CryoPort, Inc.

Good afternoon and welcome to Cryoport's fourth quarter and full year 2022 earnings conference call. All participants will start in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I will now turn the call over to your host, Todd Frommer 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 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 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, and good afternoon, ladies and gentlemen. We appreciate you 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 fourth quarter and full fiscal year 2022 and review document to our website. It can be found under investor relations and the events and presentation section. This document provides a review of our financial and operational performance and a general business outlook. If you have not had a chance to read it, I would encourage you to go to our website and download it as it is elucidating in terms of our development pathway and the initiatives we are undertaking to assure our future. Now, I'd like to provide a brief update on our business and then we'll move on to answering your questions. Today, we reported a solid finish to 2022 with record total revenue of $237,300,000. led by a 24% increase in revenue from Cryoport Systems. Our annual growth at Cryoport Systems was fueled by strong demand for our comprehensive suite of products and services and strong growth in the cell and gene therapy market. At the end of the year, we supported a total of 654 clinical trials worldwide, a net gain of 52 clinical trials since year end 2021. and with 79 of these trials in Phase III. At the end of the year, we also supported 10 commercial therapies, an increase from eight since year-end 2021. Further, we anticipate supporting up to 21 commercial therapies in 2023 as a result of our forecast of up to an additional 22 anticipated application filings, 11 new therapy approvals and an additional 12 label or geographic expansion approvals for a combined total of 23 anticipated industry approvals in 2023. The regenerative medicine market continued its development in 2022 as one of the fastest growing therapeutic segments. While patient demand remained robust, our commercial revenue ramp was partially impacted sequentially due to our clients' continued cell therapy manufacturing capacity constraints, shortages of bladarivine, and a pause in the shipment of an auxiliary therapy dosage to biostorage for a specific client due to their supply chain issues. Having said that, the recent introduction of new cell and gene therapies into the market has set the stage for greater activity levels in 2023. Over time, we expect the industry manufacturing capacity will increase in order to meet the pent-up patient demand, and as it does, Crawford will continue to lead the way in the development of advanced temperature control supply chain solutions that will support the advancement of cell and gene therapies as well as our growth. Notwithstanding, current manufacturing capacity constraints, many analysts expect the regenerative medicine market to grow at a compounded annual growth rate of 25 to 30% over the foreseeable future. Part of the reason for our confidence today is that 2022 marked a year of significant achievement for CloudFord. As reflected in our adjusted EBITDA, which is $13.7 million for the year, we continue to make significant strategic investments to build out our informatic competencies, global supply chain center network, manufacturing capacities, bioservice offerings, and capabilities to support and accelerate our growth. These actions are designed to further expand our end-to-end solutions supporting the supply chain for the life sciences market, and specifically the cell and gene therapy market. Our investments are designed to strengthen the market position and to create new and diverse revenue streams. To provide you with some examples of our investment investments in June of 2022, we opened our first two global supply chain centers located in Houston, Texas and Morris Plains, New Jersey. These are state of the art facilities that employ cutting edge technologies providing advanced logistics combined with GMP bioservices operations designed to support cell and gene therapy with storage, secondary labeling, kitting, and fulfillment. Clients have already begun to acknowledge the value of these novel services, and others are in the process of qualifying our facilities to join those who are already enjoying its benefits. We also continue the development of SkyTracks, a revolutionary condition monitoring system and the next generation of the Cryoport Elite line of shippers, which includes Elite Ultracol and the Elite Cryosphere, which will officially launch during the second quarter of 2023. At MBE Biological Solutions, we have strengthened the innovation pipeline and have a number of new initiatives that we will announce as they mature. Regarding Cryo PDP, we continue to build out the most advanced global biopharma logistics network in the world, which in 2022 is expanded in India and into Japan, Ireland, Poland, and Spain. And we have not forgotten the growth opportunities for our virus storage operations, as Crowdgene will be expanding into San Antonio and Philadelphia markets during 2023. Our strategic initiatives during 2022 included targeted acquisitions such as Cell & Co. Bioservices in France and Cell Matters in Belgium. Cell & Co., the first class biorepository, was acquired to provide a foothold for our global supply chain center network in EMEA. And we will soon expand that operation into Paris. The acquisition of Cell Matters provided us cryopreservation expertise for launching our IntegraCell platform. IntegraCell will offer the cell and gene therapy a standardized apheresis collection and end-to-end cryopreservation service for leukapheresis-derived autologous and allogeneic cell therapies. This is important to the cell and gene therapy industry as it will be the first time biopharma manufacturers will be able to source consistent, higher quality starting materials from which to manufacture their therapies. Our actions in 2022 were a step in the development of initiatives that are designed to lay a very strong foundation to help drive our long-term growth. The development of our continually advancing technologies to meet industry needs and support requirements globally gives us an unmatched capability to support the rapid advancement of clinical and commercial cell and gene therapies. Considering these actions and the impact of our planned initiatives in 2023, we're providing a full year 2023 revenue guidance in the range of $270 million to $290 million. This represents top line growth of 18% at the midpoint over 2022 revenue. Our 2023 outlook reflects our expectations of a continued solid demand environment with micro conditions improving and the continued development of our exciting array of initiatives. As we closed a successful 2022 and headed into this new year, we are excited and confident about 2023 and our long-term growth prospects. We believe Crowdport has never been in a stronger industry leadership position than it is today as we enter 2023 with a strong balance sheet, cash position, and a fantastic team of highly motivated people. Our continually advancing technology and global footprint gives us the critical infrastructure and unmatched ability to support the swift growth of cell and gene therapies from research to commercialization. We do not think that there is any other company that offers such a wide range of comprehensive end-to-end solutions to support these life-saving therapies.

