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

Well, we -- this will be our third investor conference. We did our first in 2016, we were here 3 years ago in 2018. And we probably would've been here last year, but obviously, we had issues, but we're glad you're back. I think you're going to hopefully like the product today. We spent months working on this and a little bit about our company is that we're -- we definitely punch higher than our weight class for our side. But we're complicated. We do a lot of stuff, a lot of moving parts. And forever, we're trying to demystify the complexity of biotech in all the different things we have. So today's goal is to really do just that to give you a good view of our vision for the next 5 years, but help you really understand all the components bottom up the way you like to work and all should add up to what we think will be the future for us. First, we have our usual disclaimer here, get online and see the reconciliations and all the usual stuff. It's all there. Here is the agenda for today. We're starting right on time, and we hope to be finished on 12:30, will need to be because we've a car for the airport soon after that. But if we're done early, we'll take Q&A longer. The plan will be we'll all present. I have myself, 2 -- our 2 presidents who run the businesses, and then Jim will do the follow-up on financials and the main event, the forecasting and vision and the stuff. And then they'll come up and we'll sit and we'll do Q&A from up here, okay? You all know me. I'm Chuck Kummeth, I'm on 8.5 years here in the role. And here's my team. On the top row, you see the[ Section 16 ]. And they're all presenting today except for Brenda. But Brenda is in the room. So if you need legal help, she's back there. And in the middle, you have more of our staff people. And Kevin is in the room as well, never go too far without him. We have a lot of IT in our company and Kevin is good to have around, and he's also our data specialist, information specialist and marketing specialist. I think Struan was here last time, our Head of HR. He's not here today. Bob was running ProteinSimple and ran the division analytics instruments for a while. He left for a little while, took a sabbatical, he has come back, and he's now heading up corporate to curb dev. We have added a VP of quality and regulatory to our staff, reporting right -- directly to me to be compliant. And then below, you have division VPs and regional VPs. Matt McManus will be new coming from Asuragen, and we'll talk more about that later with a new diagnostics division plan. And Steve Crouse is also new learning -- taking over Analytical Solutions. Just a point I'd like to make, most of my team have been with me the whole way 7 or 8 years just about. We've not lost any executives in 8 years I've been here. And we've never used a recruiter for anyone on this page. So we've got pretty good networking and pretty good story out there, and we do seem to be a company that people want to join. So it's -- we think we're creating a great culture, and we'll talk about that, too. All of us are from larger companies. I worked 25 years at 3M. I spent 4 years at Thermo where I met Jim. Jim has been with me 12 years as my wingman, and we're amazingly compliant together. I'm not sure why, but we always have been. And -- but everybody is from HP or Agilent or larger multinationals, we kind of get it. Most of our business leaders and like Dave, Dave ran a $1 billion-plus division at Thermo as well. So we understand how to drive larger business processes. And to that point, we're running a multinational model here. It's a subsidiary model. So it's real simple. It's divide and grow. I like the model. It's always worked for me. It made 3M great and at least in the old days. And it's very simple. The divisions own the P&L globally. They determined strategy globally. They handle the CapEx and the headcount decisions and the regions and divisions themselves, they run their P&L. Some regions especially are executing the plan, executing the strategy, executing. But you want to have that local governance because you don't want teams in China taking direction from an Minneapolis, right? You want to have it as local and close as you can. So it's a matrix. So we have a combination of formal P&Ls and informal P&Ls and they can all work together. Everybody is paid off of growth and EBIT. So it all works pretty well. The 2 regional leaders that you saw on the previous page are both from 3M, one running APAC, one on Europe. So they understand this model extremely well. But it's worked for us. It continues to work. We're at 2 segments, 5 divisions, and I expect when we get done in 5 years, with the rest of the division, it will be probably twice that and hopefully, 8 to 10 divisions and the model will still work very well. So here is a new segment and division structure. It's the same as the old. We've renamed a couple of divisions. We made one change. We've combined Exosome with Asuragen to make a more comprehensive diagnostics division. Proteomics research reagents is the same division. It's really proteins and antibodies primarily in our core reagents, but we're really focusing on where the world caught up in proteomic these days. It's more definitive of what we're doing, so we renamed it that way. Analytical tools the same way. Along with that tools, just like the division before, it's not only the instruments, but also our assay businesses. So including ELISA and a Luminex and everything we do, assays. Assays are very closely tied to these instruments, as you know. And so they still work all together. The Diagnostic Reagents, the oldest business in the company is still where we have our controls and calibrators, but we also sell an awful lot of OEM antibodies and probably a lot of you had tests in the last 6 months to a year, and you probably are getting tests made with antibodies that came from us. So with a lot of OEM antibodies. Molecular products is the new division. And it's a combination of Exosome and Asuragen. And the leadership of Asuragen has really taken over, being the leadership overall. Matt McManus has -- many of you probably know Matt. Matt's pretty well-known name in our industry, well versed in the science domain knowledge and an excellent leader, a fantastic person. He's from the Boston area, so it kind of works with Waltham and everything else as well as often. And then our ACD platform, which we had called Genomics division before. We're renaming this spatial biology, which really more defines what we're doing. And again, this is the morphology friendly technology for single cell analysis, and we'll get into that more under Kim's presentation. I should also mention, you see the brands down below. We may be talking about our segments. We have to. The division, not so much, but the brands and the product lines we do. So kind of pretty much following what other companies do at our size or larger, right? Our 4 key strategies haven't changed. Geographic expansion. We're still focused on China and India, we'll get back one of these days as well. Europe is still growing for us. We're growing everywhere we definitely have more growth outside the U.S. than we do inside U.S. So expansion is still an important strategy for us. We are a products company. We have a lot of products, as you know. And innovation is key. We measure a lot of innovation. We measure our first year product sales. We measure how many antibodies, how many proteins we're launching. We really get into the details on just what we're doing and why. We'll talk about prioritization later how we prioritize all this stuff because there's many, many workflows in our company, and we still launch over 1,200 new reagent-based products a year. So it's a lot to keep track of. A lot of companies call M&A a tactic, not a strategy. I think in our case, it's still a strategy. So we are still doing bolt-on M&A. We probably aren't doing M&A for scale and fit or taking out cost reduction. We're not a company about saving nickels, we're a company upon growth. And we'd rather grow quicker than worry about saving. So we have a lot of sites, but that's because we've done acquisitions, we have a lot of talented people who want to be where they're at and that makes it all work. So more to come. We'll talk more about the end, the numbers you'll hear later on from Jim exclude all M&A. So M&A is on top. And lastly, you can't grow like we've grown. I'm going to show you charts and you can look ahead as well. You'll see we more or less tripled or more so in head count in the last 7, 8 years. You can't grow like we have and not have issues on change management and working on culture. 8 years ago, nobody ever heard of us, 5 years ago, maybe a little bit, 3 years ago, a little more. Now Bio-Techne already mentioned in the same kind of train of thought, frame of mind, whatever with the Agilents and the PerkinElmers and companies of that size and even larger. So we're there. So we've got to real focus on what that means, what our culture for our future is and it's important because we want to keep generating demand for talent and the desire to be part of our team. And as we all know, attrition right now is very high for everybody, right? There's a lot of mobility right now. And so if you're not focused on your culture and your talent and retention, you're going to have an issue. We have grown from 7 to 35 sites, mostly through M&A, and they range really from small to larger. We still have the biggest group in Minneapolis, roughly 800 employees. But now we have over 500 in California, and we have around 250 or so in the Boston area. So we are spreading our wings, so to speak. We're spread out pretty well in Europe. We've set up subsidiaries in all the major countries now in Europe and distribution around that. We cover Africa, South America, Australia through distributors, but they're not on the map, through partnerships through distribution. A lot of sites for our size company and yet we still somehow managed to find a way to near 40% op margin. Moving on to core product innovation. We've used version of this chart for a long time. I still like it because it talks about what we're doing today and what we're going to do tomorrow. We have the core of the company, the history, the legacy of the company with our antibodies, our protein, our assays, our controls, calibrators, small molecule, and they really fuel the basis of synergies to all these different legs in the stool. So whether it's facial biology, whether it's liquid biology and then looking for synergies with exosomes, whether it's in instrumentation, primarily antibodies, and Dave will talk about all the different applied markets that use antibodies and work with instruments and processes like Simple Western and such. And of course, the big thing for our future, probably the biggest opportunity we have looking at our future is cell culture and gene therapy. And of course, this is a lot about antibodies and other content as well. So here are some examples of synergy. So mainly mapping proteins and antibodies to the different instruments we have or the different types of tests or assays we have, whether it be spatial profiling, whatever. But we have found a lot of synergy. We have synergies, certainly in channel. We have synergies certainly in the science, but we also have synergies on the product system as well. Everyone has a business process. We're not the Danaher business process, and we're not really Six Sigma fanatics or EPI, like we learned at Thermo, which is really a version of Six Sigma. But we do have a set of rhythms that we run our company by that I think are very interesting work very well, and we're a little bit unique, and I'll get into how we're unique. Most companies have really 2 primary rhythms for how they work, and there will be a strategic planning cycle and an operating plan cycle, figuring out what you're going to do, figure out how you're going to do it and give everybody their target. We have a little more than that at Bio-Techne. So we set our direction in strategic planning like most companies. But then we spend the time, some time collecting data and working -- having every team come up with different ideas about what we're working on and what we should be working on and what we might be working, what maybe should be killing. We collect that data and we work into it. We work a prioritization process for about 2 or 3 months. And we actually prioritize, we rank, rack and stack every workflow in the company. This last year was about 400. We ended up going forward, about 300. I mean the 100 we didn't do. One reason we have really great results, and we have really great growth is because we don't waste time on things that are [Technical Difficulty]. We don't have pet projects. We don't have a hidden stuff going on. We don't have politics of one president trying to beat up another one for his project or her project. Everybody works together on this process, and we decide together what we're going to do and we're not going to. And then it's a 5-year outlook. And if you do a good job with that 5-year outlook, year 1 of the outlook is darn near your AOP for next year. So it's very close. So our actual operating plan process is actually quite short and quite painless as compared to working in other companies that we've all been in. So it begins as an enterprise-level process and then gets divisional and it turns back to enterprise. Because you got to rack and stack in each business first, and then we rank everything across the company so that we know that what's best for the company overall is what wins, okay? We -- on the bottom row, it just talks about the Decision Conference, and that really is you could gain this, right? So we have a consultant that we've worked with for years. It's a process that I helped develop back in 3M, 15 years ago, actually. And you want to make sure that as a team, most of you know Frank Mortari, he's on that team. We make sure every business is working in the same way, and I'll get into more of that, how that -- how we reduce the gaining aspect of privatization. So here's what it is primarily. Every project has really 2 axis. And there's a cost side and there's a benefit side. Most companies prioritize based off just looking at benefits. How much can it grow? How much can it make? What's the revenue? And without really understanding the true significance of the cost or the duration, the time of that cost or the risk analysis, risk profile of the program in general. But we have a filter on the right that creates a composite benefit of algorithm. And yes, there's revenue and there's EBIT involved in it, but there's also strategic significance or some soft metrics as well that which we had assigned numbers to and everything is ranked. And then along the bottom axis are the true cost of this program. So every project ends up being like a triangle. And you can already see what's the best kind of triangle, the one with the steep slope, more benefits, the better on as little cost as possible. So we want nice tall, short little triangles. And on the right, you see is the stacking of all those triangles, and they're just really -- they're just ranked by their slope. The highest slope are here, the lowest slopes are here. And if you see a space, that means this program here, that's the triangle. That's a big program because it's got a long cost, right? And there's the trap. Most companies stick with their big programs because they're big and they're political, they're significant, but they might have a terrible slope, and they shouldn't be held kept going. So this is a way to kind of cut through all that. It also is a way to provide a common language for all your businesses and people to work together to understand what we're going to do, what we're not going to do. And what happens is you never end up with following that line perfectly. This is an algorithm. This is where you end up. So the division is picked here. We ended up finally here. But if this is their cost, so that's -- you think of this as your budget, and this is your revenue, your value at the end, essentially, if you ended up here versus here, you have this much less value on the same budget, if you can get to here virtually, you can see you create more value. So you're picking higher-value projects and you've got risk all melded in there already. So you're picking the best portfolio, and you actually know where your resources run out. You know where your line is. So you're not overdoing, you're not overburning your people and you have a list of stuff to do next when you actually finish something, you know what's next? And that's always a problem, right? What do you do? So we do this every year, and it's worked really great for us. All right. So now moving from there, operational back to more marketing. Probably one of the #1 questions we've been receiving in the last year or so now almost is that why are we doing so well compared to our peers, everyone's drawing off of this tide, this rising tide of COVID and certainly in life sciences and health care. And if you're in PCR, it's been [ Bonanza ], right? But we've been doing very well. Some of it's serendipity. We've been working on our marketing and our digital platforms for 3, 4 years now. And we're just so happen to be launching all those in the past year, and they've been really -- they've really been giving back and delivering for us. So the one web focus for us has really worked well. With all these acquisitions, they also came in a lot of our website. A year or 2 ago, if you want to order 10 things from us across 3, 4 divisions, you had to get on 6, 7 websites to do it. It's a real pain. So now we can actually order. Customers have a much better experience. The digital solution, the SEO, it's really hard to be in the antibody business with 400,000-plus SKUs and not have a good search engine. Researchers always start with search. They're always going off citations. They're always starting where science left off. They don't want to recreate the wheel, so they want to pick up where things have been. So they use search. So you want to be in those citations and you want to be discoverable. So we do that, and we buy a lot of ad words. We do a lot of Google type stuff. We pay Google a lot and to get -- be in that top search be in that top 3, and the payback has been staggering. So we have a data analytics lab now. We have actually a PhD in data helping drive and create our algorithms. So we generate all the right experiences that you want, you'd expect then references happen for the customer now as well. But we also know exactly what we're getting for our investment. And the teams came to Jim and I about a year ago saying, we're actually getting $30 for every dollar invested off of our web. And we said, wow, okay, send more and come back to us later. They came back and said, we're still getting $15, spend more. Until we see an [indiscernible], let's keep spending. We're still at $5 to $6 of payback, We more than quadrupled our spend in our SEO experience. It's paying. This is one reason we're growing faster than our competition. This is the primary reason we were taking share in antibodies. We're doing fantastic antibodies, this is why. And then the marketing strength, marketing in general, we use agile. We're focused on cross-selling. We're really -- prioritization allows us to work more together anyway. There are just a lot of not only dialogue but materials that you have to -- and you have to be digital with materials as well. So we focus really hard on making crisp, good materials for marketing for our customers. And as you all know, R&D Systems going way back, we are known for what, posters, the best posters ever, right? So it's important that we stay with that, that we keep our brand alive. We keep -- the researchers understand that we're still out there for them. We give them a little extra. And marketing is one area we do that. And just a little bit on the web. So we have an awesome website now. It's over 10 million-plus annual views run rate a year. We're doing double-digit traffic growth every quarter. And it's all about a better customer experience. It's all about allowing an ease of ordering because we are becoming larger and if you're buying reagents or instruments, you're also looking for assays and it's just very important you'll get all the stuff in one place. And if you're looking by application, you want to have references of all the stuff you might need for an application, and we can do that now. And we couldn't 2 years ago. We just couldn't do it. And this is just a slide to show all the different attributes that go into the data analytics team to provide that better customer experience. It's hard to create metaphors that show you just how important it is and how hard it is and how good we're doing this right now with our teams. And the data that speaks for itself, the delivery speaks for itself. But it's all about delivering the right message at the right time to the right person. And we all get flooded with stuff online, and we really focused on not doing that. We focused on getting our research customers what they're looking for and a pleasant surprise with the information they're looking for. M&A. We've had a pretty good track record. We took more or less a year off in 2020. COVID kind of hard on us. We've been very busy. And we actually did play in the Aldeveron game and a few others recently. But we're very -- we're also very diligent in our -- how we do the process. We don't -- we still are following protocol process of we're looking for a 10% or better ROIC in 5 years. I don't think I've seen a large deal go like that for a while. So we're probably more and more still focused on private deals like we've done, the best things we've done have been the private deals in the past like ACD like ProteinSimple, and there's still a lot out there. Our pipeline is still [ 100 ] deep. And we've got a great debt position. Our cash has never been better. And when Jim gets up and talks about our future and vision, there's no M&A in the numbers. So look at it on top. We've done a fair amount of M&A. It's helped us reach our goals. We were here in 2016 telling you how we would get to $1 billion in near 40% op margins, and we're there. The prioritization. When it's finalized, we show the Board every January, we showed the Board last January the outcome and what prediction was 5 years ago. And as of last year, we were within 1% top line and bottom line from our prediction 5 years ago. So the process does work. So we feel better about our next 5-year projections for you, our goals, our vision than we did 5 years ago. So we think the credibility is more there now. The strength is there. We've got a better team. We've got more cash. We've got a better brand, we've got a better website, and we're ready to go after it. Speaking of TAM, when I joined, it was really just an antibody assay protein business, and it just wasn't a very big pond. And it wasn't growing as all of you remember, NIH funding wasn't very good back then either. And now look at today. We're really focused on entering markets that are still growing quite significantly. So we have a $14 billion to $20 billion TAM at this point in these 7 major areas, right? And if you look at these analytically, we're still in very early innings in share in every one of them. This is why we can continue to grow and grow at the high rates that we are. And some are pretty exciting. I think all of you would agree if you want to be in this industry, if you don't have a play in spatial biology, you're probably missing the boat, right? So we're doing, I think, all the right things. Lastly, culture, employees 800, 2013, 2,700. We'll be back here in 5 years, and I'm sure will be somewhere around 5,000. But you can see the breakdown, pretty big gain in China, pretty big gain in Europe as well. And hopefully, if -- probably in 5 years we'll have something significant enough to talk about India I would expect as well. So our culture is really we came up with this system, I guess, years ago, EPIC, and it's really just simple. It's simple. We'd like to keep it simple. Employees like simple. We measure everybody qualitatively year on how they are for empowerment, passion, innovation and collaboration. Empowerment, we want to develop people, but we want to give people what they need, and they get out of their way. There's nothing worse than micromanaging. We don't rehearse a lot of presentations. We don't redo things. We try to be innovative and let people be inspired and get on it. Again, we have prioritization done. We kind of set the goals ahead of ourselves. We know what they're doing, and we let them run with it. And usually, we're pleasantly surprised. Passion, I've been in a lot of industries. And let me just tell you, being in the life sciences is a little more passionate being an abrasive of 3M okay? So we tend to attract people that are -- have that little extra about wanting to help people. So I think passion comes in the territory. Innovation, it's hard to be a successful company if you don't have some ways to innovate. And I've been in companies that were on top and then not on top. And we've all been our own business. We've always seen failures. How many remember BlackBerry and there's all kinds of stories out there, right? So you've got to really keep innovation in the forefront of your employees' minds and really help them understand that innovation is everything. And it isn't a process that you can schedule. It's about creating an environment where this happens because it may happen in the least expected time or place. And you just want people to be happy and engaged and passionate and if they have the tool and they like what they're doing, they're going to innovate. And collaboration is how you get more than the next person. How do you compete. If you can collaborate and get leverage, you can create things that nobody else has. So we focus on that as well. A lot of focus this year on social, social everything. We have -- as you'd expect, we have done our first DSR as well. But a little bit on social stats. We are actually a pretty unique company. We have -- we're over 50% e-mail. We're over [ 52% ] in scientists. We're a pretty heavy percentage of PhDs. I think it's somewhere around 10% or so. 30% of the workforce are non-white, actually about 25% are Chinese. We have -- almost 1/4 of our employee count in Minneapolis are Chinese and many have been here for 20, 30 years. And I tell you what that means is that to get out of China 30 years ago on a student visa, you had to be off a chart smart, not like today, it's much easier to get around But back then, very difficult. And a lot of them like Minnesota and stayed, we have very good attrition with our scientists in Minneapolis. We bit hard and early with COVID. We were looking at a horrible quarter that first quarter when COVID came out and we didn't know what was going to happen, like many of us. We sold some stock in ChemoCentryx to build up a little cash war chest and told the employees that we were not going to do furloughs and not do any layoff no matter what happened that they could be safe. We figured this is a 1-year problem at the time, we all did. And we know how hard it was to attract talent and build the team. We thought let's not start over in a year, right? So let's just suck it up and take care of everybody, and let everybody focus and maybe we'll outperform our competitors by a little bit, at least by them being happier and feeling safe. Worked pretty well. We had a pretty good year last year, and we extended our bonus plan to all salaried employees in the company at this point, so. And we do other things too. We're helping local schools. We're a big partner with the science museum in Minnesota, which is one of the biggest and best in the country. So we try to listen to our employees what they want to get involved in and a little bit different in some companies. We did do our first CSR, as I mentioned, and we are 14001 certified in a couple of our major sites. We're going to keep working on everything. We understand our energy and water management pretty well in waste, but we'll work. The next thing is gas emissions. I don't think we're going to be a big emitter anywhere, but we'll follow all the protocols and try to be better than average in terms of acknowledgment and knowing the data. And then governance, we used to get done pretty hard by ISS for our Board. It's a lot of longevity. We had a lot of famous old scientists in our Board, and they've kind of come off for age. But in the last 4 years, we've actually replaced 4 of -- half of our independent directors. And we have 2 women -- 2 of them are newer women. One was replaced, but -- and one is also racially diverse. But we have still a mix of business people and science-related people. And probably our heaviest hitter now is probably Rupert Vessey, who is Head of R&D for BMS. So he was the Celgene guy, and he got promoted in the acquisition. He's so good and he's been fabulous, by the way. So onward. This is probably the chart I just should have started with and had one slide and asked if there are any questions. But clearly, it's a pretty good slide. And you're going to see it again later, vergence of it with Jim, but I do want to point out that we were on track for 11% before COVID hit. We had one quarter to go, right? We're fiscal and we missed miserably even that one quarter, so you can imagine how bad that Q4 was to get to end up with only 4. But at least we had growth. Most companies didn't have any growth in their first COVID year. And we're looking at strong comps, but we've got a strong future. We ended the whole year at 22.5, and you're going to hear later how we're going to keep all this going, maybe not 22.5, but a darn fine number of growth. So it's been year by year, little by little, but we've been incrementally improving, and I see no reason why this is going to stop. We're going to keep innovating. We're going to keep moving into more and more lucrative areas, and it's going to pay -- more than pay the bills. And we're going to -- we feel better about a 40% op margin future than we did 5 years ago to be honest so with strong growth. So that will be -- this will be unique in our industry, especially once we become more than a $1 billion company, which is this year. So in summary for me, we're well positioned in growing and underpenetrated markets. We don't think we need more these are plenty of pounds and they're plenty and big enough and they're growing well. Culture and process is focused on driving growth synergies and maximizing our profitability. We're definitely poised to benefit from, we think, a favorable macro environment. NIH, October isn't even here yet, and we're all expecting 20% or better. I think it's going to happen. Laying the groundwork for a very sustainable future. We're focused on it. We do have 8 different ERGs groups, and we're allowing that innovation to all folks around the company. We have a great M&A track record. I would say not all of 16 since 2014 are winners, but I would say 12 are and 3 or 4 are absolute fantastic. So we'll cover all of them. We're definitely benefiting from COVID-19 tailwinds. We're not a COVID company. We're not in the PCR bubble. We had 3% tailwind for, I think, 3 quarters in a row, and I think we see that going forward. We're about COVID research, and it's not going away. If anything, it's going to incrementally improve. And we're not giving up in serology either, Dave will talk about that. Cell and gene therapy, we're going to talk a lot about that today, and it is a virtual tsunami coming. And I think we are even better prepared and positioned than I thought we would I mean I just don't see anyone chasing us at the level we're at with our workflow. I think we have an amazing workflow put together, and we're getting a lot of traction. And I think it's going to be just amazing to watch. And if nobody follows us, if nobody tries to really get in on what we're doing, if we get a major share of this going out 3, 4, 5 years, it's going to be way larger than the numbers you're going to do later. And some of the data you're going to see is going to be just astounding. And lastly, we had a record year. We're trying to take a little time to celebrate our employees as well. But we do feel that there's a reason is because we're a diversified portfolio, and we're not a stand-alone unicorn, we're a whole stable unicorn, with platforms in the company, and they're all growing and they beat many, many multibillion dollar entities on their own if we did spin things out. So with that, I will pass off to Dave.

