changes to documents, content, or other information on this web site without obligation to notify any person of such changes. In the conference calls upon which Event Briefs are based, companies may make projections or other forward-looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement based on a number of important factors and risks, which are more specifically identified in the companies' most recent SEC filings. Although the companies may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized. THE INFORMATION CONTAINED IN EVENT BRIEFS REFLECTS LSEG'S SUBJECTIVE CONDENSED PARAPHRASE OF THE APPLICABLE COMPANY'S CONFERENCE CALL AND THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE CONFERENCE CALLS. IN NO WAY DOES LSEG OR THE APPLICABLE COMPANY ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY EVENT BRIEF. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S CONFERENCE CALL ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.