Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the BioLife Solutions' Q4 2024 Shareholder and Analyst Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. As a reminder, today's call is being recorded. I would now like to turn the conference call over to Troy Wichterman, Chief Financial Officer of BioLife Solutions. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining the BioLife Solutions' 2024 fourth quarter earnings conference call. On this call, we will cover business highlights, financial performance for the quarter and full year 2024, and present 2025 revenue guidance. Earlier today, we issued a press release announcing our financial results and operational highlights for the fourth quarter and full year of 2024 and 2025 revenue guidance, which is available at biolifesolutions.com. As a reminder, during this call, we will make forward-looking statements. These statements are subject to risks and uncertainties that can be found in our SEC filings. These statements speak only as of the date given, and we undertake no obligation to update them. We will also speak to non-GAAP or adjusted results. Reconciliations of GAAP to non-GAAP or adjusted financial metrics are included in the press release we issued this afternoon. Now I'd like to turn the call over to Rod de Greef, Chairman and CEO of BioLife.

Thanks, Troy. Good morning, and thank you for joining us for BioLife's fourth quarter and full year 2024 conference call. 2024 was a pivotal year for BioLife. Over the last 12 months, we strategically reshaped our portfolio, establishing BioLife as a leading pure-play enabler of cell and gene therapies, strengthening our long-term growth trajectory and unleashing the attractive financial profile of our streamlined operations. We executed in our core business evidenced by quarterly sequential Cell Processing revenue growth including Q4, bringing us to five consecutive quarters of growth and exceeding the high end of our already raised full year guidance for that platform. In parallel, we repositioned the company and optimized our portfolio, divesting non-core product lines to drive gross margin and adjusted EBITDA margin expansion. By completing the sale of two freezer product lines and our biostorage business, we not only emerged much more focused operationally, but also with a stronger and cleaner balance sheet, which when combined with positive cash flow from operations, makes us self-sufficient. I believe we are better positioned today than at any other time in our long history. A summary look at our 2024 results, from continuing operations, when compared with our as-reported results in 2023 highlights the positive and material impact to our go-forward financial profile these divestitures have had. Although total revenue in 2024 was $82 million, compared with $143 million in 2023, due to divestitures, our GAAP gross margin doubled from 31% in '23 to 62% in '24, which generated absolute GAAP gross margin dollars of $51 million compared with $44 million in 2023. Our adjusted EBITDA in 2024 was positive $16 million or 19% of revenue, compared with negative $5 million in 2023. We also doubled our cash balance with the sale of non-core assets, ending 2024 with $109 million in cash compared with $45 million in 2023, while also paying down $5 million of principal on our $20 million year-end '23 bank debt. We have a strong foundation in place, are self-sufficient and well-positioned strategically and financially moving into 2025. Moving to the fourth quarter results, our Cell Processing platform revenue was $20.3 million, up 7% over Q3, and a year-over-year increase of 37%. For the full year, Cell Processing revenue totaled $74 million, a record high, increasing 12% when compared to '23, driven by high-single-digit growth in Biopreservation Media or BPM and higher percentage growth in our other tools, although from a much smaller base. In Q4 and for the full year, our top 20 customers continue to represent approximately 80% of our BPM revenue with about 40% coming from distribution versus 60% direct. Approximately 36% of total BPM revenue came from those customers with commercial therapy with the caveat that a portion of that demand is likely going to clinical pipeline programs and process development validation versus patient dosing. These metrics are, in general, consistent with what we saw in 2023. At the end of '24, our BPM was utilized in a total of 17 unique cell and gene therapies, and during the year, we had a combined total of 17 unique therapy approvals, geographic expansions, additional indications or earlier lines of treatment. As we have previously stated, we believe our BPM products are utilized in over 70% of relevant, commercially sponsored, CGT trials in the US, and at this point, we have not been able to identify any commercial freeze media used in this set of clinical trials. So home-brew formulation continues to remain the only form of competition. To drive sustained growth in our Cell Processing business, a key commercial priority this year is to continue to deepen our relationship with existing BPM customers, both in commercial and clinical trial settings, while leveraging those partnerships to create cross-sell opportunities and increase adoption of our broader Cell Processing portfolio. For instance, while our CellSeal vials are already incorporated in an established commercial therapy and utilized in numerous clinical trials, there is a significant opportunity to scale these products over time. We see this as a significant mid- to long-term growth lever as additional products integrated into commercial therapies can materially enhance our revenue potential. Said differently, if these products are specified into a commercial therapy, they can increase our revenue per patient dose by a factor of 2x to 3x compared to our BPM products alone. As we enter 2025, we are cautiously optimistic that the modest improvement in the underlying industry fundamentals that emerged in 2024 will continue. With respect to the 2025 guidance we issued this morning, we anticipate an acceleration of growth when compared to the 8% realized in 2024. We expect total 2025 revenue of $95.5 million to $99 million, representing growth of 16% to 20% compared to 2024, with growth primarily driven by our Cell Processing platform. We anticipate that Cell Processing revenue will grow between 18% to 21% to $86.5 million to $89 million, largely due to projected increases in BPM sales to our commercial CGT customers. We expect this in turn will drive solid adjusted EBITDA margin expansion for the full year. Now, I'll hand the call over to Troy, who will provide an overview of our full 2024 results and '25 guidance.

