Bio-Techne Corporation (TECH) Earnings Call Transcript & Summary

All right. Good afternoon, everyone. Hope you've all been enjoying the conference so far. I'm Julia Qin from the Life Science team at JPMorgan, and it's my great pleasure to introduce you to our next company presentation by Bio-Techne. Just as a reminder, if you'd like to ask a question, you can use the feature on the website. And with that, let me turn it over to Chuck.

Thanks, Julia. Well, welcome, everybody. We're glad to be here. This is our seventh invite in a row, 7 years at this conference. And we're excited to be here yet again and not be walking around the ring out in San Francisco, so it's all good. I'm going to advance my slides here on paper, and you'll be able to follow along electronically. I'll try to remember to tell you what slide and probably I'd be doing this all day. Slide 1 is the safe harbor. Of course, that's meant to tell you about forward-looking statements and remind you that you can go to our website and check out GAAP-related reconciliations, et cetera. So I won't give everything you need in this presentation. So we definitely like it if you'd check out our website sometime. Moving on to Slide 2. Our business overview. We've come a long way in the 7 years that me and the management team has been here at Bio-Techne. It started with changing the name of the company, et cetera. It's actually a 43-year-old company, but it feels more like a 7-year old company, given what we've done and everything we have changed. Currently, we're still headquartered in Minneapolis. We're roughly 2,300 plus employees. It was about 700-and-some when I joined. We're in 35 locations now, mainly due to 15 acquisitions, and a lot of unique characteristics and a lot of unique potential in people in different locations that came with the acquisition. So we are pretty well spread out. We did a fiscal ending last year on June 30 with about $739 million in revenue, pretty tough Q4, even in Q3 from COVID beginning. We'll talk about that. We have, I think, the world's best Nasdaq symbol, TECH. And our market cap recently exceeded $13 billion, which we're pretty proud of. It was about $2.25 billion when we all started 7 years ago. We are really trying to create a company, it's a life sciences based portfolio. We are still currently 82% consumables. We've done some acquisitions and some development in instruments. They currently represent 10% of our revenue. Services that go along with mostly instruments and some consumables and royalties add to it, but we're still very, very consumables driven company and the content, we'd like to say. The company really has a number of platforms, roughly 7 or so major platform designs, starting with antibodies that we've been at for a long time. The company began with proteins 40-some years ago. We're the world leader in proteins by any measure you want to look at. We're known mostly for research only, but we are going to be moving very swiftly into GMP-related proteins for the production, support and bioprocessing for cell and gene therapy. We have automated protein analysis instruments, largely 3 platforms in our instruments division, we call Analytical Systems division. And there -- we'll have a slide or 2 on that, but roughly, it's automated Western blot and immuno -- microfluidic immunoassay multiplexing system and a biologic system for measuring protein purity in drug production. We are in immunoassays. We are the people that created the ELISA 35-plus years ago. We're still the world leader in ELISA. We continue to turn versions of our ELISA technology into diagnostics and, in some cases, FDA approved. We have a new-to-the-world serology, a quantitative serology test as well that's certified with a CE Mark for full quantification in Europe. And we're searching for that last claim with the FDA for neutralization here in the U.S. We'll talk about that a little bit as well. We have a tissue biopsy platform, it is an acquisition called ACD. It's molecular based, and we'll talk about it as well. It's -- the product is RNAscope, and it's fabulous. It's based off probes that can analyze tissue in a way that does not destroy or destruct the tissue in any form. We have clinical controls and calibrators, also goes back to the fundamental time at the beginning of the company. And we are probably the world leader in these controls. We have over 30 different customers we sell OEM controls into for most every type of hospital-related, blood-related equipment that's out there. And then lastly, we have a liquid biopsy platform. It's based on exosomes. We have a slide on that as well. And that's one of our latest or newest acquisitions and a platform that we see many, many new products come out of it over the next decade or so. Still mostly a tools company though, that's how we like to think ourselves as. So moving on to Slide 3. You can see our breakdown of this revenue. We have spent the last few years, really trying to mitigate a lot of that academic risk, moving as much more towards biopharma-related customers as possible. We have done a pretty good job. We're now mostly biopharma, but we still have a very, very heavy degree of academia as well, which we'll talk about the COVID. Certainly has been an issue with COVID this year. We do a lot of OEM. We do a lot of custom work. We do a lot of royalty related work for people. And we are -- have a lot of distribution, mainly Asia. Our Asia revenue is really all distributed related. We are broken down still almost the same as it's been. The growth has been almost consistent across all these 3 parameters, 57% Americas, 25% Europe, and Asia is slightly ticking forward and growing at 18%. Moving on to Slide 4. We have 4 key strategies that we kind of run the company by. They're pretty easy to understand and probably in most people's strategic plans. We are a small company. So we're still very focused on geographic expansion. 