Executive Summary / Key Takeaways

• Repligen is emerging from a period of headwinds, demonstrating strong underlying business momentum driven by its highly differentiated bioprocessing technologies and strategic execution, evidenced by 11% organic revenue growth (14% non-COVID organic) in Q1 2025.
• The company's targeted M&A strategy, particularly recent acquisitions like the 908 Devices PAT portfolio and Tantti Laboratory, is enhancing its technological moat and expanding its addressable market in high-growth areas like new modalities and process analytics.
• Operational improvements and strategic pricing are driving significant margin expansion, with adjusted gross margin reaching 53.7% in Q1 2025 and full-year 2025 adjusted gross margin guided to 52-53%, representing 160-260 basis points of year-over-year expansion.
• Strong order trends, including a 18% sequential increase from Q4 2024 to Q1 2025 and double-digit growth across most franchises, signal sustained demand and support management's unchanged full-year 2025 organic guidance of 9.5-13.5% growth.
• While macro uncertainties persist (tariffs, China, biotech funding), Repligen's focused portfolio, key account strategy, and operational agility position it to outperform the broader bioprocessing market and capitalize on long-term growth drivers in biologics manufacturing.

A Specialized Force in Bioprocessing's Evolution

Repligen Corporation stands as a specialized global life sciences company, operating at the critical juncture of biological drug manufacturing. With over 40 years of industry expertise, the company develops and commercializes innovative technologies and systems designed to enhance the efficiency and flexibility required by biopharmaceutical companies and Contract Development and Manufacturing Organizations (CDMOs) facing pressures on production costs, capacity, quality, and timelines. As the broader market for biologics continues its secular growth trajectory, Repligen's portfolio, spanning filtration, chromatography, proteins, and process analytics, plays a vital role in optimizing both upstream and downstream processes. The company strategically positions itself by focusing on highly differentiated technologies and pursuing targeted acquisitions that complement its existing capabilities and expand its reach into high-growth areas like new modalities, including viral vectors, mRNA, and cell and gene therapies.

The bioprocessing landscape is dominated by larger, more diversified players such as Sartorius AG (SRT), Thermo Fisher Scientific (TMO), and Danaher Corporation (DHR), who possess significant scale, broader portfolios, and deeper financial resources. While these competitors offer comprehensive, end-to-end solutions, Repligen carves out its competitive niche by focusing on best-in-class, specialized technologies that address specific bottlenecks and unmet needs in the manufacturing workflow. This focused approach allows Repligen to often lead in innovation speed within its chosen domains, developing solutions that can offer tangible performance advantages over more generalized offerings from larger rivals. For instance, Repligen's strategy emphasizes technology integration, such as combining its FlowVPX analytics with ARTeSYN systems, creating differentiated offerings that resonate with customers seeking enhanced process understanding and control.

Repligen's competitive standing is further bolstered by its strategic focus on key accounts and its agility in responding to evolving customer requirements, particularly in the rapidly advancing new modalities space. While larger competitors benefit from economies of scale that can sometimes translate into lower upfront product costs, Repligen aims to justify its potentially higher price points through superior performance, improved yields, and enhanced operational efficiency for its customers. This requires a strong technical sales force and deep customer relationships, areas where Repligen has been actively investing, including building out a dedicated key account management team covering its top 20 customers.

Technological Edge: The Engine of Differentiation

At the heart of Repligen's investment thesis lies its portfolio of differentiated technologies, which provide a competitive moat in specific bioprocessing applications. The company's strategy is centered on developing and acquiring technologies that offer quantifiable benefits to customers, driving adoption and market share gains.

Key examples of this technological differentiation include:

• Acoustic Wave Separation (ATF): This technology is a cornerstone of Repligen's Filtration franchise. While specific quantifiable yield improvements over traditional methods were not detailed in the latest reports, management highlighted that ATF consumable revenues grew greater than 20% year-on-year in Q1 2025, reaching a record non-COVID level, and that ATF technology was designed into another blockbuster mAb during Q3 2024. The increasing adoption of ATF, particularly at 9 of the top 10 CDMOs and in late-phase/commercial drugs, is driving significant consumable uptake, indicating its value in process intensification and yield enhancement.
• OPUS Pre-Packed Chromatography Columns: These columns offer significant advantages in purification workflows, particularly for CDMOs and increasingly for large pharma. Management reported that Chromatography orders increased greater than 50% in Q1 2025, the highest quarterly order intake in three years, driven by growth in large-scale columns. This suggests that the speed and convenience of pre-packed columns, enabling faster changeovers and reduced packing validation time, are compelling benefits for customers.
• FlowVPX Process Analytics: This technology, designed for real-time protein concentration measurement, is being integrated with Repligen's systems (like ARTeSYN). While specific quantitative performance metrics for FlowVPX itself were not provided, management noted that Process Analytics revenue grew 20% in Q1 2025 (12% organically), driven by consumable and service uptake. The integration with systems is creating a new market need and is being platformed by several big pharma companies to improve productivity, highlighting the value of integrated PAT solutions.
• Proprietary Resins and Ligands: Through organic R&D and acquisitions like Avitide and Tantti, Repligen is developing its own content for chromatography resins, particularly for new modalities. Management highlighted strong growth in chromatography custom resins in Q1 2025 and the planned launch of at least two, if not three, new resins over the next few quarters, focusing mostly on new modalities. The strategic intent is to offer tailored purification solutions for the diverse and complex molecules in this space, leveraging technologies like Tantti's macroporous beads combined with Avitide's affinity content to potentially offer superior capacity and throughput.
• Metanova Mixing Technology: Following the Metanova acquisition, Repligen is launching single-use mixers (ProConex MixOne) based on this technology. Management described Metanova's technology as considered the "best mixing technology by far" and expects initial orders for the single-use mixers in the second half of 2025, with sales projected for 2026 and beyond. This expands Repligen's offering in fluid management with a differentiated technology.

These technological advancements contribute directly to Repligen's ability to command premium pricing, improve gross margins (Q1 2025 GM of 53.7% reflects favorable mix and productivity), and gain market share in targeted segments. The ongoing investment in R&D, further boosted by the integration of acquired teams and technologies (like the 908 Devices PAT portfolio), is aimed at maintaining this innovation edge and addressing the evolving needs of the bioprocessing market, particularly the increasing demand for process intensification, continuous manufacturing, and advanced analytics.

Financial Performance: Emerging from Headwinds

Repligen's financial performance in Q1 2025 signals a clear acceleration following a challenging 2024. Total revenue for the quarter reached $169.17 million, an increase of 10.4% year-over-year. More significantly, organic revenue growth was 11%, and organic non-COVID growth stood at a robust 14%, demonstrating strong underlying business momentum. This performance exceeded expectations and was achieved despite a foreign exchange headwind.

The improvement was broad-based across key franchises, with Proteins showing the highest growth, outperforming expectations due to strong chromatography resin sales and timing of commercial demand. Chromatography and Analytics also delivered double-digit growth. While Filtration revenue saw a slight decline year-over-year excluding COVID, this was attributed to a tough comparison from a large hardware sale in the prior year, with underlying strength in consumables and fluid management.

Profitability saw significant expansion in Q1 2025. Adjusted gross profit was $91 million, resulting in a 53.7% adjusted gross margin, a substantial increase of nearly 450 basis points compared to 50.1% in Q1 2024. This margin improvement was driven by higher volume leverage (150 bps), favorable product mix (100 bps, particularly from Proteins), and strong manufacturing productivity (200 bps), partially offset by COVID-related headwinds (60 bps). Adjusted operating income rose sharply to $23 million, up 72% year-over-year, translating to a 13.8% adjusted operating income margin, a 490 basis point increase from 8.9% in Q1 2024. This leverage was achieved despite a 9% increase in operating expenses (6% organic), reflecting disciplined cost management relative to revenue growth.

Looking back at the full year 2024, Repligen reported total revenue of $634.44 million and a GAAP net loss of -$25.51 million. This reflected significant headwinds, including a major reset in the Proteins franchise due to decreased OEM ligand demand and a slowdown in the China market. The year also saw substantial pre-tax restructuring and other inventory-related charges totaling $81.1 million since July 2023, with $59.7 million related to inventory write-offs. These actions, while impacting 2024 results, were part of a plan to streamline operations and right-size inventory levels to better align with current demand and product strategies, positioning the company for improved profitability moving forward.

Liquidity remains strong, with cash and cash equivalents totaling $697.2 million at March 31, 2025. While cash decreased sequentially from $757.4 million at year-end 2024, this was primarily due to the $69.7 million cash used for the acquisition of the 908 Devices PAT Portfolio.

Operating activities provided $15.0 million in cash in Q1 2025, demonstrating positive cash generation from the core business. The company believes its current cash balances are sufficient to meet its needs for at least the next 24 months, absent potential large acquisitions or debt conversions.