Thank you, Rod. Today, we will be reviewing current and prior period financials from continuing operations for Q4 2024, which excludes financial results from Sterling, SciSafe and CBS. We reported total Q4 revenue of $22.7 million, representing an increase of 31% year-over-year. The year-over-year increase was primarily related to a 37% increase in our Cell Processing platform. Evo and Thaw platform revenue for Q4 was $2.4 million, a decrease of $200,000 or 8% from the same period in 2023. GAAP gross margins for Q4 2024 was 60% compared with 53% in Q4 2023. Adjusted gross margins for the fourth quarter was 63% compared with 63% in the prior year. Adjusted gross margin was in line with the prior year, due to an increase in revenues offset by product and customer mix. GAAP operating expenses for Q4 2024 were $24.8 million versus $24.4 million in Q4 2023. Adjusted operating expenses for Q4 '24 totaled $15 million compared with $15.4 million in the prior year. GAAP operating loss for Q4 '24 was $2.1 million versus $7.6 million in the prior year. Our adjusted operating loss for the fourth quarter of 2024 was $0.7 million compared with $5.1 million in Q4 2023. Our GAAP net loss was $2 million in Q4 or $0.04 per share compared to $7.2 million or $0.16 per share in the prior year. The decrease in operating loss and GAAP net loss was primarily due to increased revenue and decreased personnel costs, including stock-based compensation. This was partially offset by an increase in performance-based bonus accrual, in addition to increased accounting fees related to divestitures and SOX. Adjusted EBITDA for the fourth quarter of 2024 was $4 million compared with $3.7 million in the prior year. Our adjusted EBITDA increased primarily due to higher revenue, partially offset by a $900,000 increase in SOX consulting and accounting-related fees due to divestitures, which we expect to be lower in future periods after Q1 2025. Turning to our balance sheet. Our cash and marketable securities balance at December 31st, 2024 was $109.2 million, compared with $34.1 million at September 30th, 2024 and $52.3 million at December 31st, 2023. Taking into consideration our adjusted EBITDA of $4 million, our increase in cash during Q4 2024 was primarily related to the divestitures of SciSafe and CBS. Our SVB long-term debt balance at December 31st, 2024 was $15 million compared to $20 million at December 31st, 2023, with quarterly repayments of $2.5 million moving forward. Turning to 2025 revenue guidance, total revenue is expected to be $95.5 million to $99 million, reflecting an overall growth of 16% to 20% over 2024. Our Cell Processing platform is expected to contribute $86.5 million to $89 million, or 18% to 21% growth over 2024. Our Evo and Thaw platform is expected to contribute $9 million to $10 million or 3% to 15% growth over 2024. We expect adjusted gross margin for the full year to be in the mid-60s, a reduction in GAAP net loss, and expansion in adjusted EBITDA margin in 2025 due to higher expected revenue, partially offset by increases in R&D expenses related to development projects. Finally, in terms of our share count, as of February 24th, 2025, we had 47 million shares issued in outstanding and 49 million shares on a fully diluted basis. Now, I'll turn the call back to the operator to open up for questions.

Thank you. We will now begin the question-and-answer session. Today's first question comes from Matt Stanton at Jefferies. Please go ahead.

Hey, thanks. Maybe first one just on the margins, particularly the EBITDA margins. Any kind of finer point you can put around the continued expansion? I think you talked about the improving top line and mix dynamics there, but also some investment dollars into R&D. So, can you just talk a little bit about the pacing of that continued expansion through the year? And then any color maybe where we might look to exit the year here in '25 on the EBITDA margins? Thanks.