Thanks, Chuck. Yes. I was -- I've been here for -- Dave Eansor, President of Protein Sciences segment. I've been here for most of the run Chuck talked about going on 8 years now. It's hard to believe, really, it's been that long. But I was reflecting back on Investor Day 2016 and looking through some of my slides, they were pretty simplistic. So it's a more complicated business today, a lot bigger. There's lots of questions back then about how you're going to grow the antibody business and the protein business and the assay business and how you're going to get out of the blocks with instruments. And I got to tell you, I couldn't be more proud of my team and the execution that we've had over the last several years. But I think more importantly, I've never been more bullish on our future. As Chuck said, I think we're really poised for even greater success going forward. This is what the business is all about. It's reagents and analytical solutions. It's currently or last year, a little over $700 million. $8 billion to $11 billion addressable market. To be successful in these businesses, there's no magic bullets, it's you have to do 100 different things, right. And there's not always intellectual property to protect you. So you've got to really execute and if you're going to grow disproportionately. So breaking the business into the 3 chunks. If you look at our reagents, we think the addressable market for that is close to $3 billion. It's growing mid-single digits depending on whose statistics you look at. We think our share is around 10%, a little greater in certain product areas like proteins and a little less in the more fractionated product lines like antibodies. And our growth rate is anywhere from 50% to 100% better than the market in the last few years. Swinging over to the right on the analytical tools, which would be a combination of our instrumentation platforms as well as our assays, our plate-based assays, we think that's about a $3 billion market, potentially growing mid-single digit with the instruments growing probably north of [ 20 ] and with high single digits for the traditional plate-based assays. So kind of a weighted average growth rate of about 15%. And we still think we have a lot of runway in this space with 10% or less market share in those end applications. And then cell and gene therapy in the middle is really not so much a product-based business, but it gets products from both the protein analytics and the reagent side that are typically made GMP or used in a regulated way to produce the cell and gene therapies. And we think the addressable market there is at least $3 billion, growing 20%. Our growth obviously is higher than that because it's pretty nascent for us. And we have minimal market share there, but we think that this market is on the cusp of exploding really. So in general, as Chuck reflected we're pretty much underpenetrated in the Protein Sciences segment, in high-growth markets and with a lot of potential. So kind of starting with proteins. Why are they important? Obviously, DNA is important because it provides instructions for the cell, RNA translates those instructions into what proteins need to be made, but it's really the proteins that do the work. And I think the world is really waking up to that now that proteins do everything. They form structures. They perform all the functions. They do all the regulation. Proteins are absolutely critical, which is why we're in a pretty good spot. Our proteins are used in cell therapy applications, which I'll talk about later. They're used in cell growth and differentiation in research. They're used as antigens for antibody production. And that's an important part of what we do. They're used in diagnostics, in the controls and calibrators business. They're used in specialty media formulations for different cell types. They are also used as biomarkers that we -- that people are studying to understand disease and many other applications. So we're known for the highest purity, highest most bioactive proteins on the market and the best lot-to-lot consistency and those things are not trivial. And when we say bioactivity, I'll refer to bioassays. This is something that we do that's pretty unique. We develop bioassays in-house that help to indicate how effective our proteins are at performing the functions they are supposed to perform. And then we also use those same bioassays to look at lot-to-lot consistency. So in that regard, we're quite unique and why we're so valued by pharma and CROs in particular. We have the largest range of proteins by far, both RUO and GMP and most publications out there. The best bioassays, as I mentioned, and the best reproducibility lot-to-lot. We test every lot against back lots to confirm the performance of our antibodies. During COVID, we quickly pivoted and started to develop a number of proteins. We have proteins to every variant out there, and there are over 30. And we also made proteins that represent the receptors that COVID combined with, and we sell a lot of those reagents into the marketplace, and this is where a lot of the tailwinds are coming from that Chuck mentioned. We do custom protein development. This is not a big business for us, but when pharmaceutical companies have special challenges, we're the ones they come to custom protein development. We also can tag our proteins and put them on plates so that people can run experiments to show interactions with the proteins in plate-based assays, we have proteins for regenerative medicine products, which are critically important, immune checkpoint proteins. And as Chuck mentioned, we sell all of these proteins with our antibodies on a world-class website with excellent search engine optimization capabilities. Antibodies I don't think since COVID, anybody doesn't know what an antibody is now. So this is not much I probably have to explain, but they are specialized proteins with specific reactivity. They're a byproduct, your immune system. They essentially mark foreign substances for destruction. They are even -- they're very relevant in the cancer treatment process and essentially what CAR-T cells are the business end of the antibody interacting with the cancer cell to market for destruction. They can be engineered these days. So this is not your grandmother's antibody business. It's a much more sophisticated business. And a lot of antibodies, as you know, have been developed as therapeutics and the sequences of our antibodies are starting to appear in those therapeutics because of all the years we've been developing antibodies. There's a number of applications for antibodies, Western blot and our own Simple Western technology is a key one. Immunohistochemistry, flow cytometry immunocytochemistry, there's a whole host of immunoassay platform. So the Luminex, ELISA and Simple Plex assays and a number of other competitor assays. Anything that requires antibody pairs. We are the clear leader in antibody pairs, which are required. So you need a protein with 2 antibodies in a Sandwich assay. And that's something that is a very key specialty for us. We do blocking and neutralization assays. We make arrays. We have a very large collection of antibodies in our Minneapolis site. In terms of applications, the big ones that are growing the most currently are the immuno-oncology space. the neuroscience space and the cell and gene therapy space. We have antibodies for all different applications here and assay types and we're feeling very bullish about the potential for the libraries of antibodies we have. That library is growing to over 400,000. So it's not just the antibodies that we offer on our website or in our catalog. We have what we call sister clones large libraries of antibodies to the same target. So that we can screen these antibodies for the best ones for different applications. And those methods that we're using these days, which I can't really talk about because it's proprietary, but we are much more sophisticated. So we're looking at the kinetics and the binding capabilities, the off and on rates for these antibodies and how they work together in pairs. These are critically important details that determine the best antibodies for different application types and for different targets. We also license our antibodies to both -- to the RUO market, to the diagnostic market, and then we license our sequences selectively to therapeutic producers that end up using those sequences in some therapeutics. And we get a nice stream of revenues and royalties from those relationships and those agreements last many years. Small molecules, we don't talk about a lot, but it's a nice niche business for us. It's a highly profitable business for us, and we have a strong reputation for quality small molecules, where we're known for our presence in cancer research and epigenetics, our small molecules are also used in stem cells and I'll talk about a little bit their use in the regenerative medicine space in cell therapy. We're also very strong in neurodegeneration. And this is a new and emerging area of research and also for therapeutics and it's called targeted protein degradation. So in this platform, it leverages the ubiquitination pathway to get rid of proteins that are either excessively expressed or proteins that are defective in some way. And there's a whole new therapeutic class coming out of this, and we are the leader in producing tools that leverage its pathway. And we're the tool of choice now for a lot of pharma companies that are doing research in this area. And so going forward, look for this to be a new therapeutic class that we expect to grow quite a bit over the next several years. I'll point out also that our Simple Western instrument is the tool of choice for verification that these methods are actually working to remove the proteins of interest uniquely. And so there's a nice synergy in our business there as well. On the Analytical Solutions side. So this is, again, it's a combination of our instrumentation and our legacy kit-based or plate-based assays. We have 3 main platforms here. So the Western blotting platform, the biologics platform and which is capillary electrophoresis and imaging for biologics and then our Simple Plex and immunoassay platform. So immunoassays are ELISA kits and dual sets, which is kind of a poor man's ELISA kit, where we actually kind of test the market and get out new biomarker tests. And we have the broadest library there and then the Luminex platform, which has been around for quite a while, which is a multiplex platform and then our Simple Plex platform, which is the automated ELISA that we got through the acquisition of CyVek. And many of these instruments, of course, have a long string of consumable revenues that come along with them. And as time goes on, as you might expect in a typical instrument model, razor, razor blade model, the more instruments we place obviously, the more consumables that we sell. As we look at this space, we'd like to think about where our instruments are and our assays are in terms of stage of development. And there are obviously different stages of maturity. And the far right there, you see that our DuoSets and Quantikine kits have probably been around the longest, but they're still growing quite nicely because we are the market leader, and we've got a very broad selection there. Luminex has been around for a long time, and there are a number of large players in the Luminex space. And so it's in the late majority. But again, we provide not only our own assays, but we provide most of the content for that entire market. Our Maurice instrument platform, our capillary electrophoresis instrument is in the early to late majority, but we keep building applications for this for this box, and it's becoming much more versatile over time. And then Simple Western, we think, has just recently kind of crossed the chasm and I'll explain to you why that is. But we still have a lot of runway with this platform, and it's been a tremendous grower for us, both from box placement perspective as well as a consumables perspective. And we think Ella, our immunoassay platform, our automated immunoassay platform is just now crossing that chasm as well. And we've got a proven track record of bringing instruments and consumables through this process. Beginning with Simple Western. It's got a lot of advantages to traditional Western blot that we've talked about. But more specifically, time to result, the ability to quantitate your Western blot experiment, that the amount of throughput and the amount of flexibility you get from the platform is unmatched. You can do up to 96 samples per run. Reproducibility is way better than anything manual Western blot and we're improving on that all the time. And then the other key advantage is you need very low sample volume to do your experiment. One thing that gives us an indication that it is really crossing the chasm is that last quarter, we sold almost 90% of the boxes that we place without any demo. So we're getting a lot of sales into repeat customers who we're trying out with Simple Western and now are adopting it as a standard platform and really doing their own education within their companies of other parts of the companies that are still doing Simple Western blot the old way. We have now 2 platforms for Simple Western. So you may have recall, we used to have Wes. So we're discontinuing Wes. And now we have 2 models: Abby and Jess. Abby is designed for the academic market. It does complete automation of the Western blot workflow, has reduced sample costs, higher plexing as well. More recently, we launched what we call RePlex, which allows customers to reuse certain elements of the consumables to essentially strip and reprobe and therefore, get more out of their consumables, and that's important for the academic market, especially very fast time to results, and we've greatly improved our data analysis software and protein quantitation capabilities. Jess is the higher end of our Simple Western line, and it's -- the big difference here, it's got everything that Abby does but it has high sensitivity, fluorescence as well. And the second half of this year, we will be launching an improved version of our fluorescence which we expect to be well received by the market. It's a bit higher capital cost, but again, it gives you that ability to multiplex. And we think this is going to be a big hit with pharmaceutical companies in particular. Our biologics platform is mainly our Maurice platform, although we do have an MFI instrument as well. Our current market for our biologics is image capillary isoelectric focusing. That's where the majority of our revenues come from. There's also the high resolution of our charge protein isoforms. We also do a size-based separation with this instrument. It's automated. It's fast. It's convenient. It's got versatility of uses. And it's -- also more recently in the last couple of years, we've spent a fair amount of time and energy to get it software compatible with the Empower platform. The Waters Empower platform is widely used in the industry. So we made our instrument compatible with it. It's particularly important where customers use the instrument for QC purposes. And so within a validated environment. So they really require this, and it's not only secured our position there, it's opened the door to a lot more sales because of that regulatory compliance. Going forward, we've got big plans for this platform to continue to grow. We've got fast SDS cartridges that will be coming out, which will far exceed the performance of our competitors. We also think we can further penetrate the ion exchange market. So we plan to do pre-fractionation of samples in front of MS, or mass spec. So this should be very attractive for that market. We also plan to do liquid chromatography expansion through charge-based fractionation projects that we have in the pipeline. The other thing that we're doing here is really a big focus, actually with all of our instrument platforms on application expansion. So I said you have to do 100 things right. This is one of them. You've got to be able to publish and show that your instrument works well for applications that are growing and popular and tell people step-by-step how to do it. One such application area is in empty versus full capsid analysis and also capsid stability, which are really important for AAV in cell and gene therapy. And that's an area where we're leading right now and is resulting in a lot of instrument placements. So a very versatile high-resolution protein characterization tool that we continue to expect growth out of going forward. And then our Simple Plex platform, we've talked about quite a bit. It's an automated ELISA. It's quickly become a favorite tool for immune monitoring and biomarker research. We think it's crossing the chasm largely because we've been expanding the library. We can do that because we make antibody pairs, and we have assay development team that's second to none. We are expanding the plex, so we can now do up to 32 samples by 8 biomarkers in a single assay. And then we're also expanding application areas here. Cell and gene therapy is a big area of growth for our Simple Plex platform. It's used in development and process monitoring and also in QC at a number of cell therapy companies. And then we are investing heavily in getting diagnostic status for this instrument. So stay tuned there. It takes -- going to take us a bit of time. But we're getting 13485 status, ISO 13485 status for our facilities. And we're also expanding our facilities in Wallingford, Connecticut and will be 5x the capacity to make cartridges there. And we're also improving the quality of this platform on a continuous basis. So ultraprecise instrument, very easy to use, put your sample in, put in your cartridge, push your button. It's every bit as sensitive of anything out there, including Quanterix. It's cost effective. And over time, we're expanding the plex of it. So we have really high hopes for this platform as well. All 3, as you've seen from our results in the past several quarters, all 3 of our instrument platforms are growing really nicely and reaching that critical mass of adoption and tipping point, I guess, if you recall it, and as I mentioned, wherever we place these instruments, they are driving considerable consumable growth, and we expect over time that, that consumable revenue will continue to grow far in excess of the instrument platform placement just because they're getting used more. Just a couple words on our conventional immunoassay platforms. They may not be as sexy or as exciting, but they