Repligen (RGEN) Shares Rise on Q3 Earnings & Revenue Beat
Repligen Corporation RGEN reported third-quarter 2023 adjusted earnings per share (EPS) of 23 cents, which beat the Zacks Consensus Estimate of 14 cents. The company had recorded adjusted earnings of 77 cents per share in the year-ago quarter.
Total revenues of $141.2 million also beat the Zacks Consensus Estimate of $138 million. Sales declined 30% year over year and 31% at constant currency (cc), as there were no COVID-related revenues recorded in the reported quarter.
Shares of Repligen were up 17.8% on Tuesday following the better-than-expected results. However, the stock has lost 20.5% in the year-to-date period compared with the industry’s 24.6% decline.
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Quarter in Details
The company reported product revenues of $141.1 million, down 29.6% from the year-ago period. It also reported royalty and other revenues of $0.03 million, up 9.1% year over year.
Repligen’s base business revenues of $140.1 million declined 19% year over year at cc.
The company’s base business can be categorized under four franchises such as filtration, chromatography, protein and process analytics.
Revenues from the chromatography business declined in the third quarter owing to stiff competition. RGEN expects full-year chromatography business revenues to be flat.
COVID-related revenues for the reported quarter were nil compared with $29 million in the year-ago quarter.
The protein franchise was also weak in the reported quarter, owing to a slowdown in demand for pharma accounts. As previously mentioned, RGEN continues to expect revenues from this business to be down 10%-15% in 2023.
The filtration franchise’s sales declined 35% year over year as COVID-related revenues plunged in the reported quarter. The base filtration business was also down 17%. RGEN continues to expect revenues from this business to be down 30% in 2023.
Meanwhile, the process analytics franchise revenues were up 7% year over year as FlowVPX and RPM systems continued to witness strong demand in the quarter. However, the performance of this franchisee was below management’s expectations. Repligen now anticipates this business to grow in the high single digits versus the earlier projection of 15% growth in 2023.
The gene-therapy business contributed almost 20% of Repligen’s total revenues in the quarter, indicating growth of 11% year on year.
Adjusted gross margin was 42%, down from 57% in the prior year quarter due to a decline in production volumes and a less favorable product mix.
Adjusted research and development expenses totaled approximately $10.5 million, down 2.9% from the year-ago quarter’s level.
Adjusted selling, general and administrative expenses amounted to $43.6 million, down 5.4% year over year.
Adjusted operating income totaled $5.2 million, down 91.1% from the prior year quarter.
As of Sep 30, 2023, Repligen had cash and cash equivalents worth $630.8 million compared with $603.7 million as of Jun 30, 2023.
2023 Guidance Tightened
Repligen tightened its revenue and profit guidance for 2023.
The company now expects total revenues in the range of $635-$645 million compared with the earlier projected band of $635-$665 million.
Repligen now anticipates base business revenues to decline 8.5-9.5% on a reported basis against the previously projected range of 5-9% on the same basis.
Adjusted net income is estimated in the band of $97-$100 million, down from the earlier guidance of $98-$102 million. Adjusted operating income is anticipated in the $96-$100 million range, lower than the earlier projected band of $104-$110 million.
Repligen expects adjusted gross margin in the 49-50% range, down from the previous guidance of 50-51%. Adjusted operating margin is anticipated in the band of 15-16%, also down from the earlier projection of 16-17%.
Adjusted EPS is anticipated between $1.70 and $1.76, indicating a decline from the prior estimation of $1.72 and $1.80.
Recent Updates
In October 2023, RGEN completed the previously announced acquisition of Metenova AB, a privately-held Swedish company specializing in the manufacturing of magnetic mixers for pharmaceutical and biotechnology applications.
The acquisition is likely to further strengthen Repligen's Fluid Management portfolio by adding Metenova’s market-leading magnetic mixing technology, designed for both upstream and downstream bioprocess applications.
On the third-quarter earnings call, management stated that it expects Metenova to generate around $5 million in revenues in the fourth quarter.
Repligen Corporation Price, Consensus and EPS Surprise
Repligen Corporation price-consensus-eps-surprise-chart | Repligen Corporation Quote
Zacks Rank & Stocks to Consider
Currently, Repligen has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the healthcare sector are Dynavax Technologies Corporation DVAX, MEI Pharma, Inc. MEIP and Arvinas, Inc. ARVN, sporting a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Dynavax Technologies’ 2023 loss per share have narrowed from 24 cents to 22 cents. Meanwhile, during the same period, earnings per share estimates for 2024 have improved from 2 cents to 8 cents. Year to date, shares of DVAX have rallied 33.6%.
Earnings of Dynavax Technologies beat estimates in two of the last four quarters while missing the same on the remaining two occasions. DVAX delivered a four-quarter average earnings surprise of 25.78%.
In the past 60 days, estimates for MEI Pharma’s 2023 loss per share have improved from $6.54 to $4.89. During the same period, loss per share estimates for 2024 have narrowed from $5.14 to $4.02. Year to date, shares of MEIP have rallied 40%.
Earnings of MEI Pharma beat estimates in three of the trailing four quarters and met the same on the other occasion. On average, MEIP came up with a four-quarter earnings surprise of 53.58%.
In the past 60 days, estimates for Arvinas 2023 loss per share have improved from $6.14 to $6.05. During the same period, loss per share estimates for 2024 have narrowed from $7.91 to $7.84. Year to date, shares of ARVN have lost 52.9%.
Earnings of Arvinas beat estimates in one of the trailing four quarters and missed the same on the remaining three occasions. On average, ARVN came up with a four-quarter negative earnings surprise of 14.22%.
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