Yes, sure, Matt. I'll take that one. So, if you look at some of the commentary we made in the earnings call, there was an abnormal, I'd say, more one-time in nature-type cost in G&A being related to SOX and the divestiture accounting costs thereof, which we'll see some leakage of that in Q1. But if you take that Q4 number as a good jumping-off point for 2025 for SG&A, that would be a good jumping-off point. And then, for R&D, we didn't mention some development projects we're working on. So, if you take that Q4 2023 baseline for R&D, that would be a better baseline than Q4 2024 due to those development projects. And then as far as EBITDA margin expansion, yes, we would expect that, that pretty steady throughout 2025 as far as increasing compared to 2024 into that mid-20s that we mentioned.

Okay. Thanks. That's helpful. And then Rod you talked about the revenue opportunity to increase 2x to 3x by cross-selling the portfolio beyond just Media. Obviously, that doesn't happen overnight. It sounds like it's a big focus in '25. Can you just kind of talk about either the products or the customers where you're seeing the most potential to do that? And when we can maybe start to see some of the benefits of that cross-selling of the portfolio over time here? Thanks.

Thanks for acknowledging that. It definitely requires time since our position in the media market is very strong and large, meaning it will take several years to approximate that. However, we do have a major commercial customer that uses both CryoStor and our CellSeal vials in their approved therapy. This represents an ideal case for us. Additionally, they are assessing our automated fill system as they aim to automate their manufacturing process within a closed system. This hardware is a significant driver of consumable sales as well. Our strategy is to focus on our clinical trial customers and direct our sales team toward those accounts to promote our products. We see potential with our later-stage commercial customers, including the one I mentioned, as they evaluate CryoCase, which was introduced last year. However, for the media, as you advance down the clinical development path to a commercial product, switching becomes quite challenging and expensive, particularly concerning the container for the final drug product. We're currently discussing the introduction of CryoStor into their clinical pipeline, which is a considerable opportunity. We'll approach this from both the early-stage levels, where switching is more feasible and cost-effective, and within the commercial therapy customer pipeline.

And just to clarify, Rod meant to say CryoCase, not CryoStor.

Thank you. CryoCase, yes.

Okay. Thank you.

Does that make sense?

Yes, that's helpful. Appreciate it, guys.

Great.

Thank you. And our next question comes from Anna Snopkowski with KeyBanc Capital Markets. Please go ahead.

Hi. This is Anna on for Paul Knight. I want to ask on the momentum you are seeing in Cell Processing platform, you mentioned that this is the fifth quarter of consecutive growth. So, maybe just a little bit into what is driving this growth and increased visibility. Is it any one specific approved therapy or is it the overall health of the industry improving? Thanks.

Thank you, Anna. We're seeing some progress with the non-approved therapy in the clinical trial group of customers, which is slightly ahead, and we anticipate modest growth there. In terms of distribution, we do expect some growth as well. However, the main driver for Biopreservation Media and Cell Processing in 2025 will be the group of 17 commercial customers in our base. This group will contribute significantly to our revenue growth in 2025.

Perfect. And then, could we get an update on your outlook over the long term in terms of adjusted EBITDA margins, now that we've moved past certain product lines and the pro-forma business is coming into focus?

Yeah, sure. So, like we said, for the full year in 2025, we'd expect mid '20s for adjusted EBITDA. And then going outward, it's really highly dependent on Media growth, as you know, there's a tremendous flow-through on the revenue for Media. So, we could model out Media growth at certain percentage points with that flow through of, call it, 65% on revenue to get to an expanded EBITDA margin with not huge increases in OpEx. So if you do model that out, you can get to the '30s, call it, in 2026 timeframe towards end of '26, middle of '26.

Thank you.

Thank you. And our next question comes from Chad Wiatrowski with TD Cowen. Please go ahead.

Hey, guys. Yes, I just wanted to dig in on sort of Media growth and maybe less so for 2025 as it's mentioning it's going to be approved therapies driving growth. But just like at a higher level, when you look at catalysts and clinical trials as some of these newer modalities are expanding into larger indications, could you just speak to maybe how Media is used differently between like a gene therapy, a CAR-T or like a TIL-based therapy, and kind of how BioLife is positioned to benefit respectively?

Yes, that's a good question. The product is effective across most cell types, often performing better with some than others. The key distinction between the different modalities and cell types largely depends on the amount of CryoStor used per dose. Looking at Iovance's AMTAGVI, which specifically mentions the use of CryoStor, they utilize the largest amount per dose compared to a CAR-T therapy, which uses less. Ultimately, it all comes down to the volume used per dose, and many of our customers consider this information confidential, making it challenging to determine the exact quantity of our products utilized per dose. However, AMTAGVI's FDA insert provides a clear indication of the amount of CryoStor used.

