Good afternoon, everyone. Thanks for joining us on our second quarter 2024 earnings call. Our press release and the slides accompanying today's call are posted on our website and available at investors.maravai.com. As you can see on our agenda for today on Slide 2, Trey will first provide you with a business update; and Kevin will review our financial results and guidance. Drew Burch, President of Nucleic Acid Production; and Becky Buzzeo, our Chief Commercial Officer, will join the call for the question-and-answer session following the prepared remarks. During today’s call, management will make forward-looking statements. It is possible that actual results could differ from management's expectations. We refer you to Slide 3 for more detail on forward-looking statements. Also, during this call, we will be referring to certain financial measures not prepared in accordance with generally accepted accounting principles or GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures is available in the press release and also posted to the investor section of our website. Please also refer to Maravai SEC filings for additional information on the risks and uncertainties that may impact our operating results, performance and financial condition. Now, I'll turn the call over to Trey.

Thank you, Deb, and good afternoon, everyone. We appreciate you joining us for our call today. Let me briefly recap the quarter, share an update on our new Flanders facilities, highlight some innovative new products we introduced, and provide a few additional business updates before turning the call over to Kevin. Let's start with our second quarter results on Slide 5. Today, we reported $73 million in revenue for Q2, $17 million in total adjusted EBITDA, and $0 in adjusted fully diluted EPS for the quarter. Our nucleic acid production segment had revenue of $58 million in Q2, the Biologic Safety Testing revenue was $15 million in the second quarter. Kevin will go into more detail on the financial results later in the call. Slide 6 shows our cash on hand at the end of the quarter was $573 million, up about $11 million from Q1. Debt is $530 million gross. Thus, we maintain a $43 million net cash position. We remain in a great position to fund our long-term growth strategy through organic investments, while simultaneously pursuing external partnerships and/or M&A. Regarding organic investments, let me provide an update on our two Flanders facilities. I'm excited to share that our Flanders facilities are truly coming alive. Flanders 1 started initial engineering runs in April, and our team has continued to hit all key milestones to ensure we complete our commitments to BARDA and the U.S. government. On Slide 7, you'll see a photo of one of the four clean rooms at Flanders 1. This was taken during the recently completed engineering run to produce GMP CleanCap M6. Other milestones we've achieved for our Flanders 1 facility include our Environmental Monitoring Process Qualification or EMPQ and our ISO 9001 Certification. Flanders 1 adds significant scale and mitigates operational risk as we now have multi-site capacity to manufacture cGMP small molecules in the United States. This includes the CleanCap analogs as well as other nucleic acid chemistries like rNTPs and N1-methyl-pseudouridine, which are also needed as clinical grade inputs for mRNA production. Turning to Slide 8, our Flanders 2 teams produced the first batch of mRNA in the facility through the successful TriLink internal engineering run, demonstrating our ability to bring TriLink’s best-in-class mRNA manufacturing processes to our Phase 2 and Phase 3 mRNA service customers. In addition, the cGMP manufacturing environments at the Flanders 2 facilities have also completed their EMPQs and initial data review of our primary manufacturing suites for use in late phase and commercial manufacturing campaigns. This is a very important step to ensure the facility meets the stringent regulatory requirements our customers have for their clinical material. TriLink is committed to combining our innovation in mRNA manufacturing with the compliance needed for late phase and commercial manufacturing. This marks the beginning of how we can enable the advancement of life-changing medicines for patients worldwide. I'm also really pleased by our commercial team success in winning RFPs for Flanders 2 CDMO services for builds that start in the second half of 2024. One customer whose RFP for a pivotal trial has already stated an intent to work with TriLink on additional products in their pipeline to service their early phase clinical manufacturing needs. Being the first customer in a brand-new facility is not an easy decision, but the combination of our investments in plant design consultations on regulatory requirements and our experienced teams have eased any of the customer concerns. TriLink has manufactured over 100 GMP batches with over 70 different constructs, and we've made over 16,000 RUO constructs for thousands of clients. We are in a unique position to be of strategic value to our customers at any stage of their journey. Our customers continue to trust in our expertise and our manufacturing and analytics along with our new state-of-the-art mRNA plant are the key elements in winning these deals. TriLink is committed to providing innovative solutions to mRNA drug development from early discovery through pre-clinicals, and now through late phase and commercial service to complement our products. TriLink has also established its analytical sciences Center of Excellence or ASCE, reinforcing our commitment to mRNA innovation. The ASCE will serve as the hub for analytical development where assays and tests will be available to our customers. ASCE is closely linked with every manufacturing site, including the new Flanders facilities with redundancies and equipment, so the test methods can easily be transferred and product release occurs at the site of manufacturing. The ASCE also expands the capacity of TriLink’s analytical services