Matt Larew

Jim expressed encouragement about FY2027 with company-specific headwinds behind them, definite academic stabilization, and strong pharma. Agreed with peers expecting uptick in second half of calendar 2026 pending biotech recovery. Won't give soft FY2027 guidance until next quarter.

Kim acknowledged biotech surprised to the downside, stepped down from mid-single digit declines to high single digit despite funding improvements. Early-stage biotech funding was actually down while late-stage was up. Conversations are improving but cannot assume clear stabilization.

Jim confirmed low single digit full year view unchanged, requiring mid-single-digit Q4. Kim clarified that excluding the two GMP headwind customers, the underlying growth trajectory is in the ballpark of mid-single digits.

Jim cited unfavorable mix across reagents vs instruments, spatial underperforming higher-margin diagnostics, and lower-margin OEM customer orders. Expects overall mix to gradually improve in Q3 and Q4.

Kim noted that unlike previous cycles where funded companies needed to build infrastructure first, current biotech recipients already have facilities in place. This suggests funding could translate to Bio-Techne revenue faster than the historical 2-3 quarter lag.

Jim confirmed underlying business ex-2 customers grew 1% in Q1, expects to accelerate to 3% in Q2, with further improvement in H2 from lapping administration policy impacts and stronger diagnostics ordering patterns.

Kim outlined M&A focus on three areas: core reagent additions for global distribution, cell therapy workflow capabilities, and ProteinSimple instrumentation adjacencies. Described maintaining a precise target list that they are actively nurturing.

Jim shared that academic customers are overreacting relative to actual NIH exposure, cutting spending 10-15% across the board preemptively. Believes current behavior is worse than any actual funding outcome, making resolution an upside catalyst.

Jim declined to validate or reject 8.5% consensus but framed current headwinds as temporary, noting trajectory was strong before policy shocks. Expressed hope for more clarity in three months but did not provide a specific FY2026 starting point.

Jim credited multi-year structural streamlining and diligent discretionary cost control, especially during recent uncertainty. Kim added efficiency gains from management process improvements, ERP modernization, acquisition integration, and operational optimization.

Kim noted biotech recovery in line with expectations (~30% of revenue), but large pharma improvement was better than expected. Jim added smaller biotechs gradually progressing while large pharma started recovering earlier than the April-May expectation.

Kim noted competitive M&A activity as positive validation for spatial biology market. Corrected that RNAscope multiomics launched last quarter. Profitability to improve via instrument uptake and consumable pull-through.

Kim confirmed both existing customers progressing through clinical phases with larger orders and new customers being added to the funnel, with broad activity improvement.

Kim cited G-Rex's scalability, cost, flexibility and performance advantages and emphasized synergies with GMP proteins. Grant program seeds customers early in preclinical development.

Eric highlighted SelfDose, Crystal Zenith for high-end biologics, and administration systems, with an attractive margin profile after SmartDose 3.5 exits.

Eric positioned Synchrony prefillable syringe as an extension of the HVP spectrum, not comparable to SmartDose. Economics are very attractive. Already received orders since Italian launch. Long-term pipeline play similar to NovaPure adoption curve.

Eric confirmed CapEx returning to 6-8% of sales, focused on HVP centers of excellence campus expansion rather than greenfield. Tech transfers take 12-18 months. Elastomer components less than 1% of drug COGS. Bob noted no change in customer buying behavior from MFN headlines.

Eric confirmed he visited the constrained European facility personally, team executing well on ramp-up plans. New team members take several weeks to get up to speed. Opportunity to continue accelerating with confidence in delivering mid-to-high single digit HVP growth.

Eric said injectable delivery will remain the majority of GLP-1 market. Models already incorporate shared oral/injectable assumptions, and HVP assets are fungible from COVID capacity.

Eric confirmed automation timeline on schedule for end-of-year validation and commercialization, with earlier delays now resolved.

Eric explained the contract secures the existing full-share position for a very long duration, calling it a natural progression of the relationship.

Eric acknowledged strategic review of SmartDose specifically while emphasizing the broader delivery device portfolio remains valuable.

Marc credited innovation and product launches, including two mass spectrometers and electron microscopy strength.

Marc described the trend toward automated, data-connected labs for biology model building, noting instrument R&D roadmaps focus on better connectivity for these scaled facilities.

Marc confirmed reshoring contracts signed in CDMO, brownfield bioproduction wins secured, with revenue largely a 2027-2028 tailwind. President Trump visited their Cincinnati drug product site.

Casper said Accelerator Drug Development is driving meaningful authorization wins for CRO and new pharma services contracts, with OpenAI collaboration focused on further shaving time and cost.

Casper said AI reduces wasted experiments but increases confidence-driven wet lab work, and TMO is optimistic about the intersection of AI and wet lab demand.

Management described deploying central commercial excellence teams for pricing discipline, launch readiness and segmentation, replicating the Waters playbook with specialists embedded across new divisions.