[10-Q] Repligen Corp Quarterly Earnings Report
free
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ___________ to___________
Commission File Number
(Exact Name of Registrant as Specified in its Charter)
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(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
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(Address of Principal Executive Offices) |
(Zip Code) |
(
Registrant’s Telephone Number, Including Area Code
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No
The number of shares outstanding of the registrant’s common stock on August 4, 2025 was
1
Table of Contents
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PART I - |
FINANCIAL INFORMATION |
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Item 1. |
Financial Statements |
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Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 (Unaudited) |
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Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited) |
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4 |
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Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited) |
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Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (Unaudited) |
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7 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
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8 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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27 |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
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34 |
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Item 4. |
Controls and Procedures |
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34 |
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PART II - |
OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
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37 |
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Item 1A. |
Risk Factors |
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37 |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
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37 |
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Item 3. |
Defaults Upon Senior Securities |
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37 |
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Item 4. |
Mine Safety Disclosures |
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37 |
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Item 5. |
Other Information |
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37 |
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Item 6. |
Exhibits |
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38 |
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Signatures |
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39 |
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2
PART I – FINANCIAL INFORMATION
ITEM 1. Financial Statements
REPLIGEN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, amounts in thousands, except share data)
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June 30, |
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December 31, |
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2025 |
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2024 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net of reserves of $ |
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Inventories, net |
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Prepaid expenses and other current assets |
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Total current assets |
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Noncurrent assets: |
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Property, plant and equipment, net |
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Intangible assets, net |
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Goodwill |
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Deferred tax assets |
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Operating lease right of use assets |
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Other noncurrent assets |
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Total noncurrent assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Operating lease liability |
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Current contingent consideration |
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Accrued liabilities |
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Total current liabilities |
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Noncurrent liabilities: |
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Convertible Senior Notes due 2028, net |
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Deferred tax liabilities |
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Noncurrent operating lease liability |
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Noncurrent contingent consideration |
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Other noncurrent liabilities |
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Total noncurrent liabilities |
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Total liabilities |
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Commitments and contingencies (Note 11) |
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Stockholders' equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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( |
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( |
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Retained earnings |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
3
REPLIGEN CORPORATION
Condensed CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited, amounts in thousands, except share and per share data)
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Three Months Ended |
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Six Months Ended |
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2025 |
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2024 |
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2025 |
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2024 |
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Revenue: |
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Product |
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$ |
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$ |
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$ |
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$ |
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Royalty and other revenue |
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Total revenue |
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Costs and operating expenses: |
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Cost of goods sold |
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Research and development |
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Selling, general and administrative |
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Change in fair value of contingent consideration |
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( |
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( |
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Total costs and operating expenses |
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Income from operations |
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Other income (expenses): |
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Investment income |
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Interest expense |
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( |
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( |
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( |
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( |
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Amortization of debt issuance costs |
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( |
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( |
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( |
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( |
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Other income (expenses), net |
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( |
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( |
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Other income, net |
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Income before income taxes |
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Income tax provision |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Earnings per share: |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted (Note 13) |
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$ |
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$ |
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$ |
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$ |
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Weighted average common shares outstanding: |
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Basic |
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Diluted (Note 13) |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income (loss): |
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Foreign currency translation adjustment |
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( |
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( |
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Comprehensive income |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
4
REPLIGEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited, amounts in thousands, except share data)
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Three Months Ended June 30, 2025 |
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Common Stock |
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Number of |
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Par |
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Additional |
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Accumulated |
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Retained |
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Total |
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Balance at March 31, 2025 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Exercise of stock options and vesting of stock |
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— |
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— |
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— |
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- |
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Tax withholding on vesting of restricted stock units |
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( |
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— |
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( |
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— |
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— |
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( |
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Issuance of common stock pursuant to contingent consideration earnout payments |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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Translation adjustment |
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— |
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— |
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— |
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— |
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Balance at June 30, 2025 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Three Months Ended June 30, 2024 |
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Common Stock |
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Number of |
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Par |
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Additional |
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Accumulated |
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Retained |
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Total |
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Balance at March 31, 2024 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Conversion of debt |
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— |
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( |
) |
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— |
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— |
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( |
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Exercise of stock options and vesting of stock |
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— |
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— |
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— |
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Tax withholding on vesting of restricted stock units |
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( |
) |
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— |
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( |
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— |
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— |
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( |
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Issuance of common stock pursuant to contingent consideration earnout payments |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Translation adjustment |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
Balance at June 30, 2024 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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Six Months Ended June 30, 2025 |
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Common Stock |
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Number of |
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Par |
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Additional |
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Accumulated |
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Retained |
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Total |
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Balance at December 31, 2024 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Exercise of stock options and vesting of stock |
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— |
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— |
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Tax withholding on vesting of restricted stock units |
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( |
) |
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— |
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( |
) |
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— |
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— |
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( |
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Issuance of common stock pursuant to contingent consideration earnout payments |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Translation adjustment |
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— |
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— |
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— |
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— |
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Balance at June 30, 2025 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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5
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Six Months Ended June 30, 2024 |
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Common Stock |
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Number of |
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Par |
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Additional |
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Accumulated |
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Retained |
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Total |
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Balance at December 31, 2023 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Conversion of debt |
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— |
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( |
) |
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— |
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— |
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( |
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Exercise of stock options and vesting of stock |
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— |
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— |
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Tax withholding on vesting of restricted stock units |
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( |
) |
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( |
) |
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( |
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— |
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— |
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( |
) |
Issuance of common stock pursuant to contingent consideration earnout payments |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Translation adjustment |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
Balance at June 30, 2024 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
6
REPLIGEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, amounts in thousands)
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Six Months Ended |
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2025 |
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2024 |
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Cash flows from operating activities: |
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Net income |
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$ |
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$ |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Amortization of debt discount and issuance costs |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Deferred income taxes, net |
|
|
( |
) |
|
|
( |
) |
Change in fair value of contingent consideration |
|
|
( |
) |
|
|
|
|
Unrealized loss on derivative contracts |
|
|
|
|
|
|
||
Net unrealized foreign exchange gain |
|
|
( |
) |
|
|
|
|
Operating lease right of use asset amortization |
|
|
|
|
|
|
||
Loss on disposal of fixed assets |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Changes in operating assets and liabilities, excluding impact of acquisitions: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
( |
) |
Inventories |
|
|
( |
) |
|
|
|
|
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
|
|
Other noncurrent assets |
|
|
( |
) |
|
|
|
|
Accounts payable |
|
|
( |
) |
|
|
|
|
Accrued liabilities |
|
|
( |
) |
|
|
|
|
Operating lease liabilities |
|
|
( |
) |
|
|
( |
) |
Noncurrent liabilities |
|
|
|
|
|
( |
) |
|
Total cash provided by operating activities |
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Acquisitions, net of cash acquired |
|
|
( |
) |
|
|
|
|
Additions to capitalized software costs |
|
|
( |
) |
|
|
( |
) |
Purchases of property, plant and equipment |
|
|
( |
) |
|
|
( |
) |
Sale of property, plant and equipment |
|
|
|
|
|
|
||
Total cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from exercise of stock options |
|
|
|
|
|
|
||
Payment of tax withholding obligation on vesting of restricted stock |
|
|
( |
) |
|
|
( |
) |
Payment of earnout consideration |
|
|
( |
) |
|
|
( |
) |
Other financing activities |
|
|
|
|
|
( |
) |
|
Total cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
|
|
|
|
||
Net (decrease) increase in cash and cash equivalents |
|
|
( |
) |
|
|
|
|
Cash, cash equivalents, beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents, end of period |
|
$ |
|
|
$ |
|
||
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
||
Assets acquired under operating leases |
|
$ |
|
|
$ |
|
||
Fair value of shares of common stock issued for contingent consideration earnouts |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
REPLIGEN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Basis of Presentation
The condensed consolidated financial statements included herein have been prepared by Repligen Corporation (the “Company”, “Repligen”, “our” or “we”) in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”), for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X and do not include all of the information and footnote disclosures required by GAAP. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on March 14, 2025 (“Form 10-K”).
