睿力根 (RGEN) 2026年第三季法說會：營收創新高並上調財測

重點摘要

• Repligen 公布 2026 年第三季營收創歷史新高，達 2.09 億美元，年增 11%（按列報基準），有機成長 12.5%。
• 經調整後營業利益成長 24%，達到 3,300 萬美元；經調整後營業利益率擴增 170 個基點 至 15.9%。
• 耗材業務營收成長 20%，服務業務成長超過 20%。資本設備訂單成長達 15% 左右，創下五年來單季新高，儘管因交付時程推遲至 2027 年導致設備營收下滑。
• 層析業務營收成長超過 50%，蛋白質業務成長超過 40%，分析業務成長 20%。過濾業務下滑 11%， 反映出 ATF 相關逆風、Polymem 拆分出售、匯率波動及設備交貨時程影響。
• Repligen 將 2026 年營收指引調升至 8.44 億至 8.52 億美元，其中包括約 2,400 萬美元 來自 10 月 6 日完成收購的 BioLife。
• 管理層表示，Repligen 已具備優勢，預計列報營收在 2027 年將成長至少 25% 並超越 10 億美元，前提是市場成長保持高個位數且無重大匯率變動。此為規劃架構，非正式 2027 年財務指引。

核心財務業績

Repligen 約投入了 5.5 億美元 的現金用於 10 月的 BioLife 交易（包含費用並扣除所取得的現金）。管理層表示，目前備考現金餘額高於 3 億美元。

GAAP 結果包含一筆 4,100 萬美元 的非現金減損，與一項智慧財產權授權協議相關。該筆費用已自調整後結果中排除。

業務與營運表現

產品系列

過濾業務： 營收下滑 11%。 此結果包含來自 Polymem 剝離出售與外匯所帶來的合計 2 個百分點逆風。管理層將表現略低於預期主要歸因於客戶要求的設備交付時間延至 2027 年，以及先前揭露的 ATF 與基因治療計畫逆風。Repligen 目前預期全年過濾業務營收將持平至略為下滑。

層析業務： 營收成長超過 50%，主要由 OPUS 層析柱以及來自 CDMO 與生物製藥客戶的需求所帶動。大型層析柱繼續保持成長動能。目前預估全年成長將至少達到 30%。

蛋白質業務： 營收成長超過 40%，受配體、成長因子以及客製化與標準樹脂帶動。今年迄今成長率達到 34%。 Repligen 還延長了與 Ecolab 的供應協議。管理層繼續預期全年將成長 15% 左右。

分析業務： 營收成長 20%，創下季度新高，主要受到耗材與服務的推動。Repligen 目前預估全年分析業務成長將超過 30%。管理層表示，75%-80% 的售出系統包含 FlowVPX 配件，而 SoloVPE 安裝基數的升級週期仍處於早期階段。

客戶、區域與經常性營收

生技製藥客戶推動了成長，而 CDMO 營收在基期偏高的艱難比較下下滑。新興生技營收呈現中個位數成長，今年迄今則保持在 15%-19% 的高雙位數成長區間。

細胞治療營收成長近 30%。基因治療成長超過 25%（若扣除特定平台逆風的影響）。

北美佔季度營收的 49%，並成長 6%。EMEA 佔 34%，並成長超過 20%。亞太地區與世界其他地區佔 17%，與 2025 年第三季創紀錄的銷售額相比略有下滑。中國區營收成長超過 40%（本季度），今年迄今則成長超過 50%。

服務佔營收的 7%。簽署服務合約的系統數量成長近 40%（今年迄今），儘管資本設備營收表現平淡。

管理層財務預測

該財測假設外匯呈中性，且 Polymem 資產剝離帶來約 1 個百分點的逆風。 第四季有機成長預計將維持在全年目標範圍內，而第四季毛利率應落在全年財測範圍內。

管理層預計第四季營業費用將比上一季增加低雙位數百萬美元，反映出成長性投資以及近乎一整季的 BioLife 費用。

預計 BioLife 將貢獻約 1.14 億美元 的 2026 年備考營收。管理層持續預期此收購案將在 2027 年為每股盈餘貢獻至少 0.05 美元。

風險與關注焦點

• 資本設備需求正在改善，但客戶決策依然緩慢。近期新簽約的大多數系統預計將於 2027 年認列營收。
• 過濾業務持續面臨 ATF 客戶逆風、特定基因治療平台的影響，以及硬體安裝量減少導致耗材拉貨下滑。
• 產品組合與通膨抵銷了第三季規模槓桿與定價帶來的效益。
• BioLife 的整合仍處於早期階段。Repligen 在評估 CryoStor 報廢率改善與商業綜效的同時，對 2026 年剩餘時間採取審慎假設。
• 管理層表示，回流本土相關商機進度約比先前預期晚了 9 至 12 個月，大多數交付可能發生在 2027 年底、2028 年或更晚。

分析師問答亮點

BioLife 整合： Repligen 已採取行動落實超過半數預期的第一年營業費用綜效，主要來自上市公司與領導層成本的削減。長期商機則包括降低 CryoStor 報廢率、交叉銷售，以及擴大在亞太地區（特別是中國）的品牌知名度。

設備在手訂單： 資本設備訂單達到了自 2021 年以來的最高單季水平。管理層預期進入 2027 年時的在手訂單將顯著強於 2026 年初，儘管營收轉化仍取決於客戶的交付時程與更快的採購決策。

細胞治療假設： 管理層表示，其 BioLife 財務模型主要依賴現有商業化療法的成長，並保守假設在收購後的前兩年內不會有新的 FDA 細胞療法獲批。公司指出，2026 年已有三款細胞療法獲得批准。

回流本土： Repligen 在第一季贏得了一項徵求建議書（RFP），第二季贏得一項，第三季贏得兩項。管理層對長期商機仍持積極態度，但表示客戶仍在評估如何在美國、歐洲與亞洲之間分配資本。

生物相似藥與 ATF： 管理層指出與生物相似藥相關的 ATF 應用顯著增加。在 2026 年前九個月中，Repligen 取得的新 ATF 客戶與應用數量已大致追平 2025 年全年的總和。

利潤率與投資： Repligen 繼續致力於實現 到 2030 年調整後 EBITDA 利潤率達 30% 的目標。 管理層表示，BioLife 可能使公司提前達成該里程碑，但也可能將部分效益重新投資於商業資源與研發，而非加速實現該目標。

法說會完整逐字稿

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完整財報電話會議逐字稿

管理層陳述

Operator

Good morning and welcome to Repligen's Third Quarter of 2026 Earnings Conference Call. My name is Julian, and I will be your operator. [Operator Instructions]

I will now turn the call over to Jacob Johnson, Vice President of Investor Relations for Repligen. Jacob, please go ahead.

