CryoPort, Inc.

Good afternoon and welcome to Cryoport's third quarter 2022 earnings conference call. All participants will start in a listen-only mode. As a reminder, this call is being recorded. I would now like to turn the call over to your host, Todd Fromer from KCSA Strategic Communications. 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 obligations 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 filed with the Securities and Exchange Commission. It is now my pleasure to turn the call over to Mr. Gerald Shelton, Chief Executive Officer of Crowdport. Jerry, the floor is yours.

Thank you, Todd. Good afternoon, ladies and gentlemen. We appreciate your joining our earnings call today. With us this afternoon is our Chief Financial Officer, Robert Stavanovich, our Chief Scientific Officer, Dr. Mark Zawicki, and our Vice President of Corporate Development and Investor Relations, Thomas Heinzen. As a reminder, we have uploaded our third quarter in-review document to our website. It can be found under Investor Relations in the Events and Presentations 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. I will provide a brief update on the business, and then we will move on to answering your questions. Last quarter, I began the call with, quote, reflecting strong demand across all business units and geographies, we delivered another solid quarter with second quarter revenue increasing 14% or 18% on a constant currency basis. Unfortunately, this quarter, I must report that like many companies that operate globally, we experienced a convergence of macro economic pressures that impacted our third quarter revenue. They were wide ranging and abrupt in their impact. For the third quarter, we are reporting total revenue of $60.5 million, an increase of 7% compared to $56.7 million for the third quarter of 2021. With all the aforementioned factors in mind, we have re-evaluated our guidance. Our guidance for the full year 2022 is now in the range of $232 million to $238 million, with a decrease of approximately 10% from previous guidance. We also are reevaluating our aspirational goal of $650 million to $750 million in total revenue by the end of 2025, given all the exchanges, all the changes that have occurred since we provided you that goal. We reached these conclusions after deliberate consideration of potential impact of pressures on MBE biological solutions and cryo-PDP as these business units have greater international exposure than Crawford Systems or CrowdGene. Short-term issues aside, the one thing we know is that we have a solid company that is healthy with $350 million of cash and manned by highly motivated people who believe in our mission to serve our target markets, which are dynamic, growing, and nascent. Despite these headwinds impacting our second half of 2022 performance, we remain positive given the outlook of our target markets, and we are working diligently to further advance our leadership position in the essential supply chain platform company serving our life sciences market. Crowdport has never been stronger and never had so many business development initiatives underway. The foregoing initiatives and the others that have been publicly disclosed are focused on further strengthening our business and positioning us in the dynamic and growing markets we serve. The commitment of our team is resolute and its commitment to deliver solutions that support life-saving cell and gene therapy is second to none. Our markets remain solid and we expect Crowdport to continue to grow and prosper despite any short-term headwinds. We remain confident in Crowdport's long-term growth prospects, and our ability to increase shareholder value through good times and bad. As a team, we will continue to move forward. We will not accept excuses for any internal or external issues that affect our performance. We will make the necessary near-term strategic adjustments that are needed to weather these times and come out a much stronger, much more efficient organization because of our efforts. Our attitudes, esprit, Actions, teamwork, and dedication are of ultimate importance and will see us through any short-term obstacles as we continue to position ourselves to take advantage of opportunities in 2023 and for the long-term growth. Now we will be happy to open the lines for any questions you may have. Operator?

Of course. Thank you. And if you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, it is star 1 if you would like to ask a question. And we'll go ahead and take our first question from Puni Soda with SCB Security. Please go ahead.

Hi, you have Michael on for me. Thanks for taking my question. I think I wanted to start with MBE. I was wondering if you could quantify the impact of the China shutdown and also how you see the growth looking in the future. I know before you talked about the mid-teen type growth, I wonder what you're contemplating now.

Well, I'm going to answer part of the question and then turn it to our CFO, Robert Stavanovich. Long-term, MBE is solid. It's a solid company, and it's in a solid market. There is some variability quarter to quarter, and so, of course, it creates a variation. If I look at the long-term history of MBE, there is very slight cyclicality. There's very slight seasonality. So that leads us to the conclusion that there's a concern about by our customers, there's a concern about the market conditions and the uncertainty in the economy. I think that short-term will be short-term lived, and then specifically for the financial impact, I'll turn it to Robert.

