Cryoport, Inc. (NASDAQ:CYRX) Q3 2023 Earnings Call Transcript
Cryoport, Inc. (NASDAQ:CYRX) Q3 2023 Earnings Call Transcript November 9, 2023
Operator: Good afternoon and welcome to Cryoport Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I will now 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 the 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. 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. We appreciate you joining our earnings call today. With us this afternoon is our 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 third quarter 2023 and review document to our website. It can be found under Investor Relations in the Events & Presentations section. This document provides a review of our financial and operational performance and general business outlook. If you have not had a chance to read it, I would encourage you can go to the website and download it. I will provide a brief update on the business and then we will move on to answering your questions.
Earlier today, we reported third quarter results that were consistent with our expectations as discussed on our last earnings call, taking into account current and well-known global economic and geopolitical challenges. Having said that, we are continuing to see solid and sustained demand from our key life sciences and cell and gene therapy customers despite the current macroeconomic climate. What I mean by that is, when you take a close look, you will see that our quarterly results contain some very promising growth points, including a notable increase in commercial and cell and gene therapy revenue. In fact, commercial revenue increased 54% on a year-over-year basis and 52% sequentially. At the same time, our bioservices revenue increased 26% year-over-year.
Regarding cell and gene therapy, Cryoport Systems grew 10%, both on a year-over-year basis and a quarter-over-quarter basis. All this growth was driven by the sustainable demand we saw during the quarter and that we are continuing to see from advanced therapy manufacturers. We also continued to increase the number of clinical trials supported. During the quarter, we added a net 27 trials year-over-year, this brings our global clinical programs to a record total of 670, with 81 of these trials being in Phase III, a total of 6 Cryoport-supported BLA, MAAs were filed during the quarter. Looking ahead, during the remainder of 2023, we expect up to an additional 5 anticipated application filings and 1 new therapy approval. We think our MVE Biological Solutions order intake has begun to stabilize.
MVE’s results this quarter were in line with our expectations and our current guidance reflects this. During the quarter, MVE and some 70% of – with some 70% of the world market continues to produce healthy financial metrics. So we remain quite confident about our long-term market outlook and the recovery of our China market as the country, despite its current economic lows, is a hot bed for the life sciences. Alongside our operating results during the third quarter and in the recent weeks, we have continued to execute on our corporate strategy to accelerate our long-term growth through our innovation department – development projects and small strategic and smart strategic acquisitions and partnerships. For example, this includes our collaboration with the Cell and Gene Therapy Catapult, the premier cell and gene therapy manufacturing innovation center in Europe, to provide integrated logistics support for its Stevenage Manufacturing Innovation Centre in the United Kingdom.
Further this partnership from its location on the Catapult site will provide other opportunities within the Stevenage bioscience cluster. This collaboration establishes our UK logistics center, which will – our first UK logistics center, which will further support our European expansion. We recently completed the acquisition of Tec4med Lifesciences, a technology spinoff of the Technical University of Darmstadt, located in Darmstadt, Germany. Tec4med provides next-generation pharmaceutical supply chain visibility by integrating advanced condition monitoring, cloud and artificial intelligence solutions. We are excited about integrating Tec4med’s cutting-edge technology for comprehensive monitoring in real time across all Cryoport companies.
By doing so, we will expand our digital supply chain solutions offerings and be able to provide our life sciences clients with even greater condition monitoring options, logistics management capabilities and customer support. With these latest developments and our leading market positions, we have even greater belief that our long-term growth prospects are solid. There is no other organization in the life sciences with the breadth of capabilities Cryoport has in providing robust dependable end-to-end supply chain solutions. Today, CRYOPDP is the world’s third largest specialty couriers serving the life sciences, covering over 220 countries and territories. MVE Biological Solutions is the world’s largest manufacturer of vacuum-insulated products and cryogenic systems, and is the preferred brand for academic, government and life sciences companies worldwide.
Cryoport Systems supports approximately 70% of all the cell and gene therapy clinical trial market, and as we continue building out our global supply chain solutions, that share continues to grow even in a challenging environment. And Cryogene is one of the industry’s most trusted and specializing in the secure storage of biological specimens and supporting MD Anderson, Baylor, Texas Children, Atara, Lanza, Star and many others. Cryoport is poised to capitalize on the continued growth of the life sciences and especially the cell and gene industry, as more therapies make their way towards commercialization over these coming years. Even with today’s economic and geopolitical environment, the cell and gene therapy industry is expected to grow at a 10-year compounded annual growth rate of approximately 20%.
This concludes our prepared remarks and now that I’d be happy to take your questions.
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