REPLIGEN CORP

Previous wording

We have experienced, and expect to continue to experience, cost inflation, primarily in raw materials, and other supply chain costs, as a result of global macroeconomic trends, including global geopolitical conflicts, and labor shortages. Actions taken to mitigate supply chain disruptions and inflation, including price increases and productivity improvements, have generally been successful in offsetting the impact of these trends. We continue to monitor the effects of recently implemented tariffs, and the potential imposition of modified or additional tariffs.

Current wording

We have experienced, and expect to continue to experience, cost inflation, primarily in raw materials, and other supply chain costs, as a result of global macroeconomic trends, including global geopolitical conflicts, and labor shortages. Actions taken to mitigate supply chain disruptions and inflation, including price increases and productivity improvements, have generally been successful in offsetting the impact of these trends. We continue to monitor the effects of tariffs implemented by the Trump administration, and the potential imposition of modified or additional tariffs.

Previous wording

On March 4, 2025, the Company completed its acquisition of 908 Devices Inc.’s (“908 Devices”) desktop portfolio of four devices for bioprocessing process analytical technology applications (“PAT Portfolio”). In connection with the transaction, Repligen also acquired facilities, employees, equipment and lease obligations for facilities in North Carolina and Braunschweig, Germany as well as certain working capital balances related to the PAT Portfolio. The transaction is referred to as the 908 Devices PAT Portfolio acquisition.

Current wording

On March 4, 2025, the Company completed its acquisition of 908 Devices Inc.’s (“908 Devices”) desktop portfolio of four devices for bioprocessing process analytical technology applications (“PAT Portfolio”). In connection with the transaction, Repligen also acquired facilities, employees, equipment and lease obligations for facilities in North Carolina and Braunschweig, Germany as well as certain working capital balances related to the PAT Portfolio. This transaction is referred to as the 908 Devices PAT Portfolio acquisition.

Previous wording

Total revenue for the three months ended March 31, 2025 and 2024 were as follows:

Current wording

Total revenue for the three and six months ended June 30, 2025 and 2024 were as follows:

Previous wording

During the three months ended March 31, 2025, product revenue increased by $16.0 million, or 10.4%, as compared to the same period of 2024. This is mainly due to an increase in revenue from Proteins compared to the prior year related to the timing of sales, as well as strong performance versus the prior year in our Chromatography and Analytics franchises. In addition, Filtration revenue slightly declined due to a large hardware sale in 2024 that did not recur in 2025 and $3.3 million of decreased COVID-19 sales. Additionally, products acquired from 908 Devices contributed $1.0 million in revenue during the three months ended March 31, 2025.

Current wording

During the three and six months ended June 30, 2025, product revenue increased by $23.5 million, or 14.8%, and increased by $39.5 million, or 12.7%, respectively, as compared to the same period of 2024. This is mainly due to an increase in revenue from our Chromatography and Analytics franchises during the second quarter of 2025. Over the first half of the year, the increase was primarily driven by our Proteins, Chromatography, and Analytics franchises. In addition, the three and six months ended June 30, 2024 included $8.2 million and $11.5 million, respectively, of COVID-19 related sales. Related to our acquisitions, products acquired from 908 Devices contributed $2.9 million and $4.0 million, respectively, in revenue during the three and six months ended June 30, 2025.

Previous wording

Royalty and other revenues in the three months ended March 31, 2025 and 2024 relate to royalties received from a third-party systems manufacturer associated with our OPUS® chromatography columns. Royalty revenues are variable and are dependent on sales generated by our partners.

Current wording

Royalty and other revenues in the three and six months ended June 30, 2025 and 2024 relate to royalties received from a third-party systems manufacturer associated with our OPUS® chromatography columns. Royalty revenues are variable and are dependent on sales generated by our partners.

Previous wording

Total costs and operating expenses for the three months ended March 31, 2025 and 2024 were comprised of the following:

Current wording

Total costs and operating expenses for the three and six months ended June 30, 2025 and 2024 were comprised of the following:

Previous wording

During the three months ended March 31, 2025, the increase in cost of goods sold is driven by the 10.4% increase in product sales compared to March 31, 2024. Partially offsetting this increase is a decrease in materials consumed in the production process.

Current wording

During the three and six months ended June 30, 2025, the increase in cost of goods sold is driven by the increase in product sales compared to same period in 2024, with lower excess and obsolete scrap costs being partially offset by product mix.

Previous wording

Gross margin was 53.6% and 50.1% in the three months ended March 31, 2025 and 2024, respectively. The primary drivers of the margin improvement is reduced materials consumed in the production process, and leverage of relatively consistent labor overhead costs period over period with increased sales.

