Bio-Techne Corp at Wells Fargo Healthcare Conference Transcript

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

Question: Brandon Couillard - Wells Fargo - Analyst : Kim, you've been CEO for a little over six months now. You led DGS before. Just curious if you start off, what has surprised you when you look at the company from a higher-level perspective. Are there any synergies maybe you didn't notice before or holes in the portfolio that you maybe weren't aware of before?

Question: Brandon Couillard - Wells Fargo - Analyst : Coming off your fiscal fourth quarter, what would be kind of top one or two things you want to leave people with? And just remind us where you sort of see the forward year in terms of the guide.

Question: Brandon Couillard - Wells Fargo - Analyst : Maybe just touching on China. I think it was down high single digits in the quarter. What are you expecting for the next 12 months, is that putting stimulus aside? And then in terms of stimulus, can you talk about your exposure to that. I think you pointed to a benefit in the second half of fiscal year. Are you starting to see orders yet from those accounts?

Question: Brandon Couillard - Wells Fargo - Analyst : Maybe shifting gears. On your last call, you talked about continued softness in pharma similar to other peers. It sounds like you expect that to continue into calendar '24. If we look at your business mix, if you break down this way sort of between like preclinical, let's say, Phase I, Phase II and then later stage exposure. How would you say the spreads across that pipeline, if you will, if you look at it that way? And remind us what the biotech versus kind of large pharma, small molecule business.

Question: Brandon Couillard - Wells Fargo - Analyst : Life science reagents, there's been weakness here across the industry. seems to be tied to pharma reallocating dollars at least toward more clinical programs, perhaps away from discovery and kind of Phase 1. There's also been some competitive changes out there, obviously with Abcam and Danaher. Can you just talk about how this business is positioned why you think there's been such weakness and maybe when you expect growth to rebound? James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance This is specific form for a large pharma or --

Question: Brandon Couillard - Wells Fargo - Analyst : Got you. Maybe switching gears over to Simple Western. It's historically been a 15% to 20% grower. Do you think the business returned to that level? And where are you in terms of penetrating the academic portion of that market?

Question: Brandon Couillard - Wells Fargo - Analyst : Yes. That's going to be my next question is you announced the upcoming launch of the LEO platform. What's left that you had a new instrument introduction there. And what does that add to the business or the market opportunity at the high end?

Question: Brandon Couillard - Wells Fargo - Analyst : If we look at Simple Plex. Can you talk about the utilization across the installed base and the longer-term part of the way, I think you get to $1 billion of revenue for Diagnostics the usage and uptake of that of Simple Plex in diagnostics. What do you think we start to see that coming through?

Question: Brandon Couillard - Wells Fargo - Analyst : Maybe switching gears over to spatial and Lunaphore. Can you talk about what markets moving forward plays in, how those are growing, who the competitors are and kind of what separates wire from others in the market?

Question: Brandon Couillard - Wells Fargo - Analyst : You talked about not being able to meet demand for winter what needs to be done to rectify that? And how big is the backlog? And how long will it take you to draw it down?

Question: Brandon Couillard - Wells Fargo - Analyst : How is Wilson Wolf performed in the current environment? How are they positioned for 25? And any chance you complete that acquisition before the end of '27?

Question: Brandon Couillard - Wells Fargo - Analyst : Jim, if we look at the guide for '25, you're looking for, I think, low to mid-single-digit growth in the first half, high single digits in the back half. What's informing that view of that acceleration and what parts of the portfolio do you expect to be above that level, which ones might be lower? James Hippel - Bio-Techne Corp - Chief Financial Officer, Executive Vice President - Finance Let me get more specific around that guide. So it's really about the pace of recovery. We're the first ones sticking our next out truly in 2025. So we had to really sit back and reflect on what does the recovery look like and how does that play out at least conceptually. The good news is that we're actually talking about recovery and not trying to catch a falling knife. Like we feel like we've all been doing this industry for the past two years. And we had a good fiscal year '24 was a very stable year for us albeit growth that we don't like to see. We did still grow at 1% for the year. We're 1% for Q4 and not a whole lot of variation throughout the year. So it does suggest a bottoming. As we think about recovery, we talked about at least right we're here and now when we did our last earnings call, first month into the quarter, hadn't seen any real inflection points as of yet. We call basically low single-digit growth to start the year. But from there, biotech's funding has been strong the first six, seven months of the year, significantly over fiscal year '23 and even higher than fiscal year '19 by like 25%. At some point, that funding will turn into spending. And we're hopeful that will start to kick in, in our December quarter. And that's what kind of elevates us up to the mid -- low end of the mid-single digits. And then from there, we think the next stage of recovery, we'll see from China. As we talk a lot about China already from a stimulus perspective. All indications are that will start to translate into revenues in the January, February time frame, so call that our third quarter. And that would get

Question: Brandon Couillard - Wells Fargo - Analyst : Kim, I mean, biotech has always been in the acquisitive company. Where should we look for you to be active when it comes to M&A? How are you feeling about what's your appetite for larger deals as opposed to more bolt-ons and where the biggest holes in the portfolio you'd like to be active in them?

Question: Brandon Couillard - Wells Fargo - Analyst : Unfortunately, we're out of time, so I have to leave it there. Thanks so much for being here. Everybody, have a great day.