CryoPort, Inc.

thank you for standing by this is the conference welcome to the cryoport first quarter 2021 earnings call as a reminder all participants are in listen only mode and the conference is being recorded after the presentation there will be an opportunity to ask questions to join the question queue you may press star then one on your telephone keypad Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Todd Frommer, Managing Partner of KCSA, for opening remarks. Please go ahead.

Thank you, Operator. Before we begin today, I would like to remind everyone that this conference call contains certain forward-looking statements. All statements that address our operating performance, events, or developments that we expect or anticipate occurring in the future are forward-looking statements. These forward-looking statements are based on management's beliefs and assumptions and not on information currently available to our management team. Our management team believes that these forward-looking statements are reasonable as and when made. However, you should not place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results, events, and developments to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in Item 1A, Risk Factors, and elsewhere in our annual report on Form 10-K filed with the Securities and Exchange Commission, and those described from time to time in the other reports which we file with the Securities and Exchange Commission. It is now my pleasure to turn the call over to Mr. Gerald Shelton, Chief Executive Officer of CryoPort. Jerry, the floor is yours.

Thank you, Todd. Good afternoon, ladies and gentlemen. We appreciate you joining our earnings call today. With me this afternoon is our Chief Financial Officer, Robert Stavanovich, our Chief Scientific Officer, Dr. Mark Sawicki, and our Vice President of Corporate Development and Investor Relations, Thomas Heinzen. As a reminder, we have uploaded our first quarter 2021 and review document to our website. It can be found under the investor relations section in the events and presentation section. This document provides a review of our recent financial and operational performance and general business outlook. If you have not had a chance to read it, I would encourage you to go to the website and download it. Now for a brief general update followed by your questions regarding our first quarter results. Following our major accomplishments in 2020, we entered 2021 with an unrivaled leadership position with market-leading temperature control supply chain solutions for our biopharma, pharma, animal health, and reproductive markets. Our global platform now consists of 32 locations and a family of companies that provide mutually reinforcing solutions, services, and products. As anticipated, our new platform delivered outstanding performance for the first quarter, with revenue growing to a record $53.3 million. Our recent strategic acquisitions of MVE Biological Solutions and Cryo PDP contributed significantly to this performance as we navigated ongoing integration of these two excellent teams. Since closing the MVE Biological Solutions and Cryo PDP acquisitions, we have sharpened each team's focus on the cell and gene therapy market and made investments to fuel their growth, positioning us for excellent growth in 2021 and beyond. As a part of very large companies, neither Cryo PDP nor MVE Biological Solutions were focused on the high growth regenerative medicine markets. Now, as a part of Cryoport, we can leverage our deep expertise and resources to accelerate growth and market capture. In the short time since closing these acquisitions, we have made significant strides in defining strategic focus, aligning resources, identifying synergies, and stoking the respective innovation pipelines of each of these businesses. One example is the recent joint launch of Carport Systems and Crowd PDP's new Global Logistics Center in Osaka, Japan, which will further support and accelerate growth in the Asia-Pac region. As I previously expressed, We anticipate achieving over $100 million of revenue and cost synergies over a five-year period of time between crowd PDP and crowd port systems, and that is well underway. Excuse me. At MBE Biological Solutions, our production facilities are running at full capacity, breaking records monthly, as it benefits from a newly invigorated strategic direction. Revenue growth rates for both MBE Biological Solutions and Cryo PDP were significantly higher than their historical growth rates, and we believe these first two quarters as a part of CryoPORT are an early indicator of the growth potential of both of these operating units. We anticipate continued strengthening from both Cryo PDP and MBE throughout 2021. CryoPORT's overall organic revenue also increased by 35% year-over-year. Through our dedicated teams, ongoing investments, and expanded footprint, we now have a very broad reach within the industry and are dedicated to continuously scaling our business with focus and purpose. I'd like to emphasize that our business units reported record revenue year-over-year growth on a pro forma basis, as well as sequential growth over our record for fourth quarter 2020. The biopharma pharma market was the primary driver for our growth and represented approximately 80% of our total revenue for the first quarter 2021. And we continue to build out our pipeline of potential commercial customers with total number of regenerative medicine clinical trials supported by crowdport reaching a record 543 trials compared with 465 at the end of the first quarter 2020. Commercial revenue was generated primarily from our global agreements, supporting the continued market introduction of Novartis' Camrya and Gilead's Yascarta. In addition, Bristol-Myers Web has received FDA approval for its cell therapy, Brezania, and Bluebird Bio and BMS have received FDA approval for their CAR T-cell therapy, Abacma, the first of its kind CAR-T cell therapy for the treatment of multiple myeloma. These therapies mark Crowdport's sixth and seventh long-term agreements supporting the global commercial launch of a cell and gene therapy. We expect these agreements to begin to contribute to our revenue in the second quarter of 2021 and ramp throughout the remainder of the year, driving additional growth in our commercial revenue in 2021. A total of three Cryoport-supported MAAs or BLAs were filed in the first quarter of 2021. Based on internal information and forecasts from the Alliance for Regenerative Medicine and looking forward, we anticipate up to 18 MAA or BLA submissions for Cryoport-supported products during 2021. In addition to our organic growth rate, I'm sorry, in addition to our organic growth and due to increasing demand for support in the APAC region, we supplemented our Osaka opening by acquiring Critical Transport Solutions Australia, a market leader focused on premium healthcare logistics management services, specializing in in-time excuse me, specializing in time and sensitive critical solutions for the biopharma, pharma, and medical industries in Australia. As a part of CrowdPort's CrowdPDP business unit, CTSA will also support CrowdPort systems in Australia. CTSA is expected to have strategic impact on our APAC initiatives as the number of clinical trials in the region continues to increase. The acquisition of CTSA is an important step in our APAC strategy, as with the addition of CTSA, we will be able to serve the domestic Australian market more effectively, as well as providing robust temperature control supply chain solutions for the international clients who need support throughout the APAC region. Now I'd like to request that the operator open the lines for questions.

