CryoPort, Inc.

Good day, everyone, and welcome to the Cryoport Incorporated Second Quarter 2021 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Todd Frommer. Please go ahead, sir.

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, we 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 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, Mr. Robert Stavanovich, our Chief Scientific Officer, Dr. Mark Sawicki, and our VP of Corporate Development and Investor Relations, Thomas Heinsohn. As a reminder, we have uploaded our second quarter 2021 in review document to our website. It can be found under investor relations in the events and presentation section. This document provides a review of our recent financial and operational performance and a general business outlook. If you've not had a chance to read it, I would encourage you to go to the website and download it. Now for a brief update followed by your questions regarding our second quarter results. I'm happy to report that the second quarter of 2021 was another record quarter for Crawford. Our performance in the second quarter follows on the heels of our record performance in the first quarter and was driven by strong results across all business units, reflecting the continued successful execution of our strategy. We achieved growth in the number of clinical trials supported, grew revenue from commercial agreements, continued outstanding growth in our legacy businesses, CryoPort Systems and CryoGene, continued to scale MVE Biological Solutions and CryoPDP, and closed on two international acquisitions to further expand our geographic footprint in key locations. As we continue to build our leadership position with market-leading temperature control supply chain solutions for the life sciences industry, we achieved a 55% organic growth rate year over year. We also benefited from significant contributions from our recent acquisitions of MVE Biological Solutions and Cryo PDP. And most importantly, we delivered robust growth in all markets we serve, which are biopharma, animal health, and reproductive medicine. We are particularly pleased with the growth we see in cell and gene therapy, where we are now 560, we are now supporting 561 regenerative medicine clinical trials. This represents an advancement of 14% from the same period in the prior year. Our pipeline of potential commercial customers is currently the largest in our history. We also are supporting eight commercial therapies in regenerative medicine. including SkySona, a one-time gene therapy for the treatment of early cerebral adrenoleukodystrophy, difficult to pronounce, by Bluebird Bio, which was granted market authorization by the European Commission on July 21, 2021. On the financial front, total revenue in the second quarter of 2021 was $56.2 million, up from $9.4 million in the same period of the prior year, representing an increase of 498%. Our biopharma business accounted for approximately 81% of our total revenue in the period and remains strong. This was a revenue increase of 431% over the second quarter of 2020. For comparison purposes, our organic growth rate in this market was an impressive 51%. Revenue from our eight commercial agreements increased 26% year over year. Looking ahead, we expect revenue to continue to accelerate in the back half of the year as commercial therapies continue to ramp on a global basis. In recent months, there have been significant milestones accomplished in the regenerative medicine market around the world. Expanding globally is an important initiative for us as we are experiencing increasing demand for our solutions in the regenerative medicine market To that end, we recently acquired Critical Transport Solutions Australia, or CTSA, a market leader focused on premium healthcare logistics management services specializing in time and temperature critical solutions for the medical and biopharma markets headquartered in Sydney, Australia. We also acquired Fairgate. a provider of innovative temperature control supply chain solutions headquartered in Brussels, Belgium, which supports our expansion of presence in the EMEA region. These additions to Cryoport are in strategic locations where hundreds of cell and gene therapy trials are underway, as well as an increasing number of commercial approvals, such as the marketing approval of Chemriya in Australia in February 2021. In the second quarter, we also launched our new CryoPort Systems, CryoPDP Global Logistics Center in Osaka, Japan, which we set up to support commercial launch activities and client needs that we believe will further accelerate growth in APAC. Our pledge of generating $100 million of revenue and cost synergies between CryoPDP and CryoPort Systems is underway and proceeding on schedule. In summary, we're pleased with our quarterly results, the initiatives that are underway, and the progress we're making. We now have 33 facilities in 16 countries, covering key biopharmaceutical clusters in the Americas, EMEA, and Asia-Pac. Consequently, we're very well positioned to continue to execute on our growth plans. We're especially proud of our people, Our dedicated global teams are driven by passion for the markets we serve and the contributions we make to the support and the advancement of the life sciences industry. Ladies and gentlemen, that concludes my prepared remarks. Operator, please open the lines for questions.