5 years ago, it was mostly China. Now we've definitely grown pretty sizable for our size company in China. And we're focused on India and other areas in Asia, more so Korea. And we're still not done with Europe. Europe has had a tremendous run here, more than doubling in the last 6, 7 years and almost triple in the employee count. We have a real focus on innovation. We are a science company. We have 250 Ph.Ds in this company. We are very diverse. We'll talk about that later as well. We do focus on innovation. We do a lot of prioritization on this innovation. We have come from a company that had almost 0 IP to one now with over 500 patents and filings and an awful lot of trade secret knowledge, and what we like to say is a 35-year head start or lead on our competition in areas like proteins. We -- a lot of people think of M&A as a tactic, not a strategy. We have had so much of our growth dependent on doing gap filling and doing M&A that we do have it as a strategy. So we are looking for adjacencies that can leverage primarily all the science and content that we have, our antibodies, our proteins, our assays and in a way that they can build the company in new divisions that can scale. Hard to scale with just content on itself. Applications around instruments and diagnostics and are -- they have bigger ways to grow, I guess, and more ways to grow. So we are still focused on that. We are looking at new applied markets like gene and cell therapies. And we'll talk about that some more. And then lastly, you can't grow from 700 people to 2,300 in just 7 years and not be focused on culture and attrition and diversity and all the things you have to do to make a real company. We have a set of values, we call EPIC. Every letter means something in our company culture. We measure everybody by them. We help all employees with career development. We really focus hard on allowing employees to move from business to business. And it's a fair amount of travel in our company from the 35 locations we talked about. And in this time of COVID with a lot of people working from home, it's very important because as we have younger people who are feeling not that sense of community, not being in a company very long, it's really important that we deal with this or we will have higher attrition. We've done very well with this. Our attrition is quite low. And we're still looking for all the talent we can find, to be honest, and we're behind plan on our hire. All right. Moving on to Slide 5, which talks about the sustainability of our company and what it really means. We are trying to build a company for the next 40 years. And we did issue the company's very first CSR this year, and it covers a lot of ground, but starting first and foremost, environmental. We are trying to be as environmental-friendly as we can as a company, but we are also focused on ISO certification, energy management, water management. We have -- we're moving to more and more processes from the center to try and have productivity and savings and just be responsible for the spend that we have in areas that we use energy, et cetera, waste management and things like this. We have a lot of materials that are regulated, so we have to be very careful with radioactive-related materials, et cetera. And of course, things that are related to blood and such are always watched carefully. On the social front, we're very diverse. We have actually over 52% of our scientists are female, about 50% of our global work force is female. We have roughly, I'd say, 30% or so of our workforce is minorities and diversity. And we have a heavy Chinese population. Minneapolis is very heavy in Chinese, and there are a lot of them here, and they are one of the keys to our strong science foundation. Many of these people came to us 20, 25, 30 years ago. And if any of you know China, to get out of China back then with a student Visa, you had to kind of be off-the-chart smart to get over there. And we're lucky enough to have attracted a lot of those students here many years ago, and they provide a lot of innovation for us. We are also a sponsor for the Minnesota Science Museum, one of the biggest in the country. We do a lot for students and with schools around the country, but first and foremost, here in Minneapolis area with STEM and especially girls are getting into STEM. We do a lot of work there, a lot of volunteerism. We're heavy into United Way. We are, I guess, as a company, personally sponsoring different schools that are challenged with their numbers on education and literacy, mainly in the more dense urban areas of Minneapolis, remedial, middle and high school. So a personal commitment there from all of us. And then on governance, we have now achieved 25% of our Board in either minority or female, which is not breaking any record, but a good start for us and better than average in our industry. We are led by an independent chair, who's been at the helm year here for over a decade. We have a great relationship with the executives on my team and the Board. There's a lot of interaction, a lot of accessibility, and it's been very healthy and very good. In the 7 years I've been here, I have not lost one single executive, to be honest. So we're doing well. Moving on to Slide 6. Our segment structure. A couple of years ago, we moved from a couple of different business unit models to a segment model where we have different divisions within these segments. We're trying to get set up for the future because we'll talk about it on our last slide, but as we reach $1 billion and $1.5 billion and hopefully $2 billion someday, we want to be a portfolio of different segments and different divisions in different applied markets. So starting off, we're -- now