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

Okay. Good afternoon, everyone. Thanks for joining us this afternoon. A real pleasure to have Bio-Techne. It's think about life science tools companies, it's the one that got away, the one that we seldom cover as biotech. I'm excited to hear what Jim has to say. From the company, we have CFO, Jim Hippel. I think in the background, we have David Clair, who runs Investor Relations. Jim, thank you for taking the time this afternoon.

Yes, you bet. We haven't gotten away, Vijay. There's plenty of -- growth.

That's a good one, Jim. So, maybe on that note, right? And again, apologies if some of my questions are big picture basic. I was looking at your presentation with clearly, the organic has inflected, right? When I looked at your Analyst Day presentation in the past two years, it's been double digits, excluding COVID, right? Like has something changed in the business? And what caused this inflection in the business?

Well, I mean it's actually progressed the way we had planned for it to progress for the past five to seven years, to be honest with you. I mean we're building this portfolio that we have over the past eight years as an adjacency to our core reagent portfolio with the instruments, layering on the instruments, layering on the genomics, the diagnostic capabilities. We knew when we bought these businesses that they were still in the kind of early adopter stage of their profile but that they had the technology the applications and the market size ahead of them and unique positioning in terms of competitive advantage to really go up that growth curve, to be early adopters and early majority, et cetera. And we knew it would take a few years for that to start to happen and we would gradually get there. And here we are in the case of ProteinSimple almost five years later. And it's growing faster than it ever has, even though it's double, triple the size of what it was when we bought them. And of course, our spatial biology business, ACD, a couple of years behind ProteinSimple, but very much following that same trajectory. Using those two as an example because they're two of our larger acquisitions. But we've made over 15 now acquisitions and many of those have followed very similar trajectories based on their life cycle, but maybe smaller, so they don't stand out as much individually. But it's really far right along the lines. We said five years ago that we'd be $1 billion business by this year. And sure enough, we're going to hit that. We got that run rate going with this right now. So it's not necessarily a surprise to us. The only -- the inflection that occurred with the last quarter of our fiscal year '20 when COVID initially hit caused a bit of a rubber band effect, where things got pulled back when they were shut down and then got released when they came back online. So it caused this kind of dip and then this huge surge. But when you normalize it out, like we try to do at that roughly 13% 2-year CAGR, it's pretty much where we expected it to be six, seven years ago. So it's not necessarily a surprise to us. And the fact that we've -- the plan has worked out in total the way it has -- there's always pieces of it that don't work out perfectly. But in totality, it has worked out the way we envisioned, it gives us confidence that our vision for the next five years will be very similar.

That's remarkable. It's amazing if I think about the prior decade, I guess, 2010 transformation and life science tools is that you had big acquisitions or big spin-offs, it's amazing. The number of companies who are talking about these smaller acquisitions, having transformed companies in the higher-growth assets that you guys are a prime example. A couple of other tools companies talk about it. So it's really interesting evolution in the space. Along those...

Maybe I think what we're most proud of also is not so much the execution that's occurred on these acquisitions we bought and seeing them develop the way we envision but also the synergies that we achieved with our core reagent model, which is why -- another reason why we bought these. It was because we thought 1 plus 1 will equal more than 2. And the growth rates we're now seeing in our core reagents, which were flat to dismal eight years ago and then gradually crept up to low single-digit growth and mid-single-digit growth. Now we're talking about double-digit growth in our core reagents. And this company hasn't seen that for 25 years. So I think that's what we're actually most proud of, to be honest with you.

Fantastic. And I think I was saving my long-term financial question for the last. But because you brought up -- makes you guys confident of the next five years, what should the next five years look like for Bio-Techne?