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The business and economic uncertainty resulting from global geopolitical conflicts, supply chain challenges, foreign currency fluctuations, and cost pressures on customers' purchasing patterns has made such estimates more difficult to calculate. Accordingly, actual results could differ from those estimates.
The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
The Company made no material changes in the application of its significant accounting policies that were disclosed in its Form 10-K. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of only normal, recurring adjustments necessary for a fair presentation of its financial position as of June 30, 2025, its results of operations for the three and six months ended June 30, 2025 and 2024 and cash flows for the six months ended June 30, 2025 and 2024. The results of operations for the interim periods presented are not necessarily indicative of results to be expected for the entire year.
Recent Accounting Guidance
The Company considers the applicability and impact of all Accounting Standards Updates (“ASU” or “ASUs”) issued by the Financial Accounting Standards Board (“FASB”) and other recently issued guidance or rule decisions on their condensed consolidated financial statements. Updates not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s condensed consolidated financial position or results of operations. Recently issued accounting guidance that the Company believes may be applicable to them is as follows:
Recently Issued Accounting Guidance – Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses.” The ASU requires additional disclosures by disaggregating the costs and expense line items that are presented on the face of the income statement. The disaggregation includes: (i) amounts of purchased inventory, employee compensation, depreciation, amortization, and other related costs and expenses; (ii) an explanation of costs and expenses that are not disaggregated on a quantitative basis; and (iii) the definition and total amount of selling expenses. The ASU is effective for our Annual Report on Form 10-K beginning in 2027 and subsequent interim reports. Early adoption is permitted. The ASU should be applied prospectively. Retrospective application is permitted for all prior periods presented in the financial statements. We are currently evaluating the impact of adopting this ASU on our financial reporting disclosures.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures.” ASU 2023-09 enhances the transparency and decision usefulness of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. ASU 2023-09 will be effective for the Company in its income tax disclosure included in its 2025 Annual Report on Form 10-K and will be applied on a prospective basis. However, retrospective application is permitted. Besides a change in income tax disclosures, the
8
Company does not expect the adoption of ASU 2023-09 to have a material impact on its condensed consolidated financial statements.
The Company uses various valuation approaches in determining the fair value of its assets and liabilities. The Company employs a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:
Level 1 - |
Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. |
|
|
Level 2 - |
Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities. |
|
|
Level 3 - |
Valuations based on inputs that are unobservable or significant to the overall fair value measurement. |
|
|
The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level input that is significant to the overall fair value measurement.
Fair Value Measured on a Recurring Basis
Financial assets and financial liabilities measured at fair value on a recurring basis consist of the following as of June 30, 2025 and December 31, 2024 (amounts in thousands):
|
|
As of June 30, 2025 |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market accounts |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
Current contingent consideration |
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Noncurrent contingent consideration |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
As of December 31, 2024 |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market accounts |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Foreign exchange forward contracts |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Current contingent consideration |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
Noncurrent contingent consideration |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
Cash and cash equivalents
As of June 30, 2025 and December 31, 2024, cash and cash equivalents on the Company's condensed consolidated balance sheets included $
Contingent Consideration – Earnouts
9
As of June 30, 2025, the maximum amount of future contingent consideration (undiscounted) that the Company could be required to pay in connection with each of its completed acquisitions is: $
A reconciliation of the change in the fair value of contingent consideration – earnouts is included in the following table (amounts in thousands):
Balance at December 31, 2024 |
|
$ |
|
|
Decrease in fair value of contingent consideration earnouts |
|
|
( |
) |
Earnout payment - equity element |
|
|
( |
) |
Earnout payment - cash element |
|
|
( |
) |
Balance at June 30, 2025 |
|
$ |
|
The recurring Level 3 fair value measurement of our contingent consideration obligations for Tantti include the following significant unobservable inputs (amounts in thousands, except percent data):
Contingent Consideration Earnout |
|
Fair Value as of |
|
Valuation Technique |
|
Unobservable Input |
|
Range |
|
Weighted Average(1) |
||
|
|
|
|
|
Monte Carlo |
|
Probability of |
|
|
|
|
|
|
|
|
|
|
|
|
Success |
|
|
|||
Commercialization-based payments |
|
$ |
|
|
|
|
Earnout Discount Rate |
|
|
|||
|
|
|
|
|
|
|
Volatility |
|
|
|||
Revenue and Volume- |
|
|
|
|
Monte Carlo |
|
Revenue & Volume |
|
|
|||
|
|
$ |
|
|
|
|
Earnout Discount Rate |
|
|
|||
|
|
|
|
|
|
|
Probability of |
|
|
|||
Manufacturing line expansions |
|
$ |
|
|
Probability-weighted present value |
|
Earnout Discount Rate |
|
|
|||
The fair value of the contingent consideration liability is valued using the inputs noted in the table above. During the three months ended June 30, 2025, the Company adjusted its revenue targets for Tantti based on revised forecasts. Accordingly, the Company recognized a gain on the change in fair value of contingent consideration. Changes in the projected performance of the acquired business could result in a higher or lower contingent consideration obligation in the future.
Fair Value of Other Financial Instruments
The fair value of outstanding foreign exchange forward contracts are valued using quoted forward foreign exchange prices at the reporting date.
Fair Value Measured on a Nonrecurring Basis
During the three and six months ended June 30, 2025, there were no re-measurements to the fair value of financial assets and liabilities that are measured at fair value on a nonrecurring basis.
Convertible Senior Notes
On December 14, 2023, the Company issued $
10
The primary risk managed by the Company using derivative instruments is foreign exchange risk. Foreign exchange forward contracts are entered into as hedges against unfavorable fluctuations in the U.S. dollar to Swedish krona (SEK) exchange rates. The Company does not apply hedge accounting to these contracts because these derivative instruments are not qualified as accounting hedges; therefore the changes in fair value are recorded in the condensed consolidated statements of comprehensive income. By using derivative instruments to mitigate exposures to changes in foreign exchange rates, the Company is exposed to credit risk from the failure of the counterparty to perform under the terms of the contract. The credit or repayment risk is minimized by entering into transactions with high-quality counterparties.
The notional amounts of the outstanding contracts at June 30, 2025 and December 31, 2024 were as follows (in thousands):
|
|
June 30, |
|
|
December 31, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||
|
|
U.S. Dollar Amount |
|
|
SEK Amount |
|
|
U.S. Dollar Amount |
|
|
SEK Amount |
|
||||
May 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
September 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
The fair value of outstanding derivative instruments recorded in the accompanying consolidated balance sheet were as follows (in thousands):
(in thousands) |
|
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
Derivatives not designated or not qualifying as hedging instruments |
|
Balance Sheet Location |
|
|
|
|
|
|
||
Foreign exchange forward contracts |
|
Other current assets |
|
$ |
|
|
$ |
|
||
Foreign exchange forward contracts |
|
Accrued liabilities |
|
$ |
|
|
$ |
|
||
The effects of derivative instruments on the condensed consolidated statements of comprehensive income were as follows (in thousands):
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
Amount of Loss Recognized on Derivatives |
|
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Derivatives not designated or not qualifying as hedging instruments |
|
Location of loss recognized on derivatives |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts |
|
Other expenses, net |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
2025 Acquisition
908 Devices Inc. Bioprocessing Analytics Portfolio
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,
11
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.