Now we'll be happy to take your questions. Operator?

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from the line of Puneet Sudha with SVB Securities. Please go ahead.

Hi, you have Michael on for Puneet. Congrats on a strong finish to 2022. I was hoping to start with getting a bit more clarity on the guide. I was wondering how much of this is reflecting recovery in MBE and cryo PDP after some hiccups in 2022 and how much is strength in clinical trials or some of these new commercial therapies coming online?

I'll let Robert answer that question.

Yeah, maybe just a couple of things on the guidance. You know, one, you know, we do have strong conviction on the revenue guidance. It's, you know, an 18% growth over 22 at the midpoint and 22% growth at the high end of the range. A couple of things to have in mind. One, if you look at MB and cryo-PPFs, we do expect them to go back to double-digit growth. But, you know, a few things. You know, we did have some unanticipated headwinds in 2022 here. And if you just look at Q1 of last year where we had the fire damage of our MBE new freight facility where we had about a 9.4 million revenue loss, if you were to add that back to the 22 number and look at it at a constant currency rate, we would be about 14% constant currency with that add back. So if you compare that with the 18% midpoint, it's certainly achievable. But more importantly, Jerry talked about some of the initiatives that we've put in place during 2022 in expanding our bioservices in Houston and New Jersey, the acquisition of Cell & Co., which adds bioservices capabilities in Europe, and then a number of key new product introductions in Q2 of this year. All of these will contribute to the revenue growth in 2023, so I think that's important to realize. The other part is, as we've seen in the growth of clinical trials, We're seeing not only growth in clinical trial basis, but also maturation of the clinical trials and advancements into the filings as well as into expected approvals that we'll be supporting. So there's significant kind of dynamics within our market, within our customer base, that allows us really to drive the revenue growth for 2023.

All right, great. I think that clarifies a little bit.

And then I also had a question about the Global Bioservice Network you're building out. I was just curious what sort of incremental OPEX you expect that to drive and if there's any growth margin contribution we should expect as new capacity comes online?