We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 2. We will pause for a moment as callers join the queue. The first question comes from Brandon Willard with Jefferies. Please go ahead.

If you guys have some add-on for Brandy, thanks for taking my questions. First, to start for maybe for Jerry, you talked about the 100 million plus of synergies over five years mentioned again today. You continue to work to identify them and execute on them, and they remain on schedule. Do you still offer any additional color on the process you're going through, key areas of focus, and maybe what you're most excited about across the portfolio as you look at those synergies over the next few years here?

Well, I can't give you a lot of specifics. I can point to, you know, the joint operations that I mentioned in my commentary, Matt, where we opened up a joint center between Cryo-PDU and Cryoport Systems. I can also tell you that much of the freight that was going to third parties is in process of coming our way through cryo PDP. And then we have a joint operation in Singapore as well. So there are a number of things that are going on. It's hard for me to categorize them or to go through all of them at one time. But I can tell you that those initiatives are well underway. Do you want to add anything to that, Mark?

Yeah, I think on the cost side, you know, Gary was mentioning more on the operational or product side, so to speak, but on the cost side also, we have, you know, a lot more power as it relates to spend management through third parties, like, you know, scheduling, you know, freight on airlines and others, you know, the consolidated platform between systems and PDP provides the ability to leverage better pricing and discounting structures with transportation partners, for example. So that's just another example on the spend side for you.

Thanks. That's helpful. And then it shouldn't really be a surprise given your strategic partnership with Lonza, but we noticed you added some language in the most recent 10-K that both CROs and CDMOs are engaging your services exclusively in conjunction with, you know, their contract service platforms in order to service clients across your mutual client base. So, it looks like you also added Cineos Health here in 1Q. So, can you just talk about the expectations for these type of relationships going forward and the ability you guys have to kind of accelerate this and expand upon them to include CryoPort's expanded portfolio of services?