Current wording

Gross margin was 51.7% and 50.7% in the six months ended June 30, 2025 and 2024, respectively. The primary drivers of the margin improvement is reduced materials consumed in the production process, lower excess and obsolete scrap costs and leverage of relatively consistent labor overhead costs period over period with increased sales.

Previous wording

R&D expenses increased $1.7 million, or 15.0%, during the three months ended March 31, 2025, compared to the same period of 2024. The increase in R&D costs is primarily driven by the results of the operations of the 908 Devices PAT Portfolio and Tantti acquisitions, which have been included in our consolidated results of operations since the acquisition dates of March 2025 and December 2024, respectively.

Current wording

R&D expenses increased $3.4 million, or 32.0%, during the three months ended June 30, 2025, as compared to the same period of 2024, and increased $5.1 million, or 23.2%, during the six months ended June 30, 2025, as compared to the same period of 2024. The increase in R&D costs is primarily driven by the 908 Devices PAT Portfolio and Tantti acquisitions, which have been included in our consolidated results of operations since the acquisition dates of March 2025 and December 2024, respectively.

Previous wording

SG&A costs increased by $9.5 million, or 15.3%, during the three months ended March 31, 2025 as compared to the same period of 2024. The primary driver of this increase is professional services which increased $6.3 million largely related to our acquisition and integration activities. The increase in SG&A costs also reflects $2.8 million related to the results of the operations of 908 Devices PAT Portfolio and Tantti, which have been included in our consolidated results of operations since the acquisition dates of March 2025 and December 2024, respectively.

Current wording

SG&A costs increased by $5.7 million, or 8.8%, during the three months ended June 30, 2025 as compared to the same period of 2024. The primary drivers of the increase in the SG&A costs is $3.6 million related to incremental expenses incurred as a result of the 908 Devices PAT Portfolio and Tantti acquisitions, and $1.5 million expense in professional services related to acquisition and integration activities.

Previous wording

Investment income includes income earned on invested cash balances. Our investment income decreased by $1.7 million for the three months ended March 31, 2025, as compared to the same period of 2024 due to a decrease in interest rates and the average invested cash balances. We expect investment income to vary based on changes in the amount of funds invested and fluctuation of interest rates.

Current wording

Investment income includes income earned on invested cash balances. Our investment income decreased by $2.8 million and $4.5 million, respectively, for the three and six months ended June 30, 2025, as compared to the same period of 2024 due to a decrease in the average cash balances on hand and a reduction in interest rates. We expect investment income to vary based on changes in the amount of funds invested and fluctuation of interest rates.

Previous wording

Interest expense increased $0.2 million for the three months ended March 31, 2025 as compared to the same period of 2024. Interest expense is relatively consistent as it primarily consists of the contractual coupon interest on the convertible debt outstanding. See Note 9,“Convertible Senior Notes,”to our condensed consolidated financial statements included in this report for more information on the Convertible Senior Notes.

Current wording

Interest expense decreased by $0.2 million and $0.4 million, respectively, for the three and six months ended June 30, 2025 as compared to the same period of 2024. Interest expense is relatively consistent as it primarily consists of the contractual coupon interest on the convertible debt outstanding. See Note 9,“Convertible Senior Notes,”to our condensed consolidated financial statements included in this report for more information on the Convertible Senior Notes.

Previous wording

Transaction costs related to the issuance of the 2019 Notes and the 2023 Notes are amortized to amortization of debt issuance costs on the condensed consolidated statements of comprehensive income (loss).

Current wording

Transaction costs related to the issuance of the 2019 Notes and the 2023 Notes are amortized to amortization of debt issuance costs on the condensed consolidated statements of comprehensive income.

Previous wording

The change in other expenses, net for the three months ended March 31, 2025, compared to the same periods of 2024, is primarily attributable to the revaluation impact of intercompany loans with subsidiaries during the three months ended March 31, 2024. In December 2024 we entered into foreign exchange forward contracts to mitigate these fluctuations.

Current wording

The change in other income, net for the three and six months ended June 30, 2025, compared to the same periods of 2024. The 2025 gain is due to the foreign exchange revaluation of the contingent liability relating to Tantti, while the 2024 loss is due to the revaluation impact of intercompany loans with subsidiaries. In December 2024 we entered into foreign exchange forward contracts to mitigate the foreign exchange fluctuations relating to intercompany loans with subsidiaries.