Yeah, maybe just a couple of comments on MBE. So if you look at MBE and our product revenue, really, which is comprised by MBE, we had a 5% year-over-year growth for that business and about 9% on constant currency. But we have identified, and that did lead us to bring down the revenue guidance for the full year by 10%, identified a specific impact on the MDE business. And there are really a couple of items that really drove that. One, because of the increased economic uncertainties and the disruption in the capital markets, We believe that that has curtailed some of the capital expenditures by MBE's customers for the larger cryogenic systems and freezers towards smaller units. And for the second half of the year, that probably had expected impacts about 15 million for 2022 second half. The second component is related to the reoccurring shutdowns in China. It actually this time for the first time impacted our Chengdu manufacturing facility for MBE And so the impact for that for the second half in total is expected to be about 2.5 million for 2022. So we're specifically looking at, you know, the impact on Q3 and Q4 of 2022 and not beyond. We will provide additional guidance on that when we report on our full year results.

Got it. Thank you. And then my next question happens to do with clinical trials. the number of trials continues to grow. I was wondering if, you know, with biopharma being more cautious with their capital spending, if the pipeline, if you see anything for the future pipeline impacts there. And we also heard from another tool company about delays in cell and gene therapy enrollment. I'm wondering if that's something you have any visibility on?

Please check your mute function. Hi, can you hear me? Sorry. Can't hear anything. Hello? Please stand by. Please check your mute function. Bye. Bye. Am I on a call? Hello? Again, please stand by. Ellie, can you hear me? Sorry? Scott, I can hear you. Okay. Are we in the subconference right now? We are now live. Yeah, hi, folks, we're back. We apologize. Our line dropped. How much of that did you catch? Maybe just answer.

They didn't hear anything. You have to repeat the answer.

Okay, so it was about clinical trials and if we're seeing any slowdown or any pausing.

Yeah, so I apologize. I'll just reiterate here. You know, so from a clinical trial standpoint, you still see very, very robust activity. You know, we're up to 643 clinical programs with 80 phase three projects. Clinical trial activity in space continues to be very strong. You know, our portfolio clients have, you know, have raised a lot of money and are very comfortable from a cash position. And, you know, they're not slowing down their investment in their clinical portfolios. At this point in time, we see extremely robust activity.

Just to emphasize on what Mark said, if you look at the Cryoport Systems revenue, if you look at overall growth year-over-year, it's 25.4%. Clinical trial revenue is in excess of 26%. Commercial revenue in excess of 23%. The core business of Cryoport Systems is very strong. As a reminder, total revenue 80% of that is related to biopharma, and a big portion of that is related to the cell and gene market.

Got it. Thank you very much. Great. Thanks, guys.

And we'll go ahead and move on to our next question from John Sauerbeer with UBS. Please go ahead.

Hi. Thanks for taking my question. I was wondering if you could run through some of the other assumptions in the guidance, maybe the FX outlook for the fourth quarter and just any additional color you could provide on some of the shifts that you're seeing from customers there to the smaller distributors?

Yeah, maybe just, yeah, I can add a few comments to it. You know, as I mentioned earlier, you know, a big portion of what we see in the second half and it started Q3, expect that to move into Q4 as well. is that change in customer spending that we think is driven by the current uncertainties in the market and the economy. And so that does certainly impact MBE's freezer business. And we mentioned about 15 million for the second half. If you look at Europe, which is really driven in large part by the Russian invasion of Ukraine, we haven't once seen an impact on the general logistics volume, really mostly for non-cell and gene therapy trials. which heavily rely on the Eastern European enrollment, as well as delays in new studies and the onboarding of new clients, primarily for our cryo-PDP business. Impact there is expected to be about 3.5 million for the second half of the year. And then I mentioned a little bit of the APAC region and the shutdowns in China. One, the impact on MBE's manufacturing plant in Chengdu, China. that was shut down for two weeks and was more than the two-week shutdown alone, as well as, again, somewhat of a slowdown for Cryo PDP's business in the APAC region related to specific trade lanes there. So that's some of the main pieces. And then obviously, like many companies, we are impacted by the negative foreign exchange rates. And we have about 37% of our revenue in foreign currencies. We have about 2.6 million impact or 4.4% on revenue for the third quarter. And we expect to be in around 3 million for the fourth quarter of this year.

Thanks. And I guess, you know, the relationship with Takeda sounds like that's a 2023 opportunity. Any way just to frame kind of the revenue opportunity with that relationship there?

