Repligen's Strong Q3 Recovery: CEO Says Pharma Orders Rebound, Analytics Business Grows

Repligen Corporation RGEN reported third-quarter (Q3) revenues of $141.19 million, down 30% Y/Y, beating the consensus of $140.64 million.

The company's Q3 adjusted EPS reached 23 cents, beating the consensus of 17 cents and down 77 cents a year ago.

For Q3 2023, base business accounted for approximately 99% of total revenue. There was no COVID-related revenue in the quarter, compared to approximately $29 million for Q3 2022.

Adjusted income from operations for Q3 2023 was $5.2 million, compared to $58.2 million for Q3 2022.

In October, Repligen completed the acquisition of Metenova for $164 million in cash and $9 million in equity consideration.

"While the broader challenges that have dominated our industry over the last twelve months continued in the third quarter, we saw positive signs of recovery," CEO Tony Hunt said. "Our order book strengthened by mid-quarter, delivering an overall book-to-bill of 1.07 by quarter end."

"In particular, orders from our Pharma customer base rebounded, with many of the projects highlighted on our second quarter call converting to purchase orders. In addition, we continued to see momentum in the gene therapy space and delivered another growth quarter for our Analytics business," he added.

Guidance: Repligen forecasts FY23 adjusted EPS of $1.70-$1.76 versus prior guidance of $1.72-$1.80 and consensus of $1.74.

The company expects FY23 revenues of $635 million-$645 million versus previous guidance of $635 million-$665 million and a consensus Of $644.53 million.

William Blair writes that Repligen's shares are trading at 33.3 times the previous 2024 EBITDA estimate, in contrast to the 15-year average of 48 times. 

The perspective on Repligen remains unwavering as a top-tier player in the bioprocessing sector, and William Blair anticipates the company's continued delivery of exceptional top-line growth, which should help sustain the current valuation multiple. It reiterates the Outperform rating.

Price Action: RGEN shares are up 4.74% at $119.58 during the premarket session on the last check Tuesday.