Well, as we showed in our Investor Day deck, the model is to get to $2 billion. And it's to go from a 13% organic growth rate where we kind of think we're at today and exit five years from now at a much higher organic growth rate, closer to 20%, call it, high-teens. We believe with the portfolio we have today, without any acceleration of any further markets, that 13% is very sustainable for at least the next five years. We're still less than 15%, in some cases, less some 10%, penetrated in all of our of our key growth platforms we have today. And again, they're growing faster than now than they were five years ago on a much bigger base. So that's kind of the floor as we see it. The accelerator that gets us into the high-teens growth five years from now is the two emerging markets that we're still in the very early days and very well positioned, and that's in our liquid biopsy platform with Exosome Diagnostics and then now with cell and gene therapy. And cell and gene therapy who gets the press, and we talk about the most is our GMP proteins, which is a key ingredient into that whole therapy process. But reality is cell and gene therapy touches almost our entire portfolio, just like our entire portfolio touches biopharma -- traditional biopharma today, cell and gene therapy is kind of next-generation biopharma. And so where our instruments have been and are continuing to be used in traditional biopharma today, they are being used quite a bit also in the cell and gene therapy. And that's where a lot of our accelerated growth is coming from and where we expect it to come from in the next five years and continue to increase that growth rate.

That's incredible. I think I'm looking at your Analyst Day deck, right? What goes into the liquid biopsy piece, Jim? What gives you the confidence -- is this -- the end markets are growing 20-plus and so you should be 20-plus? Or is there some differentiated angle here for Bio-Techne?

Well, it comes to Exosome Diagnostics. How we think about it is it's not just a test. It's not a one-trick pony prostate test. Yes, that's the first commercialized test, but it's a platform. It's a technology. It's very differentiated, and there's no other exosome-based diagnostic company out there today. And we're convinced it's a superior technology to the other technologies that exist out there that are most perfectly used, mainly -- cell-free DNA. And it'll take some time to demonstrate and prove that out. But I think slowly but surely, we're doing that and we'll continue to do so. A lot of big pharma already gets it. We have a multitude of partnerships with almost all the big pharmas on various programs to have -- use our technology for diagnostics for drugs that they're developing, whether they're cancers or for orphan-type drugs or for neurological disorders that, frankly, only our Exosome technology can even find biomarkers for. So again, we think it's a platform. It's got a number of different tests and angles that can go. We don't necessarily think or plan on doing all ourselves because that could take forever and be very expensive. But as we have one success after another, we're looking at partnerships. And we already have, like I said, a big pharma, very much interested. And we're working with them and they're paying us for that access. But also other diagnostic companies have got their attention and we're talking to them on a continual basis in terms of what's the right time to do a partnership with them and with what kind of indication.

You've brought up a number of points on ExosomeDx. It's a platform. It's not a one-test company. Let's talk about the current existing test. I think you have a prostate and kidney test on the market. The profit, I think it's been around slightly longer perhaps given screening rates being impacted by the pandemic. I think one of the questions is, when does the base volume get back to pre-pandemic levels? What are your current expectations on that front?

Yes. I can tell you, I think we're pretty much there now. I think we'll see it. And hopefully, we'll talk a lot more in next -- in our next earnings call. But we're pretty much there now. We've -- yes, the timing was bad, right? I mean it took us an extra year to get Medicare reimbursement for various reasons. And then once we got the Medicare reimbursement, COVID hit, right? And that's been 1.5 years of no one wanting to see their doctor. So it's been a problem for all diagnostic companies, but especially ones that are trying to break glass like we are. But in the meantime, we did a lot of back channeling in marketing with digital marketing and so forth with doctors and with patients to keep them aware of our test and the technology. So that when they did go back to the doctor, they'd be hopefully asking for it. And I think we're starting to see some of the benefits from that come back. Obviously, having access back into the doctor's offices again is helping. And there was one more clause, let me think about that. Sorry, I just lost it.

It will come back. It will come back. Maybe on that point, Jim, what is the current -- you mentioned Medicare reimbursement rate. So where are you on the commercial reimbursement side? And are there any inflections from a reimbursement perspective? How should we think about this business as we come out of the pandemic?