are really nice-sized markets and still growing nicely. R&D Systems brand is the premium immunoassay brand in the market. It's the trusted ELISA platform for pharma, also for CROs. We are the clear leader here. We have largest library, the most publications, the highest quality assays, and we're also a leading provider of Luminex assays. We -- our specialty here is we can do custom Luminex assay development. But as I mentioned, we also provide a vast majority of the content for the entire Luminex market in terms of antibody pairs and protein standards that are used to make these assays no matter who makes them. So this is a very large and profitable conventional immunoassay segment, I would say, growing nicely for us and above the market. We are still taking share in all of these platforms. So that's kind of the traditional business as I talked about back in 2016 and 2018 and how it's evolved. As I mentioned, it's a lot more complex. There's a lot more moving parts, but there's also a lot more opportunity. But I'll move on now to cell and gene therapy because a lot of those tools that I just talked about are used in this space. It used to be talked about Emily Whitehead and that was the poster child literally for success of cell and gene therapy. But I'm happy to say that there are many, many success stories now beyond that. And really, I know myself and a lot of people that work in our business when they talk about this with family and friends, what they talk about is us being an innovator and enabling these cell and gene therapies and actually saving lives. This is what we -- why we get up in the morning is really why this is so important. There are really 3 main areas, the way we look at the market anyway of cell and gene therapy. There's the traditional stem cell-based therapies, so inducible pluripotent stem cells and hematopoietic stem cells and mesenchymal stem cells. There's a lot of therapies that are coming in that space where essentially you're trying to grow up stem cells in large numbers and then convert them into another type of tissue and then transplant that into the body, or you're doing it with a blood-based therapy. It's -- these are pluripotent. They require a lot of growth factors, which we provide, GMP and some small molecules. So a really important area for us and an area that we go to market direct with. So the next area for us that's really important and emerging is the gene-modified cell therapy. So this is where CAR-T cells would be or natural killer cell therapies where there's a genetic modification done to typically a T-cell or an NK cell. And that cell is used to then go fight a cancer in your body. We go to market there through ScaleReady, which I'm going to talk about, which is a joint venture we formed and that got some delays with COVID, but finally got off the ground in earnest in January. And then the gene therapy space, where historically we haven't played a lot in, but as I'll talk about, we are playing in now, particularly with our instrumentation but also with our nonviral gene editing platform, which we think is going to have a place in this market going forward. So first, a little bit about the market, and there's a lot of information on this slide, but just to highlight a few things. We think that the market for cell gene therapy is somewhere between $4 billion and $5 billion. It's grown about 25% CAGR since 2015. And it's expected to grow at even a higher rate for the next 5 years. And depending on who you talk to, estimates, almost everybody thinks that by 2030, this will be north of $30 billion market. There are currently 1,358 active cell therapy trials going on. And CAR-T -- right now, CAR-T trials represent almost half of those trials. So it's a really important part of the early market. But as I'll talk about, I think a sleeper in here could be the NK, natural killer cell market, which many, many cell therapy companies are adopting programs around NK cells as well. So we think that this is certainly a market to go after. And it's really about getting shots on goal. Right now, the market is pretty nascent. Most of the players are in early innings. And so it's about trying to play moneyball and figure out which customers have the best chance of succeeding and why based on their workflow, the indications they are going after, the competitive environment they're going after. So we kind of have our own proprietary algorithm, if you will, about how we look at this market and who we think are going to be the best partners for us going forward. Also included in there is what types of products that they potentially could buy from us. So when I think about ScaleReady, and again, this is in this center gene-modified cell therapy space, which is a good chunk of the market today. The reason we partnered with these 2 companies, in particular, is because they are key elements of the workflow and they work together very closely with the reagents that we have to offer. So the idea here is to offer an end-to-end solution. And the most important word and why we called the joint venture ScaleReady is that we wanted to make something that was scalable and work together seamlessly. So the partnership is between Fresenius Kabi, who has an instrument called the Lovo, and they have a new generation instrument that will be coming out as well soon, specifically for immune cell therapy. But that instrument does key steps of cell separation at the beginning, so separates out the white blood cells and then cell washing at the end before the cells are frozen to go back into the patient. On the far right is Wilson Wolf. We partnered with them because we believe that they have the best cell culture approach, best cell culture vessel. And it's very simple, and it's IP-protected gas permeable membrane on the bottom of the cell culture vessel that lets the cells breathe, optimize media volumes. And we think the absolute best way to grow cells for -- especially autologous cell therapy. And then our offering is really in 4 key areas. So we offer GMP proteins, which is kind of the lead horse and where we've got most of our volume so far. We have -- through the acquisition of Quad, we bought -- we've got access to a non-bead-based cell separation and activation reagents, and we are actively working with Fresenius to perfect a cell separation approach there that will allow us to, in combination with their instruments, separate out T cells specifically with no risk of contamination of bead. We have specialty medias that we're developing for regenerative medicine space, but also for T cells and NK cells, and I'll talk more about NK in a minute. And then we have nonviral gene editing tools through the acquisition of a small company called B-MoGen that spun out of the University of Minnesota. So the combination here is sold through a joint venture commercial team, which is a collection of technical sales experts and field application specialists that know these workflows inside and out. They study the workflow so that they know the workflow as well or better than the customers that are conducting them. And we have a, call it, challenger sales model where we get the customer engaged in discussion around what are the weaknesses in their process and why they should be looking at our workflow for scalability and reproducibility. So for illustrative purposes, I wanted to show you some of the potential for our ScaleReady. This is the world according to Wells Fargo. It's a bull's eye chart that they published. They study this space a fair bit. And I don't know the exact algorithm for why they include companies on this because it certainly isn't the entire universe and maybe it's about 1/5. But a lot of these companies are public, and I'm sure it has to do with investment opportunities that they are presenting to their clients. Most of them are public, as I said, but some are private. So I don't want to get the impression that this is the entire market. But as you look at this diagram, just to interpret it a little bit, around the outside are the different kind of approaches to cell therapy that are used. So autologous and allogeneic CAR-T therapies are on the top left, and that probably expands from about 7 o'clock to 1 o'clock there. So by far, as I pointed out in the previous data, about 50% of the market is in the CAR-T space. And then there's fewer players, but a lot of other different approaches to cell therapy around the outside. As you move towards the center of the bull's eye chart, you move towards BLA. So the companies on the outside of the chart are preclinical, and then they move to Phase I, II and III and then to BLA submission and approval. So what we started to do is to analyze this to see where are we from a ScaleReady touch point perspective with these companies. And it turns out that 84% of the allogeneic CAR-T. And by the way, autologous for the use of -- those of you that don't know, autologous means the cells go from you back into you, right? And allogeneic, think of it as more like off the shelf, so a donor cell that is scaled up for cell therapy and then can be one to many. So when we looked at the allogeneic and autologous CAR-T, we had 84% and 72% of the customers on this chart, respectively. I can't tell you which ones because of confidentiality. But in the drug program perspective, we had 76% of the allogeneic and 48% of the autologous. We then looked at other areas of the chart, we had 60% of the TCR and 48% of those programs. We had 90% of the -- these 4 categories here combined -- had to combine them because actually we had 100% of some of them. And then on the NK front, where we see a tremendous amount of growth coming more recently, we were positioned in about 56% of those customers. So the key takeaway here is that our scale-ready shots-on-goal approach, our challenger sales approach is and we're getting seeded into a number of these accounts with either 1, 2 or all 3 of the product lines that I mentioned earlier. Overall, participation in this chart is about 48% of the companies in the bull's eye, 68% of those in Phase I and II and then 48% of the ones on here that are preclinical. Overall, for the entire market and our database indicates that there's at least 1,800 in our sales force database. We have 668 customers that are customers who are scale-ready for 1 product line or another. 510 of those are in preclinical or research phased. So it just tells you kind of how nascent this market is. 150 of them are in the early innings, Phase I and II. Only 6 are in Phase III and 2 of our customers are BLA or commercial. So a lot of potential here for this market and something we're extremely excited about. Any given cell therapy customer, depending on the number of reagents that we provide them, if they can make it to market. And again, depending on the indication, so it varies widely, it could be $10 million to $20 million per customer. It's that kind of potential. It also doesn't happen just on its own. In addition to offering these products, we also have to offer a ton of data. So behind the scenes, we have a lot of scientists working all the time to generate data that shows how our products work together seamlessly, not only our own reagents, but the bioreactor and the instrumentation from our partners. So we are continually generating that data in-house and publishing, but we're also doing it with our customers because people believe their peers, obviously, don't think they have any kind of agenda. And that approach is working quite well, but we're in the early innings of that as well. There's a ton of data customers want to see before they will adopt or change the process. So the cell and gene therapy market requires this and it's going to be an expectation going forward and not many companies can provide this combination, let alone the data of them all working together. Cell and gene therapy also requires GMP facilities. So we've talked quite a bit about our GMP protein facility that we opened up -- grand opening in the late fall of last year, 61,000 square feet. We believe it's the highest capacity, highest quality. You'd be blown away if you walk through it, it's really state of the art, differentiated from any of our competitors in many respects. And it's intended for clinical use of our products. Capacity up to about $200 million of revenue, depending on the mix and the pricing involved in the kind of proteins we sell. But we think we can go well beyond that and we left space in the facility to expand to produce our various medias for cell and gene therapy as well as certain GMP antibodies that are used with our clouds and in other elements of the workflow like in QC. We're quite excited about this, and we're currently producing saleable product in this facility as of this fall. A little bit about the NK market, so the natural killer cell market. As I mentioned, we feel like this is kind of a sleeper, potentially. This gives the potential for off-the-shelf cell therapy because these NK cells don't present the graft-versus-host disease risk. So they -- and they are very effective in killing cancers. We have a very nice offering in this space. So our TcBuster technology can be used for non-biogene editing of NK cells. Our media -- we have a great media for growing NK cells. Of course, our GMP cytokines and small molecules can be used here as well. And then one thing that we're quite excited about is our clouds technology. We're developing this application right now. But one of the downfalls of natural killer cells historically has been that you had to use a cancer feeder layer to grow the cells. And of course, nobody wants to use a therapy that involves the use of cancer cells themselves. So we've figured out a way now to create clouds that can reproduce that feeder layer effect, essentially messaging and nutrients that go to the NK cells that allow them to propagate and work very effectively, as effective as the ones that were cultured with these, what I call, K562 cancer feeder line. So this is something we're quite excited about, and stay tuned. This is something in the next couple of years that could start to really materialize. A little bit about our small molecule business. So again, we don't talk a lot about this, but our Bristol manufacturing facility is ISO 9001. We have -- we started to make there -- we had a whole separate section of the facility now that makes ancillary material in GMP-grade small molecules. So this is kind of a niche. Nobody else that we know of makes small molecules for use mainly in regenerative medicine. So iPSC cell workflow, anybody that needs like ROCK inhibitor, for example, which is used to freeze these cells. It's a very important material for that workflow, and we make the only GMP version of that in this facility. We make a bunch of other small molecules that are used in the stem cell for reprogramming differentiation, expansion and self-renewal. So this is another area that we're excited about, and we intend to expand that facility to accommodate a specialized GMP space in the next year. Finally, I'll talk about our genome engineering services. So again, we got this through the acquisition of B-MoGen, which was a spin out of the University of Minnesota. We have our 3 areas here that we do gene editing services in. One is our proprietary TcBuster technology, which is a next-generation nonviral gene delivery system. It allows a transfer of the gene of interest into any cell type. We'd also do GMP manufacturing to do proof of principle for preclinical and up to Phase I in a small facility that we built that just around the corner from our Minnesota site. And then we also offer cell and genome engineering services using CRISPR technology, but also some of our own proprietary gene editing technology. So a little bit about TcBuster. It's called transposon-based plasmid. There's also a transposon mRNA. The benefit of this is it has a higher cargo capacity. So it's not going to be for everybody. But where AAVs can break down is they can only carry so much capacity into -- cargo into the cell. So the longer that mRNA sequence, the more important it is for you to do -- to look at nonviral approaches, and this is exactly what we offer. It also gives a lot more targeted insertion you get much less -- less fewer random expression events. There's obviously no virus handling required here. And then important for the customer these days, it's a short lead time. You try to get an AAV from one of these suppliers, it can take 6 months to a year or more. And it's a lower cost per patient, 50% or so lower cost per patient to use this versus the virus technology. So we think this is going to carve out its place, and we've got a lot of companies interested in this, proof of principles going on. What we need is the first IND, and we're hopeful that, that could happen in the next 12 months. The last thing I'll talk about is our instrument platform because people think about cell and gene therapy and the benefits of biotech, you think about our reagents. But actually, we're getting a big lift in our instrument business from cell and gene therapy as well. So our gest is used in new target discovery. Our Simple Plex instrument is used in bio titer measurement. We have a number of customers doing in-process testing with Simple Western and Jess as well. We're doing vector characterization. This is a really important application area I talked about for our Maurice and our Jess instrument. We had a number of customers. And one of the reasons we had such a lift in our Simple Plex sales during COVID is we had a number of researchers doing cytokine storm studies using our Simple Plex instrument. We can look at purity with our MFI instrument, but also Simple Plex and Jess. And then we can do Simple Plex cell activation and monitoring as well. So used around the entire workflow. As I said, we're getting a big lift from this every quarter, selling more instruments into the cell and gene therapy space and probably in the gene therapy space with the empty versus full capsid application that's been one of the biggest growers for us. So in closing, as I said at the top, we're better positioned, I think, than ever, and we're doing some really important things here. We're not only enabling the discovery of these biomarkers that are the root cause of disease. But now with the advent of our cell and gene therapy business, we are actually moving closer to the patient and actually getting closer to playing a big role in saving lives. So as the song goes, our future so bright, we got to wear shades. So I think it's -- we're really excited about it. Nick, it's break time now. [Break]

