Qiagen N.V. (QGEN) Earnings Call Transcript & Summary

Hi, I'm John Sourbeer. I cover Life Science Tools and Pharma Services at UBS. For our next fireside chat, we have QIAGEN. And with us today is CEO, Thierry Bernard. Hi, Thierry.

Thank you.

And a reminder: if you like, we have iPads up here. And through the UBS app, you can ask a question if you have any questions in the audience. So Thierry, I figured just to start things off, COVID testing continues to be a topic of interest. Can you just talk a little bit about the cadence of the COVID testing guidance for the year? I think it's $14 million. And then -- how do you see this normalizing as we see cases drop throughout the year?

So I think what is clear for us is that we will continue to decouple our P&Ls and our results from the COVID evolution, because it's far too volatile to forecast what's going to happen. We have said many times and we proved it many times that we are extremely COVID-relevant. So any time there is an outbreak or a surge, obviously, we are here with our product in Sample tech, in QIAcuity, in QIAstat, in NeuMoDx and many others to answer, but we don't want to take assumption on COVID. Quarter 1 was a solid quarter for QIAGEN, 15% growth CER, whereas the non-COVID, which is our priority growth, at 14%. So obviously, we have been helped by COVID in quarter 1, especially in January, COVID grew by 18%. But that doesn't drive us to take more assumption for Q2, Q3 or Q4. If there are more outbreaks, we need to see it as a bonus to our model but we really don't want to take more assumptions. So we stick to what we said in 2021, which is we will halve our COVID results in '22 compared to '21. And the real focus of the company is definitely on the non-COVID. And this is where we confirm that we will grow at double digit for the year, and this is where we want to really execute.

Appreciate that. And -- let's turn to the base business. And as you mentioned, QIAGEN has done a nice job of accelerating that to double-digit growth with 1Q pretty solid at 14%. Just can you talk about the trajectory of the base business and how you see this playing out in 2022?

For the complete non-COVID?

Yes, for the non-COVID complete.

Sure. So we need to go in a bit more detail line by line. So Sample tech non-COVID was slightly down compared to Q1 of 2021, but there is nothing to worry about. It's just an effect of demand in Q1 '21, which was very strong on Sample tech non-COVID, and after, obviously, 2020 with no demand. And so it's just a base effect. We are very confident that this is going to come back to growth. It grew last year without that base effect, so absolutely no problem here. And as we said some years ago, we think that overall, the Sample tech growth profile for QIAGEN is basically mid-single-digit growth. We took advantage, by the way, of COVID to launch new product in Sample tech, like new protocols like QIAprep&amp. And what is very interesting is that this was very relevant in COVID, but it has application beyond COVID. You can use it for flu, you can use it for COVID and flu test. So it's kind of interesting. It's not a short-lived product only. So Sample tech, we are #1 in the market, both manual and automation. I see no reason, if we continue to invest, for this to not continue. And I think that mid-single digit is a nice perspective. Moving on to QuantiFERON. So QuantiFERON had a very good year in 2021, has a very good start. You have seen 40% growth when there is still not a lot of migrant testing in the world. So we believe that there are still potential for QuantiFERON, not to always grow obviously at 40%, because here there are some base effect. But a double-digit growth of 12% to 13% for QuantiFERON is something that we can easily model. We have launched new products. We have launched that product dedicated to low resources, high-burden countries. We are the first company to do that. We have a fully automated workflow with our partnership with DiaSorin and Tecan and Hamilton for the front end. So this is healthy growth. And in addition, we continue to launch new application. Lyme is in Europe. We expect to submit it to the FDA at the end of the year. So -- QIAstat is a product that has been tremendously impacted by obviously -- positively by COVID. We have an objective this year at $85 million revenues, which is progressing compared to last year. The first quarter was good, both for non-COVID and COVID. And what is interesting is QIAstat now in Europe, at least, has a complete menu, to be relevant in any kind of tender: respiratory, GI and meningitis. So before we were extremely competitive from a system standpoint, because we believed that the instrument is better, and the worth was better than BioFire even as BioFire is very powerful, obviously. But now we start to have a menu which is company. It's not the case yet in the U.S. We have submitted our GI test to the FDA. We are now waiting for the approval. But for us, there is no doubt that QIAstat is a double-digit growth profile, not only in 2022, but also beyond. NeuMoDx has a more difficult base comparison with COVID, so we proposed a guidance to the market at $80 million for this year, which is slightly lower than last year performance. It's very simple why. We have a menu in Europe in -- on NeuMoDx, 15 assays approved. We don't have that menu in the U.S. So in the U.S., we have that massive headwind from COVID that will disappear over time. But beyond 2022, NeuMoDx, same story, it's a double-digit profile. We are gaining market share. It's a new system. So -- digital PCR, QIAcuity, it's a product that is very little impacted by COVID. We had a small application around wastewater testing. It was good to show our agility to develop quickly a solution. We had more than 60% growth, 60%, 6-0 in Q1. We continue to progress well on the growth of the installed base. We'll continue to add application. We will enter the biopharma market testing on digital PCR in the second half of the year. Here -- obviously double-digit post 2022. But here, even before, better than [ this ], I think on a midterm range, we need to take the #1 position on that market. What is also very good beyond the 5 pillars of growth is that the core business is doing quite well. Our chemistry for next-generation sequencing, which is completely platform-agnostic. We sell it on Illumina, we sell it on BGI, on Element, is growing at a solid double digit, 16% in Q1. There is no reason for this to go down post COVID. It's made also of our bioinformatic activities. It's $100 million -- $100 million of revenues, which is growing at double digits as well. This is a big market. It continues to grow. It's favored by basically trends in oncology and in next generation sequencing. We are positive here. And we had also good performance on our companion diagnostic. Why? Because pharma companies are starting to invest again, post-COVID, in clinical trials and new therapeutics. So overall, I think this company has exited COVID, if there is an exit to COVID, obviously, as a much more focused, solid, stronger, well balanced -- it's well balanced between life science and molecular diagnostics. Even inside the 5 pillars of growth, it's very well balanced between 2 key leading position, QuantiFERON and Sample tech, and some growth profile product with NeuMoDx, QIAstat and QIAcuity. And well balanced between the core business and the 5 pillars. And last but not least, well balanced geographically. We are not depending on any specific geography. Economic downturns happen all the time, and we are basically also well balanced here.