I was going to say they'll tie into this answer as well. So the last piece of this puzzle, we recently bought a surgeon and a very strong, strong management team with great expertise and experience in diagnostics in general, the science, especially the regulatory aspect of it, the reimbursement aspect of it. And we've already combined the surge in Exosome businesses together under one leadership. And they're already finding some early wins with how we commercialize, how we go to market. And we believe that's also what's helping get our test rates back to pre-COVID levels and beyond. So we're very excited about that. On the reimbursement side, roughly 60% or so of our patients profile-wise are Medicare. So -- and we have that covered. So it's really the 40% that we're continuing to chip away at from a reimbursement perspective. And we make progress every quarter in getting new insurers to reimburse the product. We have One National who is on board now. And it will take time, and they all have their own nuances and what they want to see. It's almost like you got to do a separate small study for every single one of them. But it's one of those things, too. As it becomes more used in practice, there will be more pressure to get reimbursed. And we're seeing that start to happen. So it's not happening overnight. It'll take probably a couple of years to get to 90%-plus reimbursement. But the key here right now is just getting the utilization of the test because that will be kind of self -- that will help drive and push the payers to feel like they need to pay. They'll getting pressure from their patients.

Understood. And where are we in the adoption curve for this test right now?

We're in way early days, I mean, way early days. So yes, it's still greenfield ahead of us for sure.

Understood. And as you think about the tough five-year outlook, how big should ExoDx and ExoTRU kidney be when you think about that $2 billion goal or at least meaningful or look, we have a portfolio approach and there are other tests that could come in and it's a fairly derisked model?

Yes. I won't get too specific, but I'll tell you this, it's all $12 million or $100 million of revenue is what we expect between the EPI and the ExoTRU. And some of that will determine how much that ends up being through a partnership versus doing it on our own, but it's at least that much.

Got you. And this is your five-year goal, right, about $100 million between both these tests?

Minimum.

And on the kidney side, again, the point of this being a true platform, right, that thing kidney certainly demonstrate that adding on top of prostate. But how do you plan to commercialize this test, right? It's slightly different, right? I think it's a rejection test. You need to go after transplant markets and that's a slightly different base. Can you talk about your commercialization plans for ExoTRU?

Yes. So to be fair, we're actually going down a dual path. We're going down a path of what -- going alone, like we did with EPI. But we're also actively talking to a number of potential partners to -- who already have access to that channel and have a reputation -- a good reputation there and would be a great partner to speed up the adoption of this test and make it -- hopefully make it the primary test that doctors want to use. So we're in active discussions with a number of potential partners. And I expect that by the -- hopefully early on, but definitely in the second half of this fiscal year, we all have either announced a partnership or we will have a more distinct plan to discuss or to announce about how we're going about it alone. But we have internal plans to do that. And we're going down that path in parallel in case the partnerships -- the discussions don't pan out like we would hope. But we do think that it will be less expensive, less -- you're taking a much more concentrated group of doctors, of clinics to do this. So you don't need nearly the bandwidth of sales reps that you would say for the urology world and definitely for the private practitioner world. And from a reimbursement perspective, unlike the prostate test, where we were basically breaking glass with trying to get the very first liquid biopsy-based prostate test approved through Medicare, this has already been done, right, by Natera and CareDx already have tests that have Medicare approval. So it's generally easier to get that approval if the fundamental of a liquid biopsy solution has already been approved and now you just have a different method that actually could show better results. So we're optimistic that we'll get that through the reimbursement process with Medicare much faster. And Medicare, I think, is over 90% of the reimbursement for kidney transplant as opposed to 50% or 60% like it is for prostate cancer.

So there -- sorry, complete your thought process.

No. No, I'm finished. Go ahead.

You brought up Natera and CareDx. We actually had CareDx earlier on this afternoon. How -- like do you compete against those players head-on? Or -- and if you do, is your test differentiated? Do you have any clinical data to show that ExoTRU kidney is different from what's out there in the market?