So we'll get Kim up here now and move into the next segment.

Thank you. Thank you, Chuck, for the opportunity to present again, it's my second time. And glad we're having an investor call this time or a investor meeting because we made a lot of progress, a lot of things changed in my segment. My name is Kim Kelderman. I manage the Diagnostics and Genomics segment. My presentation today is going to be a short overview of the segment followed by many deep dives in every product line. And then eventually, I'll put all the pieces together and explain to you why I am so excited about this segment. Go to the first overview. As you can see, we have 4 product divisions in this segment. Last year, they did together a $228 million in revenue. The products currently on market are addressing an overall market of $6 billion to $9 billion. And this market grows pretty rapidly to mid-double digits. The first product group is the spatial biology. And you may well know the ACD product brand with products that can interrogate DNA, RNA as well as protein. And real power of this technology is that it maintains the spatial context. So you can exactly see what is going on where in your tissue sample. The next division over is the liquid biopsy division. In there, we have the engine of exosomes. And I will explain to you later why we believe that exosomes are the best way to do liquid biopsy. Third product group, newest to the family is an acquisition closed earlier this year in April of Asuragen. And Asuragen has a nice collection of molecular products. Molecular products to do genetic screening, oncology and it also have a portfolio of molecular controls, which is very interesting. I'll get back to that later. The fourth and last division here in my segment are the Diagnostic Reagents. Diagnostic Reagents have, for example, bulk antibodies, calibrators and controls and very exciting newer in this division is the capability of delivering assay. So we design assays for customers. Good. If we then go into the first division, product division, it's the spatial biology division. And as you might know, this space is growing quite rapidly. There are all kinds of market numbers over the place. Very, very different in size. But 1 thing they all have the same, which is that they're all indicating a huge growth for this market. This market is literally exploding. I'll give you some indications here. You can see in the bar diagram that overall spend in Life Sciences, a little north of $100 billion. Life Sciences tool of that part is $30 billion. If you think about the spend in and tissue-specific diagnostics, here you're talking about $20 billion or so. And if you then think about where this spatial context is really making sense and adds value that's $4 billion to $5 billion of addressable market for us. And that's the research part only. So if you think about other diagnostics part, which we have been entering just as well, that's another $4 billion to $5 billion. The diagnostics part we address with our HPV as well as COVID-19 probes that are FDA approved. And we're inching to that space rapidly, and I'll talk to you later about the portfolio in there. The next slide is why this space is good. I'll explain to you how it is so interesting. First off, it is a very complex area. Tissue profiling is just very difficult. There are many different tissue -- cell types. And even within the same cell types, there are still cells that are doing different things from each other. They're obviously organized in a 3D way. So it is very, very complex spatially. However, our ACD products have the capability of finding any genetic target that you're looking for, and bright it -- shine it up, bight it up, really, really bright -- shine it up brightly. That way, you can see actually what gene is where. That way, you can study what's going on in and around the cells and you can clearly understand what the disease pathology is. Now in the 3 pictures on the top right, you can see again that there is all kinds of different cell types, different vascularization. And then the 4 bubbles represent all the different types of probes we sell. We have over 47,000 probes that you can just download from -- that you can order through Internet. But we also do custom probs, where rapid turnaround, we can get you any prob that you're really looking for. Now when you run our assay, the final outcome is basically a spatial map. Very much a picture as if you use the telescope bubble, right? And you look into space, you get exactly what you're looking for because you know what is where, and you can kind of identify a lot more information that way. That is exactly why this space is growing because there's a lot more information than just yes, no, is there a gene, right? I'll explain how our technology is able to do that. To the lower left you basically see at the bottom there. You see that little line, which is green and blue, that's a target. So imagine you're looking for a specific gene, right? The blue part would be your target sequence. That's the 1 you're looking for. We designed the probes. Those are those little those Zs you see in the bottom. And those Zs, we actually develop in pairs. The first Z has the exact fitting sequence as the target you're looking for. So just like a LEGO block. That thing clicks in place, but only if it's fitting sequence, right? Now the second Z next to it in a slightly different color does the exact same thing. The sequence next to it needs to be very specific and that Z also needs to click in like a LEGO block. Only if there are 2 Zs next to each other, there will be an L-shape tree that we build on top of it. So it is very specific because that is just the 2 Zs have to be there, both of them have to be there. Otherwise, nothing happens, right? Once that L-shaped tree is there, our chemistry put branches on it and then put a whole bunch of bright dots on it, bright light, basically, like a Christmas tree. Now the target is much longer, so you can build a whole bunch of those trees next to each other. And basically, you build a forest of Christmas tree. And that shine so bright that if you put that on the microscope, you can see that dot with naked eye. That is very powerful. Now obviously, we took a lot of time to try -- not try, we patented all around it, right? So it's very well protected. And we did that because, again, this is the only chemistry that can detect a single molecule in or around a single cell for any target DNA/RNA or proteins. You can run multiple experiments in parallel, so 1, 2, 4 markers up to 48 and then you can interrogate any length of target in any tissue. And that means 2 things. It could be any species like mouse or humans, but it also means any tissue preparation like FFPE or fresh frozen tissue, you can do any of that. There are different Christmas light types, right, chromogenic and fluorescent detection. And most important, as you can see in the bottom, it does all this while preserving the spatial context. So what happened and also where? Very exciting, and I'm going to show you right now which targets we can interrogate, right? During last year, we have enabled this technology for DNA because that's where it all starts, like David mentioned, RNA was always our stronghold. But think about microRNA, which is a really booming space over the last couple of years, it's a much shorter target. So we had to adjust our chemistry to also shine brightly even though the target is shorter. So you can't build as big as a forest. So therefore, we had to make the chemistry with more branches, longer branches, so you can put more Christmas lights in and still get the same bright signal, right? And then eventually, this year, we moved this technology to also work on protein. Now what research area are we playing in, in order of importance? Very much the same like Dave presented earlier, we really play in immuno-oncology, neurosciences, cell and gene therapy and QC as well as in cell and gene therapy, their workflow. In oncology and not a surprise over the last 18 months, we also see a lot of activity in the viral research, right? How do we know this? Our publications. We are really proud of the trend in our publications. We have third partie's independent publications in repute magazines, and of course, we follow those, right? We've passed 4,600 publications in the last year. And that for us is yet another indication. I mean, of course, the revenue was growing really, really fast. This is yet another indication for us that this technology is getting global adoption very rapidly in all these research areas. Very encouraging. Many people ask, when do you use this technology? Where do you play? Well, let me talk you through the diagnostic assay, the evolution of a diagnostic assay. There's the discovery phase where researchers are really trying to carve their net really wide because they don't know what they're looking for. So they would like to interrogate 10,000 to 100,000 targets and figure out which 1 is part of the disease pathway that they're investigating. For that, you would need high, high plexing, right? The spatial context is not so important, the specificity is not so important, but you need lots of data. You don't know your target, right? That is not where we play. Customers use our products there, and we are fine with it, but a real strong suit is the next phase, translational research, right? That's where you know somewhat what you're looking for. You have 1 or 5 targets, maybe 20 that you would really like to precisely interrogate. For that, you need mid-to-low plex, you need multiomic detection, you need some automation. And now you can really precisely study what's going on, high specificity, but also with the spatial context and that's exactly what this technology can do better than any other technology. Now on the back-end side, you see that eventually this then becomes a clinical diagnostic assay where you run a IBD assay that's actually when you really know what target you look for. It has to be repeatable. It has to be precise. And the special context is really favorable. So that's where we can play just as well. And that would be the other $3 billion to $5 billion market that I just mentioned. So this is our strong play. On the right-hand side, on the left-hand side is more the discovery where companies like Tenex are playing just for your -- for the context of where do we play specifically. Okay? So if we know that we play there, then we know that we can be really, really good there because we occupy that space really well. On this graph, you see on the vertical axis, the amount of data that comes out of your experiment. On the horizontal axis, you can see all the different targets and/or different samples that we now can cover. Now look at the bottom left, we were always really good in RNA. That was our stronghold. I just mentioned that we adjusted a chemistry to also be able to interrogate smaller targets, smaller parts, still lots of light. Then we made it into DNA, proteins, and we've also realized that people want to do more than 1, 2 or 4 experiments at the same time. So we put the plexing part in there, all the way up to 48 plexing. Of course, the more complex the workflow, the more automation we really want. We have many relationships with box companies. Two very long relationships that are very healthy with Leica and Ventana. And now we're bumping in the frontier today, meaning what we're going to work on is to enhance the informatic tools for customers to better process, the information that we're getting out because that's more and more these days, right? And then we would also like to optimize workflows for our customers, right? Some people run ISH and IAC except the workflows we are focusing on trying to make it easier and being able to run those things in parallel and create co-detection, right? That's our future. And we have a fantastic coverage of this space. As you now can see a strong history and we have a great future ahead with this business unit. I then jump to the next one, liquid biopsy, exosome based. In there, we have the prostate cancer test, kidney rejection test and companion diagnostics. But the first thing people always ask is, look, why are you so enthusiastic about liquid biopsy. And that's because the exosomes that we look at are a lot better modality than most of the other modalities in liquid biopsy. Think about it. You usually interrogate either circulating tumor cells, sell-through DNA or you utilize exosomes. Now we know that specifically in cancer, early detection is really, really important. Now in the early stages of disease, the exosomes are available abundantly, right? So there's plenty of them. For the others, that's not really the case. So you want to detect early and then you also want to be able to reduce the background noise and that you do by selecting and fishing out the right exosomes. Exosomes have the same fingerprint on the outside, same markers as the originating cell. So we have technologies to fish them out and there we'll be able to select the information and reduce the background, which is, of course, not always easy with the other modalities, specifically cfDNA. The question could be, well, is the information any good in an exosomes? And the answer is yes. Exosomes are actually designed to bring information from 1 cell to the other, so they're like satellites. They shoot out the cell. They have all the information in there, DNA, RNA and proteins and then eventually are designed to protect this information until they reach to the other cell. And therefore, we know that the information in there is really well protected and is of high quality. That's very unique. And that's why we're so excited about the exosome business. The typical workflow based on exosomes, as you see on the left-hand side there, living cells actively shed exosomes, you see those little purple bubbles. If you zoom into those, you see them intracellular floating around. They carry the entire genomic information and they have the biomarkers outside like the hosting cell. And they float around basically in any bodily fluid. So urine blood as well as saliva. And many of those bodily fluids are much easier to obtain than blood. So for us, that's a real game changer. We sell the kits that help you isolate the exosomes you're specifically looking for. And once you have those you can interrogate those using NGS machines or QPCR machines and with that really understand cellular processes but also disease pathways. So it's a very, very enabling technology for research. If you look at the product that we currently have on market and the products that we're developing. As you all might know, we have the prostate cancer test on market. What we also used to call EPI. We launched this year an EPI version, which is kitted EPI CE that's specifically for Europe because Europe has more a decentralized model and does not have the clear option. So we designed that product specifically for Europe, addressing the European market. Very exciting in our pipeline is the ExoTRU kidney transplant rejection test. I'll double-click on that 1 next slide, so I will skip over this one. And then in the pipeline, we have lots of very exciting projects. Johan Skog, the leader for R&D and the innovation center in the Exosome Dx business is sitting here in the audience. We are proud to have him because there is amazing work being done specifically around the early detection of cancer based upon exosomes. In addition, the team is working on a second generation of prostate cancer test, and this is a rule-in test rather than a rule-out test, which will broaden and enlarge our market vastly. And then the R&D team is in parallel working on many very exciting CDx projects. CDx, companion diagnostics project. Basically, we design a diagnostic for a pharma company so that the right patient gets the right drug. Very exciting pipeline and, of course, a double click on this kidney-transplant rejection test. A couple of facts. First off, 22,000 patients get a new kidney every year in the U.S. alone, right? There are over 200,000 people living with a new kidney. There are 90,000 patients waiting for a kidney and that indicates to you how scarce kidneys are and how important they are, right? However, 40% of the patients that have a new kidney show signs of rejection in the very first year. So that means there's a lot of opportunity to be able to detect that early, the rejection. And once you know that there is a rejection, how to dose, which medication to make sure that you have to optimize the chances for the kidney to stay with the patients, right? Now exosomes are ideal for this. You see that little pink kidney there and the blowout to the left, not only -- Are there exosomes coming out of the kidney cell tubular cells, right? Also, exosomes are coming out of the immune system, the T cell that is possibly attacking this kidney. So now we have exosomes coming from both these parts with all the information about activity, the happiness of the kidney cells as well as the status of the T cells. This -- these exosomes inevitably end up in your urine, and we all know that a urine sample is relatively easy to obtain. In fact, we have a kit that we can send to your house and you can take your sample from your house and send it back to us. And if you look at the workflow in the monitor. We take that kidney sample. We take those specific exosomes out. We run it on QPCR and then we send the result to the physician, which can make them the right decisions on what to do with this patient very noninvasive compared to a tissue biopsy of a new kidney, right? We have a publication that came out, we're really proud of. And if you look at the performance of the test, it's off the charts, right? There's the sensitivity, specificity and the predictive values are very, very good. And we are working hard on this test. I can't wait to give you more information sooner rather than later on the progress that we're making with this test, and we're very excited about it, not only from an economical point of view but also from a human quality of life point of view, right? We didn't jump into the third newest to the family division, which is a Asuragen division. I already mention the different product groups. In total, those products on market addressed about a $1 billion market, 14 products in that portfolio, which 2 are IVD approved in a fast-growing market, somewhere mid-double digits. What is the offering that we have in Asuragen? It's basically proprietary kits, right? So easy to use kits that have everything in there that you need to run the chemistry. And this chemistry is really, really good at reading through hard-to-read sequences. So where other technologies stumble, that's the focus of our kits in general. In addition, on the right bottom side, you can download for free software for interpretation. And in the top right, are the -- is the automation. Automation, we partner for. So we are automation nonspecific. We pick the best box for our test, meaning we look at installed base, we look at what technology works best for us, and we're looking at price performance and then usually have a partnership with the box owners so that we eventually can provide a complete solution to our customers with all these 3 ingredients in there. Of course, we have patterned this technology well and are enjoying all these products currently on market. The genetic screening. Genetic screening is basically to get a risk assessment of inherited diseases, right? And we can address inherited diseases like Fragile X, spinal muscular atrophy, cystic fibrosis, Lou Gehrig's disease, Huntington's disease, amongst others. In the middle, you see our oncology products, which address the leukemia, solid tumors and non-small cell lung cancers. And on the right-hand side, very interestingly, we have a group of molecular controls. I'll get back to that because that fits really nicely with the diagnostic reagents division. And those molecular controls are mainly around infectious diseases. So have been a real important -- played a real important role over the last 18 months. And as you can see, the top 2 are all related to SARS-CoV-2. Now if we then look at our portfolio in the product pipeline. Here are a couple of aspects. The first one is hard to do carrier screening panel. So currently, the high complexity lab runs around 8 different workflows for these specific diseases. We are creating a panel so that a high complexity laboratory can run that in 1 workflow. One NGS workflow, so there's obviously a huge efficiency by having that panel run one time. The second product further out in the pipeline is the expanded carrier screening panel. And that has a different dimension that getting you screening panel is basically to cover all the genes, all the diseases that organizations like ACOG will give you guidance for, so we want to cover all of them. But more importantly is that we make this test so easy to run, so that it's not a specialty lab that can only run it, you can decentralize it. Any molecular lab can then run these hard to do tests, which is a real market enabler for us. Now last but not least, we know that we have amazing stuff in the pipeline at ExosomeDx, and this unit has the capability to productize, to make kits, but also get the regulatory and the clinical stuff in shape, and there we've got global IVD products ready for global distribution. So a very exciting funnel on that part, too. Now the Diagnostic Reagents. First off, we're really proud that we are serving and working with most all the large IVD companies, IVD providers in the world. You see some of their logos on the left. And we have long-standing relationships, a real strong channel and that you do not do overnight. That takes decades, and we're really proud of that part. The market, I show you the macro there. On the left-hand side is $1 billion of addressable market. And the first column, you see I cut it up in sample types. And basically, we play in any of those sample types, blood and urine and others. The real strategic focus there is market share, and that's market share as such, but also share of wallet of our strategic partners. The second cut, you can see is divvied up in different types of testing. And as I may want to focus you on the fourth motto, which is the molecular diagnostics. Until half a year ago, we had no offering there whatsoever for our partners. And now with that product group that we've acquired through Asuragen, we now have offering there, and we are really excited to be able to work with our partners to further utilize those products and build them into their assay. Now on the right-hand side, on the right-hand side of that middle thick black bar, you can see the assays and reagent market. This is another $1 billion market. Three years ago, I told you that, that was an adjacent space in that we were going to try to enter that. We've done so really successfully. It's unbelievable what's actually a real reinvigorating part of this business. And the nicest thing about it, it's not very complex in how we did it. I'll walk you through. First off, we have those relationships with those large IVD companies, right? We have, for a long time, made standards and controls, high-quality standards and controls for these IVD companies. To do so, you really need to understand the assay that they're running. Very often, our teams will find points of improvement to get the assay more stable or to get the statistics on the assay, the performance of the assay up. So we would tell them how we would do it. And therewith, the customer would have a better assay and we would have standards and controls. However, very often, those customers are now going like, well, since you know this, so well, wouldn't you be able to design our assay? And of course, was the answer, yes, but I didn't want to become a design house, right? Just design assay and in over is not our model. However, now we're designing those assays, and we put in, of course, our standards and controls. We pull in antibodies from Dave's business, and we put all kinds of reagents from across the organization to those assays. We hand over the design to this partner. And once they start running it, we have a beautiful pull-through of all our components that we sell, right? This has been really a nice aspect of this business, and it's made it a lot less lumpy. And it's also enabled us to have 8 consecutive quarters of growth in spite of the pandemic because during the pandemic, some of the routine testing was down by 20%, but we kept it in the black. And it's really nice -- highly likely because some of the pull through, some of the components we have been able to sell because of our relationships. Now we're coming to the segment again. And as you might have noticed, I talk a lot about the ExosomeDx, liquid biopsy and the molecular products and how they're actually joined by the hip. So this week, we've made the decision to combine those 2 businesses. And it's a really interesting move, and I think very promising move, and I'll show you why. You see this middle block here. Let's focus on the middle first. That's the molecular diagnostics division, a new division that Johan will manage and in that we have the exosome Center of Excellence managed by Johan, where all the innovation and the exosome-driven innovation will happen. And that team can then select if their assay and their product is going into a companion diagnostics business unit, meaning building a diagnostics for the pharma companies or whether we put that in a CLIA lab, like we did with a prostate cancer test, right? So your exosome-based innovation goes into the CLIA lab and you can serve the U.S. market that way or -- and/or if you want to make a molecular product out of it, fully kitted with the approvals, you can hand it over through your CLIA lab into the molecular products division and there they serve global IVD market. It's very exciting. So we do have 2 CLIA labs in that business, 1 in Waltham and 1 in Austin. And we have and will continue to build out a specific CDx channel as well as a channel for laboratories around the world. That's a new channel for Bio-Techne. So we're really excited that we now have a Dx channel into laboratories. And we have -- part of that came with Asuragen, right? The U.S. channel was already very much built out. There were good starts of the European channel. And now with Bio-Techne, we are fully utilizing and building out further this channel into Europe. Now if we quickly step back to the spatial biology. That is pretty much the same. It has these ACDs powerful spatial products in it. It has a services department in that, where we can do professional services for pharma as well as for academics. So they send their tissue samples in and recent the reports and charge for it and get them to fall in love with this technology. They have exclusive access to a pharma as well as to a research channel, academic channel globally. And then if we jump to the right, that's a diagnostic reagent. We know this 1 so well because it's the longest with us, it's the backbone. They have internal supply to my other divisions, but they also pull through from all of Bio-Techne into those OEM channels into the IVD companies around the world. Now I will give you 3 lenses. Why this is an excellent idea. First lens is basically the stepping stones from a component supplier to a molecular diagnostic kit supplier. We have been really, really good at supplying components for decades, right? We then sell these to customers and customers make something out of it, subassembly or a product, and we've been really good and partnering that way. However, over the last 5 to 6 years, Chuck has guided us to capture more value out of the market. As you can see on the little diagram on the right-hand side. So we started putting subassembly -- assemblies together. We created products or wait for the OEM channels, and we actually started selling results and used our own products with the developed test setup like we have with the prostate cancer test, right? Now over the last 2, 3 years, we've been kicking around during our strategic session, how do we participate selectively in the molecular diagnostics field. And I say selectively because you don't want to barge in there and boil the ocean because you'll end up unconscious, if you look at your bottom line. But we do want to go in there selectively and then play wherever we feel that we have a competitive advantage in technology or where we have a better channel where we can win. So that is our vision. And now with the Asuragen addition, we can certainly play in there. We do have now these products on market and these capabilities to get the products there. Very exciting. The second lens is really around the companion diagnostics. So on top, you see the drug development life cycle. Early on, the pharma company doesn't exactly know what it's looking for. So it needs to go find out which markers are really doing what the exosome-based technology has been extremely useful there. We have great relationships with these pharma companies, many projects going on. And then once they like a certain target, you might want to do your preclinical, your early testing. And yes, we had the CLIA lab in Waltham and could help them support that. From there, there was no where to go, though. So we would lose our customers. You see that bottom line, the bottom row really showing you that if you then go into clinical 1 and 2 in Phase III -- we now have multi CLIA labs, and we have the capability to develop a product, get the regulatory approvals and then utilize our global channels to distribute this product globally. So we can really stay the whole journey with this pharma customer and cover it -- cover all their needs during this CDx approach. Now the last lens I'm going to talk to you about is more people related, the patient journey. The genetic testing, the risk -- the assessment of risk of inherited despises. You typically do pre pregnancy or during pregnancy that is market segment that we've never been able to play in, right? We didn't even have a channel in there. With the Asuragen acquisition, we now play in that market. Once you're in the world, and you're a kid or an adult, you go to your annual checkups, their routine testing happens. We participate there with the diagnostic reagents through these IVD partners. And we like that position because the physician market is really distributed, right? So there's many, many touch points. So we like that these IVD companies sell their routine testing, and we can participate through making their assays and selling components to them and their standards and controls, et cetera. Now once you get an abnormal result usually, your doctor will send you to a specialist, and the specialist will further investigate what's going on. So to take a tissue sample, for example, now there we play with our ACD products, right, spatial biology. They could do some more oncology testing, where we have the oncology test, for example, the kidney prostate cancer test. We got the kidney test coming on. Specialists will also do the oncology testing that Asuragen brings along. And also there, you need standards and controls and need other reagents so we play there squarely. Now the last vertical is the patient monitoring, and that's really very much the same as the initial -- the previous column. It's all about, is the medication working and eventually, hopefully, is the patient healthy again. And there, they do very similar testing, and we also fill that space really nicely with our 3 divisions. Now if you think about it, we cover the patient journey. The previous slide I showed you, we covered a whole journey for drug development. And then the slide before that, I showed you that we are now on all the stages on the stepping stones from component supplier to being a full DX supplier type of kitted products, and that is exactly why I'm so super excited about this segment going forward. Thank you very much. Jim?

