Repligen (RGEN) Beats on Q2 Earnings, Lowers '23 Guidance
Repligen Corporation RGEN reported second-quarter 2023 adjusted earnings per share (EPS) of 53 cents, which beat the Zacks Consensus Estimate of 49 cents. The company recorded adjusted earnings of 91 cents per share in the year-ago quarter.
Total revenues of $159.2 million missed the Zacks Consensus Estimate of $167 million. Sales declined 23.3% year over year and 23.1% at constant currency (cc), owing to the expected decline in COVID-related revenues.
Despite the mixed results, the stock was up 2.01% on Wednesday. Shares of Repligen have risen 0.7% in the year-to-date period against the industry’s 12.3% decline.
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Quarter in Details
The company reported product revenues of $159.1 million, down 23.3% from that recorded in the year-ago period. It also reported royalty and other revenues of $0.03 million, flat year over year.
Repligen’s base business revenues of $157.1 million declined 8.7% year over year at cc.
The company’s base business can be categorized under four franchises — filtration, chromatography, protein and process analytics.
RGEN’s chromatography and process analytics businesses were the major growth drivers in the second quarter. The uptick in these two business franchises offset the decline in COVID-related revenues.
COVID-related revenues for the reported quarter were nominal at just more than $1 million compared with $36 million in the year-ago quarter.
The company’s chromatography business performed well with 5% growth in revenues. This improvement can be attributed to an increased demand for ARTeSYN systems and flow paths as well as a rise in sales for OPUS pre-packed columns due to growing resin requirement.
RGEN expects its chromatography business to witness 5-10% growth in 2023 compared with the previously projected 10%.
The protein franchise had a good quarter as well, driven by strong demand for NGL ligands that Repligen supplies to Purolite. RGEN expects this business’s 2023 revenues to be down 10-15% owing to a slowdown in demand for pharma accounts.
The filtration franchise’s sales declined 40% year over year due to a drop in COVID-related revenues. The base filtration business was also down 20%. RGEN expects this business to recover in the second half of 2023 as the macro headwinds, such as the impact of forex, are likely to subside by then.
The process analytics franchise had an excellent quarter. Revenues were up almost 20% year over year as FlowVPX and RPM systems witnessed strong demand in the quarter. Repligen anticipates this business to grow 15% in 2023.
The gene-therapy business recorded 4% growth in revenues.
Adjusted gross margin was 50.2%, down 850 basis points (bps) year over year due to decline in production volumes and a less favorable product mix.
Adjusted research and development expenses totaled approximately $9.7 million, down 5.3% from the year-ago quarter’s level.
Adjusted selling, general and administrative expenses amounted to $40.7 million, down 11.6% year over year.
Adjusted operating income totaled $29.4 million, down 55% from that recorded in the prior-year quarter.
As of Jun 30, 2023, Repligen had cash and cash equivalents worth $603.7 million compared with $618 million as on Mar 31, 2023.
Lowers 2023 Guidance
Repligen lowered its profit and sales guidance for 2023due to a challenging macroenvironment and a decline in demand from pharma-based business orders. Significant decrease in COVID-related revenues (compared with the previous year’s level) also contributed to the guidance revision.
The company now expects total revenues in the range of $635-$665 million, down from the earlier projected band of $720-$760 million.
Repligen also anticipates base business revenues to decline 5-10% on a reported basis against the previously projected growth range of 4-8% on the same basis.For the full year, foreign currency impact on base business is expected to be nominal.
Adjusted net income is estimated in the band of $98-$102 million, down from the earlier guidance of $134-$138 million. Adjusted operating income is anticipated in the $104-$110 million range, lower than the earlier projected band of $153-$158 million.
Repligen expects adjusted gross margin in the 50-51% range, down from the previous guidance of 52-53%. Adjusted operating margin is anticipated in the band of 16-17%, also down from the earlier projection of 20.5-21.5%.
Adjusted EPS is anticipated between $1.72 and $1.80, indicating a decline from the prior estimation of $2.35-$2.42.
Repligen Corporation Price and Consensus
Repligen Corporation price-consensus-chart | Repligen Corporation Quote
Zacks Rank & Stocks to Consider
Currently, Repligen has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the same industry are ADC Therapeutics ADCT, ImmunoGen IMGN and Akoya Biosciences AKYA, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 90 days, the Zacks Consensus Estimate for ADC Therapeutics has widened from a loss of $2.60 per share to a loss of $2.61 for 2023. The consensus estimate has narrowed from a loss of $2.75 per share to a loss of $2.55 for 2024 during the same time frame. Shares of the company have lost 61.2% year to date.
ADCT’s earnings beat estimates in three of the trailing four quarters and missed the mark in one, delivering an average surprise of 10.70%.
In the past 90 days, the Zacks Consensus Estimate for ImmunoGen has narrowed from a loss of 56 cents per share to a loss of 50 cents for 2023. The consensus estimate has narrowed from a loss of 23 cents per share to a loss of 21 cents for 2024 during the same time frame. Shares of the company have rallied 246.2% year to date.
IMGN’s earnings beat estimates in three of the trailing four quarters and missed the mark in one, delivering an average surprise of 31.24%.
In the past 90 days, the Zacks Consensus Estimate for Akoya Biosciences has narrowed from a loss of $1.80 per share to a loss of $1.71 for 2023. The consensus estimate has narrowed from a loss of $1.57 per share to a loss of $1.33 for 2024 during the same time frame. Shares of the company have lost 30.2% year to date.
AKYA’s earnings missed estimates in each of the trailing four quarters, delivering an average negative surprise of 21.05%.
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