group, opening the possibility for a new business associated with nucleic acid product testing. Let's move to Slide 9, in our nucleic acid production segment. I'll highlight our new product portfolio expansion and our focus on bringing these products to market. NPIs or new product introductions are a key strategic priority for us, and I'm pleased with the progress we've seen today. The TriLink team enhanced our catalog mRNA offerings, repositioned custom chemistry services developed offerings for our GMP and NTP platform and launched catalog IVT enzymes into the TriLink commercial ecosystem. Let's take each of those in order. As we touched on last quarter's call, we recently launched new catalog mRNA products with our TriLink discovery group using the CleanCap M6 and N1-methylpseudouridine. We've now completed that catalog refresh and upgraded our existing catalog with our most up-to-date CleanScript IVT process. Since the launch, sales have exceeded our expectations for these new products, so we're very pleased with the market response. Our custom chemistry offering has been repositioned to improve how quickly our customers can interact with us and get the custom nucleic acids they need. The team tackled a few key areas, the most notable being our turnaround time, cutting that quote-to-cash process in half. Overall, we believe the improvements enable both existing and new customers to easily choose us and have a great experience to help them advance their discoveries. In Q2, we launched both RUO and GMP nucleotide triphosphates, or NTPs. When our customers come to us for their mRNA raw materials as they start discovery, it's important for them to know that we can continue to support them with GMP grade materials produced here in the U.S., as they scale and move into the clinic. This effort showcases our capabilities to do just that, with a GMP platform for standard and custom molecules. As our customers advance their development, we can move with them scaling from production and water-rich to production in landers, and with the confidence of high-quality productivity and our expertise. Expanding our portfolio across these materials better enables us to support our customers and unlock the potential of genomic medicines. During the last week of June, we launched our IVT enzymes under the TriLink Brand, an important effort across both TriLink and Alphazyme. We've already incorporated Alphazyme enzymes into our CleanScript mRNA production workflow, and now have extended the enzyme product offering to our TriLink customers. By offering these enzymes at a single point of sale with our CleanCap technology, along with modified and unmodified NTPs, we have made it easier for our customers to access the breadth of differentiated mRNA production inputs and for us to gain a greater share of wallet. As you can see on Slide 10, TriLink is able to supply all the key inputs for the IVT mRNA production process, all produced in our U.S.-based facilities. We have four CleanCap options, and starting this quarter, we'll offer M6 as a GMP input. Our CleanCap franchise is patent protected for CleanCap materials and methods in all major markets in the world, and we're continuing to innovate with R&D on new mRNA capping analogs, while continuing to protect the franchise with new and continuing patent applications. We have N1-methyl-pseudouridine, and as I just mentioned, we now have the wild type RTPs and a process for scaling up other modified NTPs into GMP production. And finally, we offer the enzymes that are used in the process. So, by having all the key inputs for IVT, we enhance the simplicity of doing business with TriLink, we can support the full workflow with innovation across the in vitro transcription inputs and continuous improvement to the IVT production process itself. Turning to Slide 11, Glen Research also launched five new products in our 59th Glen report, expanding our tools for genomic research and diagnostics. This includes Serinol Nucleic Acids that expand our options for DNA and RNA backbone modifications. SNA oligos will hybridize with SNA RNA as well as DNA. These oligos are nuclease resistant and have been used in guide strands for CRISPR, molecular beacons, and other applications. I continue to be impressed by customer feedback regarding Glen Research's industry-leading promptness, responsiveness, quality, and commitment to excellence. Turning to Slide 12, we continue to bolster our market leadership in the mRNA space through collaborations and strategic partnerships. In Q2, we announced a collaboration with Johns Hopkins University to establish a new mRNA Innovation Center. TriLinks investment in the partnership includes funding for the center and enables Hopkins researchers to use CleanCap and our in vitro transcription technology CleanScript. Additionally, TriLink will provide technical expertise and access to other critical discovery and manufacturing supplies, further lowering the barriers to discovery and application of mRNA. The center will bring together Johns Hopkins experts in RNA biology, genetic medicine, drug delivery, and biotechnology under one roof. We expect it will serve as a training center for the next generation of RNA investigators and as a hub for RNA researchers across the Hopkins’ network. Our continued key academic partnerships are helping to enhance innovation and are designed to accelerate market adoption of our latest technology and products. In addition to the JHU agreement, we have seven active research collaborations with top-tier academic institutions, including a new collaboration with the Houston Methodist Research Institute. We shared with you during our last call that Alphazyme was collaborating with applied DNA for scale-up manufacturing, enabling the linear RNA polymerase. They have recently completed the process development project, which resulted in over a 70% reduction in linear RNA polymerase manufacturing costs, and the manufacturer of a quantity of enzymes sufficient to support applied