Well, a lot of energy there. It would be hard for me to match that. And hopefully, both Kim and Dave were able to mystify somewhat for you today. They always do for me every time I doesn't talk is fantastic. But needless to say, I know you'll understand what I have to talk about today, statistics and numbers. So let's first start with kind of where we're at and how we finished fiscal year '21, and what our business mix looks like today. From a segment perspective, we're still very much a proteomics-focused company with about 3/4 of our revenue coming from the Protein Sciences segment and roughly 1/4 of our revenue coming from Diagnostics and Genomics. When you look at our product profiles, we still are very much a consumables-driven business, with over 80% of our products considered consumables. And nearly another 10% comes from other recurring streams, such as services and royalties. So all combined, we're about 90% of recurring everyday run rate type business. Roughly 10% of our business comes from instruments, but I'd argue more importantly, roughly 10% of our combined nonrecurring revenue is driven directly from those instruments. When we look at our geographies, we're over 50% in the U.S., in the Americas, roughly 1/4 of our revenue is in Europe and the remaining roughly 20% comes from Asia with more than half of that coming from China. You saw this chart 8 years ago, Asia, China would be fairly slivers on this chart. And then finally, from an end market perspective, we still are today primarily a research use-only market. where our customers in that market are roughly 2/3 biopharma and roughly 1/3 academic. The distributor pie, you see there roughly matches our business in Asia, which tends to go through third parties in terms of transactional -- transactions. And in the OEM, you see at 18%. The majority of that is coming from the diagnostics reagents business that you just heard Kim talk about there we sell to practically every IVD instrument maker in the world. There are also some unique antibodies and proteins that we make specifically for other companies that resell under their brand, we consider that OEM. All right. I thought given that this is kind of the anniversary of our very first Investor Day 5 years ago, it'd be interesting to go back and loved to see exactly how have we performed compared to our aspirations at that point in time. So starting with revenue, back in fiscal year '16, we were just under $0.5 billion of revenue, which was a significant step up from where we were just a few years before, roughly over $300 million of revenue. As you recall, much of that revenue increase in that 17% CAGR came from the acquisitions that we did early on to create the kind of the new transformation of our company in terms of breadth and market penetration. Between fiscal year '16 and fiscal year '21, that CAGR was 13%, but a big difference between the CAGR in the last 5 years versus the CAGR in the first 3 years, is that most of that growth or at least more than half of that growth came from organic revenue growth as opposed to acquisition-based revenue. I think the chart on the right shows that quite clearly where 5 years ago, we were sitting at fiscal year '16, where we had just grown 6%, which gradually increase you saw the chart from Chuck from basically flat when we first started our transformation in fiscal year '13, even though the overall revenue CAGR was higher at 17%. Looking forward to fiscal year '21, on an adjusted basis, we finished around 13% organic growth, and it's increased almost every year between those 2 periods with fiscal year '20 being the 1 exception. So both from a total revenue perspective dollar-wise and from a percentage perspective, otherwise, we are ahead of where we were aspiring to be 5 years ago. It's also true on the adjusted operating income line, where 5 years ago, it's just under $200 million. The step-up in income wasn't quite as significant as it was for revenue because again, much of that revenue was through acquisitions and much of our acquisitions are early-stage companies that are really breaking even at the time. But we told you 5 years ago that we sell the promise in these acquisitions with their strong IP their strong gross margins and there are huge growth prospects and ability to scale that they could very quickly expand their margins and grow income very quickly. And you can see over the last 5 years, that has happened, in fact it's grown about the same pace as revenue. And the reason why it's not faster is because we have done other acquisitions in the meantime in terms of faster than revenue. And adjusted EPS, of course, has pretty much tracked the adjusted operating income line. So again, on both counts, we've beaten our aspirations from 5 years ago. And actually, in fiscal year '21, have we not had the Exosome acquisition in the last 5 years, that income number would actually be quite a bit higher than our aspiration at that time because, as you know, Exosome was a pre-revenue company. All right. What about deploying capital? We've deployed about $2.4 billion of capital over the last 8 years, our market cap. I think it's -- we're maximizing shareholder value there. Our market cap has increased by about $18 billion over that same time period. And we've been very diligent and very disciplined in how we have deployed that capital largely through M&A and I think in a very balanced fashion in terms of strengthening our core businesses, entering into new expanded product portfolios that leverage our core businesses, and then expanding into adjacent -- in very large markets such as spatial genomics, clinical diagnostics and now cell and gene therapy. We've returned roughly 500 million -- roughly $0.5 billion of revenue back to our shareholders by maintaining our dividend as well as being opportunistic about buying shares back, in this case about $110 million over the past 5 years. Ironically, our internal investment in terms of capital is lowest from on internal perspective and only about less than 10% in CapEx. And that's not because we don't care about investing organically in the business. I think it's more a reflection of the low capital intensity our business model has. Doesn't take a whole lot of capital to make a whole lot of money in our business. But we have invested a couple of hundred million to support our growth, largely in facilities and equipment. And of course, the most noble 1 is the largest investment we made, which is our GMP factory, which is going to support a lot of growth in the future. All right. I'll start a little deeper by segment, I thought it would be interesting to look at how much of our revenue and operating income over the last 5 years -- or the last 8 years, actually since the transformation began has come from our acquisitions and the year we acquired them versus what had done through organic execution. You can see in Protein Sciences segment over the last 8 years, the organic execution of revenue growth has nearly tripled, but we actually acquired over that same time period in the first year. And adjusted operating income, practically all of the additional income has come from organic execution. As we mentioned earlier, most of our acquisitions are essentially breakeven, some even lose money at the time we buy them. And so from there, we grow them organically, both on the top and the bottom line. I think ProteinSimple is 1 of the best examples of this where when we initially bought them, I guess it's been 7 years ago. They were a $50 million business, fairly breaking even. And they've now crossed over 30% operating margin contribution line and still expanding. Moving on to Diagnostics and Genomics. The profile here looks a little bit different. First of all, the starting point was much lower, a very small base. because 8 years ago, it was really just the hematology control of a the legacy hematology controls business that made up this part of the business. And there were some acquisitions done early on to bolster that business and give it more scale. That's where diagnostics and clinical came on. So it was really the only acquisitions we materially bought revenue in year 1. And the organic piece has been smaller, but that's largely because much of that organic growth is coming from our new growth platforms such as ACD and Exosome, which have been done more recently in the last 8 years as opposed to early on in the past 8 years. Going forward, we expect that green bar organic to be driven by those 2 businesses will look much more like the Protein Sciences for the next 5 years. Adjusted operating income, again, all and then some of the increase in operating income has been organic because collectively, our acquisitions actually were losing money, and that's largely because of Exosome being pre revenue. So I think it's important to note not only how we bought quality assets, but we've executed on realizing the full potential of quality assets as well. And then another way to look at the history of how acquisitions have impacted our top and bottom line is a look at a relative perspective on operating margin and ROIC. I'd just point out that the big ones, the big acquisitions here that occurred in the last 5 years because we've been very transparent about talking about when we buy a larger acquisition because of the nature of those acquisitions in the early days, they are going to be dilutive to our margins initially. But because of the potential we see in scaling those businesses and their high gross margins and unique technologies, we have a -- see a potential for them to scale their margins very quickly. When we do a bunch of acquisitions kind of back-to-back it's kind of harder for you to see externally. And you can see the trend here from '16 and '19 was kind of that way where we initially bought ACD and we had a step down in margin. And a step down in ROIC. But then after that annualized, it started to flatten out and even started to rebound. Then we purchased Exosome, had another step down in margin, another step down in ROIC after that started to annualize just as we're starting to analyze margin was starting to flat out, ROIC was starting to go up and then COVID hit, and that was the trough for everything, right? But in the last 1.5 years, we really haven't done any acquisitions, and we've come out stronger out of COVID than we even entered it. And as we had predicted, the margin has escalated and the ROIC has exploited quite dramatically as a result. I also will point out a surge in acquisition, which we just did in Q4. So those who listened to me carefully in the last call, I've messaged that we expect a step down in margin again this year because of that new acquisition. But again, the margin profile of that business long term is very strong. All right. So that's the history lesson. What's in it for the future? 5 years ago, we've stand up here telling you that we can nearly double the business in 5 years, and that was our target to do so. And we had a decent level of confidence in that because of the unicorns -- the stable of unicorns we had at the time and our confidence in our teams to execute on those unicorns. We stand here now in front of you today with yet another new 5-year target, not a forecast, but it's a target, but the target we have pretty good level -- high level of confidence in achieving, which is that more than doubled our revenue yet again in 5 more years to something north of $2 billion. Three main reasons why it gives us confidence is that, first of all, the market -- overall market conditions of life science research in a post-COVID world, I think we all would agree are more favorable now to our space than they were 5 years ago. So we're in a healthier market overall for life science tools. Our Unicorn is stable -- a stable of unicorns are nearly double now what they were 5 years ago, now with cell and gene therapy and Exosome as part of that stable. And then, of course, our prioritization process that Chuck talked us through in the beginning of our presentation today. I mean that was the key -- the prioritization was a key process that enable us to see the path to make the most out of both our core and our acquisitions combined together. And it's the same tools we use today, it's the same tools we've used in prior business to tap -- to turnaround companies and turnaround businesses. And it's really the output of that process that ultimately gives us the confidence that this can be achievable. So specifically, how do we get there? I kind of put it into 5 big buckets here of growth with the key product category down at the bottom. And then very various products themselves or product lines that make up those product categories and the brand that represents those particular products. So starting with like how -- we call our core, you hear us reference our core all the time. What do we mean by core? I think -- [indiscernible] I'll repeat it, it's RUO of proteins, our antibodies, our ELISA kits, small molecules and our legacy diagnostic controls. We have an expectation that, that business should be able to maintain at least a 7% CAGR going forward. Now pieces of that will be -- we think will be higher, probably the proteins and the antibodies, some pieces that might be slightly lower, maybe diagnostic controls, for example. But all in, we see as being a 7% CAGR and still the biggest piece of our business. Within the instruments, which is the next column over our instruments called out specifically under the ProteinSimple brand, of course, this is led by our horses, Simple Western Biologics and Simple Plex. We believe we can get a 17% CAGR over the next 5 years, which is in the ballpark of where we've been in the last 4 or 5 years. As Dave explained, we think we've -- some of those product lines have crossed the chasm, some are about the cross the chasm. So we don't see any reason why we can't continue that momentum for the next 5 years with so much more market to go after. And it's now a much bigger business than it was 5 years ago. So the actual dollar contribution will be considerably larger to our base. And of course, you just heard Kim talk about the ACD business, RNAscope, DNA scope, all the different scopes that come out of that. Spatial biology is hot, and it's a big market, and it's going to stay that way, we think for years and years to come. And there's no -- for all the opportunity that you just heard Kim talk about there. There's no reason why we keep -- should not expect and hold ourselves accountable to mid-20-type percent growth level for this piece of the business for the next 5 years at least. If we were to stop there, rough math would suggest that we should be able to be pulled at least the organic growth that we experienced, the adjusted organic growth we experienced in this past year, if not slightly higher, just because these are bigger businesses now. What will accelerate our growth rate, we believe from here are 2 new exciting spaces that are still right today, nascent and small. You've heard that both -- you heard nascent used a couple of times. But have just huge opportunities, and we're very well positioned, as you heard today again. And that's in the liquid biopsy space around the Exosome portfolio as well as, of course, the cell and gene therapy that this particular chart highlights really just the reagent side of things. But as you heard Dave talk about it also is going to be a driver of continued growth in our instrument platform as well. And those 2 horses or unicorns -- small today, therefore, they're going to have the highest growth rates in terms of the potential in the future. And there will be also very large contributors from a dollar perspective given the opportunity set that's out there. And I think the chart also signifies when we can expect that to happen. Those 2 bars of the chart are further to the right because it will probably take a little longer for those to materialize as Dave explained with its bull's-eye charts in terms of where our customers are in the life cycle of bringing those to market today versus where they will be in 3 to 5 years from now. With doubling our revenue, as we've historically shown, we take a lot of pride in not only our growth, but also in our ability to produce profitable growth and that will continue. And also a strong cash conversion of that growth and of that income. And our cash flow historically is always geared very closely to our net income, and we manage that very tightly and expected going forward. So with that kind of increase in our revenue base, we absolutely should expect to double our free cash flow, which would be more -- well more than enough to very quickly pay down what debt we have today. But more importantly, over the next 5 years, cumulatively that -- both cash flows, combined with an ending leverage point of, say, 3.5x leverage, which we would consider -- something we'd be willing to do and pretty risk-free given our business model, we give us well over $4 billion cumulatively of potential dry powder for more acquisitions and finding more of those unicorns are put in are stable. And yes, it's been quiet the last 1.5 years. And yes, it's an expensive environment right now to be doing M&A in, but we're patient, we're diligent. And we're very, very active. And our reagents and our products touch almost every new technology that's out there, and that's what's so exciting about our space is that there's always a new unicorn out there. And we'll be ready to pounce on it when it arises. To keep this really this virtuous circle going for what we hope to be decades. So in end, we were well positioned 5 years ago, and that was the story we told you then in terms of getting to double-digit organic growth, we think we're even better positioned today to produce even higher organic growth. And I forgot to mention on that last slide, with cell and gene therapy and exosomes really lightened up in the back half of this time frame, we think we'll be ending fiscal year '26 with organic growth in the high teens. So it will be bit of a J curve in terms of organic growth, which we show here a 16.5% CAGR, but we're not necessarily expecting 16.5% in a straight line. You will start out in the 13%, 14% range and progress to the high teens is what -- how we think this will play out. And of course, as I mentioned before, with our legacy of investing smartly in the right projects with the right ROICs. We will see our adjusted operating income increase by as much, if not more, absolutely getting to that 40% margin. How much above 40%? Probably the question you're asking, and I'm not going to give it to you. Because I think as time goes on and we get above that 40%. There's a lot of things internally we could potentially do from an internal investment to accelerate that growth rate even further that don't hit CapEx, but hit OpEx, right? But still maintaining a 4 handle on our margin. You could ask it, why don't you do that now is because the opportunities haven't fully vetted themselves as of yet. But -- if hit that 40% when we think those opportunities do, it will be a right time to pull that trigger. So again, not foreshadowing if those things don't happen, we'll be well north of 40% operating margin no question. Of course, talk about the great cash flow conversion we have and the powder that will give us to continue -- continually update and add to our stable of unicorns. So I hope you heard today, we have a fantastic leadership and this is just the tip of the iceberg. It's really the leadership and the people and our scientists out in the field that really make this all happen. And I think we have some of the best in the world. We had some unique internal processes that we don't give all this nice lingo to try to jazz it up. It's really straightforward, but it works. How boring is the process called prioritization, right? And it's a pretty boring name, but it works. And of course, at the core of our company has been and always will be science. We have some of the best scientists and thinking people in this space that I've ever been associated with. So with that combination, I think we're going to do very, very well and achieve our targets. So that's all I have. I think we're going to do some Q&A.