Consideration Transferred
The Company accounted for the 908 Devices PAT Portfolio acquisition as a purchase of a business under Accounting Standards Codification (“ASC”) 805, “Business Combinations.” Under the securities and asset purchase agreement, the PAT portfolio and associated net assets were acquired for cash consideration of $
Fair Value of Net Assets Acquired
The preliminary allocation of purchase price is based on the fair value of assets acquired and liabilities assumed as of the acquisition date. As of June 30, 2025, the purchase accounting for this acquisition had not been finalized and has been recorded on a provisional basis. As additional information becomes available, including but not limited to the outcome of an updated valuation related to developed technology and additional analysis related to inventory valuation, the Company may further revise its preliminary purchase price allocation during the remainder of the measurement period. Amounts recorded on a provisional basis include but are not limited to intangible assets, working capital accounts including inventories, deferred tax accounts, deferred revenues, lease assets and goodwill.
Cash and cash equivalents |
|
$ |
|
|
Accounts receivable |
|
|
|
|
Inventory |
|
|
|
|
Prepaid expenses and other current assets |
|
|
|
|
Property and equipment |
|
|
|
|
Operating lease right of use assets |
|
|
|
|
Other assets, long-term |
|
|
|
|
Customer relationships |
|
|
|
|
Developed technology |
|
|
|
|
Trademark and tradename |
|
|
|
|
Goodwill |
|
|
|
|
Accounts payable |
|
|
( |
) |
Accrued liabilities |
|
|
( |
) |
Operating lease liabilities |
|
|
( |
) |
Deferred revenue |
|
|
( |
) |
Deferred tax liability |
|
|
( |
) |
Fair value of net assets acquired |
|
$ |
|
During the quarter ended June 30, 2025 measurement period adjustments resulted in a net decrease to provisional goodwill in the amount of $
The measurement period adjustments described above, had they been reflected in the Company’s initial accounting for the 908 Devices PAT Portfolio acquisition would not have resulted in any material differences between what the Company recorded in its condensed consolidated statements of comprehensive income for the quarter ended March 31, 2025.
Acquired Goodwill
12
The goodwill of $
Intangible Assets
The following table sets forth the components of the identified intangible assets (determined on a provisional basis and thus subject to change during the measurement period) associated with the 908 Devices PAT Portfolio acquisition and their estimated useful lives:
|
|
Useful life |
|
Fair Value |
|
|
|
|
|
|
(Amounts in thousands) |
|
|
Customer relationships |
|
|
$ |
|
||
Developed technology |
|
|
|
|
||
Trademark and tradename |
|
|
|
|
||
|
|
|
|
$ |
|
|
2024 Acquisition
Tantti Laboratory Inc.
On December 2, 2024, the Company's subsidiary, Repligen Sweden AB, acquired Tantti from the former shareholders of Tantti (“Tantti Seller”) pursuant to a share swap agreement, dated as of July 27, 2024 (such acquisition, the “Tantti Acquisition” and such agreement, the “Share Swap Agreement”), by and among Repligen Sweden AB, the Tantti Seller, and the Company, in its capacity as guarantor of the obligations of Repligen Sweden AB under the share purchase agreement (the “Share Purchase Agreement”).
Tantti, headquartered in Taoyuan City, Taiwan, has developed a unique portfolio of macroporous chromatography beads to optimize the purification of new modalities including viral vectors, viruses, nucleic acids and other large molecule biologics. The addition of Tantti further strengthens our portfolio in the new modality space.
Consideration Transferred
The Company accounted for the Tantti Acquisition as a purchase of business under ASC 805, “Business Combinations.” Under the Share Swap Agreement, all outstanding equity interests of Tantti were acquired for consideration with a value totaling $
Fair Value of Net Assets Acquired
The preliminary allocation of purchase price is based on the fair value of assets acquired and liabilities assumed as of the acquisition date. As of June 30, 2025, the purchase accounting for this acquisition had not been finalized. As additional information becomes available, including the outcome of the obsolescence study on developed technology, the Company may further revise its preliminary purchase price allocation during the remainder of the measurement period. Besides the outcome of the obsolescence study and the tax implications of the purchase price allocation, the final allocation may also result in changes to
13
other assets and liabilities.
Cash and cash equivalents |
|
$ |
|
|
Accounts receivable |
|
|
|
|
Inventory |
|
|
|
|
Prepaid expenses and other current assets |
|
|
|
|
Property and equipment |
|
|
|
|
Operating lease right of use asset |
|
|
|
|
Other assets, long-term |
|
|
|
|
Developed technology |
|
|
|
|
Goodwill |
|
|
|
|
Accounts payable |
|
|
( |
) |
Accrued liabilities |
|
|
( |
) |
Operating lease liabilities |
|
|
( |
) |
Deferred tax liability |
|
|
( |
) |
Fair value of net assets acquired |
|
$ |
|
During the quarter ended June 30, 2025 measurement period adjustments resulted in a net decrease to provisional goodwill in the amount of $
Acquired Goodwill
The goodwill of $
Intangible Assets
The identified intangible asset (determined on a provisional basis and thus subject to change during the measurement period) associated with the Tantti Acquisition is developed technology of $
In July 2023, the Board of Directors authorized the Company's management team to undertake restructuring activities to simplify and streamline our organization and strengthen the overall effectiveness of our operations. Since the initial streamlining and rebalancing efforts contemplated in July 2023, and with the introduction of new management in the second half of 2024, the Company continued to undertake further restructuring activities (collectively, the “Restructuring Plan”) which has included consolidating a portion of our manufacturing operations between certain U.S. locations, writing-off abandoned equipment with the rationalization of excess production line capacity and discontinuing the sale of certain product SKUs. In addition, the Company evaluated the net realizable value of finished goods and raw materials to meet rapidly changing demand during a challenging supply chain environment in the industry during 2023 and 2024.
The Company recorded pre-tax restructuring activity of $
The following tables summarize the charges related to restructuring activities by type of cost for the periods presented on the Company’s condensed consolidated statements of comprehensive income:
14
|
|
Three Months Ended June 30, 2025 |
|
|||||||||
|
|
Severance and Employee-Related Costs |
|
|
Facility and Other Exit Costs |
|
|
Total |
|
|||
|
|
(Amounts in thousands) |
|
|||||||||
Cost of goods sold |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Research and development |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
Six Months Ended June 30, 2025 |
|
|||||||||
|
|
Severance and Employee-Related Costs |
|
|
Facility and Other Exit Costs |
|
|
Total |
|
|||
|
|
(Amounts in thousands) |
|
|||||||||
Cost of goods sold |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Research and development |
|
|
( |
) |
|
|
|
|
|
|
||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
Three Months Ended June 30, 2024 |
|
|||||||||
|
|
Severance and Employee-Related Costs |
|
|
Facility and Other Exit Costs |
|
|
Total |
|
|||
|
|
(Amounts in thousands) |
|
|||||||||
Cost of goods sold |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Research and development |
|
|
|
|
|
|
|
|
|
|||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
Six Months Ended June 30, 2024 |
|
|||||||||||||
|
|
Severance and Employee-Related Costs |
|
|
Accelerated Depreciation |
|
|
Facility and Other Exit Costs |
|
|
Total |
|
||||
|
|
(Amounts in thousands) |
|
|||||||||||||
Cost of goods sold |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Research and development |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Severance and employee-related costs under the Restructuring Plan are primarily associated with actual headcount reductions. Costs incurred include cash severance and non-cash severance, including other termination benefits. Severance and other termination benefit packages are based on established benefit arrangements or local statutory requirements and we recognized the contractual component of these benefits when payment was probable and could be reasonably estimated.