Yeah, we're really just getting that established right now. You know, there's build-out that's required. You know, we're actually extremely excited about the overall platform because it really does provide an opportunity for standardized apheresis collection and cryoprocessing. And it also pushes out into the community care setting significantly. And if you look at different studies, a lot of folks are saying that upwards of 80% of the eligible patient population is out in that community care setting and do not have access today. So we're quite excited by it, but it's going to take a little bit of time to obviously get this established. I wouldn't look at too much from a contribution standpoint in the first quarter or two. We'll have some impact in Q3 and Q4 next year. We haven't quantified that at this point.

And maybe just a few things to point out for you when you look at that relationship and the business initiative. You know, specifically looking at the clinical trials and corporate system support, we mentioned there's about, you know, 30% of those trials or 190 clinical trials that are all genetic therapies. And that's where we see a huge need for this initiative. And, obviously, we will see a need for autologous therapies as well, but the need for the allogeneic is going to be even more significant. So I just wanted to add that additional piece. And then Cell Matters acquisition that we completed is an integral part in establishing the expanded competencies for Cryoport for this initiative, as well as expand the revenue capture for Cryoport.

Thanks. And then last one here on my end, you mentioned you're reevaluating the aspirational goal. Any timing on when we could expect an update there on that?

Yeah, we'll give guidance on our aspirational goal when we report the fourth quarter, as well as giving you guidance for 2023. Got it.

Thanks for taking the question. No, thank you.

We'll move on to our next question from Brandon Colliard with Jefferies. Please go ahead.

Hey, guys. This is Matt on for Brandon. Thanks for taking the question. I jumped on a little bit late. Apologies if it's already asked. But, Jerry, can you just kind of give us a lay of the land on the M&A landscape? You know, any assets that might have, you know, loosened up over the last few months and, you know, given some of kind of the macro headwinds, you know, any change in your appetite on size or type of deals you'd be willing to entertain? Thanks.

No, actually, one of the good things about the environment, if there are any, is that it creates more opportunity. We haven't stopped our intensive effort toward looking at appropriate acquisition candidates, and so we will continue that. We fortunately have $530 million of cash on our balance sheet. We're in a good position to weather this upcoming recession, and we So, we continue. We have a robust pipeline and we continue to sort through it.

Thanks. And maybe picking up with that last point on kind of impending recession, choppy macro there. Robert, can you kind of talk about any, you know, actions you're taking or levers you have to help, you know, protect the P&L if we, you know, head into even choppier times ahead? Thanks.

Well, we're certainly prudent in terms of how we utilize our capital. Having said that, you know, I want to really redirect to the cell and gene therapy space. You know, we obviously have, you know, a lot of transparency in terms of where our customers are going, you know, what the expected BLA, MAA filings are. You know, if you look at the number of clinical trials we're supporting, the 80 phase three trials that we're supporting, there's going to be a significant demand for Cryoport solutions. And so that's really the main driver for a lot of the business initiatives that we have for some of the innovation that we have in terms of new technology, software, and shippers. And we'll continue to invest in these programs because it's really going to be driving significant revenue for Cryoport. So, yes, we will be prudent in terms of how we apply our cash. As Jerry mentioned, we have a very strong balance sheet. We want to maintain that strong balance sheet. but we also want to leverage the opportunity that lies ahead of us.