Sure. This ties into an overarching strategy as it relates to putting together a comprehensive supply chain platform. So we're doing this in a couple of different ways. Obviously, through acquisitional and organic-related build-out of services and competencies. But the other side of this is through partnerships. And obviously, we don't have an interest in moving into the manufacturing side, but manufacturing component is a very, very key element of managing the overall supply chain workflow for these types of products. So an example, Lonza recognizes this particular need, and they don't want to build this asset out themselves, so they view it as advantageous for themselves as well as our mutual client base to establish strategic relationships that tie together and provide a unified business platform for our mutual clients to engage the respective parties. And so this happens in a number of different ways. It happens through, you know, obviously integration of our activities and some of our systems with Alonzo, for example, or other CDMOs. And the second thing it does is it also is on the business format, we integrate some of our business profiles so that, for example, you know, Alonzo can directly offer our product offerings in part of their contracting process. And so that's just a couple of examples in how this occurs. You know, for them, they view it as a value add for their client base as well as a risk reduction element for them.

Thanks. That's all. I'll jump back in queue.

The next question comes from Andrew DeSilva with B. Reilly. Please go ahead.

Hey, good afternoon. Thanks for taking my questions, and also congrats on the progress and strong quarter. So just to start, within biopharma, can you just give us a sense of maybe what percent of sales are tied to the regenerative medicine or cell and gene therapy space specifically versus other kinds of biologics or small molecules that might be relevant with some of the more recent acquisitions?

That's a question for Mark, Andrew.

Yeah, it's a little bit complex. You know, primarily if you look at the historical business, the vast majority of the systems business is regenerative medicine focused. You know, whereas the plurality of the business within the PDP organization has traditionally been a little bit more pharma focused or biopharma focused. And so that obviously will shift over time. but I can't get the exact numbers at this point.

Okay, fair enough. And I've been getting a couple questions about this. I believe it's been renewed, but I'm not 100% sure as it relates to Novartis' relationship with you, or was it just Gilead thus far that's renewed the original contract terms?

No, both contracts were renewed last year.

Okay, okay, and I was doing some digging with some of your customers, and am I correct to say when you sign a contract, they're effectively, your customers are typically committing to the overwhelming majority of all treatments utilizing your logistics platform. While it might not be 100%, it's approaching 100% in many instances. Is that a fair statement?

Yes.

Okay. Perfect. And then as it relates to BMS's recently approved CAR T, were they a contributor during the quarter? And do you expect them still to be a material contributor to legacy Cryoport systems sales?

They were not a contributor to Q1 revenue. They will be a significant contribution in the next series of quarters from our perspective.

Okay. Okay. That's good to hear. Could you, Robert, maybe just let us know what was the reason for the significant quarter-over-quarter improvement in MBE's gross margins?

Certainly. We can tell you that.

If you look at the overall results for the quarter, we had record revenue for all business units, obviously including MBE with significant revenue growth compared to their Q4 and compared to their historic growth rates, and we expect that to continue. With that, you had, you know, obviously a higher overhead absorption that contributed to the margin. You know, we've talked about in the past that, you know, there's elasticity on the margin side of the profiles. In particular, actually, with cryo-PDP, and over time you'll see that as they move towards the zone gene therapy part of the life sciences industry, how those margins improved. They've seen a sequential improvement in margins as well, but you're absolutely right. The most significant improvement was within the lead, and that's really mostly related to the overall increase in revenue and absorption.

Okay. Useful context. Last question for me is just on animal health. A couple quarters ago, you mentioned maybe a zoetis size partner would be likely. Is that part of the reason for the substantial increase in animal health, even quarter over quarter, or is it just really all tied to recent M&A?

This is really related to the historic business that MBE brought to the table on animal health. There's been an increase on the cryoport system side as well for animal health. but not to that level in terms of the opportunities that you just highlighted.

But those opportunities are still in play. They've been pushed to a degree because of COVID-related restrictions on travel as it relates to validating and qualifying given facilities to support that work.

Okay. Okay, great. Well, that's good color, and I'm looking forward to seeing who some of those new partners are when they come on. That's it for me. I'll hop back in queue. Best of luck going forward. Thank you.

The next question comes from Paul Knight with KeyBank. Please go ahead.

Jerry, the clinical trial revenue growth was very strong. My math says above 60%, and then approved therapy revenue was down year over year. Could you add color around that?

Yeah, we certainly can, and I'm going to defer that question to Mark.

