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

All right. Good morning, everybody. Welcome to Day 3 of the Healthcare Conference. I'm Tycho Peterson [ from the health and ] science team. It's my pleasure to introduce our next company this morning, Bio-Techne. Just a very quick reminder, there's a submit question function on the website, if people have questions they want answered. And with that, let me turn it over to Chuck.

Thanks, Tycho. Well, welcome, everybody. It's Bio-Techne presentation. I'm happy to be here. I think this is [ eighth ] invite I've had. The first one was to a near closet size room with 7 people way up in the hotel, and I hope there are hundreds of you out there this year. But if not, we're going to pretend there is. And we have a great story to tell you, and we'll get going. First, safe harbor, of course, and we will have forward-looking statements. And like always, you want to reconcile the non-GAAP to the GAAP, get online on our website, and we have all the information you need there in Qs and Ks to do so. All right. So a quick summary of our company. We are now over 2,700 employees, probably should be 3,000, but like everybody else, we can't hire enough. We're at 35 locations. We're definitely a bolt-on strategy approach with a lot of legs in the stool, I'll get into that, but plenty of locations to work with, and groups of great scientists and people really around the world at this point. We're a fiscal model. So as of last June last year, we nearly got to $1 billion. We're not there yet, but definitely will be this year. And our market cap, like everybody else, has been a little volatile lately. I think we're currently hovering around 17. We are 81% consumables. People sometimes think of this really as more hardware than that right now, but we're not. We're 10% instruments, but there is about 10%, although the 81% is consumables, the cartridges that make our instruments work, which are -- there's a lot of science in our cartridges to make them great productive tools to the price because there's a lot of technology in the cartridge. And we're growing our services and royalties as well. On the right, you see our platforms. We started out as a company 40-some years ago in proteins, antibodies, assays and diagnostic reagents, but we've bolted on other platforms, not -- ProteinSimple-based instrumentation, cyber-based immunoprocessing technology, spatial biology, liquid biopsy and molecular products with the latest acquisition of Asuragen. We've worked hard over the last 8 or so years that I've been here with my team. We used to be very much an academic-focused company, at least 50-50 with biopharma, and like others, you've heard speak this week, then a big migration of mix to biopharma and mitigating that volatile funding risk in academia. Along with that, of course, we have been growing Asia and with Asia comes distribution. So you see the mix changing and the Asia is up at 17% now. China is a full 9% of our company; within a year or so from now, they should be about 10%. It was 3% or so when I and the team came here years ago. We have 4 really easy to understand strategies that drive the growth of our company. First and foremost, core product innovation. We are a science company. We have a lot of PhDs here. We devote a lot to R&D, and we focus on innovation, and we prioritize a lot year-on-year. But we're also not that big yet, and we are still focused a lot on geographic expansion. This will be a year we do cross we think $100 million in revenue in China alone, and we're growing across the board really. A lot of people talk about M&A as a tactic. For us, it is still very much a strategy, and we are bolting on. We are extending platforms we currently have, and we certainly have plenty to work on. Whereas I would say 7, 8 years ago, we were focused more on inorganic growth versus organic growth; the last couple of years, has been more focused on organic growth and for obvious reasons, ROIC on organic growth, building a factory to build out a product line pays back a lot quicker usually than M&A and especially at the prices of M&A in our industry these days. So -- and we've been growing a lot. We're really double-digit or higher over the last couple of years. You can't grow that much and not be focused on people and talent and the culture. We have grown from 800 people in the last 8 years to nearly 3,000 as I mentioned. That's a lot of growth. That's a lot of change management and culture and it's really a big focus for us and not to mention our ESG and everything else. And with that talent development, it's important to have that in the key strategy, especially in today's great resignation attrition type world we live in so. Speaking of ESG, we are very proud of what we've done so far. We are even though small and not so much gas emissions. We are focused on metrics. We're focused on energy management, water, waste. We are ISO 14001 certified. We are very proud of our diversity. We are over 50% female in the company. We are 30% minorities. We have a heavy rendition of Chinese scientists here in Minneapolis, our headquarters with 1,000 employees here alone. And our Board has a very diverse membership with roughly 25% female or minority. We're led by independent chair. And we are roughly a mix of science Board members, along with business and finance people. So a good mix, makes for a lively discussions at our Board. As I mentioned, we've been