Yes. I believe the public -- the study that has been published in [ Indiscernible ] does demonstrate the NPV value sensitivity, all that being better than the current -- both current tests that are out there in the market today. And it also, I believe, has a better -- does a better job of differentiating between, call it, false positive as negatives in terms of -- there's different reasons that your kidney could show potential rejection, but it's not necessarily rejecting it. And our test has a better way of filtering out that noise so that it doesn't send false alarms, so to speak, on kidney rejection. And then also importantly, it's urine-based as opposed to blood-based. So rather than a patient having to perhaps travel hundreds of miles to get to a clinic to get a blood draw, they literally could pee in a cup at home and send it in just like they can do that today with the prostate test. So it's also...

Yes, makes sense.

Yes, it's very much a convenience factor for the patient as well.

Absolutely. And that brings me to the platform question, right? Platform, by definition, it implies there are other tests in the pipeline. What other tests can you go after using this technology?

I mean there -- whether it's colon cancer, breast cancer, various blood cancers, bioneurological disorders, these are all, I'd say, in the pipeline because they're all tests or signatures that we're currently working on with various biopharma customers for -- as a potential -- any diagnostic. So that would probably be the best, most likely avenue of partnership for those other types of signatures. The only important thing about exosomes that I want to mention as it pertains to the competition, whether it's for prostate or for kidney or for any other, is it's fundamentally the exosomes our tests are the only ones that use exosomes as the basis for the -- finding the signature as opposed to all the other tests out there use cell-free DNA. And there's a lot of differences and pluses that I can give you as to why we think exosomes is better science than cell-free DNA. But to me, the most important one is the fact that cell-free DNA is expelled from cells as they're dying, whereas exosomes are expelled from cells throughout the entire life -- from a time they are born, as they're growing and then through the dying process. And there's a lot -- as a result, there's a lot more exosomes in any given fluid than there is cell-free DNA to actually find. But even more important than that is because they are expelled from living cells, it means the chances for earlier detection are much greater. That is the biggest differentiator between our test and any of the tests that are out there for any other signature is that because of the nature of the biology, you have a better chance of early detection.

Jim, you're pretty sharp on the science -- you did a good job explaining that. One question that comes to my mind is if exosome -- those exosomes are being secreted by all living cells. Does it create a signal to noise ratio because cancer cells, normal cells, that's a lot of secretion, right? So is that an issue for you guys?

Yes. Actually, I don't understand all the science at this level, but what I understand what I heard from our folks from Johan is that it's actually the opposite. There's more noise in trying to find cell-free DNA than there is -- exosomes. And the technology that we have to isolate exosomes and extrapolate from them the unadulterated cell-free DNA within them and RNA, it's easier for our -- generally speaking, it's easier for us to do that with exosomes than it is for cell-free DNA. The reasons why we have to get Johan in here to explain that, but that's how it's going to explain to me.

We'll save it to Johan after another day. I'm not sharp on the science, so we can leave it for another day. Maybe switching on to about your Protein Sciences, right? I was looking through your Analyst Day deck. You classify that as proteins, antibodies, small molecules, analytical tools, right? How -- within the Protein Sciences, where does the relative revenue contribution of these four different segments and how fast are they growing?

Yes. In general, there's -- we actually -- internally, we have that segment run by two different divisions. So there's kind of the core reagent division, which is the antibodies and proteins. And then we have the analytical tools division, which is our assays, both our manual ELISA assays and then all of our automated instrument platforms that are on assays as well. And the size of those two divisions are roughly 50-50 in terms of their makeup of that segment.

Got you. And you did bring up ProteinSimple. That acquisition has been a home run for you guys. I'm just curious that when you guys bought that asset versus relative to the deal model, how have expectations tracked? What's been the reality versus expectations?

Yes. It's -- I'd say where we're at five years out, we're pretty much on where we had hoped to be. I think the curve was -- I think we had it in our models a little more linear and it actually turns out to be. It always turns out that these -- the growth curves tend to be more J-curve in terms of how that early adopter versus early majority pickup actually happens. So -- but in terms of where we're at today, where we expect to be five years, I think we're spot on where we'd hope to be. And from a profitability perspective, we're way ahead of plan. We're actually way ahead of where we though we'd be. Yes, we were -- we leave a message, and we were hoping that we could get that business to a 30% op margin business and we're already well above that.