Strategic Outlook and Guidance

Repligen's management is confident in the company's trajectory, maintaining its full-year 2025 organic guidance despite the dynamic macro environment. The guidance calls for organic revenue growth of 9.5% to 13.5%, with organic non-COVID growth expected between 11.5% and 15.5%. Reported revenue guidance was slightly increased to a range of $695 million to $720 million solely to incorporate the expected revenue contribution from the recently acquired 908 Devices PAT portfolio.

This outlook is supported by strong order momentum, with Q1 2025 orders up high teens year-on-year and sequentially higher than Q4 2024, a period that itself saw the highest order intake since Q2 2022. Management expects the revenue cadence to follow historical seasonality patterns, with the second half of 2025 projected to be stronger than the first half, and year-over-year organic non-COVID growth expected to accelerate in Q2.

Key drivers for the 2025 outlook include continued strength in Filtration, Chromatography, and Proteins (expected to rebound after the 2024 reset), and significant growth in Analytics (20-25% expected) driven by the integration of the 908 Devices portfolio. Margin expansion is a core focus, with adjusted gross margin guided to 52-53% (160-260 bps expansion) and adjusted operating income margin expected between 13.5% and 14.5% ($95M-$102M). This is anticipated to be driven by volume leverage, strategic pricing, manufacturing productivity enhancements (via the Repligen Performance System), and strategic sourcing savings, offsetting inflation and prior-year COVID impacts.

Strategically, Repligen is focused on accelerating growth through its key account strategy and expanding its presence in Asia, particularly South Korea and Japan, while rebuilding its strategy for China with an expectation for market growth from 2026 onwards. Increased investment in R&D is planned to capitalize on innovation, including new resin launches and the commercialization of the single-use Metanova mixer. The company also maintains its ambition to pursue strategic M&A, targeting one to two businesses focused on new modalities and PAT, leveraging its strong balance sheet. Efforts to become "fit for growth," including investments in finance and quality systems, are underway to support future scale.

Risks and Considerations

While the outlook is positive, several risks warrant investor attention. Macroeconomic uncertainty, including global geopolitical conflicts, supply chain challenges, inflation, and foreign currency fluctuations, could impact demand and profitability. The potential imposition of new tariffs, particularly retaliation affecting US-manufactured revenue in Europe and Asia ex-China (which represents about a quarter of total revenue), could create headwinds, although management believes the net impact on EPS would be minimal due to mitigation efforts.

The China market remains challenging, although its reduced contribution (2% of Q1 2025 revenue) limits its overall impact. The health of the emerging biotech funding environment is also a factor to monitor, as softness in this segment could affect demand, although it currently represents less than 10% of Repligen's business.

Operationally, the company is still working to remediate previously reported material weaknesses in internal control over financial reporting related to revenue recognition, IT general controls, and certain business process controls (inventory valuation, financial close). While remedial actions are underway, these weaknesses have not yet been remediated as of March 31, 2025, and their full resolution is necessary to ensure the reliability of financial reporting.

Furthermore, the successful integration of recent acquisitions, particularly the 908 Devices PAT portfolio and Tantti, is crucial to realizing expected synergies and driving future growth. Delays or challenges in integration could impact financial performance and strategic objectives.

Conclusion

Repligen is demonstrating a compelling turnaround story, moving past the significant headwinds of 2024 with renewed momentum driven by its differentiated technology portfolio and focused strategic execution. The strong Q1 2025 results, marked by double-digit organic growth and substantial margin expansion, provide tangible evidence of the company's recovery and the effectiveness of its operational and commercial initiatives.

The core investment thesis for Repligen rests on its ability to leverage its innovative products and targeted M&A strategy to capture market share in the growing bioprocessing market, particularly within the dynamic new modalities space. The company's technological advantages in areas like ATF, OPUS columns, integrated PAT, and specialized resins position it favorably against larger, more diversified competitors by offering specialized, high-performance solutions that address critical customer needs for efficiency and yield.

While macro uncertainties and operational risks, including the ongoing remediation of material weaknesses, require careful monitoring, management's unchanged organic guidance for 2025, supported by robust order trends and a strengthening opportunity funnel, signals confidence in achieving above-market growth. The projected margin expansion further underscores the potential for improved profitability as volume recovers and productivity gains are realized. For investors, Repligen represents an opportunity to invest in a specialized bioprocessing player with a proven track record of innovation and a clear strategy to capitalize on the long-term growth drivers in biological drug manufacturing, positioning itself for sustained performance in the years ahead.