busy, and we've grown a lot. We've put almost $2 billion to work in M&A, but I think we've gotten back about $14 billion or more in cap -- in valuation from it. It's been a good story starting back in 2014, '13 in that area. Asuragen was our last and that gives us a really good start, I'll talk about later in terms of building out our diagnostics platform, better regulatory people, a nice line of products, with screening, diagnostics et cetera. And you look at the bottom, you see the results have been astounding. You see the dip here for the COVID year. But if you average the 2 years together, you get 13%. And it's worked pretty well. My screen is going crazy. I don't know why. There you go. And of course, last year was an amazing year for really everybody, not just us. So -- and we continue to do well. Our approach to M&A is very disciplined. We prioritize heavily. We have a lot of legs in the stool of our platform. It allows us to be opportunistic. So as we find deals and ideas that fit one of the platforms we have, then we can attack. So if you're focused on one deal at a time, it's hard to get much done. We're focused on a pipeline and a hopper at any one time. And you can see the results. We did it 2 or 3 years usually. So we do -- we are very careful. We look for a 10% ROIC in 5 years, which is up until this last year-end, it was very difficult to do anymore. Maybe now going forward, it will get easier again, we'll see. We do focus more on private deals and public processes for the obvious reasons and that. And we're -- we have a pretty good track record of bringing in teams that want to continue to build out their company, become a division here, stay on board and keep their mission alive. So -- so the latest deal. We did put a press release out, we thought we'd talk more about it today in a public forum. The Wilson Wolf agreement -- of course, Wilson Wolf was part of our ScaleReady JV. It's been doing great for a couple of years or longer here for us. We've known Wilson Wolf a long time. I've known John Wilson for over a decade back to my thermal days even. But they are an amazing company with nearly de facto standard bioreactors for the cell and gene therapy marketplace, which is developing and hopefully ready to explode. The deal parameters are as such: we will get 20% ownership investment with about a $257 million consideration upon them getting to $92 million of revenue or $55 million EBITDA. There's a put and a call here for that. We expect that to happen in year-and-a-half or less. They're at a $50 million or greater run rate at this moment and very profitable, over 40% EBITDA currently even now. The agreement then goes on for roughly 3 years to 4 years to reach $226 million in revenue or $136 million EBITDA, and we have to hand over $1 billion to take full ownership of the entity. This is expected to be at the 12/31/25, but you have to have a limit, so up until 12/31/27, but also deal parameters. If it should be under $226 million or under $136 million without the trigger happen, then we would pay out at whatever it comes at the same multiple that we would have paid out with the trigger, which is roughly a 4.4 TTM revenue multiple. So I think you'd all agree that's a nice set of terms. It's not without risk. It's all about the strong relationship. They're right down the road from headquarters here. The teams are already fully integrated because ScaleReady has been working great. And we're just owing on this. And the magic is going to be, of course, is integrating GMP Proteins, the world's best come from Bio-Techne within the GRx product lines, which is going to simplify the whole workflow of cell and gene therapy, which if you get into, you'll see this, there's a lot of complexity with trying to get the proteins into the bioreactor process in a sterile environment, very difficult currently. So we've solved that. So while we have a couple of dozen customers, and we're growing nicely in our GMP Proteins business, they have approximately 800 customers. They are virtually everywhere, and they're in virtually every clinical going on. So this is going to be a home run for us. It's just a matter of when. And hopefully, 3 years to 4 years or less. I mentioned about proteins. Of course, this is part of -- still part of our JV with Fresenius Kabi, 3 of us, and it's working great, and this does nothing more than really extend that relationship. And if anything, accelerate what we'd hope to do anyway long term. So -- and they're growing very, very fast and at a run rate currently over $50 million. So it won't take long for us to be consummating this deal completely we hope. A little look at our numbers. It's been -- last year, as you know, was a fabulous breakout year. It does come off of a leaner COVID year before. I think the way to think of it is averaging the 2 years together, if we do so, we have a 13% growth rate for the last 2 years. So it's been a steady improvement with our people, our teams, our strategies, our prioritization, our R&D investments and our acquisitions in the past 8 years, and the progress has been the plan. We laid out a few strategic visions over the years, and we've really nailed or exceeded everything we told you we were going to do. That also reflects the adjusted operating income as well as cash from operations. It's great to have all of cash because of the growth rates we've been seeing, we're literally expanding every site we're in. And just