Interesting. And within Protein Sciences like that, that's a pretty broad term, right? What are your key products out there? And how differentiated is this? Because again, sometimes it gets confusing for us. A lot of companies talk about proteomics and I can't differentiate between a mass spec and other proteomic tools. So maybe talk about your drivers here.

In the Protein Sciences space, I know how I think about it is that the very, very core of our business is proteins. And it's not necessarily what this company was founded on, but pretty dang close, 35, 40 years ago when we first started developing proteins and noted for being the highest quality, highest bioactivity, highest lot-to-lot consistency. R&D Systems is the gold standard out there for proteins we use for research. A very good protein makes a very good antibody. So therefore, we also have a very large antibody portfolio that are also very high quality known for high-quality antibodies. It's relatively narrow compared to, say, like an -- which is why we purchased Novus six, seven years ago was because they have a sourcing model that expanded our antibody portfolio from like, I don't know, 15,000 or 20,000 to over 200,000 antibodies. But the core ones that we make are generated off of our very high-quality proteins. So a very good quality makes a very good antibody. High-quality antibodies, when you pair them together, make a gold standard, high-quality assay. And that's why we also are known as having the gold standard in ELISA assays that use anybody tests. And then those three components made up the core of our business that took a better part of 30 years to build internally. And then starting around eight years ago, with Chuck coming on board, that's where we started to look externally to find assets that can leverage that portfolio. And we started with the instruments, which were nothing more than automated assays. But at the end of the day, they use our antibodies to perform those assays. So that's kind of how Protein Science has evolved to where it is today. At a high level, there's nuances, of course. And then on the Diagnostics and Genomics side, our core Diagnostics Reagents controls business, that's actually what this company was founded on 40 years ago, and it was the byproduct of the plasma from those hematology controls that they made the first TGF beta from and became the first protein product. But -- so there's a bit of sentiment with that -- sentimental about that business because it's very core of how this business was formed. But still a very good business for us today, good, solid, mid-single-digit grower, not very strong profitability. And we've built around that other controls over the years, where we can do various chemistry controls and other diagnostic kits. I think of that business as our diagnostics reagent business as being kind of the picks and shovels for the diagnostic industry. There is not a diagnostic instrument maker that does not buy our reagents or our kits for their materials for their kits, I should say. And then we've built around that over the years with venturing into the genomics side of diagnostics as opposed to just pure proteomics. That's where ACD came in with its spatial biology platform. And then, of course, we continue to kind of go upstream, get closer to the patient where the scalability becomes bigger and bigger. And that's in the actual diagnostics, the inpatients with the doctors and patients would use. And that's where Exosome and the surgeon comes into play. So it's kind of -- we kind of have the whole workflow of diagnostics from in-patient diagnostics all the way down to the tools that other diagnostics would use for their products.

That's extremely helpful. And the way you explained protein sciences, it all made sense to me, starting with the protein and antibodies and how that went into diagnostics. It made a ton of sense. So thank you for explaining that.

The one last thing I'll say on that is that people say, why diagnostics when you're a life science research company? Diagnostic is nothing more than an assay, an assay that's used for clinical purposes. And so we said, why would we forgo ourselves a huge, huge scalable market when we make the world's best assays for research? Why shouldn't we start to apply that knowledge, that technology into assays for clinical use?

Makes total sense to me. The one, I guess, question I had was the core of the businesses. You manufacture GMP-grade proteins, right? Is there some metrics around the market, Jim? And how large is that market? What is your market share? Would the market grow at? And is there something differentiated? Because your GMP -- you're manufacturing GMP-grade proteins.