DNA's anticipated demand for critical starting material for production. We developed the full enzyme production process and made breakthroughs in the manufacturing workflow that allowed applied DNA to enter the market with a fully compliant quality product and a cost structure that enables the line platform to be highly competitive. We believe that investing in new product innovation and partnering with leading academic and industry partners is a key driver for creating long-term value. We are exceptionally positioned to win customers early for product and technology adoption. Now let's turn to Slide 13 and our Biologic Safety Testing business updates under the Cygnus technology brand. As with the nucleic acid segment, we continue to innovate to bring improved products to market to support our customers. Cygnus Technologies recently launched three new products, including our second E. coli host cell protein kit for the BL 21 variant used for recombinant protein expression. Our first fungal host cell line host cell protein kit, and our Protein L mix-n-go kit, the first residual Protein L ELISA on the market. The E. coli kit was developed for a specific strain of E. coli used for recombinant protein expression and is the only kit on the market for this specific strain. The fungal line HCP kit was developed in partnership with Dyadic International. The assay is expected to play an important role in facilitating the broad adoption of Dyadic C1 protein production platform, which enables rapid and efficient low-cost production of antigens, monoclonal antibodies, and other therapeutic proteins. We believe this partnership will help accelerate the adoption of the C1 platform, ultimately aiming to enhance access and affordability of healthcare for patients in developed and developing countries. The Protein L kit, which is highlighted on Slide 14, will be used for affinity purification on next-generation antibodies, including bi-specific antibodies, tri-specific antibodies, and fragment antigen binding antibodies or Fabs. There are over 100 bi-specific antibodies in clinical development, most in the early stages. Since 2014, the FDA has approved nine bi-specific marketing applications to treat cancer, as well as hematologic and ocular diseases. In the future, the FDA anticipates there will be a spectrum of bi-specific antibodies developed to prevent, treat, or diagnose diseases. For comparison, since 1986, the FDA approved over 100 full-length monoclonal antibodies. Full-length mAbs are purified with Protein A resins. Bi-specific antibodies are purified with Protein L resin. Given the number of bi-specific antibodies in development, we believe there's high growth potential for Protein L resin, and thus we're pleased to introduce our residual Protein L quantification assay, the Protein L mix-n-go ELISA Kit. As we celebrate our one-year anniversary of occupancy in our new Leland facility, we're proud to announce the completion of our new DNA laboratory. This 800-square foot full-service space is BSL-2 compliant with segregated areas for development, manufacturing, and cold storage. This new lab provides the dedicated space and capabilities for the development of our new line of DNA detection kits, demonstrating our commitment to continuously improve and broaden our best-in-class portfolio of host cell detection products. Finally, we're pleased that Cygnus was recently featured in BioPharm International for our cutting-edge antibody affinity extraction method. As in the NAP segment, we plan to continuously improve our offerings in BST to ensure differentiated solutions, superior technical support, the highest quality services and offerings, and the most comprehensive catalog of products to meet our customers' needs. Now moving to Slide 15, in our commitment to deliver unquestionable quality. TriLink, Cygnus, Glen and Alphazyme all recently hosted successful ISO audits. These always require tremendous effort from the quality team members as well as many others on site. I was really pleased to hear how positive and complimentary the feedback was from our auditors about every process, system, site, instrument, and person involved. Quality is a central Maravai’s objective, and the zero major observations and successful certifications to ISO standards in each of the audits is a testament to our adherence to high-quality standards. Before I turn the call over to Kevin, I'd like to let you know that in early July, we published our third Environmental, Social and Governance report. Without question, our commitment to ESG goes hand in hand with achieving our company's long-term strategic objectives. On Slide 16, you'll find some highlights from the report. This new report covers the 2023 fiscal year and provides an expansive look into our evolving ESG program with tangible examples of how we're making a positive impact on our stakeholders and positioning our business for sustainable growth. A key ESG advancement was expanding our environmental disclosures to include select Scope 3 greenhouse gas emissions. These advancements will enable Maravai to better evaluate how to make meaningful emissions reductions in the future. I encourage you to review the report in the investor section of our website. The comprehensive 50-page report is the culmination of our enterprise-wide effort to deliver holistic value to our stakeholders, while scaling operations and executing our return to growth strategy in a socially and environmentally responsible manner. Along with the safety and quality of our products, we are proud of our ESG advancements and are working meticulously to increase transparency and build the infrastructure necessary to support long-term sustainable growth. This team has done important work today, and we are committed to being a strong corporate citizen. We look forward to keeping you apprised of our journey. Moving to Slide 17, I'll now ask Kevin to provide more details on our second quarter performance and our expectations for the balance of the year.