The Company’s manufacturing strategy and footprint were reviewed as a part of our 2024 annual strategic planning and budget session. These exit activities initiated in 2024 were completed in the second quarter of 2025.
As of June 30, 2025, there was
|
|
Restructuring Liability |
|
|
Restructuring Costs |
|
|
Amounts Paid in 2025 |
|
|
Noncash Restructuring Items |
|
|
Restructuring Liability |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Severance & employee-related costs |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
Facility and other exit costs |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
Disaggregation of Revenue
Revenues for the three and six months ended June 30, 2025 and 2024 were as follows:
15
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(Amounts in thousands) |
|
|||||||||||||
Product revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Royalty and other income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
When disaggregating revenue, the Company considered all of the economic factors that may affect its revenues. Because its revenues are from bioprocessing customers, there are no differences in the nature, timing and uncertainty of the Company’s revenues and cash flows from any of its product lines. However, given that the Company’s revenues are generated in different geographic regions, factors such as regulatory, economic and geopolitical developments within those regions could impact the nature, timing and uncertainty of the Company’s revenues and cash flows.
Disaggregated revenue from contracts with customers by geographic region and revenue from significant customers can be found in Note 15, “Segment Reporting,” included in this report.
For more information regarding our product revenue, see Note 8, “Revenue Recognition” included in Part II, Item 8, “Financial Statements and Supplementary Data” to the Company’s Form 10-K.
Contract Balances from Contracts with Customers
The following table provides information about receivables and deferred revenue from contracts with customers as of June 30, 2025 and December 31, 2024 (amounts in thousands):
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
||
Balances from contracts with customers only: |
|
|
|
|
|
|
||
Accounts receivable |
|
$ |
|
|
$ |
|
||
Deferred revenue (included in accrued liabilities and |
|
$ |
|
|
$ |
|
||
Revenue recognized during periods presented relating to: |
|
|
|
|
|
|
||
The beginning deferred revenue balance |
|
$ |
|
|
$ |
|
||
The timing of revenue recognition, billings and cash collections results in the accounts receivable and deferred revenue balances on the Company’s condensed consolidated balance sheets.
Goodwill
The following table represents the change in the carrying value of goodwill for the six months ended June 30, 2025 (amounts in thousands):
Balance at December 31, 2024 |
|
$ |
|
|
908 Devices PAT Portfolio acquisition |
|
|
|
|
Cumulative translation adjustment |
|
|
|
|
Balance as of March 31, 2025 |
|
$ |
|
|
Measurement period adjustment - 908 Devices PAT Portfolio |
|
|
( |
) |
Measurement period adjustment - Tantti Laboratory Inc. |
|
|
( |
) |
Cumulative translation adjustment |
|
|
|
|
Balance at June 30, 2025 |
|
$ |
|
The Company has not identified any “triggering” events which indicate an impairment of goodwill in the three and six months ended June 30, 2025.
Intangible assets
Indefinite-lived intangible assets are reviewed for impairment at least annually. Definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. There has been
16
Intangible assets, net, consisted of the following at June 30, 2025:
|
|
June 30, 2025 |
|
|||||||||||||
|
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|
Weighted |
|
||||
|
|
(Amounts in thousands) |
|
|
|
|
||||||||||
Finite-lived intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Technology – developed |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
Patents |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Customer relationships |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Trademarks |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Other intangibles |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total finite-lived intangible assets |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Indefinite-lived intangible asset: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Trademarks |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total intangible assets |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
Intangible assets, net, consisted of the following at December 31, 2024:
|
|
December 31, 2024 |
|
|||||||||||||
|
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|
Weighted |
|
||||
|
|
(Amounts in thousands) |
|
|
|
|
||||||||||
Finite-lived intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Technology – developed |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
Patents |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Customer relationships |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Trademarks |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Other intangibles |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total finite-lived intangible assets |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Indefinite-lived intangible asset: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Trademarks |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total intangible assets |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
Amortization expense for finite-lived intangible assets was $
|
|
Estimated |
|
|
|
|
Amortization |
|
|
For the Years Ended December 31, |
|
Expense |
|
|
2025 (remaining six months) |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 and thereafter |
|
|
|
|
Total |
|
$ |
|
|
Inventories, net
Inventories, net consists of the following:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
|
|
(Amounts in thousands) |
|
|||||
Raw materials |
|
$ |
|
|
$ |
|
||
Work-in-process |
|
|
|
|
|
|
||
Finished products |
|
|
|
|
|
|
||
Total inventories, net |
|
$ |
|
|
$ |
|
||
17
Property, plant and equipment, net
Property, plant and equipment, net consist of the following:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
|
|
(Amounts in thousands) |
|
|||||
Land |
|
$ |
|
|
$ |
|
||
Buildings |
|
|
|
|
|
|
||
Leasehold improvements |
|
|
|
|
|
|
||
Equipment |
|
|
|
|
|
|
||
Furniture, fixtures and office equipment |
|
|
|
|
|
|
||
Computer hardware and software |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total property, plant and equipment |
|
|
|
|
|
|
||
Less - Accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Total property, plant and equipment, net |
|
$ |
|
|
$ |
|
||
Accrued liabilities
Accrued liabilities consist of the following:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
|
|
(Amounts in thousands) |
|
|||||
Employee compensation |
|
$ |
|
|
$ |
|
||
Deferred revenue |
|
|
|
|
|
|
||
Derivative liability |
|
|
|
|
|
|
||
Income taxes payable |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total accrued liabilities |
|
$ |
|
|
$ |
|
||
The carrying value of the Company's Convertible Senior Notes is as follows:
|
|
|
|
|
|
|
||
|
|
June 30, |
|
|
December 31, |
|
||
|
|
(Amounts in thousands) |
|
|||||
1.00% Convertible Senior Notes due 2028: |
|
|
|
|
|
|
||
Principal amount |
|
$ |
|
|
$ |
|
||
Unamortized debt discount |
|
|
( |
) |
|
|
( |
) |
Unamortized debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Carrying amount - Convertible Senior Notes due 2028, net |
|
$ |
|
|
$ |
|
||
1.00% Convertible Senior Notes due 2028
On December 14, 2023, the Company issued $
The Company evaluated the Exchange Transaction and determined approximately $
18
reduced by $
Proceeds from the Subscription Transactions were $
The Company used $
The 2023 Notes are senior, unsecured obligations of the Company, and bear interest at a rate of
The following table sets forth total interest expense recognized related to the 2023 Notes for the three and six months ended June 30, 2025 and 2024:
19
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(Amounts in thousands, except percentage data) |
|
|||||||||||||
Contractual interest expense – 2023 Notes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Amortization of debt discount – 2023 Notes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of debt issuance costs – 2023 Notes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Effective interest rate of the liability component |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
0.375% Convertible Senior Notes due 2024
The Company issued $
The following table sets forth total interest expense recognized related to the 2019 Notes:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||
(Amounts in thousands, except percentage data) |
|
|
|
|
|
|
||
Contractual interest expense – 2019 Notes |
|
$ |
|
|
$ |
|
||
Amortization of debt issuance costs – 2019 Notes |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Effective interest rate of the liability component |
|
|
% |
|
|
% |
||
Stock Option and Incentive Plans
Under the Company’s current 2018 Stock Option and Incentive Plan (the “2018 Plan”), the number of shares of the Company’s common stock that were reserved and available for issuance is
Former Chief Executive Officer Accounting Modifications
On June 12, 2024, upon approval by the Board, the Company entered into the Fourth Amended and Restated Employment Agreement (the “Transition Agreement”) with the Company's former Chief Executive Officer (“CEO”), Tony J. Hunt, which amends and restates Mr. Hunt's Third Amended and Restated Employment Agreement with the Company dated as of May 26, 2022. Under the terms of the Transition Agreement, Mr. Hunt relinquished his position as the Company's CEO effective September 1, 2024 (the “Transition Date”) and transitioned to a new role as Executive Chair of the Board beginning on the
20
Transition Date (the “CEO Transition”). It is anticipated that Mr. Hunt will continue to be involved in the business as the Executive Chair of the Board until March 2026 and will continue to be employed by the Company as an advisor thereafter, until March 2027.