This market is still very, very nascent. If you think bioactivity, lot-to-lot consistency is important for research, you can only imagine how important it is for manufacturing of cell and gene therapy. So it's only natural that we should be in this market. And once we are, customers will gravitate to us. And that's exactly what we're finding. That's why our GMP protein business was practically nonexistent three years ago, and it's been doubling -- more than doubling every year. And now it's a $20 million to $25 million run rate and still growing over 100%. There's as many, last I read is 1,300 different known cell and gene therapies in various stages of clinical trials. Our reps tell us that for everyone that's in a clinical trial, there's another 10 that are in preclinicals right now. And so we're still at the tip of the iceberg of this. And most of our revenue, if not all, of our revenue today from our GMP proteins is coming from these preclinicals or early Phase I or Phase II, simply because we were a little bit late to the game to the ones who are currently in Phase III or commercialized. And we believe we are very much taking share in those next-generation signatures or therapies. And it's probably why we got into the business because we were hearing from customers that they were begging for someone like us to get in that they felt like could be a supplier once they were successful and could actually make these therapies work. So it was -- we see -- it was ours to lose if we didn't go after it. And we're still at the very, very early stages. And we signed roughly half a dozen, I think, customers already for long-term supply agreements, where we would essentially be guaranteed 95% of their supply. And these projections by our customers is that once these therapies are commercialized, it's anywhere between $5 million and $20 million per year per customer per protein. So it doesn't take that many of these what we think are thousands that are out there now to become successful for us to become a several hundred million dollar-type business.

That's fascinating. And how far are we from these projects hitting -- getting a Phase III approval, Jim?

Well, again, that's a good question. That's probably the $50,000 question with regards to is just -- can this be -- can this happen any earlier than five years? Or is it going to be later than five years, and it's really dependent on how fast these get through their trials. And that's why we've kind of -- it could be as early as three years for some of these. It could be as long as seven years for some of these. And so we've kind of picked the midpoint and said five years, but we're continually doing analysis on it to try to understand better where our customer is at in their process. And we're also -- because there are so many to go after, we're doing, I think, a good job of analyzing these customers in terms of what it is they're going after and what we think their likelihood of success is so that we can channel our resources to the most likely therapies to win first. It's not to say we won't sell to those that won't win or have a lesser chance. But let's prioritize our efforts first on those that have a higher probability of making it all the way through.

Yes. And then you did bring up on DGG, RNA scope and ACD. What is -- what do these tools enable customers to do? And what should these products look like over the five-year LRP period?

From a spatial biology perspective, that's what we call now the ACD-branded product. In my layman's understanding of what the technology does and what it's used for is immunohistochemistry is widely used methodology for analyzing what's in a tissue sample, where you want to keep the morphology of the tissue and also see spatially where that protein resides within that tissue. So two things, preserve the precious sample and also see visually where it's at. There hasn't been a good technology that's been reliable that could do that for the genes -- the RNA component of a sample. And why you may want to look at that as proteins, as we all know, antibodies as we all know are -- they're finicky. They don't always work. And there are a lot of proteins of interest that don't even have known antibody targets for them. So at a very high level, rather than start looking for the protein first in a sample, when I look for the RNA that expresses the protein, now that we have a technology that can do it with practically 100% accuracy at a single cell level with extremely high sensitivity and give you all that spatial information that you get by using IHC, keep that tissue mythology like you would with IHC. But at the end of the day, if the RNA is not there, the protein is not there, so you can stop looking. If it is there, then you can continue on with other analysis to understand the protein expression using traditional IHC. So at a very, very fundamental basis, that's my understanding of it, but it's obviously got a wide application use because it's an exploding area right now. And as you know, there are a lot of companies in the spatial biology space. Luckily for us, we see most of those companies as being adjacent to us as opposed to being direct competitors to us. They're much more into the high-level screening aspect of spatial biology, which we think actually helps our business because we're down more than -- once you identify what targets you want to go after, that's where you use our technology because of its high, high sensitivity. So these other companies, for example, NanoString, who is a partner of ours, even at 10X, their technologies are much more high plexing and screening. And we think that's helping expand the market for us ultimately.

That's fascinating. And then maybe back to your LRP, the five-year outlook and where you think revenue should inflect from low-teens to perhaps high-teens or even 20%. Is there a difference between when you look at those two segments, DGG, Diagnostics and Genomics versus Protein Sciences? Should those segment growth be in line with overall corporate? Or is there a difference between those two segments?