Yes, I'd further point out that $2 billion is without any M&A, right? So to Jim's point, that we're likely going to do something in the next 5 years. And let's say, we're at $2.5 billion from M&A. We probably won't be at 40%. Maybe it's 37% to 38%, but we'll be trading off accelerated growth with minor movements in that -- in the dilutive nature of op margin. But I think you take that trade-off. It's worked pretty well so far. So I'm going to get our presenters up here. So we're not turning around and looking goofy and get them on the spot here to answer better than I can in a lot of things, so. Dave, do you want to say something?

Yes. So hi, everybody. My name is Dave Clair. I lead Investor Relations here at Bio-Techne. Raise your hand if you have a question, pass the mic around.

So first of all, to Chuck and the team, it's great to see you in person. Thanks for organizing this. This is great. And investors as well. So first of all, Bio-Techne is really central to the protein world. That's pretty clear. What I would love to understand, given your current position, you laid out a number of growth drivers and areas where protein -- your antibodies and the other areas where you're continuing to grow. When you look at from your vantage point today, given your depth and proteins and the emerging world of proteomics, the second-generation of proteomics that we're going into. What are some areas where you think in terms of technology and capabilities where potential additions can happen and potentially where you can -- extended these unicorn type of acquisitions or bolt-on M&As and areas. There's a high-plex proteomics, there's the mass spec side of things. There is extended antibodies and microide side of things. So maybe just talk to us about that, what are some opportunities to you today?

I'll kick it off and move to David in a second, but during our strategic planning 5, 6 years ago. We had this discussion about, is proteomics going to be enough? Back then, NGS was all the rage. And should we be getting more into that, should we look in that direction? And we came to conclusion that no, proteomics was probably where we're best suited, and there's a long way to go yet. And now here we are with -- we thought that proteomics would come back on strong and hard. And it really has, I'd say, I see much more innovation now around proteomics than I do anywhere else as you just mentioned. So Dave might want to comment on some of the things on the drawing board and where we're going in directions and things he's seeing.

Yes. So I mean we're seeing some changes in the approach to [indiscernible] molecule [indiscernible] to get there [indiscernible]. We'll get there with some of our own technologies that we already have. We're also looking, both organically and through acquisition, at potential candidates to participate more in that space. I can't talk specifically about the targets, but obviously, there's a big push out there to use different technologies. Oligos, as an example, to measure proteins at a single molecule level and to do massive flex. And there are some obvious companies out there like Olink, but there's also a lot of other companies that are emerging. So that's an area we're curious about and looking at with great interest. I would tell you, though, that we have firsthand experience, not only with our own business, but seeing a lot of others try to bring these products to market. It takes a hell of a lot longer than they think, and it's a lot harder than they think, to plant these existing technologies. So we're looking at that with cautious optimism, but we're still banking on the horses we've got. And the good thing about having all this content that we have, both the antibodies and the protein standards is that everybody has to come to us. So we get a look under the hood at almost everything that's coming along very early in the game.

So we've mentioned in past discussions that we do have internal programs in plasmids and mRNA. Dave, you might want to mention that's -- it's a big area that we actually have some confidence in.

Yes. So we tried to get into that space with the big move, the big acquisition. And it -- we didn't -- it didn't pan out. We got outbid. But I think we have a more realistic view of the potential size of that market and also how long it's going to take to develop. So we are going to -- we are pursuing an organic approach there. And I think that will pay some fruits. It will take a few years. I think the AAV is one area that we can participate in for sure. And then I think we can also participate in a pretty strong way in the mRNA front because of our protein expertise and our ability to produce critical enzymes that are required for that technology to work effectively and to be able to get around the intellectual property barriers that exist there.

Okay. Super helpful. And this one is for Jim, and I'm just getting used to the in-person environment. I'm Puneet Souda at SVB Leerink. Just in terms of the op margins, I know you're not going to give us a higher number, but maybe just help us understand what are the things that you're watching on the downside to reach that 40% op margin? What are the set of things that -- where you see -- there could be potential risk just beyond COVID, just beyond sort of what's happening in the market? Anything else that we need to be cognizant of in order to reach that 40%?

I mean, I'll be honest with you, I don't see a lot of risk to that because I mean at the end of the day, the biggest risk would be we don't grow. If we don't grow, then we'd feel it's obviously tougher to expand margins. But as long as we grow, and I think it's -- we have excellent plans to grow the business. It's such an awesome gross margin business that's -- it's the margin scale very, very nicely with growth and with the -- in all of our platforms. So I can't really even think of a scenario where it'd go backwards other than additional M&A, which will likely happen. So that'd be a -- and that's another reason, it's not a 40%-plus number out there because just as there were acquisitions in the last 5 years, which have made getting back to 40% that much challenging and more challenging in that time frame, that same thing is going to happen in the next 5 years, right? But that's really the only factor I see that could derail margins in my opinion. That -- and for some reason, that's something drastically reduced our growth, but there'll be bigger problems than that if that happens in terms of margin percentage.

Very helpful. And last one from my end. Just in terms of Exosome Diagnostics and the overall diagnostic franchise, Kim. When we think about diagnostics, we think about trials and sometimes practice-changing trials and larger trials that need to be built up in order to get those products to a more mature level, get them recognized in the market. When you think about that, the investment there, how are you thinking about that in terms of -- is that something that your partners are going to do? Is that something that you're going to be taking on in order to deliver that type of a CAGR. And broadly thinking, the message that I was hearing is, is it fair to say that you are becoming sort of -- in a simplistic way, if I could, an Intel Inside to a number of these assays to characterize that.

Yes, Puneet, thanks for the question. You're right. Your assessment is right on. I think that we are obviously having this innovation center, right, with the exosomes. And from there, you can -- without too high of a cost, get into the CLIA environment, right, without doing these huge trials. And we believe that the moment you have more data there and more confident, you can always make the decision, do I partner up? And/or do I go it alone, right? And it needs to be a real good reason to go it alone because some of those clinicals are obviously very expensive. Not that we couldn't afford them, but we would certainly want to be careful with such expenses. And on top of that, usually, there are back-end expenses in setting up another channel or other relationships. So it is an equation that we continue to look at, and we will always be smart about, do we partner or do we go it alone? And we're currently going through these equations, the actual true test just as well. And I think we've got a real nice clean path forward, which is indeed using the strength and the investment levels from the different models and we picked the best one. Your second part of the question was like, are we more an Intel Inside? And I would say yes, we're more on the forefront and have these molecular products that we can globally distribute. And yes, we are in more assays that we design ourselves into in our own portfolio, but also in the IVD partners portfolio. You can see it's more than just standards and controls. We are now pushing in more of the reagents, more of the antibodies, more of the picks and shovels and the components that Bio-Techne always has been so good at. Thanks for the question.