As you guys know, Kite Novartis opened multiple new global manufacturing facilities over the last 18 months, and we've been talking about this. We've seen a small portion of those shipments shift from international to domestic. This was expected, and our global expansion, which you've seen in Japan and Singapore and others, is moving in lockstep with their overall strategies. We are seeing commercial shipping volumes increase, and we are confident that we'll see this trend continue and accelerate through 2021. These guys' recent expansion of their facilities effectively triples manufacturing capacity long-term. So just to make it clear, we are still supporting all of the patient shipments for both Novartis and Gilead. And with the new therapies, you know, the Abecma, Breonzi, and Tocardis launching over the last couple of months, you know, we're very, very bullish on the commercial ramp opportunity from a revenue standpoint over the coming quarters.

Okay. And the – on the trial growth – you know, overall trial growth of 17%. Phase one was up 14. Are academics coming back online? And then the phase three growth rate was 11. Could you talk to those two items?

Yeah, it's more opportunistic when these companies make a determination to reinitiate. Based on all the data that we have, all of the clinical pipeline as it relates to patient enrollment at these centers is back to pre-COVID levels. So we don't think that that's a factor whatsoever. So it's now more related to their clinical strategies.

Okay. And the... MBE and cryo PDP performance, Jerry, are you getting any COVID help from that? I know you can't or can't really quantify it, but how much is COVID helping? Qualitatively, I guess, if you could talk to it.

No, COVID is not a significant help, Paul. We're focused on cell and gene therapy. We do, however, where cell and gene therapy come into play in terms of therapies or cures, we do support trials. We have a significant number of trials that we're supporting in that area, and we do supply dry ash replenishment in some parts of the world for some of the vaccines. But it is not significant to us. We are focused on cell and gene therapy.

Yeah, and with cryo PDP and MBE, I guess labs reopening helps, et cetera. I mean, you know, what would you attribute this really seems like strong performance to?

Well, a strong performance has to do with a focus on cell and gene therapy and sharpening the strategies in both companies. And that's just beginning. That's just a process that's just beginning.

Okay. And then I guess my last question would be regarding the two that you landed in the quarter, Absema and Brionzi. I guess they weren't significant in the quarter. Those, I would assume, were not, and then they ramp, I guess, rest of the year? That's correct. Okay, great. Okay, thank you.

Thank you, Paul.

Thank you. The next question comes from David Saxon with Needham. Please go ahead.

Hey, guys. This is Joseph on for David. I just wanted to maybe touch on the reproductive medicine side of the business. It looks like it grew pretty nicely in the quarter. You know, concerning the backlog, do you expect this to remain fairly strong throughout 2021 and maybe beyond? Can you maybe discuss some of the increased demand that you're seeing on your side or with your partners in that business?

Well, remember, we're expanding our reach as well. So we have increased demand. We have evolving strategies that are much, you know, consistently improving our effectiveness, and we're expanding our reach. And Mark, I'm sure we'll have some other comments on that, so I'll turn to him.

Yeah, there's two key factors. One, we've built a phenomenal team from an outreach standpoint in support of the reproductive medicine space. And as Jerry had mentioned, this is now a global team that's really pushing into international markets. And the second is a reiteration of the strategy that we put together 18 months ago to really establish key partnerships with the large clinic networks on a global basis and establish sole source relationships with those folks. And both of those, we believe, are absolutely sustainable and will support that initiative. you know, that significant increase in profile moving forward for the reproductive medicine space.

Thank you. That's very helpful. And then maybe one a little bit more high level, I guess. In terms of your cell and gene therapy clients, can you maybe give us just a little information on how some of these clients choose between your different shippers, whether it be the advanced shipper, the high-volume shippers, or potentially when the cryosphere is launched?

To be frank, it's really dependent on their quality organizations and their product packaging configurations as to what they need. And so the good thing is that they have a lot of flexibility of choice. as it relates to us, and everything that we have on the market is best in class. And so, you know, dependence on whatever the quality organization mandates is how they typically make that determination.

Remember, Joseph, we're a solutions company. We're agile, and we have the tools in which to fulfill the client's needs. And so they do vary, and we vary in the way we fulfill those needs.