Well, in general, in terms of the margin contribution of bioservices, a couple of things. We're still expecting overall targeted gross margin of 55%. That is our target. Clearly, we're not quite there yet with 43.8% gross margin. If you look at the bioservices, it's a significant revenue capture opportunity, and all of our initiatives are really designed to capture revenue along the temperature-controlled supply chain supporting cell and gene therapy space. Bioservice is one of those components, and we expect certainly the margin contribution to be accretive to our overall margin based on that service. In terms of the operating expenses, if you look at Houston and New Jersey, those have been already baked in because as we talked about in Q3, while we set up these bioservice capabilities, we have to have them fully staffed before clients can come in and do their audits. At this point, at Cricut Systems, I think we have an audit every week So that really further demonstrates, you know, the interest and the movement on bioservices.

Okay, great. If I could just squeeze in one more. I'm just curious if you have any color on China. I know last quarter you mentioned some headwinds to MBE from the closure of Chengdu, and we've heard some other tools players having headwinds with the COVID zero unwinding. I'm just curious if you have any thoughts there.

Yeah, we monitor China on a regular basis. You know, China is an important country to us. We manufacture in China. We export from China. We manufacture domestic products, and we import in China. And so far, everything is working well. as the immunity builds up in the society then for COVID, that becomes less of a threat, and we haven't had any rolling shutdowns lately, and we don't expect any. So China, we think, is in good shape. No one knows what President Xi is going to do in the future and what his 2025 initiatives are going to entail, but we're prepared to work with those because we do have a strong internal base and we have a fantastic team in China.

Great, thank you very much.

Thank you. Our next question is from the line of Brandon Collier with Jefferies, please go ahead.

Hey, thanks. This is Matt on for Brandon. Maybe sticking with that theme, you know, I think on the third quarter call, there was kind of three items you guys discussed for the guidance reset, you know, freezer pricing, China, and then some headwinds at PDP. So you just touched on China, but I'd be curious, Jerry, to get your thoughts on kind of the updated status of the freezer pricing and trade down dynamic, as well as some of the headwinds you saw in PDP, how those fared in 4Q and kind of how you're thinking with them heading into 23. Thanks.

Okay, so thanks for that question. I mean, it's a good thing to be following up with. The mix of MBE business was still challenged in the fourth quarter due to the macro environment and some of the pushback that we were getting. But that's stabilizing, and it's beginning to turn back. As I explained to you about those uncertainties, it was just capital allocation reservations because of the macro conditions. But those things are, you know, tended to normalize right now and we don't, that's disappearing. And I think we discussed that, you know, a little bit earlier. But the, in terms of cryo PDP, it's moving along well. We have expanded our operations in cryo PDP. Some of the initiatives did impact our income statement as alluded to in my earlier comments and Robert alluded to because They are investments. We did move into five different countries last year, four countries expansion-wise, and then a massive development in India where we lead the market with cryo-PD services.

Thanks. That's helpful. And then, you know, you guys have discussed a lot, the slew of new products and services coming online 23 from the crowd sphere to the crowd for elite elite, as well as some of the newer global supply chain centers ramping up. And the Takeda service as well, or just to name a few, is there any way you can kind of talk about or quantify how those are expected to contribute to revenue in 2023? And, you know, maybe if you don't, you know, have. for each one, maybe, you know, stack rank, which could be, you know, potentially the biggest new product catalyst as we think about 23 here. Thanks.

Yeah, let's start with the IntegraCell platform because I think that's the one that ties back into the Takeda and Insinio's announcements. You know, this, from our perspective, is one of the most exciting concepts to hit the cell and gene therapy industry in quite a while. It's really the first opportunity for the space to be able to provide accessibility to fully standardized high-quality leukopax. And it addresses also a significant patient accessibility issue. And obviously, it's going to take some time to build this infrastructure out, and it has to also go through, you know, obviously regulatory and audit, you know, activity with our clients. So we're not going to obviously disclose anything financially on that at this point, but we do believe that we'll start to see revenue, although modest, late in 23, and it will start to ramp and become more material in 24. The other two platforms, the cryosphere and the elite platforms, so the cryosphere is, as Jerry mentioned, will launch in early Q2. It is ready to go. Our clients are now initiating validation-related activity around it, as well as the Elite line, which is really focused around gene therapy distribution. Those processes take a little bit of time because they have to go through a full validation process, which can take upwards of a year. So we don't, you know, some of these have already been started. Like, for example, for Elite, we do have folks that have been actively working in conjunction with us for that validation, and we'll see contribution on the negative 80 Elite line this year as