Under the terms of the Transition Agreement and the award agreements governing Mr. Hunt’s outstanding equity awards, Mr. Hunt’s unvested stock awards will continue to vest in accordance with their original terms. Furthermore, on June 28, 2024, the Company entered into an amendment (the “2024 Award Amendment”) to the equity awards granted to Mr. Hunt in 2024, which consisted of a stock option, restricted stock units (“RSUs”) and performance stock units (“PSUs” and together the “2024 Grants”). Pursuant to the terms of the 2024 Award Amendment, two-thirds of the 2024 Grants were forfeited, which equates to
Although Mr. Hunt’s unvested equity awards continue to vest in accordance with their original terms and there has been no amendment to Mr. Hunt’s outstanding equity awards other than the 2024 Award Amendment, the Company determined that under ASC 718, “Compensation - Stock Compensation”, the CEO Transition represented a significant reduction in Mr. Hunt’s operating role with the Company for accounting purposes. This determination resulted in a Type III accounting modification of certain of Mr. Hunt’s unvested stock awards (improbable to probable) under ASC 718 (the “Equity Modification”) on June 12, 2024. As a result, for accounting purposes only, Mr. Hunt’s unvested awards were deemed cancelled and a new grant issued for his unvested shares with the value of these awards recalculated using a price of $
As a result of the Equity Modification, the Company recognized stock-based compensation expense for the modified awards of $
The Company determined that the PSUs granted to Mr. Hunt in 2022 and 2023 should be accounted for as a Type IV accounting modification (improbable to improbable) in accordance with ASC 718, because vesting conditions before and after June 12, 2024 were improbable of being achieved.
As a result of the Equity Modification and the forfeiture of the pro-rata portion of Mr. Hunt’s 2024 Grants, the Company recognized $
Stock Issued for Earnout Payments
In April 2025, the Company issued
In April 2025, the Company issued
In April 2024, the Company issued
In March 2024, the Company issued
See Note 5, “Acquisitions”, included in Part II, Item 8, “Financial Statements and Supplementary Data,” to the Company’s Form 10-K for additional information on the acquisitions of Avitide and FlexBiosys and the contingent consideration. The shares issued to FlexBiosys represent
21
Agreement) and the shares issued to Avitide represents
Stock-Based Compensation
The following table presents stock-based compensation expense in the Company’s condensed consolidated statements of comprehensive income:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(Amounts in thousands) |
|
|||||||||||||
Cost of goods sold |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Research and development |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative(1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total stock-based compensation |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Stock Options
Information regarding option activity for the six months ended June 30, 2025 under the Plans is summarized below:
|
|
Shares |
|
|
Weighted |
|
|
Weighted- |
|
|
Aggregate |
|
||||
Options outstanding at December 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exercised |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Forfeited/expired/cancelled |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Options outstanding at June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Options exercisable at June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Vested and expected to vest at June 30, 2025(1) |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
The weighted average grant date fair value of options granted during the six months ended June 30, 2025 and 2024 was $
Stock Units
The fair value of stock units is calculated using the closing price of the Company’s common stock on the date of grant. The Company recognizes expense on awards with service-based vesting over the employee’s requisite service period on a straight-line basis. The Company recognizes expense on performance-based awards over the vesting period based on the probability that the
22
performance metrics will be achieved.
|
|
Shares |
|
|
Weighted Average |
|
|
||
Unvested at December 31, 2024 |
|
|
|
|
$ |
|
|
||
Awarded |
|
|
|
|
|
|
|
||
Vested |
|
|
( |
) |
|
|
|
|
|
Forfeited/cancelled |
|
|
( |
) |
|
|
|
|
|
Unvested at June 30, 2025 |
|
|
|
|
$ |
|
|
||
Vested and expected to vest at June 30, 2025(1) |
|
|
|
|
$ |
|
|
||
The aggregate intrinsic value of stock units vested during the six months ended June 30, 2025 and 2024 was $
The weighted average grant date fair value of stock units granted during the six months ended June 30, 2025 and 2024 was $
As of June 30, 2025, there was $
Collaboration Agreements
The Company licenses certain technologies that are, or may be, incorporated into its technology under several agreements and also has entered into several clinical research agreements that require the Company to fund certain research projects. Generally, the license agreements require the Company to pay annual maintenance fees and royalties on product sales once a product has been established using the technologies. Research and development expenses associated with license agreements were immaterial amounts for the three and six months ended June 30, 2025 and 2024.
Legal Proceedings
From time to time, in the normal course of its operations, the Company is subject to litigation matters and claims relating to employee relations, business practices and patent infringement. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict, and the Company's view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a provision for contingent losses when it is both probably that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company's operations or its financial results.
For the three and six months ended June 30, 2025, the Company recorded income tax provisions of $
On July 4, 2025, the United States enacted into law new tax legislation, the One Big Beautiful Bill Act (“OBBBA”), which contains several provisions modifying the corporate income tax code. We are still in the process of evaluating the OBBBA, but we do not expect it to have a material impact on our consolidated financial statements or results of operations.
23
A reconciliation of basic and diluted weighted average shares outstanding is as follows:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(Amounts in thousands, except per share data) |
|
|||||||||||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares used in computing net income per share – basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effect of dilutive shares: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Options and stock units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Convertible senior notes(1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of unvested performance stock units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive potential common shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator for diluted earnings per share - adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
For the three and six months ended June 30, 2025,
In July 2019, the Company issued $
As mentioned above and as provided by the terms of the Second Supplemental Indenture underlying the 2019 Notes, the Company irrevocably elected to settle the conversion obligation for the 2019 Notes in a combination of cash and shares of the Company’s common stock. This means the Company settled the par value of the 2019 Notes in cash and any excess conversion premium in shares. The Company is required to reflect the dilutive effect of the convertible securities by application of the “if-converted” method, which means the denominator of the EPS calculation would include the total number of shares assuming the 2019 Notes had been fully converted at the beginning of the period. Accordingly, the par value of the 2019 Notes was not included in the calculation of diluted earnings per share, but the dilutive effect of the conversion premium was considered in the calculation of diluted earnings per share for any period the 2019 Notes were not matured, using the treasury stock method. The dilutive impact of the 2019 Notes was based on the difference between the Company’s current period average stock price and the conversion price of the 2019 Notes, provided there was a premium. Because the remaining 2019 Notes were redeemed in 2024, there was
24
Certain facilities leased by our subsidiary, Spectrum LifeSciences LLC (“Spectrum”) are owned by the Roy Eddleman Living Trust (the “Trust”). As of June 30, 2025, the Trust owned greater than
Operating segments are components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the Chief Operating Decision Maker (the “CODM”) in deciding how to allocate resources and assess performance. Our CEO has been identified as the CODM.