And I guess maybe a little bit more specifically, do commercial clients use the high-volume shipper, or is that more towards academic preclinical research, what have you?

It's heavily dependent on whether it's an autologous or an allogeneic therapy. If it's an autologous therapy, they're traditionally using that high-volume format because it needs a wider neck opening for the blood cassettes that are being used for blood draws. Allogeneic therapies typically use our smaller unit, which has a much smaller neck opening because they're typically packaged in a vial-based format. It's pretty straightforward from that perspective.

Great. Thank you. That's helpful. That's all from me.

The next question comes from John Sauerbier with UBS. Please go ahead.

Thanks for taking my question, and congrats on the quarter. From my calculations, it looked like MBE biopharma revenues were strong up around 12% sequentially. Can you talk about any trends you're seeing there in terms of pent-up demand coming out of COVID? And do you see this business continuing to accelerate throughout the year? And are you comfortable with double-digit growth for the year for MBE? Yeah.

Well, we don't give guidance about growth and about our numbers, but it's safe to say that the growth of MBE will continue to exceed what it has been historically. And we certainly supply some storage through our distributor network for the COVID, you know, vaccines and the work in that area. And as I said, in Cryoport systems, we support a number of trials as well. There's no pent-up demand per se in that sense. I mean, we are refocusing the company and sharpening its strategy towards cell and gene therapy. and it will continue to serve all the markets it has served traditionally. And, of course, it's strong in animal health. It's strong in biologics in general. It's strong, and it will get stronger in cell and gene therapy. It already is strong, but its focus just hasn't been there. And you'll see continued growth in MVE.

Got it. That's helpful. And then I know you announced the CTSA deal in the quarter and expanding in Australia. Can you talk to me about the deal and any future M&A outlook, including expanding into areas such as China?

Well, we definitely will be in China, and we're developing that strategy now. It's been under consideration for some time, and we absolutely will be there. We are there now. I mean, we have shipments in and out of China today, but we will have a bigger presence there because Asia-Pac is going to grow. We have an Asia-Pac strategy, and we're filling out that Asia-Pac strategy. In terms of acquisitions, it'll be the traditional things that I've talked with you about in the past. It'll be in the categories of certainly in the logistics area, in the courier area. It certainly will be in packaging and especially in information technology. We have a robust pipeline. We're looking at a lot of things. It does take a buyer and a seller, but there are a lot of things that we do have our eye on. We'll continue to supplement our organic growth rate with acquisitions. Our focus, however, is not on acquisitions primarily. Primarily our focus is on organic growth. The acquisitions will be supplementary, and they will come along.

That's helpful. And I guess lastly, I know the company doesn't provide guidance, but organic growth was strong in the quarter. I think it beat consensus by around 14% on revenues. It looks like current consensus is around 200 million for the year. Are you comfortable with that number, or do you see any upside? I know it's early in the year.

Well, we feel comfortable with that number, and, you know, we did beat the consensus, and we're very happy about that, and we think we're on a good track right now.

Yeah, and again, just to remind you, obviously, you know, the market that we're primarily focused on, the cell and gene therapy market, is really poised for accelerated growth. You see that we're already now supporting seven commercial launches. So there's certainly upside potential to where the analysts have us picked right now.

Got it. I appreciate it. Thanks for taking my questions.

The next question comes from Puneet Sudha with SVB Learing. Please go ahead. Hi.

Hi, Gary and team. This is Scott on for Puneet. Thanks for taking the questions. So congrats on the nice quarter ahead of our estimates in both kind of the legacy prior part and the recent acquisitions. I wanted to get into a little bit if you're seeing any of the, you know, kind of early synergies that you identified kind of come through. On the revenue side, on MBE and PDP, can you talk a little bit more to what the strength was there, just kind of recovery out of the pandemic? If you could just provide a little more color on MBE and PDP strength, that'd be great.

So the biggest thing that we've talked about in terms of the synergy promise is the $100 million of synergies between cryo PDP and cryoport systems over the next five years. And Mark's in a good position to make a few comments on that.

