Bio-Techne (TECH) Stifel 2025 Healthcare Conference summary

Recent financial performance and market dynamics

• Organic revenue declined 1% in the recent quarter, mainly due to two large GMP protein customers not placing new orders after prior high-volume purchases tied to Fast Track FDA approvals.

• Underlying growth, excluding these customers, was low single digits, with positive momentum in academic, biotech, pharma, and China end markets.

• Pharma end market showed continued double-digit growth, and China achieved a second consecutive quarter of positive growth.

• ProteinSimple franchise delivered double-digit consumables growth in 10 of the last 12 quarters.

• Management expressed increased optimism for future quarters, citing stabilizing end markets and building momentum across verticals.

GMP business outlook and growth expectations

• GMP business remains lumpy due to customer concentration and clinical trial purchasing patterns, but is expected to stabilize as more customers reach commercial stages.

• Five customers are currently in phase three, with none yet commercial; commercial supply agreements will improve order predictability.

• Near-term headwinds from two major customers are expected to be 400 basis points in Q2, then 200 basis points in Q3, with upside possible if orders resume.

• Long-term, GMP protein growth is targeted at 20%+ in recovering markets, potentially higher as customers commercialize and new products are launched.

• Innovations like ProPAX and expanded GMP production in the UK support growth, with further upside if additional partnerships are added.

Academic and pharma market trends

• Academic market represents 22% of revenue, with US academic showing signs of stabilization and grant activity aligning with oncology and neurology research.

• Core research products in academic were flat after prior declines, indicating a return to normalized activity levels.

• Customers are behaving in line with expectations for a flat NIH budget, with less voluntary budget cutting than in previous quarters.

• Pharma end market is expected to continue double-digit growth for the company, outpacing pharma R&D budget growth.

• Normalized market conditions could drive mid- to high-single-digit growth in core reagents.