Previous wording

Income tax provision for the three months ended March 31, 2025 and 2024 was as follows:

Current wording

Income tax provision for the three and six months ended June 30, 2025 and 2024 was as follows:

Previous wording

For the three months ended March 31, 2025, we recorded an income tax provision of $2.1 million. The effective tax rate was 26.6% for the three months ended March 31, 2025, and is based upon the estimated income for the year ending December 31, 2025 and the composition of income in different jurisdictions. The difference in effective tax rates between the periods was primarily due to higher income before income taxes and lower stock windfall tax benefits. Our effective tax rate for the three months ended March 31, 2025 was higher than the U.S. statutory rate of 21% primarily due to lower stock windfall tax benefits.

Current wording

For the three and six months ended June 30, 2025, we recorded an income tax provision of $3.3 million and $5.5 million, respectively. The effective tax rate was 18.4% and 20.9% for the three and six months ended June 30, 2025, respectively, and is based upon the estimated income for the year ending December 31, 2025 and the composition of income in different jurisdictions.

Previous wording

At March 31, 2025, we held cash and cash equivalents of $697.2 million compared to cash and cash equivalents of $757.4 million at December 31, 2024.

Current wording

At June 30, 2025, we held cash and cash equivalents of $708.9 million compared to cash and cash equivalents of $757.4 million at December 31, 2024.

Previous wording

Working capital decreased by $58.8 million to $880.5 million at March 31, 2025 from $939.3 million at December 31, 2024 primarily due to the 908 Devices PAT Portfolio acquisition in March 2025.

Current wording

Working capital decreased by $5.4 million to $933.9 million at June 30, 2025 from $939.3 million at December 31, 2024 primarily due to the various changes noted below.

Previous wording

On December 14, 2023, the Company issued $600.0 million aggregate principal amount of its 2023 Notes in a private placement pursuant to separate, privately negotiated exchange and subscription agreements (the “Exchange and Subscription Agreements”) with a limited number of holders of its outstanding 2019 Notes and certain other qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (“Securities Act”). Pursuant to the Exchange and Subscription Agreements, the Company exchanged $217.7 million of its 2019 Notes for $309.9 million aggregate principal amount of the 2023 Notes (the “Exchange Transaction”) and issued $290.1 million aggregate principal amount of the 2023 Notes (the “Subscription Transactions”) for $290.1 million in cash. Proceeds from the Subscription Transactions amounted to $276.1 million after debt issuance costs of $13.9 million. The 2023 Notes are senior, unsecured obligations of the Company, and bear interest at a rate of 1.00% per year. Interest is payable semi-annually in arrears on each June 15 and December 15, commencing on June 15, 2024.

Current wording

On December 14, 2023, the Company issued $600.0 million aggregate principal amount of its 2023 Notes in a private placement pursuant to separate, privately negotiated exchange and subscription agreements (the “Exchange and Subscription Agreements”) with a limited number of holders of its outstanding 2019 Notes and certain other qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (“Securities Act”). Pursuant to the Exchange and Subscription Agreements, the Company exchanged $217.7 million of its 2019 Notes for $309.9 million aggregate principal amount of the 2023 Notes (the “Exchange Transaction”) and issued $290.1 million aggregate principal amount of the 2023 Notes (the “Subscription Transactions”) for $290.1 million in cash. Proceeds from the Subscription Transactions amounted to $276.1 million after debt issuance costs of $13.9 million. The 2023 Notes are senior, unsecured obligations of the Company, and bear interest at a rate of 1.00% per year. Interest is payable semi-annually in arrears on each June 15 and December 15, commencing on June 15, 2024. The 2023 Notes will mature on December 15, 2028, unless earlier redeemed, repurchased or converted. During the second quarter of 2025, the closing price of the Company's common stock did not exceed 130% of the conversion price of the 2023 Notes for more than 20 trading days of the last 30 consecutive trading days of the quarter. As a result, the 2023 Notes are not convertible at the option of the holders of the 2023 Notes during the third quarter of 2025, the quarter immediately following the quarter when the conditions are met, as stated in the indenture governing the 2023 Notes.

Previous wording

For the three months ended March 31, 2025, our operating activities provided cash of $15.0 million reflecting net income of $5.8 million and non-cash charges totaling $35.6 million primarily related to depreciation and intangible amortization, unrealized loss on derivatives, stock-based compensation, operating lease right of use asset amortization, and amortization of debt discount and issuance costs, partially offset by net unrealized foreign exchange gains. The non-cash charges were partially offset by unfavorable changes in working capital of $26.4 million. This is primarily driven by an increase accounts receivable of $9.9 million due to timing of sales and receipts from customers, accounts payable and accrued expenses used cash of $4.9 million due to timing of payments to vendors, and inventory manufactured used cash of $3.8 million. The remaining cash used in operating activities resulted from unfavorable changes in various other working capital accounts.