I think it's good to point out too that there has been a growing theme in our company of going beyond just catalog order kind of business. We're becoming better known in -- and the big biopharma is coming to us more often. We've announced quite a few license deals in the last few years. And we're -- we talked about it yesterday at the conference, it's -- for those of you who are online, but I asked the question, how many are we at right now? What does it add up with the royalty structure as these things pay off here with our antibodies that we've been licensing? And it's between $50 million and $100 million a year annually. It's -- nothing is baked in. Now these are 3, 5, 10 years out, but we're going on nearly a dozen deals licensed right now. We're doing more all the time. They're coming to us. We have, as Dave said, a very healthy growing, kind of somewhat throttled custom design business because we don't really want to be in that, but it's a big enabler for a lot of areas, everything else we're doing. And it creates more credibility and it creates more pull-through. And we do something really hard for a big biopharma customer. They're really grateful and they realize how good we are, and they come back and they pull through a lot more product. They buy more of our regular stuff. So it's a growing trend with us as well that we can have more and more content. It used to be just kind of the Luminex side of things a few years ago. Now it's kind of going everywhere.

Right. Great. This is Catherine Schulte with Baird. I guess, first for the 7% guide for core products. And I think that product group has grown a little faster than that over the last couple of years, even if you want diagnostic controls in there. So just given that momentum and expected increases in NIH funding. I guess is there a potential upside to that 7% number?

Yes. I got to give us a little bit of breathing room, Catherine.

Yes. I think that's the right answer that there's -- this is a model to $2 billion and where are you going to hedge a little bit. And we've been doing much better than that. But as you can see, there are -- there is plenty of upside in the model, too. That's why we feel more confident about the $2 billion now than we did the $1 billion, 5 years ago. This is one area exactly right. Now to say that we're going to be, for sure, 7% or higher in the controls, maybe a reach. We keep telling you we're close every year and we keep missing it. The pipeline is getting better and it really, really is this time. But we're still probably a year away from having more of the, I'll call them the Sysmexs of the world really coming back online strong with us. But if that happens, then we're going to be pretty far north of that 7%.

The only thing I'd point out is 5 years is a long time. And 5 years ago, we had that same category of products in the 3% to 5% range. So we have considerably moved it up in this regards to the expectations going forward versus 5 years ago. But your point is well taken, and we should certainly hope there's offset.

All right. Great. And then maybe for the new GMP protein facility, what do you view as your differentiation versus other competitors in that space? And any update in terms of filling that capacity so far? And what stages of development are the customers in that you've signed so far or talking to?

Yes. So I can't name names, obviously, but we've signed on a number of a handful of long-term agreements, simply because there aren't that many customers yet at a stage where they're ready to sign up for a long term. We tend to structure those deals more on a percentage of purchases basis than the absolute numbers. So -- and I tried to mention that, and I can't share the details of this either, but we kind of have a little bit of a moneyball type of formulation of what -- who we think the best partners are going to be based on how much they'll buy from us if they're successful, whether their process, we think is going to make it through the clinic, who they're competing against, what's the indication. There's a lot of factors that go into that. And as I said, I think any one customer could be $10 million plus annually, if they may get to market. And it's been a short-term goal approach. Currently, we're only consuming about half the capacity, though. It's a lot less than we have in our existing facility. And -- but we're quickly consuming all of that. We'll soon be moving to the new facility, but I have to tell you that it's not trivial for a customer to switch over and it's been more difficult during COVID because they have to come, they have to inspect us. And then we didn't just move the products over as they were. We took the opportunity to do a lot to make a number of changes that improve the yield, improve the reproducibility of the products and make them more cost effective and higher quality. And so we need our customers to go through that process as well to qualify against our previously produced lots in our existing facility. So it's a pretty involved process, but we're very confident. We started out with the things that are going to be used in the T cell workflow because that's, as you saw is the biggest. So that's our IL-2, our IL-7, IL-15. We started out with those. We scaled them up, made them better quality, better reproducibility. And now we're going to start, we think the end of this calendar year, be able to start to get those customers actually in the facility to do those inspections to qualify the lots against the ones we previously sold them. We made saleable products already in the last couple of months. It has a long shelf life. And so we're starting to counter the depreciation, if you will, that we're getting from that building already. And so it's just going to take off from here. It's going to depend on how fast these customers move through the clinic and how willing they are to make the switch over. And so we're trying to encourage those ones that we think are going to be the biggest users to go first.

And a little on that switch over, I think you saw the funnel. You saw what could be coming, could be a tidal wave. They -- 3, 4 years another could be dozens kind of trying to come online. Their biggest fear, and they all have the same charts. They're worried about, will there be enough reagents to go around. So I think us getting a shot, really everybody getting a shot at least be a backup and be tried out, it's going to be very high, I think. And then given our brand, and we're the world leader in proteins for research. I mean, yes, we just think it's ours to lose. We should be able to attract and really obtain an awful lot of equalization -- equalized business and throwing out the other guys who really aren't known for proteins, they're in it because they had to be in it, so.

Yes. To answer your question about differentiation. It doesn't sound robust, but it is. It's reproducibility batch to batch is key. And then just absolute capacity. Customers want to buy product that is either from the same batch that they bought last time or that is -- can be demonstrated to perform almost exactly the same as that previous batch, and that's what we're great at and that's what they love.

Building's a the deal closer, I promise you. Come on by and and see it.

Yes.

All right. Great. And last one for me, either for Chuck or Dave. There's been a lot more talk recently about drug pricing reform. I guess, how do you view the potential for drug pricing reform to become a reality and how that might impact the trends in the industry?

Well, I think we're further down the the food chain, obviously. But if drug pricing materially affects the pipeline and R&D investments that biopharma can do, it's going to affect purchasing from us and everybody else, but we wouldn't be a Phase I effect, but we certainly would be involved. It would affect everything. That's been my take. Dave, you?

Yes. Again, no, that's where I think the moneyball approach comes in because I think the ones that make the most sense, that have the highest potential will go forward. I think they'll just be more discriminating about their pipelines. And I think we need to be the ones that are in those pipelines of products that have the highest potential.

But in terms of core products, I mean we're primarily picks and shovels supplier. We supply to everybody doing everything. So as they narrow their field of research because they have to, and we'll probably take a hit, too, at some level. But I think it'd be much later. It wouldn't happen right away. And we might be able to mitigate it, given we've had some time.

At some point, I think there's going to be a consolidation in the cell and gene therapy space, it's going to be pretty significant as well. And I think...

There won't be 1,300 -- there won't be 1,800 companies, right, so.

Yes, I mean there's going to be -- the cream's going to rise to the top.

Jacob Johnson from Stephens. Maybe one for you, Dave, just on the cell and gene therapy topic. I really appreciate the charts and all the data on the ScaleReady relationships. But maybe just one point of clarification. Those are ScaleReady relationships, not necessarily customers that you're selling to. Is that correct?

That's right. ScaleReady has, like at that point in time a few weeks ago, 668 customers. That doesn't mean they're all buying Bio-Techne products or Wilson Wolf. They're buying one or more. Some are buying one of them, some are buying 2 of us, some are buying 3. Our goal from the very beginning has been to get the workflow so seamless and show data that the products work together, and that's what we're working towards. Every time the ScaleReady team gets on the phone with a customer, they talk about our entire offering, and they've already mapped out whether it's relevant to that customer and where and why. And that's a key element of what we've wanted out of this.

Yes. And certainly, it speaks to the breadth of relationships there. Maybe just a follow-up on that quickly. Just can you talk about the sales effort for cell and gene therapy? I don't think it's solely this ScaleReady relationship, though that obviously helps.

No, it's kind of complicated. But in the regenerative medicine space, the key offering there is proteins and media to a certain extent, a little bit of TcBuster depending on whether they're gene-edited. And so we go to market with our own direct sales force there, the Bio-Techne, in the immune-modified therapies like the T cell therapy and NK and a few others. Anywhere -- think about it, it's anywhere where somebody needs to use a GRx and Ella in the workflow with our reagents, that's where we try to really leverage. And we're educating that team also on the utility of our instruments. So they may not sell them directly, but they mention them. And then they'd send leads to our direct sales force. On the instrument side, we have a direct sales team that's schooled in the cell therapy workflows. And we, of course, send leads across the business all the time, and they know what customers to go into. So we have this comprehensive cell and gene therapy marketing group that is looking at the field kind of holistically and then trying to generate leads. And then we send those leads out to the specialty sales teams that go in those businesses. Finally, on the research use-only side, that's kind of where our traditional reagent sales companies are there. They're selling to the people that are preclinical or in the early RUO stages. And so we're selling them everything and then we kind of know when they're ready to move into the clinic or into a more serious stage of development, and then we hand that off to one of those other teams. So yes, there's about 4 different approaches that we go to market depending on what stage the customers are at and what type of specific cell therapy workflow that they're pursuing.

Speaking of positive, things that happened and that surprised us in the last couple of quarters, it was just the amount of assessment and specification for Ella in cell and gene therapy. We're actually in the millions of dollars of revenue. So it was quite a surprise, it's moving quickly. Yes, this potential, quite a sleeper in the platform.

Maybe, Chuck, one for you. Jim's got a picture of a pile of cash when you're talking about allocation. So on M&A and maybe also talking about your prioritization triangle. When we think about M&A, should we think about strategic growth as being the most important kind of determine of how you look at deal...

In a filter?

Yes.

So in a filter, I think we still rank revenue growth as the highest lever. And then there's a component of profitability and then we do a soft component, if we give a score of 1 to 5 on strategic significance. So we're interested in this and that's probably third. There's like 5, 6, 7 things in the filter. And we -- every year, we test that filter, first, if we still like it. And we kind of every year kind of come back to, well, we still like revenue growth. And I think we've had a lot of discussion about 40% being wonderful or not op margins. But when I look around our industry, revenue growth is still king. So I will trade off a couple of points of margin for accelerated growth. If we could become a perennial 30% grower and be it 32%, I'll take it all day long, Just to be honest. But finding those deals, as Jim has pointed to, it's been really difficult. And we're only going to be able to so far. So we'll just be patient. 7, 8 years ago, our growth strategy was 2/3 M&A and 1/3 organic. It just didn't have that much to work with. And today, it's totally flip flopped. We can be pickier now. First, we were flat back then, and now we're not. So everything we look at is dilutive pretty much. So we have to be more careful. But it doesn't mean we're not going to do it. I mean we have to do it. And we're not very big. I mean this -- we're on a path to get well beyond $2 billion. That's -- we're not done at $2 billion either so. And we're never going to get there in 5, 10 years, the many billions of dollars of revenue into at least the Agilent size we want to be at without doing more M&A. So we'll do that. And we all have M&A backgrounds. We're actually pretty good at it. So it'd be boring not to try.

I have a question from Dan Arias from Stifel who couldn't be here. Clearly, COVID drove a significant step-up in the instrument placement rate for Simple Plex, which drove really robust revenue growth for the Simple Plex business. How do you expect post-COVID placements to track? And can you talk about expectations for system utilization from a relative standpoint, mid-COVID versus post-COVID? And can you give us a feel for per box pull-through expectations? And what's on the horizon for assay development that can keep the growth going?

Classic Dan, 7 questions and 1. But do you want to take it?

Yes. So clearly, during COVID, we had a lot of interest in Ella because it's a phenomenal tool for measuring cytokine storm and individual markers that were indicative of COVID immune response. Some of that is nonrepeat. So we'll see a bit of a drag from that for probably a quarter or 2 because the amount of instruments we placed and the amount of cartridges we sold with those specific indications was pretty immense and drove a decent amount of the tailwind that we mentioned. However, we've placed a lot of these instruments into these institutions and in these labs that they are now getting very used to the -- and spoiled, frankly, by the convenience, ease-of-use and reproducibility, sensitivity, you name it, of the instrument. And so they're developing more and more applications that they want to use the instrument for. So we fully expect, after a quarter or 2 of COVID hangover that we're going to regain quite a bit of activity. We've also got a lot more larger account, getting a lot more larger accounts that are adopting the Ella platform and expanding the number of machines they're buying. So that's a great trend that we're seeing. And driving quite a bit of cartridge sales growth. I don't think we've shared the pull-through on cartridges.

We've shared theoretical and it's well over half. It's a closed system, so it's well over half. So theoretically, it should be at 75% kind of revenue based off consumables. We're not quite there yet.

Yes. Eventually.

Partly though because we've been throttled and we needed a new factory because we've been doing everything we can to make enough, but.

Yes. We ran out of capacity at one point, could not service. We had extended lead times. We're back to a point where we're back to our normal lead times, which is good, but we expand the capacity, brought on an additional shift and scaled our instrument production. And now, as Chuck said, we're building a new facility. And in the next year, that will come up and that will have the potential for like 500% capacity gain.

Even though we have -- we're crossing the chasm with that. We still have largely 20 large main customers. And so it is still a bit lumpy. Like they're doing their clinicals or projects. They buy a boatload of cartridges and then they go away for 2, 3 months and there's nothing. So it kind of ebbs and flows. We've had 3 solid strong quarters and was really flat 4 quarters ago. It's going to bounce around a little bit. So you got to be a little bit careful if we move from an 80% quarter to a 20% because it could pop back to 100% the next. It's just -- it's going to be lumpy for a couple of years. The last thing on Simple Plex, I'd mentioned is why I call the sleepers. I mean we're talking about here really is about biomarker research. And what's going to be coming soon is it going to be -- these being used in basic queue seeing in cell and gene therapy. And so it's already selling pretty fast. Tomorrow's business around that is going to be patient monitoring, which is why we're taking through 510(k) here and we have a partner in China. And that I don't even -- can't even tell you how big it might get. But we know it's an excellent patient monitoring system for cytokine storm is one avenue. And we're not sure we're done yet even thinking about all the other ways we can use this thing. So we do know that Quanterix is a bit nervous.

So just one more from online. This one is from Alex Nowak at Craig-Hallum. Can the company expand on its sales strategy around ExoTRU kidney as the company decided on a sales channel, either direct or partner, and has any decision been made to help leverage the MolDX coverage policies on transplant?

Yes. Thank you for the question. The answer is no. We have not decided yet, but we're very close. So again, the strategies have been laid out for multiple options. We're ready, and we have a plan to roll out ourselves. But if we find the good construct with the right partner, we are open to have a good deal with a good partnership. So that's why I mentioned earlier in my presentation that I'm looking forward to, sooner rather than later, announce which way we're going. But for now, I cannot disclose that yet.

I'd just add, it's -- it wouldn't be as difficult to build out that channel as it has been for prostate because it's -- obviously, there's a concentration of transplant centers. So we're not afraid of that at all. The other part about changing venue, we have the option because we have a surgeon now. So we have a sight for a different venue. I'm not sure it's any better than NGS, but we do have options if we need to. I would just also add that NGS is much, much better to work with around this indication they have than prostate. They just see it as a much more -- much bigger issue, much more painful issue, much, much more important area to address. And they've seen our data as well and they like it, so.

Daniel Macek on for Dan Arias at Stifel. Thanks for having us. Good to see everybody. Catherine mentioned one of the revenue buckets that potentially had some room for upside. It was the diagnostics controls and the core business. But I was wondering, the -- another area that I look at that I think is the ProteinSimple business within that, Dan asked about Simple Plex. And so I wanted to ask about Simple Western. 90% of the customers, you said don't need a demo. I was just wondering if you could kind of unpack this a little bit? Is this mostly like current users expanding their fleet? Or is it because the technology is becoming more broadly understood in expanding to new customers? If you could just elaborate on that a little.

Yes. I think it's a bit of both, really. But we're seeing a significant uplift in pharma and biopharma buying more instruments. So if they had 1 or 2 at a site, it's expanding to 6. Or talking to another part of their company in another part of the world even and internally promoting the fact that how much simpler, easier, reproducible the Simple Western workflow is, then those other entities are buying and adopting. The other thing is there's just so many more publications out there now that you don't necessarily have to prove it. And then thirdly, I would say, that we say no demos, we have virtual tools now that we've developed during COVID, that can almost replicate if a customer desires a demo online. So we don't have to physically go there with an instrument and actually show them in person.

It used to be one in the trunk of every rep, but yes.

