On Tuesday, 10 June 2025, Bio-Techne (NASDAQ:TECH) participated in the Goldman Sachs 46th Annual Global Healthcare Conference. The company presented a robust strategic overview, reporting solid Q3 results with notable growth in the protein sciences segment. However, challenges in the U.S. academic market and uncertainties in large pharma were highlighted. Despite these hurdles, Bio-Techne remains optimistic about its long-term growth, backed by strategic initiatives and a significant share repurchase plan.
Key Takeaways
- Bio-Techne achieved 6% organic growth in Q3, with strong performance in protein sciences.
- The company announced a $500 million share repurchase plan, signaling confidence in its valuation.
- Challenges include a choppy U.S. academic market and negative growth in China.
- Bio-Techne focuses on strategic areas like cell and gene therapy and spatial biology.
- Tariff impacts are expected to affect Q4 margins, but mitigation strategies are in place.
Financial Results
- Organic Growth: 6% overall growth in Q3, driven by a 7% increase in the protein sciences segment.
- Large Pharma: Double-digit growth in this segment, which accounts for 30% of revenue.
- China Market: Experienced negative mid-single-digit growth, but long-term potential remains.
- U.S. Academic Market: Represents 12% of revenue, with a stable core reagents business despite market fluctuations.
- Margin Performance: Q3 margins expanded by nearly 200 basis points; however, Q4 is expected to see a decrease due to tariff impacts.
Operational Updates
- Tariff Mitigation: Efforts include shifting manufacturing outside China to reduce exposure.
- Instrument Performance: Upper single-digit growth in instrumentation, with strong contributions from the Protein Simple franchise.
- Cell and Gene Therapy: Revenue exhibits variability due to clinical trial purchase timings.
- Spatial Biology: This business area is nearing $120 million in revenue, with an EBITDA approaching 30%.
- Wilson Wolf: Growth in the mid-twenties on a TTM basis, supported by involvement in five approved cell therapies.
- Future Outlook
- Q4 Expectations: Anticipated to mirror Q3 performance, with potential slowdowns in large pharma.
- M&A Strategy: Continues to be a key focus, with potential for increased activity as valuations improve.
- Capital Allocation: The share repurchase plan reflects a tactical move, not a shift in long-term priorities.
- China’s Market: Expected to remain the fastest-growing region for life science tools over the next decade.
Q&A Highlights
- Jim Hipple, CFO: Emphasized a solid quarter despite challenging market conditions.
- Academic Revenue: Highlighted the difficulty in directly correlating revenue to NIH funding.
- Recovery Outlook: Expressed optimism about a quick recovery when market conditions improve.
- Stock Valuation: Reiterated confidence in the company’s undervalued stock, justifying the share repurchase plan.
Readers are encouraged to refer to the full transcript for a detailed account of the conference call.
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