Current wording

For the six months ended June 30, 2025, our operating activities provided cash of $43.6 million reflecting net income of $20.7 million and non-cash charges totaling $61.4 million primarily related to depreciation and intangible amortization, unrealized loss on derivatives, stock-based compensation, operating lease right of use asset amortization, and amortization of debt discount and issuance costs, partially offset by net unrealized foreign exchange gains and contingent consideration adjustment. The non-cash charges were partially offset by unfavorable changes in working capital of $38.5 million. This is primarily driven by an increase in accounts receivable of $15.2 million due to timing of sales and receipts from customers, accounts payable and accrued expenses used cash of $11.3 million due to timing of payments to vendors, and inventory manufactured used cash of $0.8 million. The remaining cash used in operating activities resulted from unfavorable changes in various other working capital accounts.

Previous wording

For the three months ended March 31, 2024, our operating activities provided cash of $44.7 million reflecting net income of $3.3 million and non-cash charges totaling $32.8 million primarily related to depreciation, intangible amortization, amortization of debt discount and issuance costs, stock-based compensation charges, and operating lease right of use asset amortization. A decrease in accounts receivable provided $6.7 million of cash due to timing of sales and receipts from customers. We also had a decrease in inventory manufactured that provided $3.2 million, a net increase in accounts payable and accrued expenses of $2.3 million, primarily due to an increase in unearned revenue and accrued employee bonuses. Prepaid expenses increased primarily related to subscriptions and taxes consumed $2.3 million. The remaining cash provided by operating activities resulted from favorable changes in various other working capital accounts.

Current wording

For the six months ended June 30, 2024, our operating activities provided cash of $86.9 million reflecting net income of $9.0 million and non-cash charges totaling $65.3 million primarily related to depreciation, intangible amortization, amortization of debt discount and issuance costs, stock-based compensation charges, deferred income taxes and operating lease right of use asset amortization. We had a decrease in inventory manufactured that provided $10.5 million, a net increase in accounts payable and accrued expenses of $3.8 million, primarily due to an increase in unearned revenue and accrued employee bonuses, and a decrease in prepaid expenses, primarily related to subscriptions and taxes, which consumed $0.5 million. The remaining cash used in operating activities resulted from unfavorable changes in various other working capital accounts.

Previous wording

Our investing activities consumed $74.1 million of cash during the three months ended March 31, 2025, which was primarily driven by the acquisition of the 908 Devices PAT Portfolio, net of cash acquired, of $69.7 million. Capital expenditures during the three months ended March 31, 2025 consumed $4.4 million, including $0.9 million of capitalized costs related to our internal-use software.

Current wording

Our investing activities consumed $81.9 million of cash during the six months ended June 30, 2025, which was primarily driven by the acquisition of the 908 Devices PAT Portfolio, net of cash acquired, of $69.9 million. Capital expenditures during the six months ended June 30, 2025 consumed $12.0 million, including $1.4 million of capitalized costs related to our internal-use software.

Previous wording

Our investing activities consumed $8.4 million of cash during the three months ended March 31, 2024, which was due to capital expenditures during the first quarter of 2024, which consumed $8.4 million in cash. Included in this amount for the three months ended March 31, 2024 were capitalized costs related to our internal-use software for the three months ended March 31, 2024.

Current wording

Our investing activities consumed $15.8 million of cash during the six months ended June 30, 2024, which was due to capital expenditures during 2024. Included in this amount were capitalized costs related to our internal-use software for the six months ended June 30, 2024.

Previous wording

Our financing activities consumed $5.0 million of cash for the three months ended March 31, 2025, driven by $6.5 million in cash disbursed for shares withheld to cover employee income tax due upon the vesting and release of restricted stock units. This cash consumption was partially offset by $1.5 million of proceeds from the exercise of stock options during the period.

Current wording

Our financing activities consumed $15.2 million of cash for the six months ended June 30, 2025, predominantly due to $7.2 million in cash disbursed for shares withheld to cover employee income tax due upon the vesting and release of restricted stock units, partially offset by proceeds received from stock option exercises during the period of $1.5 million. In addition, we made payments of $2.6 million and $6.9 million to settle the cash portion of the contingent earnout obligations related to our acquisition of FlexBiosys in April 2023 and Avitide in September 2021, respectively.