cryosphere, we won't see a material impact until next year. Great. Thanks. I'll leave it there.

Thank you. Our next question is from the line of John Sauvier with UBS. Please go ahead.

Hi. Thanks for taking the question. You know, if you look at clinical trials year-to-date, I think up around 9%, and I think also you prepared remarks maybe you mentioned you think you're taking some market share. Can you just talk about some of the competitive wins at CryoPort system and any just thoughts on what your market share is looking like across phase three trials?

Yeah, as we had mentioned, we're at 79 programs in phase three. We continue to add programs and increase our overall portfolio within the space itself. There's not a direct head-to-head competitor in the market. We have some folks that are complementary to certain aspects, but it's not a completely direct correlation from that perspective. So we don't have a concern from that regard. We are the clear market share leader in the supply chain support. And as you guys are aware, cell and gene therapy is a very, very fast-growing market within life sciences. And you know, or continue to grow that base and the related revenue. So we are anticipating upwards of 11 new commercial approvals on Cryoport portfolio companies this year, as well as another potential 12 line and geographic expansions of existing portfolios. So that's going to really start to drive, you know, obviously revenue on the commercial side.

Appreciate that. Maybe just, you know, adding on to that. So you think long term here, and I think you also mentioned regenerative medicine growing 25, 30%. You're at around 18% here for the midpoint in the 23 guide. Do you think there's an opportunity to, you know, as these trials mature, become commercialized to accelerate your growth to maybe closer to where some of the industry analysts are pointing at that for the range?

Yeah, so all of these therapies, they kind of move up in a stepwise manner. You know, there's been headwinds as it relates to ramp associated with a couple of factors. One is manufacturing capacity, and, you know, a lot of our commercial portfolio entities have really been working hard to increase overall capacity. The second issue that these guys are seeing right now is, and you can see this in a lot of our commercial clients, the recent earnings commentary, they're only – they're only supporting about 30% of patient demand today. And that's really down to a patient accessibility issue. And so one of the reasons we launched the IntegraCell platform was to drive accessibility and to provide accessibility to facilitate RAMP for them. So as these things come online, we absolutely believe they will contribute to acceleration in that number.

And maybe just to add to it, if you look at Freeport systems, the revenue growth there was 24%, and actually commercial revenue grew 27%. So it is continuing to increase. And then, as Mark alluded to, there's significant dynamics in 23 that will further health revenue increases.

And remember, the commercial funds are a net number, and so they also account for programs that have dropped out. And so we have seen the second half year a little bit more volatility on the number of drops and ads. So it is a net number.

I guess maybe last one here, just on that last point. So just maybe is that on the drops and ads, is some of that macro funding related that you're seeing or any slowdowns? In projects there, I guess, any just additional color you can provide?

Absolutely not a slowdown. No slowdown at all. In fact, we see accelerating activity with a lot of our clients. You know, there's still over $12.5 billion put into the market in a bad fiscal year, which is a significant investment in the space.

Great. Appreciate all the color. Thanks for the questions. Thanks.

Thank you. Our next question is from the line of David Lawson with BTIG. Please go ahead.

Hey, congratulations on a good quarter. Can you talk a little bit more about MVE, like roughly what percentage of total revenue is coming from MVE? And we're now almost through February or two out of three months in the first quarter. Have you seen an uptick in the large freezer shipments and you know, with a warmer sort of summer, have energy costs improved over in Europe? Is that having a favorable impact? Just any more color there, what you're seeing through February would be really helpful. Thanks.