Thank you, Trey. This was a busy quarter for Maravai. I want to acknowledge the hard work of our team in generating over $73 million in revenues for the quarter, as well as the various operational and R&D achievements that highlight our employees' dedication. Now, let's review the Q2 financial results. Revenue for the quarter was $73 million, with a GAAP net loss before non-controlling interests of $14 million for the second quarter of 2024, compared to a net loss of $12 million for the same period in 2023. Adjusted EBITDA, a non-GAAP measure, was $17 million for Q2 2024, up from $9 million in Q2 2023. The adjusted EBITDA margin was 23% in Q2 2024, an increase from 13% in Q2 2023 and from 12% in the first quarter of 2024. While this margin was solid, it fell short of our expectations. Over the past six quarters, our revenues have varied between $64 million and $79 million, with adjusted EBITDA margins ranging from 12% to 30%. For the trailing 12 months, the adjusted EBITDA margin stands at 21% on revenues of $279 million. Some of your questions will likely focus on margins, so I want to discuss this further. Reflecting on the last time we achieved revenues close to this level, we see that in Q4 2023, revenues were $74.1 million and adjusted EBITDA was 28%, which was 470 basis points higher than Q2 2024. Let's analyze that data and profitability dynamics. The primary factor contributing to the margin variance was our overall product mix. Our Biologic Safety Testing business expected a decline of about a million from its strong Q1 2024 performance but ended up at $15 million, which is $3 million below Q1. This variance and lower absorption at our BSP manufacturing facility resulted in about $2 million less adjusted EBITDA compared to Q4 2023, roughly a 270 basis point hit. The second issue is our higher startup costs and expenses tied to our new Flanders facility, totaling $2.5 million in the quarter, up from $1 million in Q4 2023; this increment primarily included third-party consultants and impacted EBITDA margin by about 200 basis points. Additionally, there were incremental expenses related to R&D efforts and our Johns Hopkins collaboration, roughly a million, translating into about 150 basis points of impact. Altogether, these factors amounted to approximately 620 basis points of margin reduction compared to Q4 2023. However, we had some cost-saving actions that helped mitigate this impact, providing a benefit of 150 basis points, offsetting the broader decline seen earlier. I'll elaborate on margin expectations in our updated guidance shortly. Moving to earnings per share, basic and diluted EPS for Q2 was a loss of $0.05 per share, consistent with Q2 2023. Adjusted EPS was zero for the quarter, mirroring the prior year’s number. As we look to our year-end balance sheet and cash flow metrics, we ended the quarter with $573 million in cash, an increase of $11 million from Q1 2024, and $530 million in long-term debt, leading to a net cash position of $43 million. For Q2 2024, cash provided by operations was $17 million, and capital expenditures, net of BARDA reimbursements, were $6 million, which was lighter than anticipated due to the final outfitting of our Flanders facilities. Depreciation and amortization was $12 million, consistent with expectations. Our interest expense, net of income, was $5 million, as expected. Stock-based compensation was $14 million for the quarter, also aligned with our expectations. We ended Q2 with 141 million Class A shares and 111 million Class B shares, totaling 252 million shares outstanding. The fully diluted share count impacting our adjusted EPS was 254 million shares for the quarter and 253 million year-to-date. Now, let’s discuss segment performance. Our nucleic acid production segment generated $58 million in revenue and $21 million in adjusted EBITDA, yielding a 36% margin. The Biologic Safety Testing segment brought in $15 million, with $9 million in adjusted EBITDA and a 63% margin, which was lower than recent trends. Corporate shared service expenses affecting adjusted EBITDA stood at $14 million, down over $1.6 million from the second quarter of 2023. Overall, Q2 was solid with revenue meeting our expectations but margins slightly lower due to specific factors we've discussed, while our balance sheet and cash flow remain strong. Looking ahead to the full year of 2024, based on our Q2 revenues, we are comfortable with the total revenue range of $265 million to $285 million. Our Biologic Safety Testing business performed strongly in Q1 with $18 million but faced challenges in Q2 from ongoing uncertainties in China. We now expect low-single-digit growth for the BST segment in 2024. For the NAP segment, we project revenues around $210 million at the midpoint of guidance, sensitive to the performance of our TriLink branded discovery business and the timing of GMP-related service revenues in the latter half of the year. With $138 million in first-half revenues and a midpoint revenue target of $275 million for the full year, we anticipate the second half to generate $137 million, or about $68 million to $69 million per quarter, with Q3 likely falling in the $65 million to $70 million range. We now foresee our profitability metrics being lower than our previous guidance, with adjusted EBITDA margins expected between 20% and 22%, and a projected adjusted EPS loss ranging from $0.02 to $0.08. This adjustment reflects our product mix, higher startup costs from Flanders, and expenses from recent initiatives including our Johns Hopkins collaboration. Given the performance in the first half, we anticipate a second half adjusted EBITDA margin around 24%, driven by consistent NAP performance, an uptick in BST revenues, completion of Flanders startup costs, and overall cost control. Our guidance includes expectations of interest expense net of income between $20 million and $25 million, a slight improvement thanks to our treasury operations and interest rate cap benefits. Depreciation and amortization are expected between $45 million and $50 million, with equity-based compensation in the same range. The fully converted share count is projected at 254 million shares for the year, along with an adjusted effective tax rate of 24%. We estimate total net capital expenditures of around $30 million for 2024. Thank you for your time today. We'll now return the call to Trey.