we're in 2 segments. The first one being Protein Sciences, the second being Diagnostics and Genomics. And Protein Sciences has where we have reagent solutions division, where our antibodies and our proteins reside along with our cell and gene therapy business unit. We also have the analytical solutions division. These are the instrument platforms I mentioned briefly a slide or 2 ago. On the Diagnostics and Genomics side, the diagnostics reagents division is the historical division where we have a lot of our OEM work, controls, calibrators, et cetera, and some unique diagnostics-based, antibody-based products for the big diagnostics companies of the world. We supply to all of them. On the genomics side, here, we have our latest 2 acquisitions from the last couple of years. One, ACD for the tissue biopsy area; and then Exosome Diagnostics, which we'll talk more about. So nothing has changed in here on structure. Moving on to Slide 7. First on Protein Sciences, what's in it? I mentioned we have proteins, first and foremost. That's the biggest part of this division. Next is antibodies. On proteins, we have nearly 10,000. We're by far the largest. We launch over 60 new proteins every quarter. We're known for our quality. We're known for our bioactivity. We're known for our high prices because we can get them, because researchers want our quality. On the antibody side, we're one of many antibody companies. We're in the top 5 probably, but we're not the leader, but we're very strong. We have over 20,000 antibodies that we've developed, we make and sell. And we have about 300,000 from 50 or so different suppliers that we source and have on our website with a very extensive digital platform that's been a real big key to our success in antibodies the last few years. So when you have that many products, you have to have a great search engine. And we have remarkable tools for the researcher to find what they're looking for online. We also have in our ASD division, the ProteinSimple brand, the instruments we talked about. And these are the 3 platforms I mentioned earlier for automated Simple Western, multiplexed microfluidic immunoassay and then biologics for protein purity testing. And then lastly, we have amino assays, which is the ELISA platform for us, but also all our multiplexing is in here, different assays. We source to really everybody out in the multiplexing world. And you really can't think of a name or a brand that we don't sell antibody pairs into. We're known for this. We get an extensive royalty stream from this business. And then lastly, this is -- we're just launching our serology solution. And we'll talk more about that in the end to this presentation somewhat, but serology will also live in this division as it gets going. Moving on to Slide 8. So Diagnostics and Genomics, digging a little deeper here. The reagents are in here, the controls, calibrators. It's, again, thousands of products. There really isn't anybody that's selling hospital-related equipment that isn't a customer of ours at some level. The tissue biopsy and spatial analysis, the RNAscope product platform at ACD, now over 35,000 probes. So growing, growing, growing. We have a multiplex version, we call HiPlex. We have an XPlex version that we can plex the plex, so to speak, and go all the way to 48. So now we're starting to get into another realm where other companies exist as well. So we've got strong growth. We have a new product coming out later this year called DNAscope as well. And this product line is very, very important in cell and gene therapy as well because we can do single cell analysis, and with great integrity, with great signal, and the morphology of all these samples is retained. So you can actually do all this work on a slide with a tissue and then on the same slide, you could do IAC, if you wanted to. So very important. And also important because in a lot of cases, if you want to use IAC, which is still kind of the world's #1 method of looking at tissue, there -- 25% of the time, there isn't an antibody to do that work. So going into the cell and looking for the gene is another approach, and this is why we've seen really explosive growth of this platform. And then on the liquid biopsy side of the division here. This is Exosome Diagnostics. It's a platform, we've launched our first product, we'll talk about it later, prostate cancer diagnostic. But we believe in Exosomes as a platform as superior to sell free DNA and superior to CTCs. There's a lot more information really at a high level. It's just -- there's much more of it. There's much more information. It's easy to work with, and the signatures can start there, but also include cell-free DNA. So we think we have the strongest platform of any out there, and we think we'll have many, many products coming out of this division over the coming years. Moving on to Slide 9. So COVID-19, what's happened this year. So we haven't had the strong PCR-based test revenue stream or things, but we have had a couple dozen or more products starting from the right to the left. RNAscope, we have a special set of probes we developed that can detect COVID-19 in tissue, which has been very important for researchers trying to see about the migration of the virus in organs. And so this has been a really hot product for us this year. Using our Ella platform, I mentioned, it's a multiplexing immunoassay. It's sampled to answer in 75 minutes. The sensitivity is so good. It's one of the best platforms known in the world for actually researching or measuring cytokine storm. So it's a natural for patient monitoring. So we have a number of initiatives for this. We can't make enough of this. We talked about the explosive growth last quarter, roughly 75% or better. It would have been 100% or better if we could have made more, and that's continuing. We