Maravai LifeSciences Holdings, Inc.

Good day and thank you for standing by. Welcome to the Q1 2021 Miravai Life Sciences Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Deb Hart. Please go ahead.

Thank you, Mary. Good afternoon, everyone. Thanks for joining us on our first quarter 2021 earnings call. Our press release and the slides that accompany today's call are posted on our website and are available at investors.maravai.com under financial information, quarterly results. On today's call, we will cover our financial results and business highlights, and we'll provide updated financial guidance for 2021. As you can see on slide two, Carl will first provide you with a business update, and Kevin will review our financial results and guidance. Then we'll open up the call for your questions. On slide three, we'd like to remind you that the forward-looking statements that we make during this call including those regarding our business goals and expectations for the financial performance of the company, are subject to risk and uncertainties that may cause actual events or results to differ. Additional information concerning these risk factors is included in the press release we issued earlier today, as well as those that are more fully described in our various filings with the FCC. Today's comments reflect our current views, which could change as a result of new information, future events, or other factors, and the company does not obligate or commit itself to update these forward-looking statements, except as required by law. During this call, we will be using non-GAAP measurements of certain of our results and in providing guidance. Reconciliations of GAAP to non-GAAP financial measures are included in the press release we issued this afternoon, which is posted to Moravai's website and available via the EDGAR filings on the SEC website. The metrics we will be discussing in today's call include net income, adjusted EBITDA, income tax expense, and adjusted earnings per share. These adjusted financial measures should not be viewed as an alternative to gap measures, but are intended to better enable investors to benchmark our current results against historical performance and the performance of our peers. Now, I'll turn the call over to Carl.