trying to keep up with demand. A little bit about our company digging deeper. We have not changed our segment structure. We have 2 segments: Protein Sciences and then Diagnostics and Genomics. The sciences side, of course, is still built around the reagents and the tools. So we have antibodies and proteins and then we have the tool side, the instrumentation for proteomics and the assays to go with it. So very high tools. Down below, you see the brands and they really are between R&D Systems and Novus for the content reagents brands and then ProteinSimple for the instrumentation brand. On the Diagnostics and Genomics side, we have had some changes. Most -- foremost, we've acquired a Asuragen, and then we've combined that with Exosome Diagnostics to make an electrodiagnostics division. And the brands you see below Asuragen Exosome for that. ACD, of course, we've just renamed the division spatial biology because we think that's what it is. And they're all growing great. Even our diagnostics reagents, the oldest part of our company, we're able to move some of the Asuragen controls into that business unit, but that business is growing better than ever since I've been here and probably you can guess why, with selling antibodies, there's an awful lot of customers out there in the world looking for antibodies for diagnostic kits, especially for COVID. So first, a little bit on Protein Sciences. Nothing has changed here. It's built around proteins, antibodies, immunoassays and instruments, the brands I discussed. We're the world leader in proteins. We are research-oriented. And what we're after more in right now is expanding this platform into cell and gene therapy with GMP Proteins and remaining the leader across the board for proteins. Antibodies have been exploding for years. A lot of it's our digital prowess, we've really caught up with the rest of the world. We have an amazing website with hundreds of thousands of products and an excellent search engine and excellent levels of content now for customers to look through citations and find what they need online in any category of research they want. Assays, we are the company that created the ELISA assay. It's over 40 years old, and we still remain the world leader in that. And of course, instrumentation, we are focused on that. They're built around productivity. They're built around proteomics. They're built around using the content that we sell. So there are strong synergies. So first, on the reagent side, just talking about proteins and antibodies. We sell the highest [ proactivity ] protein available. We are roughly 3x the price of our nearest competitor. We really only have 1 near competitor. And after that, they become little guys really. We still are very small market share. It's a very broad and expanding business market. Our growth has been double digit the last couple of years. It's grown steadily. I attribute that to the world moving more and more to quality, the mix shifting more and more to biopharma. Our digital platform is becoming better and better and just reaching better -- a better tipping point, more critical mass, better visibility of our company is becoming a real larger entity in the science world. On the antibody side, we make great antibodies. We make roughly 40,000. We build them off of our proteins. When you have the world's best proteins, you make the world's best antibodies from them. And from that, you can make the world's best assays, they all work together. And again, the digital side, I couldn't stress how more important it is; we have an amazing set of data scientists here. We do analytics on the web that are critical. We still work through Fisher as a partner. We've grown steadily there as well for the academic side, the biopharma side, we pretty much deal directly. We are now selling antibodies. We have multiple deals as therapeutics that are in currently in clinicals. We were doing more of that. We have almost doubled the size of our custom business for antibodies and proteins for large, large customers out there, which has a double benefit of once they get to know us and see how good we are, guess what they buy more of our stuff. So the pull-through is fantastic. Why is all this the way it is? Well, just look above here. These are the top applications, applied markets in our space, everything from cell and gene therapy to assays to Western block, flow, specialty media, this content goes everywhere. We don't have a single customer over 1.5% of our business. We don't have any of our products that really reach more than $2 million a piece. It's very well differentiated. They're all growing. It's all about breadth and scale and having a very good catalog and having a solid R&D engine and making products that nobody else can make. We actually have 450 proteins on our catalog that nobody else in the world even knows how to make. We're the only one that does full [ and out ] bioassays, proving out our bioactivity. On the antibody side, we just are -- we're the largest catalog out there. And we make and we source like others, but we focus on make and we're focusing a lot more on licensing. We license virtually everywhere -- we're more or less the intel inside model on all Luminex and every type of immunoassay out that uses type of a kit where if they're using antibody pairs, they're probably buying them from us. On the tool side, I mentioned a little bit, but we've put the immunoassays with the tool side