Bio-Techne Corporation (NASDAQ:TECH) Q2 2023 Earnings Call Transcript

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And so it’s going to grow in that category along with everything else that’s been doing. It’s been — and things are picking up in cell and gene therapy for being spec-ed in for just good old-fashioned QC for purity, et cetera. ELA is just going to be on fire. We’re doing about 90,000 cards a year now. We just finished the factory for 500,000 cards. We’ve got 1,345 coming. It’s just almost done, and we’re going to have diagnostic research coming out of our ears, we think, on top of biomarker discovery. So, this is going to be a platform that’s going to get bigger than I think we have in our $2 billion model. I can go up and down this, but we’re also, I think, possibly light on exosomes. Exosome is screaming now, 100% plus a quarter a scene in sight.

We have a nice portfolio of new diagnostics, new tests coming out where we’ve got partners calling, the team is doing great. We’ve got a great new team with a new executive for the payer strategy on someone who’s actually connected. And we’ve made more progress with private payers last quarter that we’ve made the last two years, to be honest. So, hopefully, more on that coming soon as we put some numbers to it. So, the end answer for you is all the stuff that we are waiting to start growing. And then by the way, cell and gene therapy, proteins on top of 185% comps still grew almost 20% this quarter. Nothing is slowing down here. All this new stuff start to pick up, but our core, which is the biggest part hit a speed bump because of the OEM and the biotech funding issues, which is going to recover quickly.

We need this new stuff because that’s how we get to high double-digit growth, as Jim alluded to, but it’s picking up. but it’s going to happen. And cell and gene therapy, a $100 million portfolio for us right now, growing to $2 billion in the next 8 to 10 years. So, we’re not letting up. I don’t see any issue right now at all. It’s the things we put in place years ago are starting to happen, and we’re going to have some bumps here and there with the kind of growth rates we have. I do think we kind of must the forecast for sure. I mean we did not appreciate — fully appreciate the comps and the strong growth we had last couple of years due to COVID. We tried to level it out by averaging over the couple of years, as Jim pointed out, and I think the recovery will be good.

Our brands, we’ve just done brand studies, R&D systems, still number one. Bio-Techne is actually moving right up the ladder two after 10 years of being out there. We’ve got great association. We keep investing digitally, and that’s continued to pay back. There’s no issue to back off the $2 billion. It’s just that we probably aren’t as safely in the block of hitting it as we were, but I think we’re still there. And Namocell is going to be in the mix now too, so.

Jacob Johnson: Got it. Thanks for that Chuck. And then just the other big picture question. I heard Jim mention that I think M&A is the number one priority on the capital allocation side. So, I think that speaks to appetite. But maybe just kind of any thoughts on where seller expectations are in the current environment and any areas of interest?

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