Previous wording

Our financing activities consumed $9.0 million of cash for the three months ended March 31, 2024, primarily for $7.6 million in cash disbursed for shares withheld to cover employee income tax due upon the vesting and release of restricted stock units and the payment of $2.2 million to settle the cash portion of the First Earnout Year contingent earnout obligation related to our acquisition of FlexBiosys in April 2023. This was partially offset by proceeds received from stock option exercises during the period.

Current wording

Our financing activities consumed $14.7 million of cash for the six months ended June 30, 2024, primarily for $8.9 million in cash disbursed for shares withheld to cover employee income tax due upon the vesting and release of restricted stock units, partially offset by proceeds received from stock options exercised during the period of $1.8 million. In addition, we made payments of $2.2 million and $5.2 million to settle the cash portion of the contingent earnout obligations related to our acquisition of FlexBiosys in April 2023 and Avitide in September 2021, respectively.

Previous wording

The effect of exchange rate changes on cash during the three months ended March 31, 2025 is a result of using multiple currencies across the group, with the Euro and Swedish Krona being significant currencies for the group outside of the US Dollar.

Current wording

The effect of exchange rate changes on cash during the three and six months ended June 30, 2025 is a result of using multiple currencies across the group, with the Euro and Swedish Krona being significant currencies for the group outside of the US Dollar.

Previous wording

This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements in this Quarterly Report on Form 10-Q do not constitute guarantees of future performance. Investors are cautioned that statements in this Quarterly Report on Form 10-Q which are not strictly historical statements, including, without limitation, express or implied statements or guidance regarding current or future financial performance and position, potential impairment of future earnings, management’s strategy, plans and objectives for future operations or acquisitions, expectations and beliefs for recently-completed acquisitions, product development and sales, restructuring activities and the expected results thereof, product candidate research, development and regulatory approval, SG&A expenditures, intellectual property, development and manufacturing plans, availability of materials and product and adequacy of capital resources, and our financing plans. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which the Company operates, and management’s beliefs and assumptions. The Company undertakes no obligation to publicly update or revise the statements in light of future developments. In addition, other written and oral statements that constitute forward-looking statements may be made by the Company or on the Company’s behalf. Words such as “expect,” “seek,” “anticipate,” “intend,” “plan,” “believe,” “could,” “estimate,” “may,” “target,” “project,” or variations of such words and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated, including, without limitation, risks associated with the following: the success of current and future collaborative or supply relationships; our ability to successfully grow our bioprocessing business, including as a result of acquisitions, commercialization or partnership opportunities, and our ability to develop and commercialize products; our ability to obtain required regulatory approvals; our compliance with all U.S. Food and Drug Administration regulations, our ability to obtain, maintain and protect intellectual property rights for our products; the risk of litigation regarding our patent and other intellectual property rights; the risk of litigation with collaborative partners; our manufacturing capabilities and our dependence on third-party manufacturers and value-added resellers; our ability to hire and retain skilled personnel; the market acceptance of our products, reduced demand for our products that adversely impacts our future revenues, cash …

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements in this Quarterly Report on Form 10-Q do not constitute guarantees of future performance. Investors are cautioned that statements in this Quarterly Report on Form 10-Q which are not strictly historical statements, including, without limitation, express or implied statements or guidance regarding current or future financial performance and position, potential impairment of future earnings, management’s strategy, plans and objectives for future operations or acquisitions, expectations and beliefs for recently-completed acquisitions, product development and sales, restructuring activities and the expected results thereof, product candidate research, development and regulatory approval, SG&A expenditures, intellectual property, development and manufacturing plans, availability of materials and product and adequacy of capital resources, and our financing plans. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which the Company operates, and management’s beliefs and assumptions. The Company undertakes no obligation to publicly update or revise the statements in light of future developments. In addition, other written and oral statements that constitute forward-looking statements may be made by the Company or on the Company’s behalf. Words such as “expect,” “seek,” “anticipate,” “intend,” “plan,” “believe,” “could,” “estimate,” “may,” “target,” “project,” or variations of such words and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated, including, without limitation, risks associated with the following: the success of current and future collaborative or supply relationships; our ability to successfully grow our bioprocessing business, including as a result of acquisitions, commercialization or partnership opportunities, and our ability to develop and commercialize products; our ability to obtain required regulatory approvals; our compliance with all U.S. Food and Drug Administration regulations, our ability to obtain, maintain and protect intellectual property rights for our products; the risk of litigation regarding our patent and other intellectual property rights; the risk of litigation with collaborative partners; our manufacturing capabilities and our dependence on third-party manufacturers and value-added resellers; our ability to hire and retain skilled personnel; the market acceptance of our products, reduced demand for our products that adversely impacts our future revenues, cash …

Excerpt shortened here; the source contains the full paragraph.