Got it. And then, just on the Non-Media Cell Processing tools that you're trying to cross-sell, if home-brew is really the only alternative for Media, which has just created this dominant brand, could you speak to sort of the competitive profile of some of these other products? And what dynamics do you expect to come across, just trying to cross-sell? Thanks for the questions, guys.

Certainly. Let's discuss CellSeal vials. There are competitive vials available, with West being a notable larger competitor. Our vials possess specific characteristics related to the materials used, the freezing profile, and others, especially when the final therapy is frozen. Regarding CryoCase, it directly competes with cryobags, which are well-established and widely used for final doses. The advantages of our CryoCase include a more user-friendly design, especially before freezing, and a reduced risk of damage if it is dropped while frozen. We acknowledge that we face competition from some established products, but we are confident that the benefits of our offerings, combined with the industry shift towards automation—which CryoCase supports more effectively than bags—will drive increased adoption over time. Additionally, we are recognized as a reliable supplier for both major commercial therapy companies and numerous early-stage firms.

Thank you. And our next question comes from Matt Hewitt at Craig-Hallum Capital Group. Please go ahead.

Good morning, and congratulations on a strong finish to the year. Maybe first up, when you're talking about the growth this year, how much of that, if any, is related to some price increases? We've heard several companies here report over the past couple of weeks talk about implementing some price increases, call it, CPI adjustments, whatever. Are you including some of that into your model?

Yes. We do have our base price increase, which is, sort of, mid-single-digits, lower than previous years baked into that. And in addition to that, we've been on a push to alter some of the distribution and direct relationships that we have from a pricing standpoint given that they're legacy. Those won't really kick in until the back half of the year into '26. So, pricing is definitely a factor, but the bulk of it is coming from the demand side in terms of volume.

That's great. And then maybe kind of a follow-up to that. As you look to grow the vials and the rest of the product portfolio, given your strength with the Media products, is there a way for you from a pricing perspective to kind of bundle the whole portfolio together and maybe you're giving a little bit here, but you're taking more there and ultimately, it's a win-win for everybody?

Yes. It's a good question as well. I think that those opportunities exist. I think that the decisions around utilising CryoCase, it really goes beyond just the price, because the benefits of using it would outweigh any kind of real price increase. And the fact of the matter is it may even be equal to or lower ASP per, let's say, per final dose on the container by switching to us. So we don't really feel the need to be discounting. In fact, what we're trying to do is go the other way and have the pricing that we have on our product line reflect the premium products that they truly are.

That makes complete sense. Congratulations again on the strong year and you must feel good looking out to this year and not necessarily having some of the distractions you were dealing with last year. So congratulations.

Thank you, Matt.

Thanks, Matt.

Thank you. And our next question today comes from Thomas Flaten at Lake Street. Please go ahead.

Thank you for taking my questions. Rod, considering all the potential growth opportunities you mentioned, especially with cross-selling, if you look at the 18% to 20% growth rate you projected for 2025, do you think it could surpass 21%?

I believe that over time it can change. Since Media currently accounts for roughly 90% of the Cell Processing line, the major growth in the next few years will be primarily driven by Biopreservation Media. This growth is contingent upon the pace of approvals and the demand for these therapies in the future. Therefore, the first focus is not under our control. What we can manage is to ensure that we participate in as many clinical trials as possible as they become available. Regarding Sexton, I anticipate that its growth will increase over time. It will likely take us about 24 to 36 months to establish a solid footing, after which, as these therapies progress through the clinical stages and volume rises, we can expect to see an acceleration in revenue growth rates that surpass our current levels. Thus, I would estimate we're about 24 to 36 months away from any significant change in the growth rate.

I understand. Thank you. Regarding the business, now that a few months have passed since the deals made in November, are there any additional changes in the middle of the profit and loss statement that we should expect, either positive or negative?

No, the comments I made earlier still stand, Thomas, because those financials, as you know, are all continuing basis, right? So, that does strip out any of the divestiture entities from those financials as well as some people that went with those divestitures. So, it's a good baseline, as I mentioned for Q4 '24 annualized for SG&A. And then R&D, we will be putting more money into R&D this year compared to 2024.

Got it. Appreciate it. Thank you.

Thanks, Thomas.

Thank you. And our next question comes from Yi Chen at H.C. Wainwright. Please go ahead.

Good morning. This is Eduardo on for Yi. I guess, related to customer expansion, I had a question regarding any potential catalysts from your clients. Naturally, they get massive approvals or label expansions, that would be really relevant for your guys' projections.