see no reduction. And I think it's going to -- this has been the breakout event for this platform in all honesty, and we see a big future. It's become material for the company now. And it's on track to be, probably in a couple of years or so will be a $100 million platform. So... And next are proteins and antibodies. Of course, we sell -- we've make -- we make spike. We make S1, S2. We make antibodies to detect. We're selling a lot of these antibodies to a lot of the people you see out there selling different diagnostics tests, whether they be qualitative serological, whether they be an antigen based or lateral flow or nucleocapsid based, we sell all of these reagents treated to everybody out there. So it's been a good year for that for us. And then on the front, on the left side, serology and diagnostics. We spent an awful lot of this year, we pivoted about 150 people and a big part of the RSD, the research and regents division, towards developing a serology test, a unique ELISA. We did it in 8 weeks. It usually takes 18 months. We did it based off the strong work that Mount Sinai did. They're sitting at about 90-plus thousand patients of data. So it allowed us to move very quickly. And we have a CE Mark with full quantification. We are trying to get our neutralization claim, established with the FDA currently, hopefully be out soon. We do have an EUA for semiquantitative. And our test is a 2-part test. So you're searching for the spike protein, but then we were qualifying on the second step a positive and then we're measuring, we're doing a titer at 7 different levels. So we can actually layout the level of immunity a patient has. So we totally eliminate all false positives in that second step. And then we layout exactly the level of immunity. If -- next summer, we're all going to need -- if we all need an immunity passport to get into a concert or on a plane, we are the perfect technology to be the basis of a product like that. So we're talking to a number of agencies for that. We're also talking to a number of governments. We're set up now to selling in Europe, and we're very close in Canada and distribution in the U.S. and a lot of the hospital systems, starting, first and foremost, at Mount Sinai. We're often running with them already, but more to come. As vaccines become more prevalent, we do believe that many people are going to want to know if their vaccine is working. Are their antibodies there for themselves? Can they go see their grandchildren now? Or is it safe? So more to come. Slide 10. Our research productivity tools. We get asked a lot, why are we doing so well in this COVID landscape when academia is down and we don't have an awful lot of PCR testing here or other things like other companies do. Our tools are mainly productivity-based tools. And as -- even in academia, as duplicity has a rule this year, moving to social distancing, staggered shifts, secondary labs, people are having to buy seconds of things, new instruments, et cetera. And we've had just a blockbuster year, and we see it continuing. We gave an outlook for the beginning of this year to be a year of getting back to double-digit growth. We had that in quarter 1. We see nothing at this time to tell us anything different is going to happen. We see a strong year ahead. The Simple Western has just been remarkable that we do have products for COVID as well on that platform. But it's a 3-hour sample-to-answer platform. It saves 2 days of manual labor. We're sitting at 15% market share only. As you know, Western blot is one of the most ubiquitous, you can't do something more. It's just something every what chemistry student learns, and then it's done in every laboratory in the world. So as we move more to an automated world here, we're going to win with this platform more and more. We've had 30% growth, and we kind of see it continuing, to be honest. Biomarker discovery workflow. A lot of our products are really about just doing biomarker discovery and enhancing people's workflow. It's about saving time, but it's also about integrity and reducing errors and higher throughput, but also better data. And we're known for it. And with the R&D systems brand backing all this up, people just trust and believe it, have grown up with it and it continues. And of course, the tissue biopsy. This, as I mentioned earlier, in a lot of areas, this is the only way to actually test your tissue. It is just -- there's just too many unknowns, you can't find an antibody, you don't have a lot of signal to work with. You don't have a lot of tissue to work with. Using RNAscope is just amazing, right down to single cell analysis. Slide 11. So exosome based liquid biopsy, why is this so cool? Why do we like it so much? There's a lot in exosomes. First of all, they're in every bodily fluid. There's lots of it. And unlike cell-free DNA which are floating around your bloodstream being attacked by enzymes, and that's why they're called cell-free, and they're really SNPs and that integrity is not there, exosomes are encapsulated. The RNA is encapsulated within the exosome, and it is high integrity. It's is active. So -- and not only that, the exosome has proteins with it as well that actually give you origination data. So it's hard-to-treat cancers. It's hard-to-treat things. You don't know the organ origination. You get all of this information with exosomes. So with that, we've done a lot of work, and we have a prostate cancer diagnostic that's Medicare approved. It's growing. We have strong acceptance of it. It's just the first of many. We're on our way with the kidney rejection platform, is next, and that will be ready in about a year or so. But we can go after using this technology within blood, plasma. We can look for exosomes within colon, almost every area of the body. So it's just -- it's a plethora of