Jacob Johnson

Thank you, operator, and good morning, everyone. Welcome to Repligen's 2026 Third Quarter Earnings Call. Joining me today are President and Chief Executive Officer, Olivier Loeillot; and Chief Financial Officer, Jason Garland.

Earlier this morning, we issued our earnings release and supplemental presentation which are available on the Investor Relations section of our website.

Before we begin, please note that today's discussion will include forward-looking statements and certain non-GAAP financial measures. Actual results may differ materially from those expressed or implied by these statements due to risks and uncertainties described in today's earnings release and our SEC filings. Reconciliations of non-GAAP to GAAP measures are included in today's earnings release and supplemental materials. These adjusted financial measures should not be viewed as an alternative to GAAP measures, but are intended to best reflect the performance of our ongoing operations.

With that, I'll turn the call over to Olivier.

Olivier Loeillot

Thank you, Jacob. Good morning, everyone, and welcome to our 2026 third quarter call. We had a record quarter with $209 million of revenue. This is a significant milestone as we surpassed our prior peak in the second quarter of 2022. We believe this is another proof point that the industry is poised for its next phase of growth. It also highlights the benefits of our diversified portfolio and this was driven in part by proteins and chromatography.

In addition, we were delighted to close the acquisition of BioLife earlier this month. This combination further expands our capabilities in the rapidly growing cell therapy end market and strengthens our long-term growth platform.

We will discuss our initial observations and integration efforts in a moment. But first, we delivered $209 million of revenue in the third quarter which represented 12.5% organic growth, while expanding adjusted operating margins by 170 basis points compared to the prior year. This was an excellent result as we were lapping a very strong quarter in the prior year. Our ability to outpace market growth very significantly this quarter is a testament to our team's strong execution in a market that is still recovering.

Following these strong results and incorporating the BioLife acquisition, we're increasing our 2026 guidance. Jason will provide more details.

Our updated 2026 guidance includes an expected $24 million revenue contribution from BioLife for the period following this close in our fourth quarter. This assumes BioLife annual 2026 revenue on a pro forma basis will be approximately USD 114 million, above the midpoint of BioLife's most recent guidance. The business is performing well, and we are very confident about delivering our deal model for 2027 and beyond. With the recent acquisition and ongoing integration we are taking a prudent approach to our initial assumptions for the remainder of 2026.

We are narrowing our organic growth outlook to 12% to 13%. At the midpoint, this represents a 50 basis point increase and assume fourth quarter growth is within the full year range. This also means we will deliver a gain on our full year commitments and outpacing markets significantly.

As I reflect on our end markets, we remain encouraged by the continued improvement in the bioprocessing industry. Importantly, our funnel and order activity continue to strengthen. This is particularly true for capital equipment. Capital equipment orders increased mid-teens year-over-year and was the highest orders quarter in 5 years, while revenue declined.

The tap has not opened as quickly as we would have expected it this year. However, we continue to see encouraging signs in our funnel and order book. We are building a backlog for 2027 and will enter next year in a better position than we did in 2026.

As a result, we remain encouraged that we are seeing a gradual improvement in capital equipment demand with a notable pickup in orders for our systems. We are actively executing initiatives that will strengthen our equipment business and prepare us for the next phase of growth. This includes continued investment in innovation as well as strategic efforts designed to deepen customer engagement and support large-scale manufacturing expansion projects.

One example is our integrated solution team which is focused on addressing customer capacity expansion, such as onshoring. Consumable demand remained outstanding with 20% growth in the quarter, while services was even stronger with greater than 20% growth.

Our services team continues to execute extremely well. Year-to-date, our services team has increased the number of systems under contract by nearly 40% despite a muted capital equipment revenue environment. In addition to incremental service revenue, this allows us to be closer to our customers and provide further insight into their needs.

Services represented 7% of our revenue in the quarter, and we expect it to become a larger mix of our business going forward. In short, our base business remains strong as highlighted by our 12.5% organic growth in the third quarter.

Our funnel and orders suggest a continued improvement in the end market. In addition, we continue to execute our innovation strategy to drive above-market growth.

Moving to our performance by end market. Biopharma revenue drove growth while CDMOs declined on a difficult comparison. Year-to-date, we have seen similar trends for both customer bases. Biopharma growth was strong in all regions, as Europe returned to growth on a more favorable comparison, while year-to-date, biopharma growth has been driven by strength in North America and Asia Pacific.

Emerging biotech grew mid-single digits on a difficult comparison from last year. Demand trends remain healthy as year-to-date emerging biotech revenue has increased in the high teens. New modalities were relatively flat, but grew high single digits, excluding the impact of a certain gene therapy platform. This was led by nearly 30% growth in cell therapy.

In addition, gene therapy demand grew on an absolute basis and north of 25%, excluding the gene therapy headwind. We continue to believe new modalities will be accretive to our medium-term outlook and we're excited to expand our capabilities with the addition of BioLife.

Moving to our strategy update. I wanted to share some initial observations on our first few weeks ownership of BioLife. I will leave you with the most important takeaway first. We are even more excited about the strategic rationale of bringing our organizations together and the value we will create for patients, customers and shareholders.