Well, thank you, Deb, and good afternoon, everyone. I'd like to take a moment to welcome our newest group of investors who participated in the company's recent follow-on offering, which closed in April. We are very pleased to have you with us today. In addition, I'd like to take this opportunity to extend my personal thanks to each and every member of the Maravai team who continue to execute at an incredibly high level, as you will shortly see. If we could start with slide number five. As we shared in our pre-announcement, Maravai had a very strong start to 2021 with the largest and most profitable quarter in our history. Today, we formally reported $148.2 million in revenue, growing 191% compared to the prior year and up 50% sequentially over last quarter. Our record top line performance also contributed to outstanding EBITDA, earnings per share, and free cash flow generation. I'll walk through some of the trends we're seeing across our end markets and geographies, and then Kevin will provide you with some additional color on our first quarter results and our thoughts for the remainder of the year. Turning now to slide six, in our nucleic acid production business, demand for clean cap messenger RNA continues to accelerate in all areas, clean cap reagents themselves, GMP manufacturing services, and custom mRNA constructs. mRNA is an established platform for vaccines, continues to be incredibly successful clinically and commercially due to its flexibility, scalability, and effectiveness. One question we are constantly asked is how we assess the durability of our COVID-19 clean cap revenues and what the future holds for Maravine. Let me try to address this upfront and share with you some of our very latest thinking. As I said last quarter, it is our belief that COVID-19 vaccinations will continue to be needed for years to come in order to address new strains of the virus that have emerged as preventative measures have been eased in many countries and as selective evolutionary pressure on the virus is intensified by numerous partially completed immunization programs. We expect COVID-19 to become an endemic disease, not dissimilar to influenza, that will require ongoing public health interventions for years to come. And we fully expect that reoccurring messenger RNA vaccinations will be an essential part of these continuing interventions. The clinical efficacy of both of the mRNA COVID-19 vaccines in widespread use today has not been equaled by any of the other types of vaccines currently authorized. In fact, the European Commission President Ursula von der Leyen, herself a physician, recently said, and I quote, we need to focus on technologies that have proven their worth. mRNA vaccines are a clear case in point, close quote. This followed the announcement that the EU was in negotiations with Pfizer for 1.8 billion additional doses of vaccine for delivery beginning in 2022 and 2023. Those negotiations were concluded successfully over this past weekend, resulting in the largest single contract to deliver COVID-19 vaccines to a governmental authority over a multi-year period. It also seems clear that the ultimate share of the vaccine market held by messenger RNA vaccines through global programs such as COVAX will further increase beyond initial expectations as alternative vaccine modalities contend with concerns, however unfounded, about their own safety profiles. The development of new generations of vaccines that either offer protection against emerging vaccine variants or that enhance immunity by offering booster doses of the first-generation vaccines are well underway. Regulatory authorization of mRNA vaccine usage across all groups of the population, adolescents, pediatric patients, and pregnant women, as examples, appear imminent and will also further expand demand in late 2021 and throughout 2022. We also anticipate increasing demand for CleanCap in 2022 as our other customers' own mRNA COVID-19 vaccines receive their own emergency use authorizations and as those customers ramp up for full-scale manufacturing, just as Pfizer and BioNTech have already done. These multiple concurrent tailwinds now cause us to believe that 2022 is likely to see mRNA COVID-19 vaccine capacity among our customers expand well beyond what was originally expected in 2021. For Maravai specifically, we expect continued strong demand from our existing COVID-19 clean cap customers in 2021 and 2022 as they dramatically increase their manufacturing capacity for existing vaccines. Pfizer confirmed this expansion of capacity in their recent earnings call, indicating then that they expected to be able to manufacture 3 billion doses in 2022, up 20% from their 2021 projections. And in an open letter released just last Friday, Albert Borla stated that Pfizer's internal objective is now to reach 3 billion dose capacity in 2021, and to expand even further to 4 billion doses during 2022. Yesterday, Shanghai Fosun Pharma announced the formation of a $200 million joint venture with BioNTech to build a manufacturing facility in China capable of producing 1 billion doses of COVID-19 vaccine each year. And this morning, BioNTech announced that it will also build a 1 billion-dose plant in Singapore scheduled to begin operations in 2023. As you can see, we have a great deal of confidence in the growing demand for CleanCap we will see this year, next year, and beyond from our largest customers. In addition, global investment in messenger RNA as a platform technology for several other COVID-19 vaccines is rapidly accelerating. Pfizer raised its guidance for R&D spending in 2021 by some $600 million last week to reflect its increased investment in additional mRNA-based development programs and COVID-19 antivirals. More and more industry experts are projecting that mRNA represents the future of vaccine development efforts. The infrastructure and expertise now exist to further expand beyond COVID variants into new infectious disease targets, such as seasonal influenza, malaria, or HIV, and the race for an mRNA vaccine for the flu has clearly already begun. Immuno-oncology applications that make direct use of mRNA or gene editing capabilities now include therapeutic cancer vaccines, and advanced immunotherapies, such as CAR-T cell therapies. Some of the earliest applications of mRNA therapeutics addressed other high-value, unmet clinical needs for enzyme replacement therapies and glycogen storage disorders. Many of these early-stage clinical programs were put on hold due to the pandemic, and a number of our customers are now resuming activity in these areas. Now, turning to slide seven, In addition to our nucleic acid products, Marley's other businesses complement and round out our product portfolio. In our biologic safety testing business, customers choose our Cygnus brand due to the breadth of our test kit menu and our reputation as the gold standard when it comes to detecting impurities in the biologics manufacturing process. We saw strong demand for all categories of kits during the quarter from generic and custom host cell protein assays to other ELISA impurity detection kits. First quarter revenues for our biologic safety testing products were at an all-time high and increased 23.5% from the prior year. Our protein detection business saw 7% revenue growth versus the prior year, driven by both our custom and catalog business. We are back to historical pre-COVID sales levels as research labs have reopened and resumed new discovery and development work. Finally, I'd like to comment briefly on the M&A landscape. As you know, we built our business by acquiring established and emerging companies with strong scientific foundations in our target markets, and then by investing in their systems, processes, and people, in order to accelerate their growth and expand the applications for their technologies. Going forward, we will continue to seek a balance between driving our substantial organic growth with opportunistic acquisitions that meet our stringent financial and operational requirements. And now moving on to slide eight, I'll now ask Kevin to cover our Q1 performance in some detail and to provide our updated guidance for 2021. Kevin?