Yeah, so that's obviously been a focus of ours, and we are starting to see some contribution from that perspective. And we feel firm and confident in that $100 million target over the next four years that there's a clear line of sight towards that. I think Jerry had mentioned earlier in the Q&A that we are actively moving pipeline from a third party situation to the potential of a PDP situation. Obviously, you have to go through the equality and the vendor approval processes, which takes some time, but those are very active at this point in time.

In terms of your question about MVE, those are more subtle, and there definitely are synergies there. And, you know, it primarily comes from a different view of the market, two different views of the market, and they're supplementary, and so they're more subtle.

Okay, got it. That's helpful. Thank you guys for that. I also wanted to touch on just a competitive landscape. We've been seeing a few partnerships from CDMO companies, such as Catalent, where they're employing Sterling Ultra Cold, which is a pending acquisition by Bylife, and kind of just building out a little bit more on the cryogenic side, just their cryogenic capabilities. If you guys would speak to this, is there anything new kind of in the competitive environment? Is this a change in kind of attitude from the CMOs? Just any color you can provide there. That'd be great.

No, there's no change in the competitive environment. In fact, Catalan is a partner and customer. And they, of course, use cropboard systems. They use MBE products. And we see their build-out is normal for cell and gene therapy manufacturing company. They have to have storage, and that's what they're doing. So we see all that as very positive.

Okay, and last one for me. Last year in 2020, you know, it was an incredible year for cell and gene therapy funding, almost doubling 2019 levels by our estimates. Has any of that flowed down to kind of new clinical trial formation yet? Are you guys seeing that? More importantly, are you seeing kind of a new customer, the funnel for new customers kind of expand with all this new funding that we saw last year? Thanks for taking the questions, guys.

You know, that's a question for Mark. Yeah, so if you think about it from two perspectives, the existing companies that have been in cycle for a period of time are extremely well funded. And obviously the activity last year will continue to augment that clinical and commercial activity in the coming quarters. But there is a substantial number of new startups also that have cropped up over the last 12 months. We have listed a couple of those in our most recent quarter in review. And we anticipate additional startups to be very, very active in the coming quarters as well, because this is a very bullish space for the pharmaceutical industry in general.

The next question comes from Richard Paltry with Roth Capital Partners. Please go ahead.

Thanks. When we think about MVE running at full capacity, maybe two concepts. One, would that argue that the level of revenue you're seeing out of them should be sort of sustainable at these levels, maybe incrementally higher as you kind of build more capacity out? And then how expensive is it in terms of cost or time to increase its capacity if its growth rate does sort of tick up closer into the growth rates of the biologic area you're focused on?

Yeah, Rich, we bought MVE with growing it in mind. So none of this is new to us. It's all in our plans. And so, you know, at this stage, we have a fantastic team. I mean, I couldn't have asked for a better team than we have at MVE. And it's a matter of optimization. We have three plants. We have a plant in Shenzhou, China, and New Prague, Minnesota, and then Ball Ground, Georgia. So we will be optimizing, and we are optimizing those plants at this time, and that will continue for a while, and certainly we'll have the plant additions and maybe have a new location at some point. I wouldn't promise you that right now, but that's certainly a possibility. But there's plenty of lead time to keep up with demand.

And then if we look below the line, sort of comparing Q4 with Q1, the SG&A side went from 26 to 21. Which of those numbers seems more sustainable sort of going forward? Were there any one-time acquisition numbers that fell into Q4? Does Q1 feel like this is a good baseline to build off of as we look forward?

Yeah, I think it's a good baseline. I think if you look at the remainder of the year, you can see some increase there just related to building out additional resources. But I think it is typically at year-end Q4, even though we excluded some of the acquisition-related costs, some of those were in there, plus you have some year-end entries that you typically make. So Q1 is a good starting point. Now you can assume some gradual increase just on building out additional resources.

And maybe a similar question on R&D, you know, you've gone from basically doubled it over the last six months from, you know, a $2 million-ish a quarter to four. Does this, you know, first quarter number start to feel like a fully operationalized system or, again, building up from this point forward moderately quickly?