because they really are a tool and they were very close with the instrumentation. We first and foremost have Simple Plex, which is a plexing high-quality immunoassay automated device. It's an hour and will sample the data, 4 logs at any range, no intervention, prints all beautiful plots, you come back from lunch, it's -- there's nothing like it. It's sensitivity is amazing. It's just -- it's second in the world or anything out there. The only thing that can beat is Quanterix, which will pay a lot more and will need a bigger room. Simple Western, it's the only automated Western blot system in the world. It's been that way forever. We have solid IP across the board here. In fact, the gross margins on all these platforms are 70% or higher because of the IP and because of the nature of the instrumentation where a lot of technology is built into the cartridge itself. The Simple Western is 3-hour sample to answer, works so great that markets are expanding beyond our -- what we've been thinking about. There's an example of biopharma is coming more back to using this as a simple Western platform versus using a mass spec or other things because it's a high productivity tool, great results for the money. And biologics has been a standard out there for QCing protein purity forever. All these platforms are now being specked in the cell and gene therapy workflow. So that's why you see the strong growth. We've had quarters in the past year as high as [ 50% ] growth. We see double-digit growth going forward. And we still are roughly 10% share. These are all $1 billion-plus markets, and we're just really getting started, we think. So in placements, we talk about why there seems to be an acceleration. It really isn't COVID related. It's more about tipping point, I think, and just reaching a size of critical mass. We now have near 700 machines out of Simple Plex. We are over 2,700 Simple Western machines in the world, and we're over 2,000 biologics. So these are becoming bigger and bigger numbers. So as an example, a couple of years ago, if we were going to sell a Simple Western, we probably had to do 1 or 2 visits and do demos. 90% of our sales now on our Simple Western platform are happening and occurring without any need for a demo. People see [ Sally's ] interesting down the hall and they've used it and they like it and they want one. Now moving on to the other segment of the company, diagnostics and genomics. These are the 3 divisions. The brands are as you see below, the ACD and spatial, Exosome and Asuragen under molecular diagnostics and then the more or less the R&D systems brand for diagnostic reagents. But we also have molecular controls now with Asuragen, something we never had even being the world leader in controls. It's something that was a gap. So it would be nice to have this to our portfolio. First of all, in spatial biology, of course, this is RNAscope and DNAscope under the ACD brand. This is a fantastic technology. It's growing still steadily. We see it as a division of something north of $200 million, $300 million in 5 years. The sensitivity is so good. It's on a single cell. We now have a version to the product that can Plex, so we can go with a 12 Plex version and we can go in banks with 12 after that with the XPlex products that are coming later. We have nearly 50,000 probes. So these are probes based on the genes of different species. So the catalog is growing and the space is growing and everybody knows how hot spatial biology is right now, and we are the partner of choice, especially once you stop -- you're done funneling down from the thousands of screening activities and you want to start digging into what you really have here, this is a tool of choice and the growth has been nothing short of amazing. Our other big play beyond cell and gene therapy, I'll get to that in a little bit, but it is our liquid biopsy play. And this is Exosome. We have a Medicare release product for prostate, and we are now ready to launch kidney rejection -- transplant rejection diagnostics as well. We're looking at either going alone or with a partner. There's a lot of interest in this. You can see bullet numbers are fantastic, best-in-class. This is a little easier area to go after. It's a very big market, lots of pain, of course, with the terrible statistics around kidney transplants and the ice has been, so to speak, broken by other companies that are in the field already, but with more invasive technology. Our -- both these 2 platforms, prostate and kidney are literally [ tea in a cup ], and so it's a fantastic way to move and patients like it. I'm going to get into a little bit on exosomes in general, but we essentially release, we collect, we isolate and we run either PCR or we can do RNA seq, which we're looking forward. We have other indications. We have an entire pipeline of products that come out over the next 5 years to 10 years, raise with up to 170 genes, better versions of Epi for prostate that would be rule in, indications for looking at exosomes and blood for neuroscience indications as well as lung and breast. We have a lot of CDx going on with big pharma because this is a fantastic weapon to work with for neuroscience. You can actually sample exosomes in a blood sample and isolate exosomes that come from the brain. So getting data from the beyond blood-brain barrier is a big issue. So neuroscience is a key area for us. So huge platform. It's the future. The next slide