Jason and I were fortunate to spend time with our team at BioLife side, and I recently joined the BioLife team again in both Brussels and Indianapolis to celebrate the closing. We walked away impressed by our shared culture of innovation and customer centricity. We are thrilled to expand our offerings for the cell therapy market.

Customer feedback has been very encouraging, and we have received a number of positive responses after the acquisition. After months of thoughtful planning, our combined teams are now focused on executing the integration plan and realizing the opportunities we identified ahead of closing. In fact, our team are hosting an integration workshop in Waltham as we speak.

We have already completed actions to deliver a sizable portion of our operating expense synergies. This includes capturing public company and certain leadership costs which represent more than half of our anticipated year 1 synergies. As it relates to cost of goods sold, our team is already hard at work, evaluating potential options to improve CryoStor's scrap rate.

Finally, our commercial team are now collaborating to achieve revenue synergies. We recently cross-trained both commercial teams. We continue to believe our offerings will benefit from BioLife's trusted customer relationship. In addition, our Asia Pacific team has begun to explore the opportunities to increase awareness of CryoStor in the region, particularly in China.

As we look ahead to 2027, we remain focused on outpacing market growth. Assuming the market is growing high single digits, and with the acquisition of BioLife, we are positioned to grow our reported top line at least 25% next year, absent a material change in foreign exchange rates. This will result in our revenue exceeding USD 1 billion, which represents another significant milestone for our company.

Additionally, I wanted to spend some time on our Asia Pacific strategy. As Jason will discuss in more detail, we had another very strong quarter in China with greater than 40% growth. In China, we're advancing several strategic initiatives to strengthen our position in the market, including ongoing technology transfer with our OEM partner as we work to recapture share.

Notably, China recently published its latest 5 years biotech plan. The government expects the industry to grow at over 20% CAGR through 2030. This speaks to the growing activity in this country, and we remain convinced China will be the fastest-growing biopharmaceutical market in coming years. Beyond China, there are significant growth opportunities in the broader Asia Pacific region.

Last week, we opened a new Repligen Training and Innovation Center in South Korea. This underscores our commitment to a strategically important market that has become one of the world's leading hubs for biologics and CDMO manufacturing.

Before I turn the call over to Jason, I'll provide some more detail on our franchise level performance. I will note that all references to our 2026 expectations are on a reported basis.

Starting with filtration. As expected, the previously disclosed ATF headwind was most pronounced in the third quarter and resulted in an 11% decline in filtration revenues. I'll note this includes a 2-point headwind from our polymer divestiture and foreign currency. So the decline was slightly greater than we expected. This was largely timing related with most of our systems order planned for delivery in 2027 per customer's request.

We are encouraged by the hardware backlog we are building for next year. We now expect filtration to be flat to slightly down for the year. This includes the inorganic impact from the sale of polymer.

Turning to chromatography, revenue grew over 50%, with some help from a favorable comparison in the prior year. This was again driven by growth in OPUS columns with continued growth from CDMO and biopharma customers. In particular, we continue to see significant traction with large-scale columns. We now expect chromatographic growth of at least 30% full year.

We had another great quarter in proteins with more than 40% growth, again driven by strength across our portfolio, including positive traction in ligands, growth factors and our custom and catalog resins. We are also pleased to share we recently extended our supply agreement with Ecolab and are excited about our continued partnership.

Our protein strategy is working marvelously and we continue to expect mid-teen growth for the full year. Our analytics franchise had another record quarter with 20% growth, a strong outcome given we faced our most difficult prior year comparison. The growth was driven by a robust demand in consumables and services, while capital equipment remained healthy.

Our downstream protein concentration analytics offering were recently recognized in the USP Chapter of 507 standards. These are widely accepted quality standards used by biopharma manufacturers and regulators. This is a significant milestone that provide external validation of the technology and strengthen our credibility with biopharma customers.

From a commercial standpoint, this recognition should help us reduce barrier to adoption, support broader development of SoloVPE PLUS across products and sites and strengthen the longer-term opportunities for FlowVPX as customers adopts the technology more broadly.

In addition, we have seen traction recently with our PAT-enabled systems, which further expands the FlowVPX opportunity. As the industry continues its journey towards AI and digitization, we have engaged with several key customers who are sharing their AI-enabled process development and manufacturing strategies. This highlights the growing importance of our advanced PAT and digital twin capabilities. Given momentum in downstream demand and a growing contribution from our upstream analytics, we now expect analytics growth of at least 30%.

Before I hand the call over to Jason, I wanted to reiterate how proud we are of our Q3 results as we outpaced industry growth again and how excited we are about the growth opportunities in front of us. This is especially true as we have BioLife therapy capabilities to our portfolio.

The progress we are making in delivering our strategy is increasingly reflected in our results. This is a testament to our team's strong execution and hard work. We have several initiatives underway to drive future growth, including our integrated solution team and Asia Pacific strategy. Combined with our fit-for-growth investments and transformation office, these efforts are helping us build the capabilities and discipline needed to deliver profitable growth.

Now I'll turn the call over to Jason for the financial highlights.

Jason Garland

Thank you, Olivier, and good morning, everyone. Today, we are happy to share another strong quarter results in Q3. These results from our continued execution coupled with the strategic acquisition of BioLife allow us to increase our guidance once again. I look forward to sharing the details shortly.

Before we discuss the quarter, let me highlight that, unless otherwise noted, all financial measures discussed reflect adjusted non-GAAP measures. As shared in our press release, we delivered strong third quarter revenue of $209 million. This is reported year-over-year growth of 11% or 12.5% growth on an organic basis, which excludes the impact of acquisitions, divestitures and foreign exchange.

The previously announced sale of Polymem was slightly under a 1 point headwind to reported growth. And foreign currency was also just under a 1 point headwind as the dollar has strengthened. And for clarity, we recognized de minimis tariff refunds in the quarter.

