CryoPort, Inc.

Good afternoon and welcome to CryoPort's fourth quarter and full year 2024 earnings conference call. All participants will start in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. As a reminder, this call is being recorded. I will now turn the call over to your host, Mr. 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 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. Do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events 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 describing Item 1A, risk factors, and elsewhere in our annual report on Form 10-K to be filed with the Securities and Exchange Commission, and those described from time to time in the other courts 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. Thank you for joining our fourth quarter and full year 2024 earnings call. 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 fourth quarter and full year 2024 in review document to our website. It can be found on the main page of the Cryoport, Inc. website. This document provides a review of our financial and operational performance and a general business outlook. If you do not have a chance to read it, I would encourage you to go to the website and download it. Now, I will provide you with a brief update on our business, and then we'll take your questions. 2024 was a tough year for the life sciences. The effects of macroeconomic conditions and market dynamics were felt throughout the year. We adapted to the challenges and concluded the year with solid results and total annual revenues of $228.4 million, which is in line with our expectations. Our life sciences service business continued to its expansion with double-digit year-over-year growth in biostorage and bioservices, revenue during both the fourth and the full year periods. For the full year 2024 of our life sciences services business represented 67% of total revenue compared to approximately 62% last year. We saw considerable revenue growth for the support of commercial cell and gene therapies, which rose 37 and 20% for the fourth and quarter and full year respectively. Cryoport continues to expand its market share in the growing cell and gene therapy industry. As of the year end, we supported a total of 701 clinical trials, a net increase of 26 clinical trials over last year, with 81 of these trials in phase three. This is a record number of total clinical trials supported by Cryoport, and it is indicative of the potential commercial revenue opportunity that is developing. Moreover, We also saw a record number of crowd support supported commercial approvals over the last year, increasing the number of commercial programs we support from 14 to 19. In our life sciences product business, we think our order patterns are beginning to show signs of stability. I would remind you that even with the downturn of the cryogenic systems market, our management team has continued to provide positive free cash flow from this business. As previously reported, during 2024, we implemented a number of cost management initiatives in our product segment to align our operations with current global industry dynamics. As cost reduction and capital realignment strategies were implemented across our entire company, we made considerable progress in improving our gross margin. For the fourth quarter of 2024, our gross margin rose to 45.8% compared to 40.6% in the same period last year. We remain confident that these actions that have been taken are taking effect and will lead us to a return to positive adjusted EBITDA during 2025. At the same time, we have continued to advance our most important business development plans, which have been underway for some time as we strive to balance those plans with our commitment to achieving positive adjusted EBITDA during 2025. We're confident that these undertakings will open up new revenue streams and move us forward. For example, in the fourth quarter, we opened our IntegraCell cryopreservation solution with new state-of-the-art facilities located in Houston, Texas and Liege, Belgium. IntegraCell was set up to produce high-quality standardized cryopreserve starting material for the manufacture of cell therapies. Based on market research and our first interactions with prospects and newly signed clients, we believe IntegraCell will generate significant revenue as it offers significant advantages to cell therapy manufacturers, allowing them to produce more consistent, more robust, standardized product more efficiently. IntegraCell addresses a critical aspect in optimizing the supply chain for the development and commercialization of cell-based therapies. Another example is our Cropboard Express cryogenic CX-HV3 shipping system, or HV3, which was introduced in January of this year. The HV3 is a revolutionary cryogenic shipper that offers our clients enhanced payload protection, storage efficiency, mobility, and accessibility. With the introduction of HV3, we also improved patient accessibility to vital cell therapies in smaller cities and remote areas as it will fit into smaller aircraft. We believe this will benefit patient outcomes at large. Looking forward in 2025, we believe we are well positioned to further capitalize on the anticipated growth of the cell and gene therapy industry. At this time, we're projecting that 23 BLAs or MMA filings could occur in 2025, up from 11 last year. We're happy that 2025 is off to a good start, as three filings have already occurred in January. Cryoport's huge base of clinical trials continues to push forward, and we expect to post another record amount of commercial revenue in 2025. Based on all this, we're providing full year 2025 revenue guidance in the range of $240 million to $250 million. We intend to maintain our leading market positions, open up additional revenue streams, and unleash our operating leverage as market demand grows. We will complement this with seeking strategic collaborations throughout the year. We're confident that we have taken steps necessary to implement our growth plans and to reach our objectives of positive adjusted EBITDA during 2025. This concludes my prepared remarks, so now I'll ask the operator to open the lines for your questions.