will tell you why. A long time ago, this began and began with CTCs. The world has moved on to sell for DNA, and we think exosomes beat them all. First and foremost, the prevalence is amazing. Exosomes come at all stages of life of the cell, not just the dead or dying ones. So unlike CTCs, by the time you get enough information to know that you have cancer, it's really too late for the patient. It's just not fast enough, not upstream enough where exosomes should get information all the time. The copies, it's RNA, the copies are thousands to one against DNA. You don't have enzymes attacking the DNA in blood. So you -- these are -- this is RNA and capsid within the vesicle and that's totally protected. And not on this chart, but origin, there are proteins on the circuits of the exosome that tell you exactly where it came from. So if you're working in indications in blood and trying to figure out the thousands of possible origins where this -- where the cancer may be coming from, exosomes will tell you. So it's -- we just think a better idea, better platform in the world is slowly coming around to this. Electric products, primarily Asuragen, a leading manufacturer on carrier screening. Of course, everyone knows about Fragile X and BCR-ABL, but they have just also announced in releasing SMA as well as cystic fibrosis. We have a site that's CLIA certified. These are kids. This team has melded now there with our Exosome team. And of course, this is for kidding out more and more Exosome products in the future. So it's a wonderful platform. It's growing nicely. We have low share right now and the market sizes are attractive. And of course, reagents, where it all began for us about 40 years ago, we still are, I think, the world leader in this. We have -- we are working with well over 30 different platforms for hospital-based equipment, calibrating blood samples and such. But now we have Asuragen's molecular control to add to that, and it's ecstatic. We're really happy about having that. Our growth is solid. We're now finally crossing that mid-single-digit growth and getting what we'd hoped over the years to get to a higher single-digit growth rate. Even here, the gross margins are very nice and -- but this is very stable steady business. Our biggest thrust in our future is really around cell and gene therapy. And you can see below here, we have an amazing workflow put together. It's taken us 5 years to do this. It's taken us a JV, but we have everything from the leukapheresis instrument with Fresenius Kabi to our clouds and for activation kits, the beads used to activate, which we can really get rid of with a simple enzyme just to solve them, which is better than magnetic. We have our way of gene editing with our TcBuster platform, which is exploding in growth. We can test and we can look at the cells in screen with our spatial biology platform with RNAscope. Of course, once you have isolated and you are ready to go [ with T cell ] you got to expand, you got freedom and our GMP Proteins will be that platform. And here is also where the Wilson Wolf, you do that in a bioreactor and our platform with Wilson Wolf, the GRx will be that. Of course, we have antibodies for all on the process for flow whatever customers want to do. We do special antibody programs for customers, and we're ready to go to work with what they need. We have other equipment for testing, including LR platform. There's a lot of QC need in this and virtually all 3 of our instrument platforms are being used and spec-ed in the QC part of the process of work flow here. So we think the strongest workflow for cell and gene therapy for the future in the next slide kind of shows you what's coming. It's a virtual Tsunami. There are over 1,000 clinicals going. Wilson Wolf has over 100 customers. The JV alone has on your 700. We're at just a couple of dozen or less here so far and nothing too much on the switching on the current clinicals because we were a little late in the game with our proteins, but the movements happening, we're already over a $20 million run rate and growing very quickly, we had a 160% organic growth last quarter in our GMP Proteins, and we don't see it lightening up. So I think here, just kind of tells you what's coming, and it's going to be nothing short of amazing. It's just all a matter of when and not if. Starting to sum it up. We have a nice set of platforms in a wonderful set of applied markets, and we're in the very early innings of market share and penetration, but we're reaching tipping points in size and getting more visibility, notability, more power in our channels et cetera, and the future looks bright for our growth rates in these ponds, which are north of $20 billion of potential. And putting that all together, that's how we have -- we released this slide as part of our investor presentation last fall in New York, and it's, we think, an easy climb to $2 billion at this point. And you can see how we put it together. We put out something like this 5 years ago to get where we are today, and we beat it. We think we'll beat this. This is all organic without any acquisitions. And right now, you can -- on that target in '26, you can tack on $250 million of Wilson Wolf as well, add us something north of 50% EBITDA. So we feel very safe about talking about something north of 40% EBITDA as a company at something north of $2 billion in revenue in '26. So with that, thank you, and we'll move on to Q&A.