As Olivier provided details on our product franchise performance, I'll now share more color on our regional performance. Starting with quarterly revenue mix. North America represented approximately 49% of our total; EMEA represented 34%; and Asia Pacific and the rest of the world represented approximately 17%.

North America grew 6%, driven by strength in proteins and analytics, while lapping our strongest quarter in the prior year. EMEA grew over 20% on broad-based strength and a favorable comparison and Asia Pacific declined slightly on a tough comparison with record sales in the third quarter of 2025.

We continue to deliver on our strategic priority of Asia Pacific growth with third quarter orders breaking our prior record. Asia Pacific demand remains very healthy with high teens growth year-to-date. China demand was again robust with greater than 40% revenue growth in the quarter and strong orders. Year-to-date, China sales have grown greater than 50%.

Transitioning to profit and margins. Despite the anticipated mix headwind, we had strong margin performance in the third quarter. Adjusted gross profit was $111 million and adjusted gross margin was 53%. This is a 30 basis point decline versus last year and consistent with our expectation that the third quarter would represent the low point for gross margin in 2026.

Volume leverage and price execution were positive drivers of margin expansion but were more than offset by product mix and inflation. Tariffs had a de minimis impact on margin and year-to-date gross margin has increased 140 basis points versus last year.

Continuing through the P&L, our adjusted income from operations was $33 million in the third quarter, up 24% year-over-year. This translated to an adjusted operating margin of 15.9% and which was an increase of 170 basis points year-over-year.

Adjusted EBITDA was $44 million in the quarter or 20.9% adjusted EBITDA margin. Underlying our margin expansion in the quarter with strong leverage achieved with a modest adjusted OpEx growth of 5%. Given recent trends, we plan to make some investments through the end of this year to support our expected growth in 2027. We will remain thoughtful about balancing investments in the business and expanding margins.

I would note, our GAAP results include a $41 million intangible asset impairment related to an intellectual property license agreement that was signed many years ago that unfortunately did not lead to a positive outcome. As an unusual non-cash and one-time event, the impact of this charge is not included in our adjusted results.

Moving to the bottom line. Adjusted net income was $30 million, a 16% year-over-year increase. Our third quarter adjusted effective tax rate was 25% due to the timing of a specific item in the quarter that we do not expect to repeat.

Our full year outlook is unchanged at approximately 22%. Adjusted fully diluted earnings per share for the third quarter was $0.53, compared to $0.46 in the same period in 2025 or an increase of 15%. We continue to see strong earnings conversion from our robust revenue growth.

Finally, our cash, cash equivalents and marketable securities position at the end of the third quarter was $863 million, up $53 million sequentially from the second quarter. This was driven by strong cash flow from operations, primarily offset by $5 million of CapEx in the quarter.

In October, we deployed approximately $550 million of cash, including fees and net of cash received for the BioLife transaction. As a result, our pro forma cash balance is currently greater than $300 million.

I will now outline the improved outlook in our adjusted financial guidance. For clarity, our guidance includes the contribution of BioLife for the period following the closing of the acquisition on October 6. As Olivier mentioned, given the momentum of our underlying business and with the partial quarter contribution from BioLife, we are increasing our guidance. We are now guiding to $844 million to $852 million of revenue or $848 million at the midpoint. This represents 14.5% to 15.5% reported growth or 12% to 13% organic. This is an increase of 50 basis points at the midpoint versus our prior organic growth guidance.

This assumes approximately $24 million of revenue from BioLife. This is offset by approximately 1 point of headwind from the sale of our Polymem operations we announced earlier this year. In addition, we now assume neutral foreign currency, which had been a tailwind in our prior guidance.

Our reported growth of 14.5% to 15.5% assumes the following across our franchises. Filtration is expected to be flat to slightly down. Chromatography will grow greater than 30%. We expect proteins to grow mid-teens. Analytics is expected to achieve more than 30% growth. And as I previously mentioned, we expect $24 million from a partial quarter contribution from BioLife.

We will initially share BioLife revenue as a separate franchise, though over time, we may evaluate our overall franchise reporting structure. We continue to expect 110 to 160 basis points of gross margin expansion for the year. So with BioLife, we will likely be above the midpoint of this range. We are raising our adjusted operating income guidance to a range of $135 million to $139 million and our adjusted operating margin guidance to 16% to 16.3%. This represents 220 to 250 basis points of operating margin expansion.

Our updated guidance reflects our strong year-to-date performance and includes BioLife, which is accretive to our operating margins. We're extremely pleased with our margin performance this year. Our disciplined cost control and strong execution have allowed us to outperform our initial expectations. As I mentioned previously, we do expect to make investments in the fourth quarter and into 2027 to support future growth.

Moving to the income statement. Our guidance assumes $18 million of adjusted other income. This reflects favorable interest income trends due to rising rates, offset by the cash deployed for the BioLife acquisition. This will reduce interest income to approximately $1.5 million in the fourth quarter. As mentioned earlier, we continue to assume an adjusted tax rate of approximately 22%.

Putting this together, we expect adjusted fully diluted earnings per share to be between $2.05 and $2.09. This is up $0.34 to $0.38 versus 2025 or up 21% at the midpoint. The midpoint reflects a $0.01 increase from our prior guidance. This assumes BioLife is slightly dilutive to earnings given we will recognize nearly a full quarter of expenses, but a less proportionate amount of revenue from BioLife in the quarter.

As Olivier mentioned, we have already completed actions to deliver a sizable portion of our operating expense synergies. As a result, we are well positioned to deliver on at least $0.05 of year 1 accretion in 2027.

We expect CapEx spend to continue being approximately 3%, 4% of 2026 revenue. For additional context, at the midpoint, our guidance assumes fourth quarter organic growth is in the range of our updated full year outlook. We also expect fourth quarter gross margin to be within our full year guidance. We expect operating expenses to be up low double-digit million sequentially as we plan to make some investments in our base business, and it will include a contribution of nearly a full quarter of BioLife operating expenses.