Yeah. As I mentioned earlier, MBE is returning to normalcy. It will grow in this next year. And the impact, and there's nothing to talk about about the impact of energy prices in Europe at this particular time. Look, we had a, nothing goes in a straight line, and we had a little bit of a blip while nothing has happened, while the market is buoyant for crown port systems, you know, there was a pause there for MBE, which is straightened out, and progress is being made there. So, you know, if you have a the product orders are back into the normal mix.

Okay, great. And then for cryopore systems, you know, 24% year over year revenue growth, that sounds very high to me. Just can you provide any color around what the mix is between like incremental clinical trials that you've picked up versus pricing versus additional, you know, products that you're selling into those customers? What's driving that 24% growth?

So as you guys recall, I mean, You know, a lot of these initiatives that we've been really focused on building are starting to pay dividends. You know, we're really focused around revenue diversification of our portfolio of clinical and commercial entities. And I think what you're seeing is that disconnect between number of trials added versus revenue is a manifestation of that strategy, a successful manifestation of that strategy related to revenue diversification.

Okay. And then just one last one. Any thoughts on your clients' investments into manufacturing capacity? I mean, are you generally seeing that across the board with like Bristol, Novartis, like Gilead? Are you seeing that happen now? And I guess that should be a tailwind in 2023? Yeah.

Yeah, there's been a substantial investment in manufacturing capacity, and it continues on. You know, Kite launched their significant facility in Frederick, Maryland, the middle of last year. You know, BMS is very, very active in building out additional, two additional facilities, one in Massachusetts and one in the Netherlands. So we'll absolutely see, you know, accelerating activity associated with that.

CDMOs are also building out, Dave. So it's the outsourced manufacturing is growing in addition to the customer direct on manufacturing.

Okay, great. Thanks very much. Congrats on a good quarter.

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

Thank you. Our next question is from the line of David Saxon with Needleman Company. Please go ahead.

Hey guys, thanks for taking the questions and congrats on the quarter. Maybe just to follow up on that last question about customer capacity. You guys have in the past talked about revenue per therapy being in the $2 to $28 million range. So do you guys, and as far as I can tell, none of your therapies are tracking to that, I guess on average. Do you have a path to reaching that, you know, with your visibility into customer manufacturing capacity expansion? And how should we think about, once a therapy gets approved, how long that it could take to kind of reach the steady-state run rate?

Yeah, remember, these programs are still early in the evolutionary cycle from a pharmaceutical maturation standpoint. You know, one of the keys here around achieving that $28 million, you know, threshold is broadening out the accessibility of that product line. You know, with moving from third line or fourth line to third line and now third line to second line, as well as those geographic expansions, those are going to really facilitate, you know, acceleration of that revenue associated with these therapies. I mean, if you take a look at some of these alone, You know, you look at, you know, the BMS products, you know, their patient population went from 8,000 to 14,000. I mean, that's almost a 2X increase in potential patients that can be treated by that therapy. So you can kind of do the math in your head and what that, you know, what we could attribute as an upside opportunity for that just as one example.

Okay, thanks. And then on the P&L, I mean, it was nice to see gross margins expanded modestly, but SG&A came in quite a bit above what I was modeling at least. I guess what's driving that and how should we think about OpEx for 23? And then if I could just sneak a third one in quickly, I thought last quarter you mentioned you might give kind of Updated thoughts on an LRP, you know, the 650 to 750. So I guess any update there. And thanks so much for taking the questions.