Great. Thanks, Chuck. That was a great overview. Give me one sec here. So maybe to kick it off, obviously, there's been a lot of noise in the market on supply chain, inflationary pressures. I'm just curious how you're dealing with all this in the market today?

Well, we've talked about the past couple of quarters, and it's not to say we haven't had risk. We have had a documented amount of dollar potential breakage due to supply chain issues. And so far, the last 2 quarters, we have surmounted any issues we had. We had any breakage. Looking forward, we are starting to identify what are the new risks this quarter, and there are some, but it's a smaller number than last quarter. So we are very confident that we're able to get around the issues we have. We're not making cars, and we don't make high volumes of too much of anything yet. So meeting the vials and plates we need kind of there. So we take it very seriously. We've got a newer executive running all of our operations and done a great job. The team has expanded and we're very focused on it. Last thing I want to see, Tycho, is not shipping instruments due to a need for a $0.10 sensor. So…

Are you guys getting more aggressive on price? I mean that seems like kind of the trend in this environment?

Yes. We've come from places that focus a lot on price. We don't have full departments dedicated to it, the Thermos of the world, but we understand the math and what goes in with our brands and what we see in our power world is able to work at price. We have historically been a 1% or so net price increase every year, even with the strong margins we have, but just because of the quality we have and the brands that we have. And we're much higher than that this year going forward and for obvious reasons. And we have,,-- just like everyone else, wage inflation and such and we're [ passing the light ] on, and we're going to be able to more than cover any issues we have with our inflation, the price. -- probably running at 2 to 3x our normal let's say It would be my guess right now for the coming year.

Okay. Maybe we could spend a minute on end markets. I know biopharma has obviously done incredibly well up, I think 25% or so this last quarter, academics good. So can you maybe just talk to what you're seeing in various end markets and any noticeable impact here in the near term around Omicron?

Yes. We certainly saw a fast drop off here at the end of the quarter. I think Omicron shut down a lot of specialty academic sites and people went home for Christmas and people are putting people home, including ourselves, we were pretty much coming back to work and we reversed engines. And at least through like January, we're going to be back to work from home until Omicron moves to the system, but I think we all agree it's going to go very fast and try to flush it off out, hopefully. I think we've got it pretty well in hand. I don't think I'm going to see too many worries going forward there. So…

And how about on the academic side? Obviously, the NIH setup looks like we're still waiting for the final 2022 budget, but it looks like -- what are you thinking there?

Yes. So obviously, we saw 2 and 3 quarters ago, it was very strong across the board, academic came back with a rage a year ago, as you remember. And it softened up last quarter compared to biopharma. Biopharma is still stronger than academia. I think we're now starting to see academia just being a little more conservative because they're waiting for a budget. And we've seen both the House and the Senate budgets are very good numbers. I've been there, but they're late, right? They've got to get to a budget, they got to get this done, and we're going to start seeing probably more softening in academia. And -- but not -- it's pretty much like it's been so far. And around the world, it's no issues in China, no issues for us in Europe. We just -- it's a very -- it's kind of game on.