Before I close, I want to touch on our medium-term margin outlook and also provide an update on our strategic IT investments and AI efforts.

First on margins. We have outlined a path to 30% EBITDA by 2030. We're not formally updating these targets, but as we have mentioned previously, BioLife will be accretive to our growth and margins. With BioLife, we believe we could achieve this milestone earlier. This gives us the opportunity to explore reinvesting some of this benefit in areas that accelerate revenue growth instead of achieving this target sooner.

Potential investments include additional commercial resources and R&D innovation spending. As evidenced by our year-to-date performance, we are committed to margin expansion and have made good progress towards our goals this year. We continue to see opportunities from volume leverage, productivity and net pricing. We will balance this with the investments required to support and drive future growth.

One area we have invested in this year is strengthening our IT organization and modernizing our capabilities. We have world-class tools and have onboarded key talent this year, including a new CIO. Our team is focused on optimizing our data infrastructure as the foundation for more broad-based internal AI deployment. We have made considerable progress on these efforts including AI pilots, which are showing tangible results. We plan to leverage these initial learnings more broadly in our organization. In addition, we have launched regular training to empower our employees and their use of AI tools.

Finally, our operations team is working to drive productivity at our manufacturing sites through increased investments in automation. We're excited about the extensive list of opportunities ahead of us.

As we wrap up the call, Olivier and I would like to thank our global Repligen team for another quarter of strong execution. Our record results, increased guidance, progress in the BioLife integration, and continued investments in innovation and growth are all reflections of the team's hard work and commitment. We believe we are well positioned to continue outpacing the market and creating long-term value for our customers and shareholders.

With that, I'll turn the call back to the operator and open the line for questions.

Operator

[Operator Instructions] Your first question comes from the line of Brendan Smith with TD Cowen. Brendan, your line is open. Please go ahead.

分析師問答

Brendan Smith

Maybe I wanted to ask one on kind of the combined Repligen, BioLife outlook. I guess how should we think about maybe the cadence of integration benefits here and really where you see the most potential maybe for immediate or near-term upside versus some other aspects that will likely take a bit more time. And I guess, how much of your vision for this integration is really contingent upon any reacceleration of cell therapies broadly? Or do you kind of see the current state of that space enough to drive growth there, kind of, heading into next year? Just any color on your kind of underlying assumption there would be great.

Olivier Loeillot

Brendan, and thanks for the question here. So, as far as the first part of the question is concerned, I mean, we have already completed actions to deliver a sizable portion of our operating expense synergies, as we mentioned earlier, this really includes capturing some of the public company and certain leadership costs. But also, we are working on longer-term type of action, which is the bag opportunity. And as you know, they had a pretty high scrap rate and we are working on it with them to improve that, and that's a little bit more in the, what I'd call, mid- to long-term type of action here.

As far as the cell therapy market is concerned, I think we mentioned in July, when we signed the deal, we've made very careful assumption as far as the growth of the business for the next 5 to 10 years. And we said we are capitalizing mostly on the current commercial drugs, very high growth. And in fact, those commercial drugs have been growing more than 20% in sales over the last several quarters now. We've assumed to be really on the safe side as there could be no FDA approval offset therapy for the first 2 years after we acquired the business. And as you certainly know, Brendan, there have been 3 cell therapy approved this year already. So we are very confident about our ability to deliver on the business model for BioLife in '27 and beyond as well.

Jason Garland

And I'd just add that, that then there's no change in our view of being at least $0.05 accretive for that first 2027 year.

Operator

Your next question comes from the line of Matt Larew with William Blair. Matt, your line is open. Please go ahead.

Matthew Larew

I wanted to ask on filtration. You mentioned that was maybe slightly worse than expected for you in the quarter, but there was maybe some timing that affected that. Could you just talk about sort of what led to that? Was it ATF or other parts of the franchise? And to the extent it wasn't ATF, just curious if you could comment on ATF and what your confidence is sort of looking into '27 given that there were some pushouts earlier this year?

Olivier Loeillot

Matt, so first of all, I'd like to say like it's a testimony where we have a really very diversified portfolio of product, because, yes, our filtration was maybe a little bit weaker than we expected. The other 3 franchises have been doing extraordinarily well. In fact, we had a record quarter for both analytics and chromatography in the history of the company. But yes, the revenue decline is as expected. I mean, you know we have the headwind of the gene therapy program. We have the 2 customer headwind on the ATF side, and also we sold the Polymem business. But it has been a little bit higher than we thought and the reason is really simply because of the system business.

I mean, and then you heard us saying we had the highest quarter of order in system for the last 5 years, which is fantastic news. There's -- The less positive news was that these sales are going to come in 2027. So the recognized sales of systems that are sitting under filtration, so it's a very broad portfolio of product under filtration and unfortunately are not going to happen either in quarter 3 or quarter 4 of this year, but they're all going to happen in 2027, which is why we are very confident like filtration will be back to historical growth levels in 2027.

Operator

Your next question comes from the line of Dan Arias with Stifel. Dan, your line is open. Please go ahead.

Daniel Arias

Jason, can you just maybe talk about product mix and how you think that, that sets you up into next year? And I guess I'm thinking specifically about filtration and equipment. Historically, I think filtration has been above average and equipment below average. So how should we think about the impact of those contributions stepping up if you guys are right about seeing a rebound there? Do you think the net effect mix is positive or negative as you look out a bit?

Jason Garland

Thanks, Dan. So first, just for clarity, the far majority of our equipment sits in the filtration franchise. So the only thing that meaning that's really outside of it would be our analytics business that we -- than we sell our equipment through there. So that really is one and the same sort of dynamic filtration overall, to your point, ends up being accretive because of the pieces of ATF and other elements than some of the consumables flow that are above our margin.

