CryoPort, Inc.

Good afternoon and welcome to Cryoport's third quarter 2023 earnings conference call. All participants will start in a listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at the time for you to queue up for the question. If anyone has difficulties hearing the conference, please press star zero for the operator assistance. As a reminder, this call 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 the 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 us 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 third quarter 2023 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 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 the website and download it. I will provide a brief update on the business and then we'll move on to answering your questions. Earlier today, we reported third quarter results that were consistent with our expectations as discussed on our last earnings call, taking into account current and well-known global economic and geopolitical challenges. Having said that, we are continuing to see solid and sustained demand from our key life sciences and cell and gene therapy customers, despite the current microeconomic climate. What I mean by that is, when you take a close look, you will see that our quarterly results contain some very promising growth points, including a notable increase in commercial and cell and gene therapy revenue. In fact, commercial revenue increased 54 percent on year-over-year basis and 52 percent sequentially. At the same time, our bioservices revenue increased 26% year-over-year. Regarding cell and gene therapy, Cryoport systems grew 10%, both on a year-over-year basis and a quarter-over-quarter basis. All this growth was driven by the sustainable demand we saw during the quarter and that we are continuing to see from advanced therapy manufacturers. We also continue to increase the number of clinical trials supported. During the quarter, we added a net 27 trials year over year. This brings our global clinical programs to a record total of 670, with 81 of these trials being in phase three. A total of six crowdfort-supported VLA MAAs were filed during the quarter. Looking ahead during the remainder of 2023, we expect up to an additional five anticipated application filings, and one new therapy approval. We think our MBE biological solutions order intake has begun to stabilize. MBE's results this quarter were in line with our expectations, and our current guidance reflects this. During the quarter, MBE and some 70% of the world market continues to produce healthy financial metrics. but we remain quite confident about our long-term market outlook and the recovery of our China market as the country, despite its current economic woes, is a hotbed for the life sciences. Alongside our operating results during the third quarter and in the recent weeks, we have continued to execute on our corporate strategy to accelerate our long-term growth through our innovation development projects and smart strategic acquisitions and partnerships. For example, this includes our collaboration with the Cell and Gene Therapy Catapult, the premier cell and gene therapy manufacturing innovation center in Europe, to provide integrated logistic support for its Stevenage Manufacturing Innovation Center in the United Kingdom. Further, this partnership from its location on the Catapult site will provide other opportunities within the Stevenage Bioscience Cluster. This collaboration establishes our UK Logistics Center which will, our first UK logistics center, which will further support our European expansion. We recently completed the acquisition of Tech4Med Life Sciences, a technology spinoff of the Technical University of Darmstadt located in Darmstadt, Germany. Tech4Med provides next generation pharmaceutical supply chain visibility by integrating advanced condition monitoring cloud and artificial intelligence solutions. We are excited about integrating Tech4Med's cutting-edge technology for comprehensive market monitoring in real time across all crowd pool companies. By doing so, we will expand our digital supply chain solutions offerings and be able to provide our life sciences clients with even greater condition monitoring options, logistics management capabilities, and customer support. With these latest developments, In our leading market positions, we have even greater belief that our long-term growth prospects are solid. There is no other organization in the life sciences with the breadth of capabilities Crawford has in providing robust, dependable, end-to-end supply chain solutions. Today, Cryo PDP is the world's third largest specialty courier serving the life sciences, covering over 220 countries and territories. MBE Biological Solutions is the world's largest manufacturer of vacuum-insulated products. products and cryogenic systems and is the preferred brand for academic government and life sciences companies worldwide. Cryoport Systems supports approximately 70% of all the cell and gene therapy clinical trial market. And as we continue building our global supply chain solutions, that share continues to grow even in a challenging environment. And cryogen is one of the industry's most trusted and specializing in the secure storage of biological specimens and supporting MD Anderson, Baylor, Texas Children, ATARA, WANZA, START, and many others. Trial Court is poised to capitalize on the continued growth of the life sciences and especially the cell and gene industry as more therapies make their way toward commercialization over these coming years. Even with today's economic and geopolitical environment, the cell and gene therapy industry is expected to grow at a 10-year compounded annual growth rate of approximately 20%. This concludes our prepared remarks. Now, I'd be happy to take your questions. Operator, please open the lines for questions.