Let's maybe just spend a minute on some of the things you highlighted today, cell and gene therapy, obviously a big focus. Can you talk a little bit more about how do you fit the workflow? Are you seeing any impact on other parts of the business beyond your immediate cell and gene therapy offering?

Well, we spent a lot of time -- too much time on the workflow. We think we have the world's best workflow going forward. If you're looking out -- we're essentially doubling or better per year on our protein side. And I think that will actually accelerate as we get more things out the other end on clinicals or we get people switching to our category of proteins that they are currently in clinical to somebody else. We think we have built the world's best factory, 61,000 square foot factory, dedicated GMP proteins. We've had customers now starting to come and they're blown away by it. We have 3 products ready to go. We're working on our fourth. We have officially a catalog of 50. So we have the largest GMP protein catalog in the world. And -- but you need enough of them in inventory with lot consisting to try and work with a customer for switching because not anyone's buying just an IL-7 or an IL-2, they're buying -- they're working with 3 or 4 at least, and they want to -- if they're going to qualify somebody, they want to qualify the category, not just a single entity. So we're right on the eve of getting to that with customers. And of course, with Wilson Wolf at the helm here at a point of the sphere with 800 customers and involved in all its clinicals with somebody else's protein, we have that advantage of having them help us pull through more and more of our product. Our factory is able to do as much as $200 million of product and even more certain mix, which is almost double our current protein business for research. So it's not going to take more than 3, 4, 5 years to get to that level and expand. And we're already talking about expanding further into the workflow with media and GMP media as well as antibodies. So we'll probably do that at the same site, expanding out that site, and there's a ton of interest. So it's coming.

Good. Good to hear. I got a couple that came in on e-mail. Somebody is asking if you could talk more about the [ Acquia ] partnership that you recently announced?

Yes. It's a great partnership. As you know, we've talked about needing automation for our platform for a couple of years at least. And as we dug in and work with everybody, it became clear, I mean, every year, there's like 2 or 3 new players. Everyone is chasing automation for spatial integrity, right? And so we're working -- we'll try to work it everybody until we figure out who to buy or do our solid bit of work. But this is just the first one, and we're working with others. So of course, we've got Leica as well and Ventana on the bigger systems. But this is kind of moving down the Plex line something below the -- with the NanoStrings and 10x guys live, which we also partner with. But that system, the codex, there's already 160 out there. They've shipped 49 or something last quarter, I think already. They're growing very quickly. It's a great system. The teams get along great. Our -- we're going to work with our 12 Plex I-Plex version 2 system to start. It's ready to go. It's shipping, and we're very excited about it. They're a great company, great team. And -- but not exclusive, we're going to probably have other partnerships as well, and they get it, and we get it -- it's going to be such a big expanding market, I think there's probably room for a lot. So…

Great. Another question that came in on e-mail was really a competitive question. Both you and Abcam claim to be a leader in research antibodies, but Abcam has a lot more citations. Can you maybe touch on that dynamic?

Yes. We have a larger catalog. They are probably -- we're probably close -- we're not as a big product because they are the world leader in rabbit monoclonals and that's their focus. They source more than we do probably as well. They are very -- they're much narrower. Then they have assays, but they really focus nanoBiTEs primarily, where we focus on -- we're a portfolio-based company with a lot of synergies across different areas. I think the biggest difference that -- where we've improved in the last years is our website, they were the model 10 years ago, and they certainly did a good job of building out their website with content. It's hard to buy antibodies, of citations if you don't see content images and such. And we've spent the last 3, 4, 5 years, putting tens of thousands of images along with very detailed algorithms on our website for SEO for the researcher. And we're near 0.5 million different possible SKUs on our website, so you have to have a good search. That's the biggest difference. We've been taking share. I mean, the number -- they're public, the number of the numbers. So we've been doing high double digits for a while here and probably the only place we don't beat them will be rabbit monoclonals to be honest.

Speaking of kind of [ citation ], another question on Thermo just did the PeproTech acquisition. Is that good, bad or neutral for you guys from your perspective?

We think it's amazing for us, to be clear.

More.

