Repligen has tweaked its guidance in the wake of diminishing COVID-related orders but remains positive going forward due to a “very strong order book” for its base business.
For the first quarter 2022, Repligen Corporation reported record revenue of $206.4 million, 45% up on the same period last year. Despite this, the bioprocess vendor has reduced its full year guidance by 4% from $800-$830 million to $770-$800 million due to the fall in COVID-related demand, something expected to continue throughout the year.
For the quarter, COVID sales were around $50 million, 26% of total revenue. “We are now seeing signs that COVID demand has been impacted by the slowdown in vaccination rate,” CEO Tony Hunt said on an investor call. “Many of our COVID vaccine customers have either reduced their demand for the remainder of this year or shifted their demand into 2023.”
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He added most canceled orders came from vaccines that are less effective against the various Omicron strains, and many orders that have been pushed out into 2023 came from his firm’s largest COVID vaccine manufacturers. “We now expect COVID revenues for full-year 2022 to decline by about 20% versus last year and come in around $150 million.”
The COVID pandemic has resulted in a windfall of revenue for the service firms supporting the billions of vaccines rolled-out over the past two years, but recently industry has seen the first signs that the COVID-19 orchard is beginning to run low on ripe fruit. Vaccine maker J&J lowered its 2022 guidance by $1 billion last month, causing minor concern to vendors Sartorius and Danaher in their respective Q1 financials.
“COVID is normalizing, whatever normalizing really means, but it’s going to start to move down,” Hunt told stakeholders. “All of us in the bioprocessing industry will be able to move forward to absorb that and we’re all, I think, very encouraged by the fact that our core base businesses are all very healthy with strong order growth.”
All about that base
Repligen’s base business did indeed fare well. The business delivered 37% growth in the quarter, due to strong demand for filtration, chromatography, and analytics equipment and consumables, along with strength in gene therapy revenue, which was up more than 100%.
“Our base business performance […] has been exceptional over the last couple of years, driven by a combination of highly differentiated products, new product introductions and M&A,” said Hunt.
“Overall, we expect our non-COVID business to grow between 20% and 25% annually on a go-forward basis and we remain on track to achieving our goal of $1 billion in revenue in 2024.”