Yes.

Okay. And then one more for me. Just wanted to ask about being able to hire. I know you mentioned that, that was one of -- potentially a key driver of growth and maybe a hurdle as well. I was just wondering like what kind of trends you're seeing, how hiring is going compared to your expectations? And then maybe what are your expectations for going forward to this year?

We've just gone through analysis because that's -- the data that was kind of shocking how high our attrition was, but believe it or not, we're better than most of our peers by a couple of points anyway. It's a pretty big deal, especially with younger than 3-year company veterans. They're moving around a lot. They did have the financial crisis too, I guess it's somewhat expected, but it's really, really prevalent right now. Our industry is booming. There's a lot of opportunities. So people are taking opportunities. So you have to be on your game in terms of selling the whole package of your company to your employees, not just their comp. And it's about culture. It's about everything. We have a few things helping us out. If you want to be in microbiology in Minnesota, there's only so many places you're going to work. But certainly, the East and West Coast are very challenging. Our West Coast is where we have all our instrumentation. And of course, we're looking for software engineers, and we're right down the road from Google and everybody else. So it's not easy, right? So we have to be constantly working our message and improving ourselves as a company we want to be part of. It's challenging. It's not throttling our business. It's helping our margins a little bit yet because we're still a little bit behind, but we're better now than we were 6 months ago. And we have full -- 3 full-time recruiters. We've added one, and we may go to a fourth. A good recruiter should be able to bring in like 75 to 100 people a year as we're told. And there -- we've got some good ones, they're doing it. We need about 300 net new people this year, and that will be doable as long as we don't lose 250 along the ride. So it's challenging, but you won't hear a different answer from any CEO in our space probably. Right now, it's very challenging. I think we're not maybe the best, but we're surely way far off the bottom of the pile here.

And I would just add that we're planning on having to pay more in certain areas of the country, for certain physicians, and we've built that into our pricing expectations going forward because we know that we're going to have to cover that.

We're okay in management as I think, one, we share the equity far deeper than most companies in our space, and we've extended our bonus to every professional in the company. The only labor is left out right now. We're even evaluating, whether we go all the way through labor as well. Not many companies can do that and have the margins we do still. So that's also very positive for overall, but certainly, we're pretty safe in management.

This is [ Lizzy Spier ] from Citi, I'm here for Patrick Donnelly. So I guess, first on the M&A side, you guys talked about the focus is on revenue, but just on the size, if you look at Aldevron, it was a $10 billion acquisition and then BioLegend went for $5 billion. I guess can you talk a little bit more about the size that you're thinking of?

Yes. Any size works for me. We came in second in Aldevron. So just so you know. We were using stock, obviously, along with a couple of billion in cash. And it is such a great fit that we really thought, an EQT thought, and I know EQT because I worked for them in Germany for a while. And they know us, they know our stock. And we're the only company they were going to allow in the process to use stock because they, quite frankly, figured the minute we announced it, probably grow up $150 a share. So we're not afraid of size. We know what the result would be. We're -- we don't have to sell our execution ability. You guys never have questions on execution for us because our results kind of show for themselves. But we know what we're doing in terms of running a company, integrating other businesses and we're not afraid. It's more about strategic fit and at the right price. Preferably, we like private. $5 billion deals don't go private. They're always going to be in a process. So we're always hunting in this $200 million to $500 million range, which can go private. And if we can get it done before it goes to a public process, we'd love to do that. But if we can't, we're getting the game. And we played it BioLegend, too, but we're not really a flow provider. And it's just -- the synergies weren't as strong to go that high. I can certainly understand PerkinElmer is wanting to go adjacent and take a shot here, but they -- it looks like their price tag shows me they believe the entire management forecast. So we usually take the numbers down a bit as we model, but we're not afraid of size. It's more about the fit and the price.

Return.

Return, yes.

And timeliness for that return.

We still are stuck in a -- we want 10% in 5 years of ROIC. And I don't think we've seen a deal, had good been public here for a while. So I understand the cost of money is pretty low and everyone's whack definition is pretty low right now, but I have a hard time doing a deal of 6%, and our cost of capital is about 6.

And our own internal ROIC is in the teens.

Yes, right. Exactly.

And then I guess one more. You talked a little bit about Simple Plex and Simple Western, how much run rate do you think is left in terms of these instrument placements? And what's the eventual penetration rate you think you can get to? And I think you said you've already 2,500 placements, but the market opportunity is large. Can you just talk a little bit more about that?

There is actually one very nice metric that we can use because this ProteinSimple is the old image imager provider, and they sell imagers. And there's roughly 20,000-plus imagers in the field right now. So we have all the call points to talk to. So we do feel we're between 10% and 15% penetrated because you get the imager built in. So one of our strategies has been to upsell people who need the imager. Just to go with Simple Western automation, you get your imager built in. And so it's in the range, right? You also can look at the value of all the consumables for doing Western's by hand and it's $1 billion to $1.2 billion out there. When you map out sizable enough labs that could use automation versus continue doing 2 a week by hand, you get to roughly $500 million, $600 million or so in that range. So we've got a long way to go. And we've had a couple of quarters at 50% that are COVID-related, but this is a 20% grower for years, yet we think. And we've been asked this for the last 3 years, and we've been remaining over 20%. And I think we're just hitting that -- a good tailwind now with it as a matter of fact. Anything you want to add, Dave?

Yes. Just one other thing. A lot of the acceptance and adoption of the platform is driven by the availability of Simple Western qualified antibody content. And so we've got a big push on now. We're more agnostic about who supplies the antibody simply because it's a little bit of the tail wag in the dog. If you don't -- there's way more revenue to be had from placing instruments and selling Simple Western consumables than there is from antibody purchases from us. So although we have more than 2,000 qualified antibodies for the Simple Western platform, we are broadly expanding that through third-party suppliers to make it -- so it has much higher utility to the market overall.

Yes, a question that when I think about your bull's eye slide, it brings an interesting thought about how artificial intelligence, which seems to be showing up everywhere and helping speed up the process of drug design. Do you think that artificial intelligence and its influence in this space will change your business in a positive way, in a neutral way or a negative way? I mean how do you think of that?

Well, one way that we are working on this is we have a much bigger understanding. I guess it's a more scientific approach that's more domain-specific to what like an Amazon would do, customers that buy this also needs that. We're in the process and we can analyze workflows and understand almost instantly from where a customer is searching what they're doing. And then once we know that, we see the ability to generate algorithms to predict the requirements that they'll have for other reagents, et cetera, and even instruments. And so then we can effectively market to those companies in a much more targeted way. It's the early days of this, but I think that's where the industry is going to go from an artificial intelligence perspective.

I'm thinking more about its ability to speed up the drug development process itself by eliminating a bunch of combinations that have a lower chance of success.

That's right, where you're heading.

Yes.

I want to call an audible. We've got -- we actually have our digital officer in the room here, Kevin. And we have a data team that actually -- we have projects specifically on that doing screening. We actually took a shot at some things that we've got patents on and tested how useful they would be or our potential as a therapeutic because we got matches that are completely specific, which means they could be a drug. But without animal models because it becomes difficult. I think there's more of that happening than you realized. But that gave us the beginning to actually use more of this internally as a science and this management of the data. We have lots of to further our own direction for our own R&D and what we're looking at, and Kevin drives all that through -- and marketing as well. If he wants to make a comment?

No, you covered it pretty well, Chuck. I mean, I think it's fantastic that we have a data science team that has experience actually in our business and are also data scientists. So when I think of that team and the experience they have with the science itself. And then looking at the data, it not only does the things that Dave talked about, right, our ability to look at the pathways and understand what researchers are doing pretty quickly and benefit us on a website perspective, but it also helps us understand where the industry is going and making sure that we're ready for things like you're talking about, which is the acceleration in the market. And not just in the cell and gene therapy space, there are other spaces that we're looking at as well.

I think a lot of the antibody engineering that's going on now is going to be a big boom to the biologics industry because I think it's almost coming to the point where they can look at the structure of a target and design an antibody, and you don't have to do a lot of trial and error. It would be designing an antibody that fits very nicely. We had a speaker come in and talk to us about COVID and the spike protein structure. And he knew every aspect structurally of that and where the most likely mutations were going to come from, which ones would be the most dangerous. And then therefore, what antibodies would be optimal to design to counter that effect. Whereas in the past, that would have been just a big polyclonal search through the clones, go through 2 years of research just to get to a point where you had something to go in the clinic. I think now there's going to be a day come very soon where you're just going to engineer antibodies theoretically, like they did with the 777 plane and never fly it. It just -- it will go almost right to the clinic.

Great questions. Anyone?

This is Rick [indiscernible] with [ Santo Investment Management ]. It was just a higher level M&A question. We've been investors for a handful of years now. We've seen, as this business has gone from no organic growth to now you're talking about this high teens organic. And just the way I see the whole story developing is you've got these great tailwinds behind the overall industry. You guys are positioned well. You've got the margins, you've got the balance sheet. And you guys have just done a phenomenal job at finding these smaller M&A targets that are doing quite well as a whole. So I guess just in general, what's your secret sauce or how do you do it to uncover these opportunities. And you made the comment that everybody has to come to you and so you see everything going on. So maybe it's -- maybe that's really the answer to that, but just would love to hear your high level thoughts.

That's some of it for sure. One is, we're pretty well networked. We're from the industry. We're also a member at ALDA. 2 of our targets we found at ALDA. And ALDA's industry consortium. There's roughly 100 members there. And as you come out of stealth mode in life sciences, you usually join ALDA. So there's -- you got to use a lot of weapons to get access, but we also get a lot of calls. We also had a lot of help from a lot of bankers and investors who come by and tell us what they've heard or what they've seen and something we should look at or call. And it's almost a group effort. What we're really good at, though, is making relationships and providing value upfront in some form of partnership and getting a good look under the hood, and then maybe make a determination or a way to help them understand that we'd be a good marriage, right? It took us 18 months with Yuling's company at ACD. It wasn't for sale. And it took me getting to the Board of ACD and convincing them how good the relationship would be if we were to add them together. And the Board deciding, this is -- this does make more sense than an IPO, let's do it. ProteinSimple was off-a-w***** relationship, a really good one. And basically got a call and said, S-1's out, you should read it. there's a 3-week window if you want to scoop this. You know it really well. You almost bought it before. You don't have to do a lot due diligence. They're going to IPO, and we think maybe under the money if you want to take a look. We knew we wondered about that business. So within 2 weeks, we had a deal. And also it's -- they're never -- the only other thing I'd say is there's no recipe book for M&A, right? Every deal is different. So every time you use one approach, you never get to use it again anyway. So it's -- you just got to stay nimble and stay engaged and have a great team and keep reading, keep searching, keep listening.

It's Gary Wu from [indiscernible]. Just wanted to get your thoughts on your exposure to reimbursed markets as you get into these clinical tests. Are you pretty agnostic as long as the business opportunity is good? Or would you like to keep a limit on how much your exposure is to a reimbursed market?

I'll let Dave go with it. But the higher level question, how much do we like diagnostics, I guess. And we're going to be in diagnostics because it can scale, and there's a lot of leverage and a lot of synergies with our content, which we've talked about, you all get that. But we are going to be picky. So we want to stick to the diagnostics that can make money. Oncology, neuroscience, the areas in cell and gene therapy that Dave's talked about. And how much more deep we go, I think, depends on what it is. But exosome is a platform, not a single product and we've got one out the door. We're close on the second and Johan's in the back here, the father of the platform, but we've got another half a dozen or so to go, right, Johan? So -- and that's why we want to look at partners, too, because we can't do them all serially by ourselves. And we are still -- one reason we bought Asuragen, too, was to get that team of our regulatory experts and good at kitting and good governance, good experience in governance of diagnostics, we just don't have enough. And Dave is -- we've been...

I can add to that, Chuck.

Yes Kim. Go ahead, Kim.

So you're right, Gary. Thanks for the question. Reimbursement is super important, right? So there is several aspects. Early on in development cycle, we do already know if we have to go establish that or whether we can piggyback on an existing reimbursement code, right? So it is already a factor in the innovation center that Johan runs. The MAC question earlier, so we have the Waltham lab of NGS. We also have the Austin lab, which is Novitas, right? So we can also pick out there, which one is most favorable for our designs of the exosomes. The nice thing with 2 labs is that we'd also have some redundancy in case there's a force majeure. It gives us some multicenter or capabilities to validate each other. So those are aspects that we really like. Most other kitted products that we design and sell, especially the Asuragen portfolio, we sell to the laboratories, right? We sell through labs, and they obtain the samples, and they have to deal with the reimbursement and to make money off of it. Of course, it influences what our ASP is going to be, but we don't have to deal for all these products on market with that same reimbursement question.

Maybe we have maybe time for just one more. We've got a flight to catch. Puneet, did you want to get one more in?

Just one on M&A. Last -- so this is a question that comes to me quite a bit from investors broadly and maybe you touched on it briefly. This is more of a funnel and an ambition question on M&A. It's -- ambition is clear from the comments you made about Aldevron. So the real question is, at this point, the market and the market participants and that your peer group companies are -- they are a lot more knowledgeable about the proteins and proteomics and genomics and the opportunity in cell and gene therapy and biologics overall. And obviously, the market, it appears to be a lot more competitive for these acquisitions. So what's changing in your process in which when you have -- when you talked about 100 or so targets in your funnel and Jim showed this nice funnel slide a few years ago to now. What is -- what do you have to change sort of going forward? Because obviously, ProteinSimple was very successful, but it was back then in 2014. So 7 years later, what do we -- how are you changing the process? Or anything that you can provide there that gives us better visibility into the funnel?

I can say that one thing we're changing -- and you probably have to go earlier. And so we're looking at partnerships where we maybe take an equity stake first and try to not fully commit, but take a shot. And there's a couple of those on deck we're looking at. We've done one recently in China to that extent as well. That's probably one change because I agree with you. I think the days of finding a sweetheart call come in and coop a deal are probably going at a nice healthy size anyway. I think the processes are going to continue. They're just going to be expensive. And maybe we have to lower our sight. But if we can -- like Jim said, we can figure out a way to get the return, we'd probably still do it, but we have to have synergies and more sales synergies to create more return of what we buy it if we're going to pay more, right, so.

I actually don't have anything and hope to add to that except patience and time as well, right? We heard some noise over the past 5, 6 years around how many acquisitions we were doing a year and buying spree, et cetera, and we're trying to -- we assured everyone that we are being very diligent about it and being fiscally responsible and return expectations and so forth. And I'm not going to change that just because we're in a hot market right now. And I think with time, things are -- everything is cyclical. We all know that. And the key is it to always be active and out there and knowing and ready to strike. So when the time comes opportunistic-wise, whatever that reason may be, we can strike.

I've given plenty of therapy to an abundance of business leaders who've lost their deal, came in second or whatever, heartbroken or had too much invested in and spent months and they only -- how you should end up with the same thing every time. Don't worry, there's always be another deal. So you just got to move on.

And I'll just remind from a comment I made earlier, too. I mean it's another reason for not getting too ahead of our SKUs in the operating margin targets and commitments because, we've got an amazing internal engine right now as well. So there's some ideas that are coming up to the prioritization process in the future that would cost more money to do than we've historically spent on our OpEx, but they're not fully vetted yet. But hopefully, by the time they'll vet it, we'll be in a position where we are north of 40% and can be able to make those internal investments while still maintain that high margin.

Yes, do the ROIC calculation on the GMP factory, $50 million spend, $200 million revenue in 5 years at probably 70%, 80-plus-percent gross margin. It's much higher than 10%. I promise you.

And we have plenty of investment in every one of our instrument platforms, the consumables was running out of capacity. So on every front, we're expanding factories. And that even includes our ELISA Kits that they are also are growing their capacity as well as our Luminex platform, which are kind of the older things in the portfolio, even those things needed some capacity expansion. But as Chuck said, it's a great ROIC. There's nothing better than those organic investments.

We've got to go, I think. Well, thank you, everybody. I am extremely pleased you all showed up in person, that's great. And for the 25 of you that are here, there's actually 90-some online. So it's been really big success for us. And we really appreciate your interest in our company. Thank you.