Yeah, no problem at all. Just a little quick on the gross margin. I mean, you're right. You know, if you look at, you know, the full year gross margin was 43.8%. Slight increase over last year. In Q4, we had about 43.5%, you know, which is up, you know, about 250 basis points over the prior year growth quarter. And you see that for services as well as for product. We've seen, you know, an increase in gross margin. And having said that, you know, obviously we have a number of initiatives in 22 as well as in 23 that have still some impact on the margin, overall margin contribution. In terms of the operating expense, you know, one thing I do want to direct you is to look at the quarter and review document. We put there what we call a peelback in terms of, what we've been doing in 22, what initiatives we've put in place, and how that has impacted our EBITDA. So you look at that peelback analysis, you can see that there's been significant investments that we made, not only on the CAPEX side, CAPEX was about $22.1 million for 22, just slightly down from 2021, but in geographic expansion that have probably an impact on OPEX and with that on EBITDA, about $7 million. new service offerings that we've talked about that relates to IntegraCell as well as to the bioservices. And then, you know, other parts are technology and the software we talked about. So that's the total impact, about $23 million in 2022, related to initiatives that are all geared towards revenue capture to further establish ourselves as really the essential player in supply chain for the cell and gene therapy space. Now, in terms of looking at the 2020, 25 guidance. We understand that people like to have long-term guidance, but given the macroeconomic conditions, volatile markets that are still present today and the level of uncertainty, we felt that it was not the right time to give long-term guidance. The overall economic environment related to inflation, supply chain issues, COVID-19, the situation in Ukraine, there are still a lot of factors that we're all aware of. But given that, we felt it was best not to provide that guidance at this point in time. We're constantly, obviously, evaluating this topic, and we'll provide long-term outlook when we believe it's appropriate.

Okay, great. Thanks so much for the caller.

Thank you. Our next question is from the line of Jacob Johnson with Stevens. Please go ahead.

Hey, thanks. Good afternoon, everybody. Maybe following up a couple of thoughts on those last questions. Maybe, Robert, just first on kind of the path, the mid-50% gross margin, can you just talk about the product lines or the areas where there's the greatest opportunity for margin expansion as we think about that path in the mid-50s from where we are today on the gross margin side?

Yeah, absolutely. I think, you know, the critical area for margin improvement is clearly on the services side. And on the services side, you know, really within both, you know, the Cryoport systems offering and the broadening of the offering as well as Cryo PDP as well, you know, as Cryo PDP moves more and more into selling genes, especially courier logistics. But if you look at Cryoport systems, and we said that early on, you know, we're still at the early stage of selling gene with only a couple of meaningful therapies in the market that are, you know, that have been launched globally and are contributing revenue. Now, if you fast forward in the next, you know, two years, you'll see really a significant number of new approvals of cell therapies coming into the market, both autologous as well as ogenic. And as we're expanding our solutions and expanding, you know, beyond the temperature logistics into bioservices into the integracil offering, you'll see, you know, significant operating leverage in improving the margins. So it's really based on the maturation of these clinical trials to commercial launch, and then the maturation in the industry on a commercial basis.

Okay, got it. And then, Robert, just another long-term question, and then I have one other kind of quick follow-up on guidance. But the other long-term question, you guys talked about 25% to 30% growth from the end market, and certainly I think most agree there's bright days ahead for the industry. But as we think about the freezer business, Yeah, that's probably one that moves around a little bit more than the services side of things. You know, flattish last year, I guess double-digit growth expected in 2023. Is there any way to think about the long-term kind of growth outlook for MDE? Yes.

I mean, I think one thing to have in mind looking at last year is the fact that, you know, there was a one-time event in the new Craig facility last that had an impact on the revenue of about $9.4 million. And because of the significant order backlog that we have for that part of the business, we weren't really able to make up that revenue during 2022. So you do have to look at that when you look at apples to apples, 22 over 21. Having said that, MBE obviously has a very strong reputation in the market for quality. And we see demand. We have a very, very strong distributor network on a global basis. So I think we have line of sight, acknowledging certainly that there's still a lot of uncertainty in the marketplace in general, but we do and did a very kind of bottoms-up view for the next year and outwards to see what we can expect. One part I do want to mention on demand. MBE, they have a good gross margin. I think there's still some upward mobility on the gross margin. But more importantly, they're a solid, profitable company. So they have good EBITDA contribution, and we expect that to continue.