So we -- for 2026, again, mix becomes a push, plus or minus in terms of what we're seeing this year versus last year. We're still, as you know, going through our budgeting process for '27. But see that, that is a similar case. So again, even as the systems piece of the equipment, which, to your point, would be lower than the average we're going to have other pieces of filtration in the other segments that allow for a lift.

And then you've got, of course, proteins, analytics that are accretive overall. So I think, again, in the end, mix becomes a plus or minus around the neutral level that we'll be able to continue to manage.

Operator

Your next question comes from the line of Doug Schenkel with UBS. Doug, your line is open. Please go ahead.

Douglas Schenkel

I want to ask a couple of questions on equipment. So revenue continues to lag expectations despite improving order trends and a growing backlog. Olivier or Jason, can you just describe what's driving that disconnect? Is it customer project delays, delivery timing? And any other factors that are worth calling out? And then can you talk a little bit about book-to-bill and how much of the backlog represents committed orders with defined delivery schedules. I'm really trying to get at how much visibility and essentially, what needs to happen for conversion into revenue to occur as we think about 2027?

Jason Garland

Yes. Doug, so I'll start just by repeating. We had the highest order intake of capital equipment in quarter 3 of this year since 2021. And this is not like a light statement. I mean, it's something we've been waiting for a long time, and we think that that's really setting us up for a really great year 2027. We already know today end of October of '26 that we're going to enter into '27 with a much stronger equipment backlog than we had when we entered in 2026. So that's definitely really something we're very extremely happy about.

The other good news is we don't think the equipment tap has really opened yet. I mean, if you think about it, we've been hoping to see it opening more than we have seen it so far. But even with the tap probably being only 5%, 10% open, we've managed to deliver the highest quarter for the ever in the history of Repligen. So it means like when the tap finally opens it's going to be really potentially gigantic for all of us here in the industry, and we are really looking forward to it.

So as far as revenue recognition are concerned, I mean, it's good and bad. I mean, we probably won't recognize a lot of it this year. But it's all sitting in 2027. So all of these orders that we've gotten so far, they are all going to be recognized in 2027. So it doesn't go beyond.

And to your question, if this is making you being delayed, the answer is yes, absolutely. I got the highest funnel even after all of these orders, we still have the highest funnel we ever had on the equipment side. What is still not completely there is a velocity of decision-making, the speed which customers really push a button of an order. But the funnel is very high. The order intake has been at the highest level. So we're still very confident about what's coming next. We want the tap to open more, that's the only piece here.

Operator

Your next question comes from the line of Casey Woodring with JPMorgan. Casey, your line is open. Please go ahead.

Casey Woodring

Great. I just wanted to clarify the '27 comments you made earlier. I guess, what's the implied organic growth rate you're assuming? Or maybe asked another way, what do you expect as far as M&A contribution from BioLife in '27? Just been trying to pin down where you expect organic to land next year.

And then I guess on your assumption of the high single-digit market growth rate for next year, that's the same you're assuming for this year. Things seem to be improving from an underlying perspective. So I guess the question there is just how conservative is that end market view from your perspective and what could drive upside to that?

Olivier Loeillot

Yes, Casey. So let me start with the first part of the question. We -- that framework is not a formal guidance for 2027. And you know that very well. We're only giving guidance towards the end of February and then we are aiming to do the same this year again. But we just wanted to highlight the very strong reported growth we are going to experience next year with the acquisition of BioLife and the fact we're going to exceed USD 1 billion sales ratio in 2027. That's a really big milestone for our company. I mean, obviously, who would have thought Repligen would be above USD 1 billion back a couple of years ago. So -- and that's really why we decided to provide that data point.

We are still going through budget exercise right now and bear with us. I mean, we've only consolidated BioLife now for about 20 days or so. And so we're still learning about the business and figuring out exactly how will 2027 play out.

What that remains exactly the same as before is we are still aiming to outpace market growth by more than 500 basis points, which, by the way, we've done the whole of 2025, and we are very close to the 500 basis points above market in 2026. Even though we said with the headwind we had, we might be only 300 basis points above that. So that's really staying exactly the same for next year.

As far as the market -- overall market growth is concerned, I mean, we are just watching and listening to what people say right now. And it's fair to say like, at this stage, people are pretty careful about how will 2027 play out. I think there are two big swing factors for the market growth, Casey, next year around. The first one is really going to be capital equipment pickup. I mean -- and again, even though we had a fantastic order intake in quarter 3, has just mentioned to Doug, I mean we really want to see the tap opening much more fully than we've seen right now. That could be a huge swing factor for the overall market growth.

And the second one I would just mention is probably the approval. I mean this year has played out pretty nicely so far on the cell and gene therapy side. It's a little bit lower on the monoclonal antibody side and biosimilars. So I've always said, we want to see more FDA approval, and that could be another big swing factor for 2027.

Operator

Your next question comes from the line of Puneet Souda with Leerink Partners. Puneet, your line is open. Please go ahead.

Puneet Souda

I'll keep it to one. Just on key topic around onshoring. Wondering, Olivier, anything in the order book that you're seeing suggesting onshoring contribution right now? What's the latest thought on that? And how do you think that plays out in '27 for you?

Olivier Loeillot

Yes, thanks for the question, Puneet. I think you heard us saying we've won several RFPs so far this year, which for us is a great sign because we didn't even have a seat at the table back a year ago. We won 1 RFP in quarter 1, 1 RFP in quarter 2 and 2 RFPs in quarter 3, close to 3. In fact, we didn't count #3 because it was more going on the analytical side of the hardware portfolio. But anyway, so we've won several RFPs.

Now the question is, are they all onshoring related or not. And I'll tell you, they're opening sometimes it's a little bit difficult to pinpoint, yes, this is onshoring or this is just something that would have happened anyway. I can still tell you like I don't think we've seen the beginning of the onshoring project potential that I'm absolutely convinced we're going to see over the next few years now.