Thanks, Kevin. So, to wrap up on Slide 25, we had a solid first half of the year and are tracking against the revenue guidance range we originally communicated to you in March. We are executing on our return to growth strategy and year-to-date have introduced significant new innovations to the market that further extend our leadership across the entire mRNA production workflow as well as increasing our manufacturing capacity at our TriLink, Flanders 1 and Flanders 2 facilities in these high-value areas. Our Cygnus team continues to innovate with new product introductions and market-expanding technologies. We have incredible and passionate teams across Maravai and the opportunity to do amazing things for human health. Our balance sheet remains strong and we are well positioned to execute on opportunities for both organic and inorganic investments to bolster our market position and provide our customers with innovative solutions. We remain confident in the fundamental strength of our end markets and the value we provide our customers for the life-changing development of drug therapies, diagnostics, and novel vaccines. We remain committed to building a strong foundation for long-term, diversified and sustainable growth for our businesses. I would now like to turn the call back over to the operator to open up the line for your questions. Thank you.

Thank you. We will now begin the question-and-answer session. Your first question comes from the line of Catherine Schulte from Baird. Your line is open.

First, great to see NAP get back to double digit growth here in the quarter. Are there any one-timers or lumpy orders that you saw in the second quarter? And then, why should we expect to see a sequential decline in revenue in the third quarter? Is that primarily on the NAP side or BST?

Yes, I'm happy to take that, Catherine. Yes, I would say that as it relates to the sequential slight decline in NAP, it would be in that segment in the NAP segment. And we do see some of the orders that we had scheduled at the beginning of the year, gating that way. So, the second quarter contains some of those kind of high-volume CleanCap orders, and that is going to step down a little bit sequentially the third quarter, and result in that being a little bit. We're hopeful that BST can recover certainly from that low water point that we saw there in the second quarter.

We've discussed that dynamic a little bit. One of the interesting things about having GMP services and GMP products is that while GMP services unfortunately will tend to move out, if there's movement. Sometimes GMP products can come in and go out within the quarter or in some cases within the month. So, we did, as you identified, Catherine, have a little bit of that here in Q2, the GMP products that slid in that were helpful.

And then maybe for BST, can you just remind us how much of your business is in China and how is that business performing outside of China?

You can explain over 80% of the BST results with a China drop specifically, that's really the only place where we have any China exposure. As you know, the growth in BST China came during the ’21, ‘22 COVID period. And then of course, we took that leg down in the second half of ‘22. Since then, honestly, we've had five very steady quarters. So, the drop that happened here in Q2 in BST China specifically was a surprise to us and our distribution partners actually. I don't think that we've specifically carved out exposure, but it is now, let's say in the teens for BST.

Your next question comes from a line of Matthew Sykes from Goldman Sachs. Your line is open.

This is Evy from Matthew. Thanks for taking my questions. Can you discuss what you're observing from pharmaceutical customers regarding their discovery R&D spending compared to later stage projects? Have you noticed a shift in spending priorities as companies are looking to cut costs while still investing in their later stage projects?

