Avantor's (AVTR) Tie-Up to Address Temperature-Specific Logistics
Avantor, Inc. AVTR recently entered into an agreement with Tobin Scientific to support end-to-end moves for U.S. biopharma customers looking to relocate their labs, research facilities and samples. This partnership is expected to address the growing customer need for complex logistics solutions with temperature-specific requirements.
Tobin Scientific is a renowned provider of biopharma cold chain, ambient storage and transport & logistics services.
The latest partnership is expected to significantly strengthen Avantor’s Americas segment.
Rationale Behind the Collaboration
The partnership between the two companies is expected to leverage Tobin Scientific's expertise in the transfer of goods with temperature-specific requirements, while the transportation and logistics services complement Avantor's biorepository and archiving services. This will likely result in a better customer experience.
Per Avantor's management, its customers require the flexibility of working at their suitable locations. Hence, lab and research moves are critical to meet that need, along with a focus on efficiency and security. Management believes the partnership with Tobin Scientific will likely offer efficiency via an end-to-end solution and support its customers per their need to grow and scale.
Tobin Scientific’s management feels that its advanced storage and transport solutions, together with Avantor's diverse market reach, will likely combine to provide essential services for all customers.
Industry Prospects
Per a report by Fortune Business Insights, the global cold chain logistics market is anticipated to grow from $242.39 billion in 2021 to $647.47 billion by 2028 at a CAGR of 15.1%. Factors like the rapidly increasing distribution networks of biopharma companies and a shift from small molecule drugs to biosimilars (primarily vaccines and biologic drugs) are likely to drive the market.
Given the market potential, the latest association is expected to significantly strengthen Avantor’s business.
Notable Development
In July, Avantor reported its second-quarter 2023 results, wherein it recorded strong core organic revenue growth in bioproduction. The company delivered double-digit growth in the education & government end market in the Americas in the second quarter.
Price Performance
Shares of Avantor have lost 22.3% in the past year compared with the industry’s 16.4% decline. The S&P 500 has witnessed 8.7% growth in the said time frame.
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Zacks Rank & Stocks to Consider
Currently, Avantor carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space are DaVita Inc. DVA, HealthEquity, Inc. HQY and Integer Holdings Corporation ITGR.
DaVita, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 12.7%. DVA’s earnings surpassed estimates in three of the trailing four quarters and missed once, with an average surprise of 21.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DaVita has gained 0.3% against the industry’s 12.3% decline over the past year.
HealthEquity, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 22.2%. HQY’s earnings surpassed estimates in all the trailing four quarters, with an average of 13%.
HealthEquity has lost 0.4% compared with the industry’s 16.4% decline over the past year.
Integer Holdings, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 12.1%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 8.4%.
Integer Holdings has gained 22.7% against the industry’s 6.8% decline over the past year.
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DaVita Inc. (DVA) : Free Stock Analysis Report
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