a pipeline. So it's just a matter of what we want to prioritize, who do we want to work with and where we have synergies. Right now, we're kind of going through the whole urine tract first with solutions so we can get as much leverage and synergies as we can, but there's a lot coming here, and there's a lot more to come, but you've got to measure it in terms of years. This is going to take a decade to really fulfill its maturity what it can be. And I do believe it's a $1 billion kind of platform. Slide 12. Probably the most exciting new thing we're doing. I would say, if you're asked, what's not baked in our numbers, what's most misunderstood about our company, it's probably how powerful we're going to be in cell and gene therapy in the next few years. We've just completed a $50 million, 50,000 square foot GMP factory, protein factory, here in the twin cities. We have just launched a JV called ScaleReady with 2 other partners, one Wilson Wolf with already worldwide renowned standardized G-Rex bioreactor platform; and Fresenius Kabi is leukophoresis instruments, where you collect the blood from patient and start the analysis. But as you can see in the slide, we have all kinds of positions in the workflow. We have TcBuster for doing gene editing. This is gene editing. It's called -- using a transposon methodology. So we use electroporation to really get into the transcriptome and deliver the cargo there. It's much more accurate and much better throughput, higher yield than viral vector, and we think it will be the future. We have -- you have to separate, nicely separate and you have to do stuff with T cells as one version of the technology. For this, people are using magnetic beads currently. We have a new bead technology that's polymeric. And we can -- once we're done doing the work we want to do, we can just dissolve them and get rid of them and then get ready to put these T cells back into the patient without any risk of a magnetic bead being there. So strong interest in this as well. Our Simple Plex technology is a fantastic QC technology to see how the process is going. And of course, GMP proteins, as you have these cells out in the bioreactor, you've got to feed them. And our GMP proteins are, it's probably the biggest part of the revenue stream of this new division someday, and that's -- and we'll be able to release these proteins actually with a bioreactor, probably in a lyophilized form, which is important because it can be in a sterile format from the get go, so less risk with the customer having to reconstitute proteins or anything. So it's a bit of a complicated slide. There's a lot more detail behind it. We have an awful lot on our website, but this is exciting stuff. And we do see the future in cell and gene therapy. We know that out of 1,000 clinicals going on, many, many are looking at us right now for equivalency for our proteins. And as we move forward into new clinicals or next generations of these solutions, our technology will be the one selected and used. Slide 13. How big are these pies? So 7 years ago when we were really just selling reagents, the best we could figure out is probably a $2 billion or $3 billion market for us for ELISA kits and proteins and antibodies. We have now done enough expansion, enough adjacencies and enough bolt-ons and look in synergies within our business units that we are now looking at probably about a $15 billion TAM for all our products combined in the divisions that they sit in. So we've come a long way. I don't think we're done yet. I do think we'll keep acquiring. I think we'll continue to look for other assets in cell and gene therapy, but we're also always in the hunt for geographic expansion platform. Antibody companies in Asia or in Europe would be an example where we look at many all the time. We did buy one -- once in China. And as I said earlier, we've done 15 acquisitions, and we hope to use our strong cash flow to keep looking at doing the right deals at the right time. We won't overpay for things, but we will definitely keep hunting. We have a strong pipeline, well over 100 targets. It was a crazy year as everyone knows, things are pretty expensive right now. We've come in second a bunch of times this year. And -- but things are looking up. We got to see a lot of opportunity, a lot of new assets coming online. This is biotech, right? So things can come from an idea to a company worth a lot in 2 or 3 years. So it's always ever-changing. So Slide 14, coming to the end here. Here is the results. It's a pretty nice looking slide. We didn't expect last year to end like that. I would have -- we were definitely on track for an 11% year. We are back to 10% plus as of Q1. You'll hear in 3 weeks on how we're doing this quarter and continuing for -- going on, but we do see a strong future. And we've not only increased our revenue, we're also making more money as we go to. We had -- as you know, we had 34% EPS growth in Q1. So we do expect to be growing our bottom line as well as our top line, and so far, so good. The last slide we have here is what do we see looking out? We do see a future where we think we can get to $1.5 billion in 5 years. We are well on track for our internal goal that we try to hit to get 40% op margins. We've been there in the past few quarters, if you take out Exosome Diagnostics dilution. But we're definitely, I think, ahead of schedule. We see no problem with reaching this level of profitability and this level of scale. So we'll try to show more details around this next fall, we are planning an Analyst Day, and we'll see what we come up with, but it might even exceed these numbers, but these numbers are pretty nice all by themselves. So with that, I am finished, and I guess we're going to have some Q&A. So thank you for your attention. And I hope there are a few questions.