I think I'll hand that one to Drew.

Thanks Trey. I think that's a fair statement. We have seen, and we follow the companies publicly. There's been some reprioritization across the sector. It's a little tough to tie to one company or another company, but there's a fair amount of portfolio moves. Overall, we've seen positive dynamics in terms of mRNA program starts. And so, we think the fundamental backdrop is positive, but each given company may be reprioritizing and move forward.

And then, this is more of a broad question on your strategy. So, understand the focus is on winning in discovery and then shifting customers to GMP as they move along their pipelines. But will you try to poach programs as they move from clinical to or from the discovery to clinical from players doing it internally?

Yes, I think that's probably the biggest market opportunity because it's still early days in mRNA. I think everyone knows that. We're all excited because of how quickly we saw it go from a concept or the last mile to the billions of doses of vaccines. But really, the ecosystem and the programs that are at play, many of them started in-house and many people still perform the mRNA production process in house. One of the things we've seen, to your point, is you hear us talk about what we call our CleanScript workflow, which is the workflow that we've done hundreds and hundreds of times here. And very often we have people who make the choice of having run programs internally. Do we go through the trouble of tech transferring our program or do we just bolt into the well-traveled CleanScript process, which has already gone for so many programs at different phases? So, we actually see that conversion as probably one of the biggest opportunities we have as programs modernize and as we have the opportunity for uptake to bring efficiency to those programs.

Your next question comes from a line of Tejas Savant from Morgan Stanley. Your line is open.

A couple of quick ones, for you, Trey to kick things off. Sort of following up on that earlier question on just SMID cap biotech, right. I mean, we had a large preclinical CRO this morning, take down numbers pretty dramatically in the back half citing, weakness on the global biopharma side as well as on the biotech side. And so, what are you assuming in your back half guide in terms of the early-stage sort of biotech contributions? And then, can you comment a little bit on the pricing environment that you're seeing broadly across the space? It's just tougher negotiations. Are you needing to do more discounting here? Just any color on that would be helpful.

Thank you. We received several large orders for GMP products from major pharmaceutical companies, which impacted our typical SMID metrics, reducing them from the high teens to the low teens this quarter. We anticipate some moderation in this trend. It was a significant change this quarter, but we do not expect substantial growth in the remaining guidance for this year.

And then, Trey, on the pricing.

Pricing varies based on each specific program, so it's not as straightforward as a catalog company that simply increases prices by 2% to 3% annually. However, we do recognize opportunities to raise prices when possible. That being said, we do not have a specific target number we need to hit that would compromise the overall model for this year.

Yes, thanks. That the latter part of your question, and certainly that's going to be ultimately revenue dependent more than anything else. So, we'll see that margin tie very directly to where our revenue hits versus the cost structure. That'll be pretty stable going into next year given all of the work we've done to complete our facilities footprint, as it relates to the quarterly sequential migration of our EBITDA margin from here. I would say, as I mentioned in the prepared remarks really, it's sort of a normalization of NAP, kind of seeing NAP relatively, the same as always in the first half of the year. BST hopefully improving, and picking up some more and then a lot of the costs that were drag on the margin the first time starts to tail off. So, the other items that I mentioned, as well as some of the things related slightly higher margin in the second half.

Your next question comes from a line of Matt Hewitt from Craig-Hallum. Your line is open.

And just a heads up, you guys are cutting out pretty bad. I don't know if it's just on our end, but there's quite a bit of pauses in between words. I guess first up, you noted during your prepared remarks that NTPs manufactured obviously here in the U.S., how important is that to your customers? Are you seeing some of this repatriation kind of really starting to bear fruit and what are you hearing from customers regarding that?

First of all, I think the sound was a couple of F35s flying over us here in San Diego. So hopefully, you can hear us clearly now, and thank you for the question. I'm smiling because I would not necessarily have thought it would become such an advantage to have RUO and GMP chemistry manufacturing in San Diego, California, and similarly enzyme manufacturing in Jupiter, Florida. But we're seeing a tremendous amount of interest come from those facts. It just happens to be the result of where our businesses started and grew up. But it looks like it could become a significant strategic advantage and we have people not only asking one level deep in the supply chain but being interested, I think for the first time that I've noted in how deep in the supply chain they can find out the origin story. So, I think it's going to actually become a pretty appreciable advantage for us moving forward here.

Your next question comes from a line of Justin Bowers from Deutsche Bank. Your line is open.