Correct. It's really about the progression from our clinical trial customer base as it moves from Phase I to Phase II and so on. On the commercial side, once these therapies are launched, the time it takes for adoption in the United States is important, but there are also other factors such as geographic expansion globally and advancing through different lines of treatment. These elements are crucial for our overall growth rate and the adoption of these therapies over time. Additionally, many therapies eventually receive extended indications for the same drug years later, which also increases the patient pool.

Right. And do you guys have visibility on whether or not any of those milestones or inflection points are happening in 2025 for your clients?

Yes. We currently believe we have insight into approximately eight potential milestones or inflection points that may occur in 2025. We are monitoring this as effectively as possible, but the information can be somewhat unclear. To improve our tracking, we are collaborating with a third-party consultant to conduct a more structured review every six months instead of relying solely on internal tracking, which has provided us with incomplete data. We expect to enhance our understanding in this area. For now, we anticipate seeing about eight developments over the next 12 months, specifically in 2025.

Got it. That's really helpful. And I know the clinical trial component of revenue isn't that significant, but just curious if you guys anticipate any complications with grant funding freezes potentially. I don't know if any of the clinical trials that your customers are running are dependent on government funding, but if you anticipate any complications associated with funding freezes?

At this time, no. We are aware of the uncertainties surrounding NIH funding. If there is an impact, it will likely be seen on the distribution side of our business. We work with two large distributors who primarily focus on academic institutions and early research, and they might be affected by these changes. However, when we speak with them, they don't express any current concerns. This situation could evolve throughout the year, but for now, any effect would likely manifest as a slight decline in demand from the distribution side compared to the direct side, where most of our customers are privately funded.

Got it. That's helpful. And then finally, I'm curious about the strategy for Evo and Thaw, and if there's any potential if you have bundling products, you talked a little bit previously about kind of bundling packages with Cell Processing. I'm curious if these two would also fit into a strategy there to kind of increase your footprint with those products and services as well?

Yes. On the Thaw side, our Thaw device can be seen as a reverse razor-razorblade model, as it is designed and modified to accept our CellSeal vials. This means it serves as a beneficial add-on for those using our CellSeal vials. It might also be viewed as a razor-razorblade scenario, as its placement could indirectly encourage the usage or adoption of our products, although in a soft manner. On the Evo side, there is very little opportunity for overlap. The individuals making decisions about using Evo are distinct from those utilizing the CellSeal or other products, including Thaw, creating a clear separation in decision-making.

Got it. That's really helpful. Thanks.

Okay.

Thank you. And our next question comes from Michael Okunewitch with Maxim Group. Please go ahead.

Hey, guys. Thank you so much for taking my questions today and congratulations on all the progress.

Thank you.

I would like to see if you could provide more details. You mentioned that you're planning to increase R&D spending going forward compared to the fourth quarter. Could you elaborate on how you intend to allocate this additional budget? Is it focused on new products, or is it primarily for further improvements to your existing product line?

Yes. It's really about expanding the consumable set of products that we have and acquired from Sexton. That would be the CryoCase to do some additional work on that relative to some customer feedback. It would be modifying the CryoCase for our own internal use on the front-end, in other words, shipping our CryoStor product out in a CryoCase. There are various benefits to that. It's about increasing the consumable line of products that are associated with our CT5 automated fill device. So, it's really, I would say, product line expansion as opposed to new products per se.

Okay. Thank you for that. And then just I want to see if you could remind us of your involvement with any mesenchymal stem cell-based products? I know that Mesoblast historically hasn't been a customer, but there has been a lot of gains of traction in that space. So, any additional color with your involvement could be helpful here.

Yes. I don't know if I can give you any in real time, but I can certainly follow up with you on that after the fact, I'll sit with our folks that have managed the clinical trial side of things and have a chat with them and come back to you on that, Michael.

Certainly. Thank you very much for taking my questions, and once again, congrats on the progress.

Thanks very much.

And this concludes our question-and-answer session. I'd like to turn the conference back over to Rod de Greef for closing remarks.

Thank you, Rocco. In closing, 2024 was a year of strategic transformation and solid operational execution for BioLife. We see 2025 as an opportunity to solidify and leverage our market-leading position as an enabler of CGT therapies and position the company for long-term sustainable growth in both revenue and profitability. Thank you for your time this morning and we look forward to updating you as we move through the year as well as seeing some of you at the Cowen conference this week and other conferences throughout the year. Thank you.

Thank you. This concludes today's presentation. You may now disconnect your lines and have a wonderful day.