Great. Thank you, Chuck. That was a great overview. Let me start by asking on your COVID products, the serology test. Can you remind us how your test is differentiated from other serology tests in the market? And since we're seeing some TCR-based tests being introduced in the market as well, can you also talk about how your serology test is stacked against the TCR tests?

Well, PCR is more answering the question, are you sick. Our test is more about were you sick.

I was -- T cell receptor based, the T cell sequencing.

Yes. Well, that's difficult. I mean knowing whether you have T cells, and that's more of a -- it's more of a week-long clinical operation. So I'm also very interested in seeing what comes off for an actual test around T cells. I mean it's typically done looking for markers within its full cytometry type process. And very difficult to do. I have a hard time seeing how they're going to automate that or make that very -- it'd be very expensive probably. But there is a lot of T cell immunity out there. There's a lot of questions that people have of why they're not getting sick. And it's hard to explain. So that's one thing. Getting back to serology, we -- as I mentioned, we have a 2-part test. So we are actually qualifying the positives on a second step, and then we're titering to understand the level of antibodies that are in the sample, right? So we can tell you whether not only you're probably immune or not, we can tell how immune you are. We've also been working with Mount Sinai on their study for 8 months now on antibody -- on immunity levels, how sustainable is immunity. And all of these 90,000 patients they've had so far, none of them come back, none with a secondary infection and they've been monitoring on a weekly 150 patients to see the antibody level. And in 8 months, there's no degradation. So Dr. Florian Krammer, probably the world's most imminent epidemiologist, thinks it's going to be kind of like normal coronavirus family where it's a 1 to 2-year type of immunity, and it's going to vary a lot by individual. So all of that's important. Other people's products are really single step, they're qualitative, and they may be looking for a nucleocapsid protein only. We're actually looking for spike. We actually have an antibody that is very specific to spike. It's an internal development that we've found internally being an antibody leader like we are. And the numbers speak for themselves how well it works. It's just a matter now of getting all the politics through. Does the government want to screen or not? Will the WHO, will they look for a standard? We're actually a little bit perplexed because you could probably shave 3, 4 months off vaccine deployment by taking the 60 million to 100 million people out of the equation that don't need vaccines because they're already immune, because they either have immunity or they have had the disease already or whatever. But the current process is to be is to vaccinate everybody, whether they need it or not. So we're going to have to wait for vaccines to be prevalent for the demand to really grow. And then a lot of the early -- the earliest serologicals that were qualitative that came out didn't work very well. A lot of false positives, and that made the press. That made a lot of news when people -- mistakes were happening around these tests. So there hasn't been a lot of demand. There's been a tarnish. So we have to overcome that, too. But there is a need for serology, and nobody disputes that. So it's just a matter, I think, of the time needed to develop as a market. It will never be like the PCR market. And I think there'll be other tests that go in tandem with it, like you said, I think, a T cell type of test is also warranted. It's just a very difficult problem to overcome to get a cost-effective test out there.

What about your commercialization strategy? I mean since your test is quantitative, are you going to partner with biopharma in the vaccine trials? Or are you just going to market it directly?

