Bio-Techne Corporation (TECH) 2024 Q2 Earnings Call Summary
August 15, 2024 
Bio-Techne Corporation (TECH)
| Market Cap | 0.21T |
|---|---|
| Beta | |
| P/E | 39.75452774136047 |
| EPS | 12.247158441111395 |
| Dividend | 0 |
| Dividend Yield | 0.00% |
Optimistic Highlights
- Strong Position in High-Growth Markets: Bio-Techne is well-positioned in several high-growth life science and diagnostic end markets, with a broad portfolio that includes proteomic analytical tools, cell and gene therapies, spatial biology, and molecular diagnostics.
- Solid Growth in Strategic Pillars: Despite market headwinds, strategic growth pillars like the protein simple branded portfolio, spatial biology franchise, and ExoDx liquid biopsy business delivered solid growth.
- Efficiency Increase Opportunities Identified: Opportunities to increase efficiencies throughout the global Bio-Techne operating model have been identified, aiming to drive growth while executing on these efficiency opportunities.
- Stabilization in China: After a challenging period, the run rate in China stabilized as of the start of calendar 2024, indicating potential recovery in this key market.
- Encouraging Consumables Growth: Consumables used on the protein-simple platforms grew by at least 20% for the fourth consecutive quarter, indicating high instrument utilization even amid budget constraints.
Pessimistic Highlights
- Organic Revenue Decline: Bio-Techne experienced an organic revenue decline of about 2% due to a soft biotech funding environment, destocking by large OEM and pharma customers, and economic challenges in China.
- Biopharma Market Headwinds: The biopharma market declined low single digits, impacted by cautious spending ahead of 2024 budget cycles and a challenging funding environment.
- Challenges in China: The company faced a year-over-year decrease of over 20% in China, attributed to a soft government funding environment and deceleration in spend impacting the protein science segment.
Company Outlook
- Stabilization and Potential Recovery: While it's difficult to predict a complete recovery, the stabilization of run rates in China and the high level of activity around VC and private equity firms at the JPMorgan conference are seen as positive signs.
- Continued Investment in Growth Pillars: Bio-Techne plans to continue investing in strategic growth pillars, including cell and gene therapy, despite short-term funding constraints, indicating confidence in the long-term potential of these technologies.
- Efficiency and Cost Management: The company aims to protect and potentially grow its adjusted operating margins sequentially for the remainder of the fiscal year by executing identified efficiency increase opportunities.
Q & A Highlights
Q: Can you discuss the decline in the protein sciences business and the growth rate of core reagents and aggregate? (Dan Leonard, from UBS)
A: The overall reagents were down year over year, even though antibodies were slightly up. Instruments were down due to capital constraints from customers, but consumables on instrument platforms were up nearly 20%. (James Hippel)
Q: How is Wilson Wolf progressing since the investment? (Alex Nowak, from Craig Hallam)
A: Wilson Wolf has seen significant progress, with a tough calendar year but significant sequential improvement in their December quarter. They are expected to continue improving, with investments bolstering the adoption of the G-REX. (Kim Kelderman and James Hippel)