The Company views its operations, makes decisions regarding how to allocate resources and manages its business as
The following table represents the Company’s total revenue by customers’ geographic locations:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenue by customers' geographic locations: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
North America |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Europe |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
APAC/Other |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Total revenue |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
The following table presents the Company’s significant segment expenses which are regularly provided to the CODM for the single reportable segment:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Costs and operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of goods sold |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total costs and operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other income, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax provision |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Concentrations of Credit Risk and Significant Customers
Financial instruments that subject the Company to significant concentrations of credit risk primarily consist of cash and cash equivalents, marketable securities, accounts receivable, and foreign exchange forward contracts. Per the Company’s investment policy, cash equivalents and marketable securities are invested in financial instruments with high credit ratings. Additionally, the policy limits the credit exposure to any one issuer (with the exception of U.S. treasury obligations) and the types of instruments held. As of June 30, 2025 and December 31, 2024, the Company had no investments associated with foreign exchange contracts or options contracts. As of June 30, 2025 and December 31, 2024, the Company used derivative financial instruments to manage exposure to foreign exchange risk on certain repayable intercompany loans with foreign subsidiaries, specifically foreign exchange forward contracts.
Concentration of credit risk with respect to accounts receivable is limited to customers to whom the Company makes significant sales. While a reserve for the potential write-off of accounts receivable is maintained, the Company has not written off any significant accounts to date. To control credit risk, the Company performs regular credit evaluations of its customers’ financial condition.
25
No customer represented
One customer represented
26
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Repligen and its subsidiaries, collectively doing business as Repligen Corporation (“Repligen”, “we”, “our”, or the “Company”) is a global life sciences company that develops and commercializes highly innovative bioprocessing technologies and systems that increase efficiencies and flexibility in the process of manufacturing biological drugs.
As the overall market for biologics continues to grow and expand, our customers – primarily large biopharmaceutical companies and contract development and manufacturing organizations and other life sciences companies (integrators) – face critical production cost, capacity, quality and time pressures. Built to address these concerns, our products help set new standards for the way biologics are manufactured. We are committed to inspiring advances in bioprocessing as a trusted partner in the production of critical biologic drugs – including monoclonal antibodies, recombinant proteins, vaccines and cell and gene therapies – that are improving human health worldwide. Increasingly, our technologies are being implemented to overcome challenges in processing plasmid DNA (a starting material for the production of mRNA) and gene delivery vectors such as lentivirus and adeno-associated viral vectors. For more information regarding our business, products and acquisitions, see Part I, Item 1, “Business”, included in our 2024 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (“SEC”) on March 14, 2025 (“Form 10-K”).
We currently operate as one bioprocessing business, with a comprehensive suite of products to serve both upstream and downstream processes in biological drug manufacturing. Building on over 40 years of industry expertise, we have developed a broad and diversified product portfolio that reflects our passion for innovation and the customer-first culture that drives our entire organization. We continue to capitalize on opportunities to maximize the value of our product platform through both organic growth initiatives (internal innovation and leveraging commercial opportunities) and targeted acquisitions.
Macroeconomic Trends
As a result of our global presence, a significant portion of our revenue and expenses is denominated in currencies other than the U.S. dollar. We are therefore subject to non-U.S. exchange exposure. Exchange rates can be volatile and a substantial weakening or strengthening of foreign currencies against the U.S. dollar could increase or reduce our revenue and gross profit margin and impact the comparability of results from period to period.
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.
2025 Acquisition
Acquisition of 908 Devices PAT Portfolio
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.
The addition of these desktop assets complements and strengthens Repligen’s differentiated PAT Portfolio that provides its biopharmaceutical and CDMO customers with actionable insights to optimize development processes and improve manufacturing efficiencies.
2024 Acquisition
Acquisition of Tantti Laboratory Inc.
27
On December 2, 2024, the Company's subsidiary, Repligen Sweden AB acquired Tantti Laboratory Inc. (“Tantti”) from the former shareholders of Tantti (“Tantti Seller”) pursuant to a share swap agreement, dated as of July 27, 2024 (such acquisition, the “Tantti Acquisition”), by and among Repligen Sweden AB, the Tantti Seller, and the Company, in its capacity as guarantor of the obligations of Repligen Sweden AB under the Share Purchase Agreement.
Tantti, headquartered in Taoyuan City, Taiwan, has developed a unique portfolio of macroporous chromatography beads to optimize the purification of new modalities including viral vectors, viruses, nucleic acids and other large molecule biologics. The addition of Tantti further strengthens our portfolio in the new modality space.
Critical Accounting Policies and Estimates
A “critical accounting policy” is one which is both important to the portrayal of our financial condition and results and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. For a description of our critical accounting policies that affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations and our significant accounting policies in Note 2, “Summary of Significant Accounting Policies”, to the consolidated financial statements included in our Form 10-K.
Results of Operations
The following discussion of the financial condition and results of operations should be read in conjunction with the accompanying condensed consolidated financial statements and the related footnotes thereto.
Revenues
Total revenue for the three and six months ended June 30, 2025 and 2024 were as follows:
|
|
Three Months Ended |
|
|
Increase/(Decrease) |
|
|
Six Months Ended |
|
|
Increase/(Decrease) |
|
||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
||||||||
|
|
(Amounts in thousands, except for percentage data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Products |
|
$ |
182,329 |
|
|
$ |
158,804 |
|
|
$ |
23,525 |
|
|
|
14.8 |
% |
|
$ |
351,466 |
|
|
$ |
311,950 |
|
|
$ |
39,516 |
|
|
|
12.7 |
% |
Royalty and other |
|
|
37 |
|
|
|
35 |
|
|
|
2 |
|
|
|
5.7 |
% |
|
|
72 |
|
|
|
71 |
|
|
|
1 |
|
|
|
1.4 |
% |
Total revenue |
|
$ |
182,366 |
|
|
$ |
158,839 |
|
|
$ |
23,527 |
|
|
|
14.8 |
% |
|
$ |
351,538 |
|
|
$ |
312,021 |
|
|
$ |
39,517 |
|
|
|
12.7 |
% |
Product revenues
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.
Royalty and other revenues
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.
28
Costs of goods sold and operating expenses
Total costs and operating expenses for the three and six months ended June 30, 2025 and 2024 were comprised of the following:
|
|
Three Months Ended |
Increase/(Decrease) |
|
|
Six Months Ended |
Increase/(Decrease) |
|
||||||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
||||||||
|
|
(Amounts in thousands, except for percentage data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Cost of goods sold |
|
$ |
91,224 |
|
|
$ |
77,314 |
|
|
$ |
13,910 |
|
|
|
18.0 |
% |
|
$ |
169,639 |
|
|
$ |
153,705 |
|
|
$ |
15,934 |
|
|
|
10.4 |
% |
Research and development |
|
|
13,958 |
|
|
|
10,575 |
|
|
|
3,383 |
|
|
|
32.0 |
% |
|
|
26,882 |
|
|
|
21,813 |
|
|
|
5,069 |
|
|
|
23.2 |
% |
Selling, general and administrative |
|
|
71,227 |
|
|
|
65,481 |
|
|
|
5,746 |
|
|
|
8.8 |
% |
|
|
142,482 |
|
|
|
127,284 |
|
|
|
15,198 |
|
|
|
11.9 |
% |
Contingent consideration |
|
|
(7,939 |
) |
|
|
— |
|
|
|
(7,939 |
) |
|
|
100.0 |
% |
|
|
(7,939 |
) |
|
|
- |
|
|
|
(7,939 |
) |
|
|
100.0 |
% |
Total costs and operating expenses |
|
$ |
168,470 |
|
|
$ |
153,370 |
|
|
$ |
15,100 |
|
|
|
9.8 |
% |
|
$ |
331,064 |
|
|
$ |
302,802 |
|
|
$ |
28,262 |
|
|
|
9.3 |
% |
Cost of goods sold
Cost of goods sold increased $13.9 million, or 18.0%, and increased $15.9, or 10.4%, respectively, for the three and six months ended June 30, 2025, compared to the same periods of 2024.
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.
