Yahoo Finance Cryoport, Inc. (NASDAQ:CYRX) Q4 2023 Earnings Call Transcript
Cryoport, Inc. (NASDAQ:CYRX) Q4 2023 Earnings Call Transcript March 12, 2024
Cryoport, Inc. misses on earnings expectations. Reported EPS is $-1.31 EPS, expectations were $-0.32. Cryoport, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good afternoon and welcome to Cryoport's Fourth Quarter and Full Year 2023 Conference Call. All participants will start in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the call over to your host, Todd Fromer from KCSA Strategic Communications. Please go ahead.
Todd Fromer: Thank you, operator. Before we begin today, I would like to remind everyone that this conference call contains certain forward-looking statements. All statements that address our operating performance, events, or developments that we expect or anticipate occurring in the future are forward-looking statements. These forward-looking statements are based on management's beliefs and assumptions and not on information currently available to our management team. Our management team believes that these forward-looking statements are reasonable as and when made. However, you should not place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or otherwise, except as required by law.
In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results, events, and developments to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include but are not limited to those described in Item 1A, risk factors, and elsewhere in our annual report on Form 10-K filed with the Securities and Exchange Commission and those described from time to time in the other reports which we file with the Securities and Exchange Commission. With nothing further, it is now my pleasure to turn the call over to Mr. Jerrell Shelton, Chief Executive Officer of Cryoport. Jerry, the floor is yours.
Jerrell Shelton: Thank you, Todd. Good afternoon, ladies and gentlemen. Thank you for joining our earnings call today. With us this afternoon is Chief Financial Officer, Robert Stefanovich; our Chief Scientific Officer, Dr. Mark Sawicki; and our Vice President of Corporate Development and Investor Relations, Thomas Heinzen. As a reminder, we have uploaded our fourth quarter and full year 2023 and review document to our website. It can be found under Investor Relations in the News and Events section. This document provides a review of our financial and operational performance and a general business outlook. If you've not had a chance to read it, I would encourage you to go to our website and download it. I'll provide you with a brief update on our business and then we'll move into answering your questions.
Today, we reported total revenue of $233.3 million for fiscal year 2023, which was within our guidance range. 2023 turned out to be a challenging global operating environment, which impacted revenue across all of our business units. Product revenue was lower than historical levels, even as MVE revenue began to stabilize in the last quarter of the year. At the same time, in 2023, we saw further growth in service revenue as it became a greater part of our business. Our service business is the core driver of our growth, generating over $144 million in revenue, which represents 62% of our total. As part of this growth, we had a year-over-year growth in BioStorage/BioServices revenue of 45% and Commercial Cell & Gene Therapy revenue of 33%. As of December 31, 2023, we supported a record of 675 clinical trials worldwide, a net increase of 21 clinical trials over last year, with 82 of these in Phase 3, as well as 311 in Phase 2.
I think it's important to point out that our clinical trial portfolio constitutes a significant long-term revenue growth opportunity for Cryoport as most therapies proceed through clinical trials toward commercialization. We currently support 14 commercial therapies, up from 10 the prior year. We expect the number to grow again this year, driven by an anticipated 17 application filings and an anticipated nine new therapy approvals. In fact, we have already had two new therapies approved and one BLA filing this year. So we're off to a pretty good start. Product revenue in 2023 was lower than historical levels. As reported previously, our MVE Biological Solutions revenue began to stabilize in the latter part of the year. Putting these short-term anomalies in perspective, MVE is a global leader in the manufacture of cryogenic systems.
It is a resilient business and through cost controls, it has been able to maintain strong margins and generate considerable cash flow for our company. We remain confident in MVE and its future. I think the cell and gene therapy industry is still in a nascent stage that will develop in a way that will transform the way we practice medicine for the betterment of mankind. The actions we take daily are to support that vision, not just for the short term, but for the longer term as well. To that end, a few of the actions we took during 2023 to further position ourselves for continued growth and industry leadership included making targeted investments in our business and forming strategic relationships with respected partners. For example, we acquired Bluebird Express, a provider of time-sensitive domestic and international transportation services with the intent to strengthen CRYOPDP’s USA rollout.
We also completed the acquisition of TEC4MED LifeSciences, a technology company that provides next generation communication and condition monitoring technology for the life sciences. It is through tactical investments with strategic impacts such as these that we have over the years expanded our solutions beyond logistics and transformed our company into a robust platform of temperature control, supply chain solutions for the life sciences with a focus on cell and gene therapy. We pay attention to the development of our ecosystem and to that end, we developed additional strategic partnerships in 2023, including forming a new collaboration with Cell and Gene Therapy Catapult network in Stevenage, England, to provide integrated logistic support to its Manufacturing Innovation Center.
Through this partnership, we are establishing our first UK logistic center to support cell and gene therapy clinical trials and future commercial growth throughout Europe. Stevenage is located in the center of the Golden Triangle, arguably the most cell and gene therapy concentrated activity in all of Europe. We also expanded our relationship with NMDP BioTherapies, formerly known as Be the Match therapies, in which it will be leveraging our new IntegriCell platform in support of allogeneic donor recruitment, collection, and cryopreservation. In Asia-Pac, we developed a strategic partnership with Nippon Express, headquartered in Tokyo, which will build onto our growing APAC presence and bolster our temperature control supply chain solutions worldwide.
Our business development activities included welcoming a number of key new clients from which revenue will ramp up over time. For example, Sarepta's gene therapy, Elevidys, for the treatment of Duchenne Muscular Dystrophy has ramped up treating patients much faster than Wall Street had predicted. And by June of this year, Sarepta may receive a label expansion for Elevidys that removes all the current age restrictions. Other positive cloud developments that have continued into 2024 include the FDA's commercial approval of Iovance Biotherapy’s Amtagvi therapy for advanced melanoma, the FDA's commercial approval of CRISPR and Vertex of CASGEVY for the treatment of sickle cell and beta-thalassemia. And the FDA's acceptance for priority review of Adaptimmune’s biological license application for afami-cel and investigational engineered T-cell therapy for advanced synovial sarcoma.
As these and other anticipated therapies are introduced into the market and begin to ramp up, our commercial revenue will grow, driving further growth in logistics and bioservice revenue. We continue to set a new standard for the cell and gene therapy industry as evidenced by the launch of innovative and revolutionary products and services, including the Cryoport Elite line of shippers, which include the Cryoport Elite UltraCold -80 shipper. These cutting edge shippers are setting a new bar, exceeding industry standards, temperature, hold times, and providing additional risk mitigation. Our advanced integrated technologies enable data management and transparency verified through our training compliance service platform. With product introductions like these, we continue to expand our end-to-end solutions for the care and transport of cell and gene therapies.
The developments and actions I've outlined today are just a few examples of solid foundation Cryoport continues to build to support our long-term growth strategy. Growth in the cell and gene therapy market alone, along with other sectors of the life sciences, paused over the last year or so, but we expect 2024 to show progressive improvement throughout the year. Therefore, we're providing a full year 2024 revenue guidance in the range of $242 million to $252 million. As we move through 2024, we will continue to focus on leveraging our growth drivers and strengthening our industry leading brands to better serve our clients while capitalizing on the growth of the cell and gene therapy industry as more of these life-saving therapies receive regulatory approval globally.
We believe 2024 will be a year of progressive advancement in our business with stronger overall growth in our service business. That concludes my prepared remarks. Now we're happy to take your questions. Operator, please open the lines for questions.
See also 15 Most Advanced Countries in International Trade and 20 Cheap Alternatives to Aveda Shampoo.
To continue reading the Q&A session, please click here.