Brandon, we could add to that a little bit, too. We have a lot of initiatives that we've been working on. We've reported in previous calls, and they'll be coming to fruition by the end of this year and the first quarter of next year. One is the CrowdPortal 2.0 Logistics Management System, That's an upgrade of the software that you've seen and that gives us an edge on the rest of the world on any competition. And it's complemented by Scoutrax, which is a revolutionary radio that is a condition monitoring system collecting extensive data that is fed back into CryoPortal 2.0. And then the third thing is Cryosphere. Cryosphere is going through its final validation And as soon as that's completed, it'll be announced to the market, and we expect a nice uptake on cryosphere. Then we have two new models of Vario and Fusion at MBE. Vario is a variable rate freezer. In other words, you can dial that freezer up from 196 up to minus 80, giving great flexibility to our customers. And then Fusion... is a unit that actually does not require liquid nitrogen feeds from tanks and plumbing and so forth. You charge it with liquid nitrogen one time, and it continues to operate for a long time. We suggest checking it every five years. And then we have another fusion model coming out that will go through single doors, and that model will open up a whole new segment of the market throughout the world, because many laboratories in EMEA and Asia-Pac are on second and third and fourth floors, and then in the United States there are hospital pharmacies that are going to need this product as allogeneic products come to market. We have a direct-to-patient initiative going on through cryo-PDP in Europe that's in the alpha stage, and we expect that to be successful and play a role in allogeneic delivery as well. as well as perhaps autogas, but certainly allogeneic. Then, of course, we have the Takeda Biolife Initiative that is just being undertaken. It's not as mature as the first two or three I mentioned, but that one has huge promise for us. I mean, I can't tell you how excited we are about that operation, and that gives us the ability for apheresis collection and leukopac production giving the industry fresher, better starting material, which they are looking for vociferously. And then, of course, we're rolling out cryo-PDP in the U.S. and with cell and gene therapy. Cryo-PDP, as you know, has been a biopharma operation. It's the third most important in the world, and we're moving that to cell and gene therapy, displacing some of the other couriers. And then, of course, we're building out the U.S., which is the biggest market and the market that historically crowd PDB has not been strong in, has been developed in here. So we have a lot going on that gives us great confidence.

Yeah, let me just add, I mean, we've already put the sweat equity and resource and all of these initiatives, you know, over the last couple of years. So we're going to be able to benefit from the outcome of these. And the reason that we've made those investments is because the cell and gene space continues to accelerate. You know, in fact, you know, obviously, you know, there's a robust pipeline for earlier lined indications, you know, product expansions, you know, another two potential approvals this year and upwards of another 26 filings next year, which portend, you know, obviously a tremendous opportunity for our organization as a whole.

Thank you. Appreciate all that, Collin. Have a good one.

Thank you. Thanks.

We'll move on to our next question from David Larson with BTIG. Please go ahead.

Hi. Can you please remind me how much revenue roughly is coming from MVE, cryo PDP, cryoport systems, and then also cryogene? I mean, it sounds to me like the headwinds you're facing are really sort of limited to MVE, which I think is where the large sort of capital purchases occur, the large freezer items. So that kind of makes sense to me. But if you could just sort of run through the dollars coming from each of those divisions, that would be really helpful. Because it sounds to me like the growth rates are pretty good in some of these other divisions.

David, I'm going to turn that over to Robert in just a moment, but the headwinds we're facing are more the global headwinds that we put in the press release and in the briefing. Those headwinds include things like the Russian-Ukrainian war, or Ukraine war. That affected one of our top 10 lanes for cryo-PDP. In fact, we lost that lane because there's no volume in it right now, because trials are conducted in that part of the world. So there are broader headwinds that the economic conditions in Europe are worse than they are actually today in the United States. The oncoming of the recession that people are thinking about but not knowing how to actually approach. So those are some of the bigger headwinds, and Robert, I'll turn that over to you for specificity.

Yeah, just, I mean, you're right in terms of, you know, your initial statement about MVE and that shift from the larger freezers. So that certainly has a significant impact in Q3, and we expect that to continue into Q4 as well. However, you know, cryo-PDP was also impacted. You know, as you may recall, cryo-PDP has a very strong um, infrastructure and presence in, in, in Europe and in Asia pack. And certainly because of, you know, COVID because of Russia, Ukraine, their business has been impacted by those impacts, you know, on the regions, um, to a much lesser expense cryoport systems and really, um, no, no notable impact on the cryogen business. Now we don't break the revenue down into business units, but what I can provide you is if you look at the services revenue and the product revenue, Product revenue is really the vast majority is MBE and MBE only, and services is a combination of cryo PDP, cryoport systems, and cryogene. So if you look at the services revenue of 33.3 million for the quarter, it's up year over year 8%. It's down sequentially, but if you look at year over year constant currency, it's actually up 14%. So you have the increase of cryoport systems of roughly 25 or a little bit over 25%, which is somewhat offset by some of the impact that Cryo PDP experienced in the third quarter. For the product revenue, it's year-over-year of a 5% increase. It's down sequentially, and that's because of the items I just mentioned.