Okay, great. And then just last one for me. Can you quantify the headwind to the commercial revenue in the quarter? And then the other question around commercial revenue, you talked about 11 potential approvals this year. Is that something that's included in guidance, or is that something that perhaps could be upside as the year plays out?

Yeah, so... Yeah, the headwinds, the approximation of about a million dollars in the quarter for Q4 was the headwind, the commercial number. And so, you know, if you account for that, you know, our growth rate on commercial is really closer to 35% for the year, which, you know, obviously is a very strong number. We have modeled, although conservatively, uh, obviously the commercial launch activity, um, because, you know, as everybody's aware, you know, um, there's a lot of volatility associated with timing, even though there's a expectation for the potential of 11 new therapies coming to market and 12 line expansions. Um, you know, we don't know the exact timing of that. So if they all come to fruition on schedule, there, there obviously is an upside opportunity. associated with that, but we do account more conservatively for those launches from a guidance standpoint.

Got it. That's helpful. Thanks for that, Dr. Suleke, and thanks for taking the questions. Sure.

Thank you. Our next question is from the line of Yuan Ji with B Riley Securities. Please go ahead.

Good afternoon, and thank you for taking our questions. I have a couple of them. So for the 11 new approvals you guys are anticipating without disclosing who they are, can you comment on how many of them are anticipated to get FDA approval in the U.S.?

Yeah, hold on one second. That'd be nine. Got it.

And there are a few of the commercialized or near commercialization cell and gene therapies did not use logistic services provided by cryopore systems. As we see more manufacturing sites coming online, is there a plan to take market shares from those territories?

Did you receive that?

Are you talking about therapies that are on the market that are not using cryoport currently or are you referring to potential new approvals that won't be using cryoport? I guess both if there are any. There are some gene therapies that are approved that are not cryogenic shipments that we're not supporting today. They're primarily at minus 80 or the dry ice temperature range. Now that we have our Cryoport Elite minus 80 Ultrashipper, which is being released in conjunction with one of our new gene therapy customers, I think you'll see us wade into those other gene therapies that haven't had a Cryoport solution before. So we're going to target that. I don't know, Mark, you want to comment more?

Yeah, I mean, the whole point of, you know, The Cryoport Elite Ultra Cold Chipper was actually designed in conjunction with one of our key gene therapy partners who has a significant amount of filing activity coming around their portfolio. So it's been custom built specifically for cell and gene, and we do believe strongly that in the feedback from the industry has been extremely positive that we'll be able to pull share from other existing offerings on the market today that are supporting gene therapies in Q. Got it. Thank you for that.

Thank you for the helpful insight there. And one last question from us. So for cryo PDP, can you remind us whether it provides services to those therapies beyond cell and gene therapies? Could it provide logistics for radiopharmaceuticals as well, for which I see a lot of similarities between cell and gene therapy and radiopharmaceuticals?

Yeah, there are some similarities, but crowd PDP is focused on biopharma and with a focus on moving to cell and gene therapy, and that's the direction, biopharma and cell and gene therapy, crowd PDP.

Got it. Thanks for taking our questions.

Thank you. As there are no further questions at this time, I would like to turn the floor back over to Jerry Shelton, CEO, for closing comments.

Thank you, Operator, and thank you for your questions and our discussion today. In closing, during 2022, we took a number of strategic actions to drive Proudport's long-term growth. They're outlined in our quarter and year in review. Now, as we enter 2023, we're excited about our prospects as we're prepared to launch several new products and services with more to come. We continue to be driven by the rapid growth of cell and gene therapy and will benefit from the expansion of industry manufacturing capacity. Our team is committed to our vision, mission, and we look forward to demonstrating this to you in the coming months. We wanna thank you for joining us today. We appreciate your continuing support and interest in our company. We look forward to updating you on our progress again next quarter. From Nashville, Tennessee, we bid you a good evening.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.