Thanks, Thierry. A lot to unpack there. Maybe just starting with the diagnostic side in QIAstat-Dx. Pretty solid growth in the quarter, around 31%, above that double-digit profile that you talked about. Can you just elaborate on what's driving that growth right now? And is this any mix of COVID or non-COVID?

So COVID is still strong for QIAstat. Let's be clear, we have -- and we were the first company to have a syndromic test approved by the FDA including COVID. So obviously, I always said last year that QIAstat was probably depending for 75% to 80% of the result on COVID last year. But we always said as well that QIAstat was born before COVID and will stay way beyond COVID, and it's a menu play. And what was important to us was to be able to launch meningitis in Europe. It's done. And why I'm less concerned by potential real base effect of COVID is that QIAstat started with the respiratory panel. At that time, it was not including COVID, but even if COVID completely disappears, which will not happen, people are still going to test for respiratory. So that's one of the main drivers. We have the menu. Even if we stop COVID, you still do respiratory testing. The platform, the instrument is good. The workflow is the simplest on the market. It's -- I'm sorry for my French, it's idiot-proof. Clearly, idiot-proof. You -- Sample tech is less than 20 seconds. So very easy to use. Now we need to complete that menu on the U.S. That's the key priority. And we need to have this GI approved. We need to bring in meningitis. And then I hope that in 2023, we will have, therefore, the menu in Europe that we are going to complete with new applications and a decent menu in the U.S. as well.

So just leaning into that menu expansion. So the path there is through 2023. And any milestones to think about on the way there?

No. I think milestones are about product launches, application launches. So we need to submit meningitis to the FDA before the end of the year. We still expect to have the GI approved before the end of the year despite the backlog at the FDA, clearly. We have a very important launch coming up on QIAstat, which is the launch of the higher-throughput instrument, the QIAstat Rise, which is quite innovative. That's the first instrument of that kind, where the loading and unloading of the cartridges is fully automated. So basically the technician has no work to do here. It's going to be another value. This is a healthy market. This is a market which is still growing overall at probably 15% a year. We have a good solution. I would be completely aspirational if I would tell you that we will basically catch up with BioFire. They are far ahead of us. But taking the #2 on the position is clearly achievable. And this is our target.