Can you give us a sense of well number one with Flanders 2, do you have that capacity built out now where you want it or are you still building out additional clean room capacity? And then, can you give us a sense of what the timeline is like for that from when you just initially start adding equipment versus engineering runs versus when you're actually in revenue generation phase?

I think as Kevin mentioned, we are really at the tail end here of the capital cycle. And as we mentioned in the comments about the EBITDA bridge, we’ve really had some one-time startup costs, professional fees and other things to get the facility truly rolling. We are at the same time, however, so the whole rooftop has to open obviously but we are, let's say scaling in from a labor perspective and a total overhead perspective as we fill that factory. But there's no more substantial CapEx to do to turn on the multiple suites at this. I think we've shared this previously, but we have three parallel manufacturing suites and their job right now is to fill them up.

And then quick follow-up, any change in the committed orders that you have for some of the larger commercial programs?

For the bulk orders. No changes.

Your next question comes from a line of Conor McNamara from RBC Capital Markets. Your line is open.

Just as a follow up on the Flanders 2, have you incorporated any Phase 2 or Phase 3 program starts into your guidance this year? We'll start there.

One of our first commitments was a Phase 2/3 pivotal, so yes.

And then just, could you tell us, I know you guys have showed this in the past, but something, a trial that goes when a trial advances from preclinical to the clinic, you see a pretty big step up. Is there any way you can kind of quantify how big of an opportunity each of these programs are or how we should think about, as you add in new programs, what's the potential benefit for new programs?

I understand where you're going with that, Conor, and it would be good if we could. But what we're seeing that we're actually excited about is the broadening significantly of the use of mRNA from infectious disease vaccines to part of, well, tools for cell and gene therapy for protein replacement programs, as the message to be expressed for CRISPR gene editing and so on and so forth. And all of those have different delivery sizes and use cases. So, historically the results we've shared have been what happens to a bulk G&P CleanCap. An RUO CleanCap customer that's preclinical, that goes bulk G&P CleanCap in Phase 1 and 2 and so on. When you blend in the service now and again, we're happy to see these different uses for mRNA and these different therapeutic targets. It unfortunately makes it more difficult to predict what the step up will be. We just know that it's a good progress at each stage.

Let me just sneak one in for Kevin, if that's okay. Kevin, can you quantify that the OpEx change from Q2 to the second half of the year? It sounds like there's a couple million of costs in there that won't repeat. So, should we assume that that OpEx on an absolute basis goes down from current levels?

Yes, I think on an adjusted EBITDA impacting basis, that's correct.

Your next question comes from a line of Michael Ryskin from Bank of America. Your line is open.

Earlier the audio was a bit unclear, so if you've addressed this already, I apologize for missing it. Regarding the revision of the margin guide for the year, the bridge you provided was helpful. You mentioned the product mix in BST, which makes a lot of sense, along with the Flanders startup costs and various initiatives. I would like to understand how transient some of these factors are, particularly the product mix which should be relatively temporary. Regarding the Flanders costs, could you clarify if these are solely startup costs or if they include actual operating costs that are coming in higher than expected? Additionally, for the initiatives, such as the Johns Hopkins collaboration, do you think these are primarily one-time costs for establishing the facility and collaboration, or will they represent an ongoing expense in future models? It seems worth investigating further.

Happy to. Certainly, on the Flanders cost, we've incurred a year-to-date close to, gosh, almost $3 million now of I would say really incremental costs to bring up our quality systems, have the documentation, have the validation stock the facility with things that are not inventory able items that are therefore used over the manufacturing periods going forward. So, we've gone ahead and just included those in our expense burdens and know some companies choose to exclude those as pre-revenue startup costs, but we've just flushed those through our P&L. So, most of that will be period and isolated to the first half of the year, and then we'll be starting to generate revenue and not see those as an incremental drag on margins prospectively. As it relates to a couple of the other things that we mentioned specifically, certainly our startup expenses with the collaboration with Johns Hopkins, as well as some of our smaller license deals that we haven't talked about publicly in our enzyme division, all were basically drags on the first half and we'll kind of come in and out of some of the quarters as we look at it prospectively. But overall, when you think about all those different costs, they will predominantly be behind us as we go forward for the rest of the year.

And then, as far as some of the new product productions you're highlighting, my belief is they're relatively small contributor to revenues now and will only gradually ramp over time. So, correct me if that's wrong. But then, I also want to ask about the incremental EBITDA contribution from those. We know your historical CleanCap and BST margins. How should we think about these new products relative to that? Are they incremental to margins essentially, or should we just think about them as more in line with existing?