Gross margin was 50.0% and 51.3% in the three months ended June 30, 2025 and 2024, respectively. The decrease is driven by product mix with higher Chromatography sales, including the sale of the Company’s procured resin for OPUS columns. Procured resin is sold with a nominal mark-up, which is far below the Company’s average margin levels.
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.
Research and development expenses
Research and development (“R&D”) expenses are related to the development of products supporting bioprocessing operations. The expenses include personnel compensation, supplies, and other research expenses. Due to the fact that these various programs share personnel and fixed costs, we have not provided historical costs incurred by project.
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.
Selling, general and administrative expenses
Selling, general and administrative (“SG&A”) expenses include the costs associated with selling our commercial products and costs required to support our marketing efforts. It also includes legal, accounting, patent, shareholder services, amortization of intangible assets and other administrative functions.
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.
SG&A costs increased by $15.2 million, or 11.9%, during the six 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 $4.9 million related to incremental expenses incurred as a result of the 908 Devices PAT Portfolio and Tantti acquisitions, and $9.2 million expense in professional services related to acquisition and integration activities.
29
Change in fair value of contingent consideration
Change in fair value of contingent consideration represents the change in fair value of the obligation included in current and noncurrent contingent consideration on the condensed consolidated balance sheets as of the end of each period. Remeasurement of the contingent consideration obligation is done each quarter and the carrying value of the obligation is adjusted to the current fair value through our condensed consolidated statements of comprehensive income. Changes in expected operating results related to the amount and timing of future revenues and a change in market inputs used to calculate the discount rate resulted in a decrease of $7.9 million in the contingent consideration obligation on the balance sheet for the three and six months ended June 30, 2025. No adjustment was recorded for the three and six months ended June 30, 2024 as management’s assessment was that the balances of the contingent consideration obligations already represented fair value.
Other income, net
The table below provides detail regarding our other income, net:
|
|
Three Months Ended |
|
|
Increase/(Decrease) |
|
|
Six Months Ended |
|
|
Increase/(Decrease) |
|
||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
||||||||
|
|
(Amounts in thousands, except for percentage data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Investment income |
|
$ |
6,585 |
|
|
$ |
9,411 |
|
|
$ |
(2,826 |
) |
|
|
(30.0 |
%) |
|
$ |
13,899 |
|
|
$ |
18,404 |
|
|
$ |
(4,505 |
) |
|
|
(24.5 |
%) |
Interest expense |
|
|
(5,354 |
) |
|
|
(5,118 |
) |
|
|
(236 |
) |
|
|
4.6 |
% |
|
|
(10,604 |
) |
|
|
(10,147 |
) |
|
|
(457 |
) |
|
|
4.5 |
% |
Amortization of debt issuance costs |
|
|
(414 |
) |
|
|
(520 |
) |
|
|
106 |
|
|
|
(20.4 |
%) |
|
|
(827 |
) |
|
|
(1,003 |
) |
|
|
176 |
|
|
|
(17.5 |
%) |
Other income (expenses), net |
|
|
3,502 |
|
|
|
(215 |
) |
|
|
3,717 |
|
|
|
(1,728.8 |
%) |
|
|
3,216 |
|
|
|
(3,751 |
) |
|
|
6,967 |
|
|
|
(185.7 |
%) |
Total other income, net |
|
$ |
4,319 |
|
|
$ |
3,558 |
|
|
$ |
761 |
|
|
|
21.4 |
% |
|
$ |
5,684 |
|
|
$ |
3,503 |
|
|
$ |
2,181 |
|
|
|
62.3 |
% |
Investment income
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.
Interest expense
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.
Amortization of debt issuance costs
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.
Other income, net
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.
Income tax provision
Income tax provision for the three and six months ended June 30, 2025 and 2024 was as follows:
30
|
|
Three Months Ended |
|
|
Increase/(Decrease) |
|
|
Six Months Ended |
|
|
Increase/(Decrease) |
|
||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
||||||||
|
|
(Amounts in thousands, except for percentage data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Income tax provision |
|
$ |
3,349 |
|
|
$ |
3,314 |
|
|
$ |
35 |
|
|
|
1.1 |
% |
|
$ |
5,462 |
|
|
$ |
3,713 |
|
|
$ |
1,749 |
|
|
|
47.1 |
% |
Effective tax rate |
|
|
18.4 |
% |
|
|
36.7 |
% |
|
|
|
|
|
|
|
|
20.9 |
% |
|
|
29.2 |
% |
|
|
|
|
|
|
||||
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.
The difference in effective tax rates between the periods was primarily due nontaxable contingent consideration and lower nondeductible stock based compensation offset by lower stock windfall tax benefits. Our effective tax rate for the three and six months ended June 30, 2025 was lower than the U.S. statutory rate of 21% primarily due to nontaxable contingent consideration.
On July 4, 2025, the United States enacted into law new tax legislation, the One Big Beautiful Bill Act (“OBBBA”), which contains several provisions modifying the corporate income tax code. We are still in the process of evaluating the OBBBA, but we do not expect it to have a material impact on our consolidated financial statements or results of operations.
Liquidity and Capital Resources
We have financed our operations primarily through revenues derived from product sales, and the issuance of notes and public offerings. Our revenue for the foreseeable future will primarily be limited to our bioprocessing product revenue.
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.
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.
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.
Cash Flows
|
|
Six Months Ended |
|
|
Increase/(Decrease) |
|
||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
|
|
(Amounts in thousands) |
|
|||||||||
Cash provided by (used in): |
|
|
|
|
|
|
|
|
|
|||
Operating activities |
|
$ |
43,614 |
|
|
$ |
86,898 |
|
|
$ |
(43,284 |
) |
Investing activities |
|
|
(81,947 |
) |
|
|
(15,762 |
) |
|
|
(66,185 |
) |
Financing activities |
|
|
(15,161 |
) |
|
|
(14,747 |
) |
|
|
(414 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
4,994 |
|
|
|
1,434 |
|
|
|
3,560 |
|
Net increase in cash and cash equivalents |
|
$ |
(48,500 |
) |
|
$ |
57,823 |
|
|
$ |
(106,323 |
) |
|
|
|
|
|
|
|
|
|
|
|||
31
Operating activities
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.
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.
Investing activities
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.
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.
Financing activities
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.
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.
Effect of exchange rate changes on cash and cash equivalents
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.
Future capital requirements
Our future capital requirements will depend on many factors, including the following:
32
Absent acquisitions of additional products, product candidates or intellectual property and absent the need to satisfy any debt conversions, we believe our current cash balances are adequate to meet our cash needs for at least the next 24 months from the date of this filing. We expect operating expenses for the remainder of the fiscal year to increase as we continue to expand our bioprocessing business. We expect to incur continued spending related to the development and expansion of our bioprocessing product lines and expansion of our commercial capabilities for the foreseeable future. Our future capital requirements may include, but are not limited to, purchases of property, plant and equipment, the acquisition of additional bioprocessing products and technologies to complement our existing manufacturing capabilities and continued investment in our intellectual property portfolio.
We plan to continue to invest in our bioprocessing business and in key R&D activities associated with the development of new bioprocessing products. We actively evaluate various strategic transactions on an ongoing basis, including acquiring products, technologies or businesses that would complement our existing portfolio. We continue to seek to acquire such potential assets that may offer us the best opportunity to create value for our shareholders. In order to acquire such assets, we may need to seek additional financing to fund these investments. If our available cash balances and anticipated cash flow from operations are insufficient to satisfy our liquidity requirements, due to any such acquisition-related financing needs, the need to fund debt conversions, or due to lower demand for our products, we may seek to sell common or preferred equity or convertible debt securities, enter into a credit facility or another form of third-party funding, or seek other debt funding. The sale of equity and convertible debt securities may result in dilution to our shareholders, and those securities may have rights senior to those of our common shares. If we raise additional funds through the issuance of preferred stock, convertible debt securities or other debt financing, these securities or other debt could contain covenants that would restrict our operations. Any other third-party funding arrangement could require us to relinquish valuable rights. We may require additional capital beyond our currently anticipated amounts. Additional capital may not be available on reasonable terms, if at all.