Okay. So looking at the product revenue, these large freezers, they've shifted to purchasing the smaller freezers. There's likely a lower price point. Um, like these are mainly, I'm assuming, can you, can you just remind me like hospitals that are buying these solutions to, to put in their facilities, they can store the product there, inject the member or the patient with the cell or gene therapy at the hospitals. Like, I mean, we saw, no, we've, we've no. Okay.

No, that's, that's David. We sell, we sell at MBE. We sell through a distributor network. So we, we don't have absolute visibility, but what we can tell you is that, um, But skewing toward the smaller units, we think, is most likely a control of capital expenditures and capital spending by our clients. So when they can feign more to a smaller unit than a larger unit, we think they're doing that. We also know that there are a number of startups, and startups usually use the smaller freezers. So we think those are the two primary drivers.

Let me just add the larger units that are purchased. which are the stainless steel units, which are long-term storage, predominantly go into large academic institutions, governmental institutions, large pharma, biotech, and contract manufacturing assets. That's where the vast majority of these get placed. They don't go into hospitals unless it's a teaching hospital with a research and development arm, but they're largely going into those other environments.

Okay, my only thought there is this is consistent with what we've seen elsewhere. CapEx has been under pressure across the channel. So this is consistent with what we've seen. And then it looks like the clinical trial volumes are actually fine. They're up 10% plus year over year, right?

Yeah, so the clinical trial number is up 10% year over year. But in terms of volume from a revenue perspective, the clinical trial revenue is actually up 26%.

Okay, thanks very much.

I'll hop back in the queue. Thank you.

Thanks, David.

We'll take our next question from David Saxon with Needham and Company. Please go ahead.

Yeah, hi, guys. Good afternoon. Thanks for taking the questions. I hopped on late from another call, so I apologize if any of my questions have been asked, but You know, to that, the first question David Larson asked, you know, the headwinds you described, I mean, these don't sound like, you know, short-term challenges. So, and I get that, you know, the underlying business is showing, you know, strong fundamentals, but how should we think about, you know, growth into 2023? I mean, fourth quarter seems to be low single-digit growth. So, help us out with kind of a framework, you know, how we should take about 23 revenue growth.

Yeah, David, that question has been answered and we will give guidance when we report our fourth quarter. A lot's happening right now. We need to take into consideration. We'll also give you guidance on our aspirational goal revision at that time.

Okay. Thanks for that. And then hopefully this hasn't been asked. But, you know, the skewing to smaller units that you're seeing, I guess, you know, can you point to anything that gives us confidence that, you know, that dynamic is in competition, you know, coming to a greater degree? And it's really, you know, customers just worried about their budgets and, you know, saving money on smaller units. Thanks so much.

David, I'll give you an analogy, and it's not a perfect analogy, but it's an analogy. If you think about consumers and what they're doing, and this isn't consumers, but it's like when the gas prices go up, people stop buying the BMW X7 and they go to the 3 Series, or they quit buying an Escalade and they go into a Chevy sedan. So here you have customers going from larger capital purchases with us to smaller units. So they're still buying from us. It's just that they're buying a smaller unit. So if you look at units, it's okay. But when you look at revenue per sale, it's down. Does that make sense?

That does. And maybe I can squeeze a third one in. Maybe just an update on the new Prague facility and the E and then also the Chengdu facility. you know, where production level is at for those two facilities. And I'll leave it there. Thanks.

Okay. In terms of financial impact, you know, Robert can comment on that, but I can tell you that we've had rolling shutdowns in China. We have a number of our folks come from various districts, and there's been recurring shutdowns. that have lasted over a couple of weeks in China, which certainly has affected us in our manufacturing there. New Prague is well recovered. It's doing well. I mean, I don't have any issues with that at all. We do have a backlog that continues at New Prague. and we're working vigorously to reduce that backlog.

It's sizable. Okay, thank you.

We'll take our next question from Yangzi with B. Reilly Securities. Please go ahead.

Thank you for taking our questions. We have a couple of them. So first, on the commercial cell and gene therapies, We saw that the revenue of those products increased year-over-year by about 50% compared to the third quarter of 2021. However, Cryoport's revenue from this segment, from the commercial therapy part, was up 23%. Can you help us understand what's missing between these two numbers? Is it because Cryoport doesn't capture everything from that market?

Sorry, guys.

I missed part of that. Can you repeat it? You dropped out a little bit on me.