I think, predominantly, our incremental products, again, this is for us, continues to be more of a revenue game than a lot of varying margins within NAP. We do see a little bit based on the customer channel and some of the different business units that we have, but overall, I mean, especially as it relates to the discovery products. I mean, this for us is an infrastructure that we have in place. The incremental variable costs aren't much different. We're trying to put together really solutions that are best for our customers that drive revenues and those overall revenues drive margin expansion for us. So, for us, again, it's strategic and overall financially beneficial. Just to drive the total revenue numbers, all these products have high variable margins and again, mostly generated by our already established facilities and workforce.

Your next question comes from a line of Matt Larew from William Blair. Your line is open.

I maybe just stick on the new product side, Trey, you highlighted what now is quite a number of new products filling out for the mRNA production suite. You reference, part of that obviously is the workflow and ability to access more wallet. Perhaps relative to CleanCap, could you characterize the size of some of the markets that you're able to access with the new products, and if there are any of these new products in particular where you view your approach, your technology, the service offering, the product offering would be particularly differentiated and one that you might see drive more growth?

Yes, definitely. Within the mRNA IVT workflow, there are bulk commodity chemicals, as well as enzymes and unique technologies that are evident in our services or products like CleanCap. We are actively pursuing organic innovation to create differentiated solutions to advance the next generation of workflows. A significant aspect of this initiative is ensuring that we address all fundamental components of the IVT workflow. Following our acquisition of Alphazyme, we now have access to high-quality, high-purity enzymes that complement the strong position that TriLink and MyChem hold in the nucleic acid chemistry market. What you’re observing is the integration of all inputs to the IVT workflow, with our innovation aimed at finding more unique ways to enhance the next generation of mRNA through solutions like CleanCap. While I can't disclose unreleased details, I'm excited about the numerous opportunities within the workflow to improve overall performance. Ultimately, we aim to increase mRNA purity, enhance yield, and reduce costs for our customers, enabling us to be a comprehensive solution provider. Our goal is to propel the industry forward through ongoing innovation within this framework.

Okay. Thank you. And then just on Flanders 2, and you mentioned, winning RFPs for builds starting in the second half. Could you maybe speak to how the funnel behind some of those initial wins is building, what you're seeing from a phase or customer mix perspective? How many of those potential RFPs relate to customers who are existing CleanCap customers, and then maybe just sort of what the size or activity level is kind of on a quarter-to-quarter basis?

Sure. We have had a strong interest in our GMP services to manufacture CleanCap mRNA drug substance, and that has continued to be quite strong for us this year in building our funnel. We've made additions to our commercial team, both on the technical side and then on the seller side. And we have seen a really nice doubling of our funnel from Q1 to Q2. And it's across different indications. So, cell and gene therapy and protein replacement, those are the places that we've seen the most activity.

Rob, I think we have time for one last question here.

Thank you. Your final question comes from a line of Kyle Crews from UBS. Your line is open.

Could you please describe if your recently announced supply agreements with large CMOs or agreements you have with third-party distributors are influencing how you think about adjusted EBITDA margins going forward? And on a similar note, with Flanders 2 opening up, how do you view some of the CDMOs you're supplying CleanCap as competitors and partners for work going forward?

I'll take the latter part first and then hand the first part to Kevin. Look, we want to make sure that our technology is in every molecule. So, we realize that's unlikely if we try to hold to the idea that you have to do everything with us and we have not specified Flanders 2 to satisfy the need of every customer, obviously in every continent. That's why we have these key partnerships with the leading CDMOs like Fuji, like Lonza that we've announced. It's a key part of our program. And of course, we would love the service business, but we want to make sure that we have differentiated products. We help bring about the next generation of mRNA and that we help with that, whether it's just with product or whether it's product and service. And Kevin, I'll hand the front side to you.

These relationships are strategic and designed to create a mutually beneficial connection that enables large CDMOs to provide their customers with access to the best technologies for optimal end products. Incorporating CleanCap into this portfolio is crucial. Economically, it all comes down to volume; there isn't any standalone distributor pricing involved. The focus is on the volume of the underlying program, and we adhere to volume-based pricing. Therefore, as we increase volumes through these additional channels, I don’t anticipate significant differences in the underlying margins compared to our historical margins.

And that concludes our question-and-answer session. I will now turn the call over to Deborah Hart for closing remarks.

We just want to thank you for joining us today. We'll be attending several financial conferences in the coming weeks, so we can try to connect with you at one of those events. Feel free to reach out with any further questions, and we hope you have a great evening.

This concludes today's conference call. Thank you for your participation. You may now disconnect.