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.