Net Operating Loss Carryforwards
At December 31, 2024, we had federal net operating loss carryforwards of $19.3 million, state net operating loss carryforwards of $11.9 million, and foreign net operating loss carryforwards of $26.0 million. The federal net operating loss carryforwards have unlimited carryforward periods and do not expire. The state net operating loss carryforwards will expire at various dates through 2044. Approximately $4.8 million of the foreign net operating loss carryforwards have unlimited carryforward periods and do not expire, while $21.2 million of the foreign net operating loss carryforwards will expire at various dates through 2034. We had federal and state business tax credit carryforwards of $6.6 million available to reduce future federal and state income taxes. The business tax credit carryforwards will expire at various dates through 2044. Net operating loss carryforwards and available tax credits are subject to review and possible adjustment by the Internal Revenue Service, state and foreign jurisdictions and may be limited in the event of certain changes in the ownership interest of significant stockholders.
Effects of Inflation
Our assets are primarily monetary, consisting mainly of cash and cash equivalents. Because of their liquidity, these assets are not directly affected by inflation. Since we intend to retain and continue to use our equipment, furniture, fixtures and office equipment, computer hardware and software and leasehold improvements, we believe that the incremental inflation related to replacement costs of such items will not materially affect our operations. However, the rate of inflation affects our expenses, such as those for employee compensation and contract services, which could increase our level of expenses and the rate at which we use our resources.
33
Cautionary Statement Regarding Forward-Looking Statements
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 flows, results of operations and financial condition; our ability to integrate acquired businesses successfully into our business and achieve the expected benefits of the acquisitions; projections of tariff impacts; our ability to compete with larger, better financed life sciences companies; our history of losses and expectation of incurring losses; our ability to generate future revenues; our ability to successfully integrate acquired businesses; our ability to raise additional capital to fund potential acquisitions; our plans to mitigate our material weaknesses in our internal controls over financial reporting; our volatile stock price; and the effects of our anti-takeover provisions. Further information on potential risk factors that could affect our financial results are included in the filings made by us from time to time with the SEC including under the sections entitled “Risk Factors” in our Form 10-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For information regarding our exposure to certain market risks, see Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of our Annual Report on Form 10-K for the year ended December 31, 2024. There were no material changes to our market risk exposure during the three months ended June 30, 2025.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company’s management is responsible for establishing and maintaining adequate DCPs (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). DCPs are those controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
Under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company carried out an evaluation as of June 30, 2025 of the effectiveness of the design and operation of the Company’s DCPs pursuant to Exchange Act Rules 13a-15(b) and 15d-15(b). Based on such evaluation, the principal executive officer and principal financial officer have concluded that, as of the end of such period, the Company’s
34
disclosure controls and procedures were not effective because of the previously reported material weaknesses in our internal control over financial reporting, which are described in Part II, Item 9A, “Controls and Procedures” of our Annual Report on Form 10-K for the year ended December 31, 2024.
Material Weaknesses in Internal Control Over Financial Reporting
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. As of December 31, 2024 and as disclosed in the Company’s Form 10-K, the Company identified the following material weaknesses in internal control over financial reporting:
As of June 30, 2025, the Company has not remediated these material weaknesses. See below for a description of our remediation plan and activities.
Remediation Plan for Material Weaknesses
As previously disclosed in the Form 10-K, management is implementing remedial actions under the oversight of the Audit Committee of the Board of Directors to address the identified deficiencies.
Our remediation activities include the following with respect to revenue recognition:
Our remediation activities will include the following with respect to IT general controls:
Our remediation activities will include the following with respect to certain business process-level controls:
35
We believe we are making progress toward achieving effectiveness of our internal control over financial reporting. The actions that we are taking are subject to ongoing management review and audit committee oversight. We will not be able to conclude whether the steps we are taking will fully remediate the material weaknesses in our internal control over financial reporting until we have completed our remediation efforts and subsequently evaluated their design and effectiveness over a sufficient period of time, and management concludes, through testing, that these controls are operating effectively. We may also conclude that additional measures are required to remediate the material weaknesses in our internal control over financial reporting.
Changes in Internal Control
Except for the material weaknesses described above, there have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the three months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
36
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not currently aware of any such proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations, nor are we aware of any governmental proceedings involving potential monetary sanctions of $0.3 million or more.
ITEM 1A. RISK FACTORS
The matters discussed in this Quarterly Report on Form 10-Q include forward-looking statements that involve risks or uncertainties. These statements are neither promises nor guarantees, but are based on various assumptions by management regarding future circumstances, over many of which Repligen has little or no control. A number of important risks and uncertainties, including those identified under the caption “Risk Factors” in Part I, Item 1A of our Form 10-K for the period ended December 31, 2024 and in subsequent filings, could cause our actual results to differ materially from those in the forward-looking statements. There are no material changes to the risk factors described in our Form 10-K for the period ended December 31, 2024.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
(a) None.
(b) None.
(c) Rule 10b5-1 Trading Plans
None of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934)
37
ITEM 6. EXHIBITS
Exhibit Number |
|
Document Description |
|
|
|
3.1 |
|
Restated Certificate of Incorporation dated June 30, 1992, as amended September 17, 1999 (filed as Exhibit 3.1 to Repligen Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999 and incorporated herein by reference). |
|
|
|
3.2 |
|
Certificate of Amendment to the Certificate of Incorporation of Repligen Corporation, effective as of May 16, 2014 (filed as Exhibit 3.1 to Repligen Corporation's Current Report on Form 8-K filed on May 19, 2014 and incorporated herein by reference). |
|
|
|
3.3 |
|
Certificate of Amendment to the Certificate of Incorporation of Repligen Corporation, effective May 19, 2023 (filed as Exhibit 3.1 to Repligen Corporation's Current Report on Form 8-K filed on May 22, 2023 and incorporated herein by reference). |
|
|
|
3.4 |
|
Third Amended and Restated Bylaws (filed as Exhibit 3.1 to Repligen Corporation's Current Report on Form 8-K filed on January 28, 2021 and incorporated herein by reference). |
|
|
|
3.5 |
|
Certificate of Amendment to the Certificate of Incorporation of Repligen Corporation, effective May 15, 2025 (filed as Exhibit 3.1 to Repligen Corporation's Current Report on Form 8-K filed on May 15, 2025 and incorporated herein by reference). |
|
|
|
31.1 + |
|
Rule 13a-14(a)/15d-14(a) Certification. |
|
|
|
31.2 + |
|
Rule 13a-14(a)/15d-14(a) Certification. |
|
|
|
32.1 * |
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents. |
|
|
|
104 |
|
Cover page formatted as Inline XBRL and contained in Exhibits 101. |
+ Filed herewith.
* Furnished herewith.
38
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
REPLIGEN CORPORATION |
|
|
|
|
|
Date: August 7, 2025 |
|
By: |
/S/ OLIVIER LOEILLOT
|
|
|
|
Olivier Loeillot |
|
|
|
Chief Executive Officer |
|
|
|
(Principal executive officer) |
|
|
|
Repligen Corporation |
|
|
|
|
Date: August 7, 2025 |
|
By: |
/S/ JASON K. GARLAND
|
|
|
|
Jason K. Garland |
|
|
|
Chief Financial Officer |
|
|
|
(Principal financial officer) |
|
|
|
Repligen Corporation |
39