Rich is too early to tell you that that's a stabilized number. You know there we we are. We are very keen on. our research and our development and our engineering staffs, and we do have some big plans and a very robust innovation pipeline. And a couple of things that have surfaced, and you know that the cryosphere will be introduced in the last half of this year. We have several other things. There's a fusion 811 that will be introduced in the last half Probably the last part of this year, or the first part of next year, that's a smaller fusion product that will open up a tremendous segment of the market to us, especially in areas that have small facilities and don't have plumbing for cryogenic temperatures and that sort of thing, cryogenic sourcing. So we, and there are a number of other things in our innovation pipeline. So we'll keep you posted on that number as we move along. But I wouldn't tell you that that's something that today that is totally stable. It'll be in that neighborhood, but it could go up slightly and it could, you know, I just can't tell you right now.

Okay. Since you don't give guidance, just a very general thought concept around the quarter with your adjusted EBITDA stepping up to $7 million. Are there any thoughts that there's any one-time or cost savings or revenue generating factors in Q1 that we shouldn't consider consistent through the rest of the year? You talk about new products coming online with commercial approvals that would arguably drive the service revenue side higher. So I'm just So I'm curious if that new adjusted EBITDA high is sustainable or if there are any sort of seasonal things we need to keep in mind when we, you know, re-forecast on our own.

Yeah, just to address that, I wouldn't say there's anything seasonal in particular. You know, the one-time elements we've already eliminated out of that adjusted EBITDA. So that's a pretty clean number. Now, as you move forward, you know, again, in this dynamic market, You will see us, you know, going online with our supply chain centers in Houston and New Jersey that includes the bioservices. So some of those things will weigh into the adjusted events into the bottom line temporarily as they start, you know, seeing the full business volume come through. But I think it's a good number to use to project forward. And then, you know, just have in mind the layer on top, you know, the building out of the organizations.

Last question, again, very high level, I guess. Your adjusted EBITDA now is higher than your total revenue in the first quarter of 2019, not that long ago. So does that put you in a position to be more aggressive, maybe in terms of acquisitions on a go-forward basis to scale up the business, or do you think it's more important to stay disciplined and have balance sort of top and bottom line? Thanks.

Well, Rich, I think it puts us in a fantastic position, but we are disciplined, and we take very seriously shareholder funds. We don't even use the word spending. We use the word investment more than we use any other term around crowdfords. So we will be disciplined, but we also will be aggressive, too, as we grow. This market is growing very rapidly, and we intend to continue to be the market leader and to grow our reach and to grow our grasp and to continue to develop supply chain solutions that are compelling and more comprehensive and that meet this industry that's evolving and growing so rapidly.

Great. Thanks, and congrats on a great quarter.

Thank you. Thank you, Rick. Thanks.

The next question comes from Jacob Johnson with Stevens, Inc. Please go ahead.

Hey, guys. It's Mason on for Jacob. Maybe just one quick one from me. Just to expand a little bit on M&A and from a high level, should we think of this as more focused on the services side or the product side? Is there any area within either that interests you right now that you could shed some light on?

Well, the information side interests me very much, and if we found an acquisition that made sense, met our criteria of being a well-run company, being accretive to the company, and being synergistic to our endeavor in the services or the product sector, we would be talking with them. But I can't say that we have a preference on either place. What we have a preference for is continuing to execute on our strategy.

Got it. Thank you, guys.

This concludes the question and answer session. I would like to turn the conference back over to Gerald Shelton for any closing remarks.

Thank you, operator, and thank you all for your questions. That was a terrific dialogue that we just had, and we appreciate the questions. In closing, our first quarter was very successful. and starting the year, following a strong fourth quarter in 2020, we achieved significant growth in the first quarter with a growing number of clinical trials supported, continued outsized growth of cryoport systems and cryogene, outstanding performance from MVE biological solutions and cryo-PDP, and in January, the closing of a $287 million follow-on public offering to further strengthen our financial position and support future growth. Our unique global capability widened our competitive moat and positioned us to extend our support of the life sciences industry and especially clinical and commercial stage regenerative medicine therapies around the world. We anticipate that our continued development of our operating platform and highly differentiating solutions will continue to drive acceleration in our growth as the field of biology continues to develop. We want to thank you today for joining our call, and until the next earnings call, we bid you a very good evening.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.