It's actually a lot closer now than it was, say five years ago when we used to put our analysis together. And I think part of the reason for that is because two of our biggest growth drivers that will inflect us from the low-teens to the high-teens being cell and gene therapy and the Exosome platform. Each of those reside in a different segment. So I think the growth rates will be fairly comparable. You can make an argument that Diagnostic Genomics over time will roll a bit faster just because they're on a smaller base to begin with. But I think they'll be fairly comfortable.

That's fascinating. And you did mention the top line aspirational goals, but what does it mean for operating margins and earnings trajectory for the company?

Yes. So in our outlook that we presented at our Investor Day, we talked about a 40%-plus kind of operating margin. And we didn't go beyond that. And we could have because arguably, we could get beyond 40%. But we also don't want to pin ourselves down nor pin expectations down to much beyond that because that gives us much more flexibility in the future with regards to investing more heavily in certain areas if we choose to do so particularly in the exosome, if we want to accelerate some of those indications faster. And also, frankly, we will do more acquisitions. And the acquisitions will invariably bring the operating margin down, if not temporarily. So the likelihood of us achieving greater than 40% post acquisitions becomes highly unlikely as well. So we just didn't want to get a number that was out there that was highly unlikely to hit, not because we can't get there but because we'll either choose not to get there and accelerate growth even faster and/or do more acquisitions that would invariably bring the margin down but obviously increase the revenues and the overall profitability of the company.

Understood. That makes sense. And Jim, you bring up M&A. With 15 transactions done over the last few years, do you feel like Bio-Techne now has a core competency in acquiring assets and executing on deals? Because I do feel like there's a learning curve associated with executing on deals. So I'm curious how the thought process award for you guys.

Yes. I mean we're with every deal, to be honest with you, and every deal is different as much as you want to tend or think they won't be, every deal is different, and you've got different nuances to it. But there's no question you learn from them and our whole team learns from them. And up until very recently here, we didn't have a corp dev team. We had a corp dev person. And then whenever there was a target to get serious about, it was all hands on deck. We pulled from the businesses, and we still do. And as a result, everyone's learned not just a core team or core competency. It's become kind of ingrained in our business acumen of our leaders. But having said that, more recently, we actually do have more of a team now as opposed to having one person. We've actually got a 4-person team now that's dedicated not only to this effort but also in helping get over the finish line, various business partnership deals that we're working on as well. So we think as a result of that, we'll see more activity. We'll see more results from that activity going forward than perhaps what we've seen in the last few years.

Understood. And then maybe the last question from my side, and I've been asking all Corps. Do you guys track D,E & I, ESG metrics internally? Are there some targets in this management comp tied to any of these metrics?

Yes. So it's something that we're definitely getting our arms around. And the reality is that our company is always -- if you talk to our employees, it's been a very proud company with regards to how we -- what we do day in, day out, ultimately, are key to saving lives. Probably every drug that's been made out there in some way, shape or form has used our reagents or our products in the process of developing that drug. So it's something our employees are very, very proud of. And by its very nature, it also tends to -- people who -- particularly here in Minnesota, where the core of the business is around helping your neighbors and helping charities out and things like that, we've always been very involved in our community, very involved with our environment. We have a very low manufacturing footprint. So carbon is almost nonexistent issue for us. We use solar power here in Minneapolis, for example, solar farms. So by our very nature, we felt like it wasn't something we attracted because it was just ingrained in what we did. But we understand the importance that having that visibility for investors and for more -- even more so now for customers, quite frankly, to understand how we take it seriously is of high importance. So we're in the process of putting around some formal metrics that we can share to demonstrate how good we think we really are at it. And I have to say we don't have room for improvement every company does. But we've been -- we do it innately. And now we're going to start showing and demonstrating to the rest of the world that we do that. We understand it's important.

With that, we're at the end of time, Jim, this has been enlightening for me personally, learning a lot about the business. Thank you for spending the time with us this afternoon.

Great. Vijay. Great to be here, and we always have room for another good analyst, just so you know.

We'll see about the good part. Thank you, Jim.

Take care. Thanks.

Bye.