Well, if we could have started early enough and been out, we were really done with this by June, but it was already too late to really be part of the clinicals, being that vaccine makers were off and running by then. And they all did their own home brew serology. You have to have a serology test to get the vaccine through the FDA. So it is interesting that the FDA has allowed this to happen with no real reference, but they all have their own home brewers. So they're all interested, I think, in generation 2 when they have to check off more boxes, not cut so many corners, and this thing is mutating, right? So it's -- there's going to be changes. We think there is a lot of demand. We would've been told this if they wanted because our test works so well. And it's not their business. They'd probably just as soon have somebody else do a better one than doing their own anyway. So there's interest there, but it's not in round one because they didn't have the time to wait, right? So they had to get their vaccines going.

Got it. Other than COVID products, can you talk about which parts of your base business has seen the greatest headwinds or tailwinds from COVID? And given the recent resurgence in cases, are you seeing any incremental impact?

Yes. Not a lot of impact from the new surge. So it's hard for us to really know what we're doing. We're definitely in the rising tide and one of the boats being lifted by this and being perfectly positioned with our productivity tools and just there's more research going on in general. I think there's going to be more research coming up. I think the modest budget for next year, NIH is modest because I think everyone expects portions of all the stimulus that's yet to come is going to be -- some of it's going to be a portion towards research and making sure there isn't another pandemic ever again and being ready this time. So there's all that coming. What else did you ask me, there was something else?

Incremental headwinds and tailwinds.

Headwinds and tailwinds. So the biggest headwind for us has been urology around our exosome product. And just urologists are getting back to their offices now. But unfortunately, their patients are a little elderly, and they're the ones not leaving home. So we've introduced a home test, and we have a big campaign with Cal Ripken, Jr., whose claims that we may have saved his life with our test, and that's helped to bridge the gap and give us net growth, but definitely a headwind until we get this COVID behind us more. Urology is going to be slow, I think, in general. Other tailwinds, I think, are just like I mentioned, we can't make enough Simple Plex. Antibodies is crazy. It's just research growth, in general. And now we have new categories, right? I mean, what's the number going to be around just even COVID-related research going forward, it's going to be billions of dollars that didn't exist last year. And infectious diseases, in general, is going to have a place now in research. And it hasn't really had much. I mean when is the last time you actually paid any money for an antibiotic, they're all generic because there's been nothing new in 20 years. All of this is going to change now, I think, and the $44 billion NIH budget is a rounding error to the multitrillion dollar problem we're facing here. So I think you're going to see maybe a golden era forming and lasting years for life sciences based research. And I'm not the first CEO to mention this, this week.

Sure. Sure. That's great. For the kidney rejection test, when might we expect to see initial data on the test? And then for the exosome test in general, besides prostate and kidney, what other potential indications do you think you can beat the ctDNA based test with an exosome approach?

Well, going backwards, we think we beat them all because we can actually add cell-free DNA based information to the exosome data and having a more powerful signature. So we do feel that strongly. Kidney rejection data will be out in a matter of weeks. We've had our first peer-reviewed publication accepted, and it's ready for being published. And it's a top-tier publication as well. So it's going to be really, really exciting news. The data stacks up extremely well with other tests in the market that are blood based. Of course, ours is pee in a cup, so it's not invasive at all. The kidney rejection model is an easier model than a lot of models because there aren't so many kidney -- transplant centers in the country. And if you're a patient that has to worry about traveling 200 miles, now you can just mail in this sample. You can't do that with other invasive based approaches or biopsy approaches. So we think there's going to be a lot of interest in our test when we get it out in a year. And it's a big market. It's twice as big as the prostate cancer market.

Great. And lastly, with all the interest around unbiased proteomics these days, what are your thoughts around more participation in HiPlex or even unbiased proteomics?

Well, I don't know. I think proteomics is kind of where we live, and it's a big space. We're not that big. I mean if your question is, are we going to branch more in this next-gen sequencing or areas like that, it's probably not us, but we'll go wherever we see synergies with our content and our science mainly. I think there's a lot of room for us in more proteomics-based instrumentation, measurements, call it, next-generation flow or single cell analysis, more spatial analysis, instrument based. It would be interesting to us. There's cell sorting. All of the unique new ways of coming out with cell sorting are interesting, and they're going to be a big need in cell and gene therapy. Transposon depends on new innovation. Electroporation is important. There are some small companies in it that we're leveraging, but I see a lot of innovation coming in the future around that as well to improve the cargo unloading in the transcriptome. So you have to -- electroporation is important to get it right because if you go too far, you lyse the cell, it's a very, very tricky process.

Right. Well, that's all the time we had. Thanks so much for the great overview, and enjoy the rest of conference.

Yes, thanks very much. Enjoyed being here.