When we entered in 2026, I really thought we would see a lot of those RFPs that are purely onshoring related coming our way, and we've probably only seen very few of these. I do still believe we are going to see many more coming, once our customers are become -- companies feel a bit more confident about how to split their capital between U.S., Europe and Asia. And I really think this is going to come sooner than later now. So still very bullish about it. it's fair to say we are probably 9 to 12 months delayed versus what I thought we would be today. But certainly RFPs coming next year, orders probably next year, and certainly some deliveries towards the end of next year and mostly in '28 and beyond year.

Operator

Your next question comes from the line of Dan Leonard with RBC Capital.

Dan Leonard

I was hoping you could talk more about biosimilars as a growth driver. We just saw the first biosimilar for KEYTRUDA filed with the FDA. And with that context, can you speak to when the biosimilar inflection might occur for your business? And how do you feel about your wallet share in the biosimilar market more broadly?

Olivier Loeillot

Yes. Dan, we are really excited about what's coming on the biosimilar side. And in fact, when you think about ATF, which as you know, has been a little bit more pressure this year with those 2 headwinds with the 2 customers. We've had numerous good news on the ATF side. Well, one of them being like by the end of quarter 3, we had on almost as many new products as many new customers we had for the full year of 2026 -- 2025, sorry. But very importantly, a lot of these are going into biosimilars. And we started to see a really notable pickup in biosimilar for ATF. And that's something we're really excited about, because for the reason you mentioned, there will be a lot of products falling in as a patent cliff over the next 2 to 3 years and to be designed in multiple of this, it's going to be a very nice tailwind for us over the next several years for sure.

Operator

Your next question comes from the line of Matt Hewitt with Craig-Hallum.

Matthew Hewitt

Congratulations on the strong quarter. I was hoping to touch on the margins a little bit. I think you noted that you're seeing some higher inflationary pressures. And I'm just curious is some of the investment that you're making internally on AI and some of the manufacturing efficiencies that you're investing in, is that a function of looking for ways to offset some of those inflationary pressures? Or how are you addressing that?

Olivier Loeillot

Matt, so yes, it's a great question. Again, I think just like everyone else, the overall -- whether you stem it from [ oil ] or overall general inflationary pressures, we certainly have some of that as well. First, I'd say the -- our sourcing team is doing a fantastic job in finding offsets and helping to negotiate and work with suppliers to find the best solution. So that's really our first line of defense on that.

I think, then when you look at that broader overall, how do we expand our gross margin, how do we continue to drive productivity. That's where exactly the efforts that the team has been driving is jumping in, particularly on the AI side, whether it's more, I'll say, intelligent inspections to drive better quality. We've done a lot of work this year, and we'll continue to do next year on automation itself, right, in terms of the advancements that we can generate.

And so the -- we've had a lot of great focus from the manufacturing team to help that broader picture of continuing to drive 100-plus points of gross margin expansion like we target and are doing this year.

And the other great news is that we've added a lot of good IT leadership underneath and behind the manufacturing efforts to again add a different set of technologies, a different way to look at our data infrastructure to drive smarter decision-making and really excited about the progress we've made internally on our overall AI and I'll call it AT -- or IT rather modernization and fit for growth execution. So thanks for the question, Matt.

Operator

Your next question comes from the line of Mac Etoch with Stephens. Mac, your line is open. Please go ahead.

Steven Etoch

Maybe Olivier, sticking with the equipment and maybe one on analytics, just I think recently, you noted that 80% of systems sold over the prior last 3 months has included process analytics up from maybe, call it, 20% to 25% last year. Can you just provide us an update with how that attachment rate is trending in 3Q and what's driving the set up? Is it customer pull-through? Is it integrated solutions bundling, onshoring RFP mix, et cetera?

Olivier Loeillot

Yes. Mac, no, we are very excited about what's going on in the analytical side. I mean we had another record quarter, in fact, a record quarter ever for the company with 20% growth. Interestingly enough beyond equipment, we had very strong sales of both consumables but also services. You heard me saying earlier, we are now servicing 38% more of our system versus beginning of this year, and it's still a long runway. So service is going to be really accretive to our growth over the next several years.

But one of the big events really that happened recently for us is the USP Chapter 507 recently recognized our SoloVPE PLUS technology as being really the technology, which is aligned with the official standard to measure protein concentration. And that's a really, really big milestone for us because where we knew people were using our technology mostly say for protein concentration. And as you just alluded to it, this is going to be another big accelerator for the FlowVPX side of the picture, which is really this in-line protein concentration tool that indeed our customers are using now much more broadly than they were a year ago.

And you're right, 75%, 80% of any system we are selling, there is a FlowVPX attach that's one of the other reason why this analytical business has been growing very nicely. And we love it, obviously, a lot because beyond the growth of analytics, this is also enabling us to differentiate ourselves very, very strongly on the equipment side -- downstream equipment side.

And with the upcoming tap opening much more broadly, we think that's going to become a huge differentiating advantage for us. So a lot of great stuff happening on the analytical side. I'll just end up by saying, as you know, we are in the upgrade cycle of the SoloVPE installed base, where we've seen quite a lot of upgrade already. We are still pretty much at the beginning of the cycle here. So we are really poised for several other great quarter of our analytical product portfolio.

And finally, on the 908 side, where I was always open saying the integration has taken us more time than probably expected initially, we are now really running full speed and our funnel of opportunity has increased by 50% in the beginning of the year. So this should be another really nice tailwind for our analytical business in 2027 and beyond as well.

Operator

Your next question comes from the line of Justin Bowers with Deutsche Bank.

Justin Bowers

So Olivier, just sticking with PAT, it sounds -- can you refresh us on the opportunity for -- in terms of the replacement cycle for Flow? And then part two, is just -- it sounds like systems are the primary driver of the filtration revisions. Can you discuss how the consumables piece of the franchise is performing this year?