Yes. Well, they've been chasing us for 35 years. I mean we're triple the price of their products. They copy our catalog. They don't spend what we spend on any area. It's having a new landlord that doesn't know anything about proteins isn't going to help them. I understand where they're going and potentially a play in the cell and gene therapy, their entire company site is about as big as just our GMP site. We have -- I think last time we guessed 8x the space with our business than they do. So it's -- we're really focused to win. I think they're behind. When I think about the leaders out there, I mean, we are a little bit late to the game getting behind Miltenyi and CellGenix but they're really late. I mean there's 2 or 3 other players after us before you get to them. I would never dismiss Thermo Fisher putting their shoulder into it, but this is a privately run company forever, now going under Thermo Fisher with governance that really isn't an expert in proteins. I mean I get asked -- the #1 thing I get asked is why are we doing -- why are we the world leader in proteins with margins we have that are -- and the growth rates we have and such commanding share and there's no IP, I mean why isn't the world liter with competitors? Because the answer, what I found is it's really, really hard. So -- and getting the folding right is really difficult, and that's where all the bio activity comes from. You have to build a bioassay to prove out that folding. Nobody can figure those out there. They're harder to make -- figure out than the protein itself. Now you have Google's tool, Alpha, whatever, and we're using that as well that will even help more with the next generation of synthetic proteins that are coming. We'll be a leader there as well. But we make 6,000, and we have assays for all of them, more or less. That's hard to chase. I'm glad they're there. They're -- they focus primarily on academia with a lighter budget. Biopharma always trans to the quality, and they've always been R&D systems brand oriented. So our growth rates have been double digit. Our growth rates in our GMP category are over 100%. We continue to grow them and I think we'll continue to do that even with them being part of Thermo. I should make it clear that -- and Mark made it clear with me, just like when they bought out Affy and had eBio, which is a strong competitor to ours. That's -- it's all on the divisional side of Thermo Fisher, not on the Fisher channel side. So the PeproTech line will not be sold through Fisher I'm told. So we have a strong relationship with Fisher as a channel, and we're something north of $50 million in revenue together. So they don't want to mess that up any more than we do. So it will be very much focused on the Biosciences division, probably trying to have built out their own workflow for cell and gene therapy. And again, we've talked about this, it's going to be such a big market, an expanding market, probably room for everybody for 5 years to 10 years, probably. So…

Maybe last one in the closing minute or 2 here, just on Exosome. Can you just talk on how test volume has been trending and then updates on noninvasive kidney transplant? And how do you go to head-to-head with Natera and CareDx which you've been out in the market a while?

Well, first, in Exosome, we certainly had a pause when COVID hit and patients would stop seeing their urologists. So then they start coming back and now we're worried about Omicron, but actually, we've still seen a nice trickle level. We are now at pre-pandemic test sales per day. Back yesterday, we had a record day. So that's all going well. And that's even with Omicron. So we're trying to dig in. Now it could be already an impact from the surgeon team taking the reins. So we have that governance across the board from commercial through R&D and full leadership with the surgeon team who are diagnostics kitting experts and been around the block for over a decade, right? So that's all helping as well. We are working hard at trying to launch the ExoTRU. We have partnership interest from everybody, and I mean everybody in the industry. And we've kind of picked we want to work with, and we're trying to close that. If we don't close it with somebody, we'll do it ourselves and we'll be out before summer, we hope. The numbers are fantastic. They're best-in-class. They beat CareDx and Natera out there. So it's not a difficult channel to go after. Urology is more difficult with 20,000 or so urologists. Here, you're talking about 100 transplant centers. So it's kind of a key account model. We find 5 to 10 really good experienced reps who have that channel, I think we're ready to go. So it's more about being who we want to be. We want to be a platform and we don't want to do them all ourselves. We want to have some we do. We want to have partnerships, especially with people that are already in the channel and already have clear representation, already have a math they're working with, et cetera. So those things are considerations as well. So…

Great. We're going to leave it at that. I know we ran a little bit over. So good to see you guys and…

Thanks, Tycho. A lot of fun. Thank you. Bye-bye.