Yeah, sorry. So for the commercial cell and gene therapies, they increased 50% year over year compared to the third quarter of 2021. Cryopores revenue from this segment, the commercial therapy, was up 23%. So can you help us understand what's missing in between these two numbers? Is it because Cryoport didn't capture everything of the commercial product?

Yeah, so, you know, our commercial revenue, you're right, from cell and gene therapy did raise 23% year over year. You know, we do have significant confidence that our commercial revenue will continue to ramp as our customers continue to ramp their therapies on a global basis, as well as introduce earlier lines of therapies and new therapies to the market. As we did outline in our Q3 review, our customers are making significant progress. We've got six BLA and MAA filings that made the first nine months of this year and seven more commercial filings this year. We also have noted that we expect potentially two more commercial approvals in the fourth quarter. So, you know, we actively work on forecasts directly received from our customers and a lot of internal forecasting, you know, so we do continue to see and anticipate significant growth and progress in the commercial space in the coming quarters.

Okay, got it. So, maybe ask it in a different way. Can you guys comment on the market share change in the cryogenic logistics services and in MVE segments?

Yeah, well, so let's just go back to that one second, just to let you know. We have 100% track record on converting all of our clinical pipelines to commercial, and every single commercial client that we have, we still support.

I think you added MBE as well, and we don't believe that there's any change in market share for MBE and MBE's global business.

Got it. And, yeah, thanks for taking our questions. Thank you.

And we'll go ahead and take our next question from Jacob Johnson with Stevens.

Please go ahead. Hey, thanks. Good evening. Maybe first, kind of a higher-level strategic question. You know, as I think about legacy CryoPort and the history of the company, you know, a lot of what you were focused on was transporting final drug product with this Takeda partnership and some of the other things you've done. It seems like you're starting to move into kind of the drug substance manufacturing workflow. Should we think about, you know, as we think about M&A or maybe partnerships going forward, that's an area you'll continue to add capabilities in?

No. No. Our strategy is not to be in the manufacturing. It's not to be a CDMO or anything of that nature. Our strategy is to build the essential supply chain platform supporting the life sciences.

Yeah, let me just add to that. So the entire focus around building out the collection and processing end of the business is what, Jerry, it's all around patient accessibility and standardized product as it relates to collection activity on a global basis. This is a huge headache for the industry. And we view both of these elements as supply chain considerations around supporting our partners from a contract manufacturing and or an internal manufacturing basis, and we're trying to provide them the vehicle by which to optimize their manufacturing paradigm, to reduce the number of slots that are missed due to scheduling considerations and other things along those lines, to improve the product quality, to better manage cost of goods, and most importantly, to extend patient access out into the community care setting. The problem is that the vast majority of these programs right now are pushing all through the same teaching centers. And so they're competing for the same patients. They're competing for the same infrastructure. And so us building this infrastructure out in conjunction with the Takeda team provides a vehicle by which to standardize and extend that ability. So we view it as a supply chain extension.

Okay, that makes sense. Thanks for that, Dr. Sawicki. And then just on MBE, you know, there's been a number of moving pieces there. Just, I guess, a couple questions, if you can. When should we think about that asset returning to more normalized growth, and what do you think that growth looks like? And then the other thing, you know, you noted a lot of that through distributors, and given some of the moving pieces there this year, just how much visibility do you think you have into that business, maybe versus other areas?

You know, our visibility is limited because of the distribution network, and we also know that many other things are impacting the market, you know, the headwinds that we've outlined in our documentation. So I don't have visibility on when that business returns to, you know, the mix changes and that sort of thing. We'll just keep you apprised as we move along. We are working through it, and we'll gain insight more intelligence and more insight as we move along.

Got it. Thank you, Jerry. Thank you.

And with that, we have no further questions. I would like to turn the call back over to our management for any additional or closing remarks.

Well, thank you, Operator. And thank you for your questions and our discussion. In summary, the third quarter was a challenge. where we experienced a plethora of economic pressures that impacted revenue. Despite these short-term external issues, we continue to see solid demand in our target markets from primary cell and gene manufacturer customers demonstrated by Crowdport Systems' growth and continued momentum as evidenced by the increased number of clinical programs we support. We want to thank you for joining us this evening. We appreciate your continuing interest in our company And we look forward to updating you again on our progress next quarter when we report the 2022 results. We hope you'll have a good evening, and thank you very much.

And with that, that does conclude today's call. Thank you for your participation. You may now disconnect.