Bio-Techne Corp at UBS Global Healthcare Conference Summary

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

Question: Dan Leonard - UBS AG - Analyst : <_ALACRA_META_ABSTRACT>I believe this is your first public venue since earnings a week ago. And I'd like to reflect back. What were the highlights, what points do you think needed clarification?

Question: Dan Leonard - UBS AG - Analyst : Okay. That was very thorough. The GMP proteins part of your business certainly was a story of the quarter. And I'd like to talk a bit about that. So first off, the $7 million headwind, that's the lesser revenue from those two customers you called out, correct?

Question: Dan Leonard - UBS AG - Analyst : Can you talk about what was the growth rate in GMP proteins, excluding those customers? Or is that a not meaningful metric?

Question: Dan Leonard - UBS AG - Analyst : Okay. Can you talk about customer concentration then in GMP proteins? Or I guess you've talked about it, but could you elaborate on that? Are these two customers, half of the business? Or are they some different number?

Question: Dan Leonard - UBS AG - Analyst : Okay. Can you talk a bit how your GMP protein revenue split looks like between commercial? I assume commercial isn't part of the business yet, but we can just clarify versus Phase III versus earlier phases in clinical development versus preclinical. Just what does that pie chart look like?

Question: Dan Leonard - UBS AG - Analyst : Okay. And how do you risk adjust your forecasting in cell therapy? Because the gamut of companies that have active programs in the area range from large pharma, large biotech to publicly traded biotech companies that are sub-$100 million in market cap. So what is your process for trying to better risk-adjust the forecasting there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Dan Leonard - UBS AG - Analyst : Okay. And to think about the long-term opportunity here, I think you said a moment ago, GMP proteins were a $60 million revenue line item. Can you put that in context of what your capacity is? I think when you opened the St. Paul facility a few years ago, there was discussion around a few hundred million dollars of revenue-generating capacity, but I'd like to revisit that if we can.

Question: Dan Leonard - UBS AG - Analyst : Okay. Great. Well, with that out of the way, let's talk about some of those growth pillars you mentioned? Protein. In Protein Sciences first. We'll start off with ProteinSimple. You mentioned a mid-single-digit growth rate there. What's your degree of confidence that, that returns to a double-digit growth rate? And what would be the drivers to get you there?

Question: Dan Leonard - UBS AG - Analyst : Okay. So right now, double-digit consumables growth, mid-single-digit equipment decline blends into a mid-single-digit growth rate. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Dan Leonard - UBS AG - Analyst : And you turn that instrument growth rate that will bring the full fleet up to that mid-teens level?

Question: Dan Leonard - UBS AG - Analyst : Do you have any new product cycles that could help drive that turn in the instrument revenue trajectory, independent of end market improvement?

Question: Dan Leonard - UBS AG - Analyst : Okay. So it sounds like you have a pipeline of serial innovation across each one of your protein --

Question: Dan Leonard - UBS AG - Analyst : Got it. And could you then talk a bit more -- we spent time on GMP proteins, but you have a bigger cell therapy opportunity. Can you talk more about your efforts to grab wallet share across the entire cell therapy workflow?

Question: Dan Leonard - UBS AG - Analyst : Is it too early to talk about a ProPak attachment rate to the Wilson Wolf bioreactor?

Question: Dan Leonard - UBS AG - Analyst : Is that one of the five clinical -- five Phase III customers you mentioned earlier on GMP proteins?

Question: Dan Leonard - UBS AG - Analyst : Okay. Versus the enemy proteins. I haven't heard that before. I like it.

Question: Dan Leonard - UBS AG - Analyst : I like it. Why -- you mentioned on the conference call that Wilson Wolf had a flat quarter as well. Why would their quarter have been flat? I would have thought their revenue mix would lean a little bit more commercial. There'd be a bit -- they wouldn't have the same exposure to lumpiness that you would have.

Question: Dan Leonard - UBS AG - Analyst : Okay. Makes sense. Circling back to that ProPak comment from a moment ago. Winning a Phase III customer sounds pretty meaningful because otherwise, the time to face progression from someone in preclinical to Phase I, Phase II, Phase III could take quite a while. So if you're able to just pick off Phase III clinical trials, that seems to be the more nearer-term bigger opportunity.

Question: Dan Leonard - UBS AG - Analyst : What does the funnel of those look like?

Question: Dan Leonard - UBS AG - Analyst : Okay. Understood. Well, a final question on Protein Sciences before we pivot to Diagnostics and Genomics. Every now and then, depending on different FDA announcements, the organoid business within Bio-Techne enters the talk track. Can you tell us how big is that business for you? And how do you view that opportunity over the mid- to long term?

Question: Dan Leonard - UBS AG - Analyst : Okay. Well, with that, let's pivot to Diagnostics and Genomics and start off on spatial biology. How would you describe your confidence that spatial biology returns to double-digit growth from -- I think you mentioned it was a flat growth rate in the quarter?

Question: Dan Leonard - UBS AG - Analyst : Okay. Well, before I run off the clock here, I wanted to make sure we spoke about your 2026 framework. And Jim, I wasn't sure, on the conference call, I thought that in Q&A, you underwrote mid-single-digit growth for the second half of the year. Did I hear that

Question: Dan Leonard - UBS AG - Analyst : What's your conviction that the improvement in China is durable? James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance I mean, first of all, it's been a very long downturn for China. So I mean, at some point, you start to hit bottom there. But I think, generally speaking, we've -- Kim and I go there once or twice a year. And our last couple of visits, we've seen, first, stabilization; and in our most recent visit, it's just a different in the tone. The tone of when you talk to government officials, when you talk to biotech companies, CROs. There's a sense of -- more sense of optimism in the future than we've seen in the past two- or three years there. And at the end of the day, we're projecting growth again this quarter in Q3 for China. That will make three quarters in a row of growth. And even though our growth rates for the last two quarters, they were low double digit in Q4, low single digit in Q1, we were pretty transparent in our Q4 earnings call saying that growth had a lot of tariff pull-ins for the concern of tariffs, but still probably grew marginally. With those large pull-ins from Q1 into Q4 to avoid tariffs or at least perceived tariffs, we still grew low single digit in Q1. So the momentum in China continues to not explode but gradually increase.

Question: Dan Leonard - UBS AG - Analyst : Okay. Well, it sounds like there's a lot to do.

Question: Dan Leonard - UBS AG - Analyst : And we're out of time. Kim, Jim, thank you so much for joining us today.