Olivier Loeillot

Yes. So on PAT, I kind of already answered quite a bit of your question with Mac earlier. I mean, we think -- I made the analogy to the iPhone when the first iPhone was launched with a camera, where nobody really thought why do I need a camera, I have my own camera, it's beautiful and now probably 80% of people buying a new iPhone is because of the better quality of the camera. So I think the analogy is like people didn't really realize there was a tool called FlowVPX that would enable them to measure protein concentration in line.

And this now that says they probably bought 1 or 2 systems over the last 2 to 3 years, they realize that they love it and that this is becoming a really big key differentiator and that now they would not even imagine probably running a system without having the ability to measure protein concentration live.

So according to that, this is becoming really a big differentiator for us.

And yes, I forgot the second half of your question, can you repeat again?

Justin Bowers

Yes. It was just around filtration. It sounds like the systems are coming in a little wider than what your expectations were. So just trying to understand how the consumables piece is trending versus expectations and how that's performing this year.

Olivier Loeillot

Yes. No. So...

Justin Bowers

And some of the anticipated headwinds.

Olivier Loeillot

Yes, exactly. So the two are somewhat linked to each other. Justin, if you think about it, I mean, particularly on the ATF side, I mean, if people delay buying equipment and so on, then you might have a little bit less of the flow of new consumable coming in. So where the flow of consumable from existing product that have been either on the market, commercialized or in late phase is at a good level, it's fair to assume like there was less hardware installed over the last 6 to 12 months and probably less new consumable order coming from this lack of new hardware.

But as I mentioned earlier, in the first 9 months of the year, we got as many new customers/new application wins as we had for the full year of 2025. So I'm really very confident that we're going to be back to very nice growth trend for ATF from '27 onwards.

And then outside of ATF, we had a pretty good performance of our flagship cassette business, which is probably one of the few areas where we really have direct competition, not a lot of differentiation, and it's fair to say we are gaining market share on that side because that part of the business has been doing really well this year.

And then finally, Fluid Management, where the growth overall has been nice. We were probably hoping to see even more growth than we have, which is maybe one of the other factor why filtration finally is a little bit lower than we thought. But from a margin point of view, as you know, Fluid Management margin are quite significantly lower anyway.

Operator

Your next question comes from the line of Michael Polark with Wolfe Research. Michael, your line is open. Please go ahead.

Michael Polark

I want to better understand the BioLife fourth quarter guidance and what it might suggest for a good 2027 model input. So $24 million for the fourth quarter, you didn't own it for 6 days. So almost a full quarter. The year ago in fourth quarter '25 was about $25 million. So it looks like you're modeling it flat to maybe up a little bit on a full quarter basis. And it had otherwise been a 20% growth asset. So I want to understand, is this just a normal model haircut, hey, you're learning a bunch more. So let's model a little lower than where they were running or is there something specific about that adjustment?

And then the related question is just running into '27, is it -- is the good number for now the $115 million, the current run rate? Or is $135 kind of 20% growth still reasonable for modeling purposes?

Jason Garland

Yes, great question. I think we just really need to impress in those first days of October, they were -- they had a lot of shipments in responding to some very specific customer needs. And so on -- on a, I'll say, a run rate basis, there was a disproportionate amount of sales in those first days. And so it really isn't the math of a flat year-over-year. So I would caution you to take that view.

And of course, we'll continue to see how they'll deliver in the fourth quarter and then into next year. Again, I think you're thinking about all the pieces in the right way. We, again, have just owned them for, what do we say, 20 days. And so we're continuing to get our arms around their '27 outlook. Certainly, we have our models and expectations.

But before we finalize the budget and a guide on that, we're going to spend the right time to do it. Again, no change in the view overall, though that, that there'll still be at least $0.05 accretive for us kind of top to bottom on the P&L. So really excited about what we've learned and Olivier highlighted that we're even more excited as we spent more time there and excited about the market. So more to come to talk through that.

Olivier Loeillot

And Mike, just to add to what Jason said, with the $24 million plus what they recognized during the first few days of October, plus the quarter 3 results, we are aiming for full year USD 114 million sales for the BioLife business, so which is above the midpoint of the last guidance, Rod gave at the last earnings call, he had for BioLife separated.

Operator

Your next question comes from the line of Paul Knight with KeyBanc ahead. Paul, your line is open. Please go ahead.

Paul Knight

Olivier, could you talk to the Ecolab renewal? And also looking at this 40% proteins growth, is this to imply that we're now a kind of critical mass of the years of development at that particular product line and 40% could happen again in the quarter or years ahead?

Olivier Loeillot

Yes. Paul, yes. So starting with Ecolab, yes, we are indeed very pleased that we have just extended our supply agreement with them. This is really building on the very strong and productive partnership we've had between the 2 companies. I've been with Repligen for the last 3 years, I have to say we're becoming closer and closer, supporting each other, and they have an incredible momentum. So we see a really meaningful opportunity to build on that success in several years ahead of us.

As far as the broader protein franchise is concerned, you heard me saying, and I love all of my 4 big franchises, but this one, I think we've done a stunning job to just reinvent ourselves because where we were a pure OEM supporter of our 3 companies back a few years ago or so, beyond now the Purolite collaboration, we have our own is in our hands very broadly on both growth factors, but also on our own custom catalog resin for non-monoclonal antibody application.

And we've had incredible traction for the last several quarters now. In fact, year-to-date, our protein business has been growing 34%. So we are -- it's still a bit lumpy, which is why quarter 4 will be a little bit more challenging. We have high comp in quarter 4 for protein, but we've got so many opportunities across the entire protein franchise that the next several years are going to be extremely exciting for that franchise here.

Operator

We have reached the end of the Q&A session. I will now turn the call back to Olivier Loeillot for closing remarks.

Olivier Loeillot

Thank you, Julian, and thank you all for joining us today. We are really very pleased with our record third quarter results. We're also very encouraged by the continued momentum we have across our business. With the addition of BioLife and the strategic investment we are making across our entire portfolio in all regions, we are extremely well positioned to capitalize on the growth opportunities ahead of us.

Thank you again, and have a great day.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.