And let's move on to the QIAcuity digital PCR platform. Can you just talk a little bit about how the conversations with customers, power sells, track in there?

I don't want to be facetious, and I said that last year, but I'm positively disappointed on QIAcuity. Why? Because I think we can still faster -- we can still go faster. I'm very positive because if you think about it, it's a year -- it's a product that has been launched a year ago, basically a full year of launch. Going above 700 placement in 1 year and especially when you still have some COVID impact, I think it's a very good performance. So this is very positive. I'm positive because we have been able to prove that we could be very nimble. The development of the wastewater application was not even planned 2 years ago, and then we came up with one solution and we warned, obviously, the CDC in the U.S. with this. So it's very encouraging. Disappointed because -- especially because of COVID, I mean, the lead time between installation of the platform and this platform becoming a routine use in laboratory is still too slow, and we are working on that. And I'd like the pull-through of reagents to accelerate. But I'm clearly convinced that we have the product. We have the people dedicated to become #1 on that market. It's a question of time and execution. We proposed a guidance at $55 million for this year, I think we are in a position to achieve it. But this is not where we want to stop. If you look at the numbers from Bio-Rad, it gives you where we want to be very quickly.

And then on the menu expansion there. Can you just talk a little bit on the progress there? And what kind of non-COVID applications?

First of all, QIAcuity is a non-COVID product except for wastewater. I mean, wastewater is barely driving 10% of the placement of the system. So it's not the main driver. Those are mainly life science applications. We are now launching the first application on biopharma testing. It's going to happen at the end of Q2. So in the second half of the year on a market where we couldn't compete, now despite that good performance, we will be able to compete. It's very encouraging. And so we are also investing into the transformation of that platform into a clinical diagnosis platform. This is mainly working on the software. This has started 6 months ago. We think we can be ready by the end of 2023, and therefore, the system will be both life science and clinical diagnostics. And then we increase, obviously, the potential for sales also. We have every reason to be optimistic given the quality of the product, but there is no room for complacency. We need to continue to invest in application and on people on the ground as well [ surely ].

And then I guess, just on NeuMoDx also on the diagnostic side, a little bit light in 1Q. Can you just provide an update on how placements are tracking there and just conversations around that platform?

So we had a good Q1, a record Q1 for NeuMoDx. I mean, it's lower numbers than QIAstat because of our bigger system, obviously, and bigger capital investment, but a record quarter since the launch of NeuMoDx. What are the good topic of satisfaction and what are still the challenges? First of all, any time you launch a complex system like this on the market, the first month, you still have stability issues. And the customers, they know that. It's what we call the MTBF, the mid-time between failure, is around 3 months. It's normal, we are still fixing things and so on. This is improving a lot. So that's a good topic of satisfaction. The second topic, especially in Europe, is that beyond COVID, people are starting to move now to the rest of the menu, the bloodborne viruses, HIV, HBV, [ XEV ], the sexually transmitted diseases, this is capturing really a lot of attention. And it's a customer in Europe who said -- not us, it's not our marketing motto -- he came with that fantastic sentence saying, "I mean, guys, I mean, with this system, you have brought the simplicity of clinical chemistry to molecular biology." And this is true. And I know that some of you are always wondering why did we go into that business because Roche is there, Abbott is there, Hologic is there, yes, but they have not really massively upgraded or updated their offer over the last 5 years. And we come with a very differentiated system. So we believe in that. In addition to that, we were already in that business before. We had a nonintegrated offer with QIAsymphony under cycler, especially in Europe and the [ range of assets ]. And we had obviously to defend those customers, and where this is a perfect fit for them. On NeuMoDx, I repeat the objective that we have. It's a big market, the infectious diseases, PCR market. It's a $3 billion market. On the midterm projection, we need to target 10% of this market and it's perfectly doable. If we continue to execute on the menu, if now we bring the menu existing in Europe, those 15 assays to the U.S., in the U.S. we have, at the moment, GBS, we have CTNG. We have a plan that we presented to the market to bring the full menu until end of 2025. It should be okay. In the U.S., we have a fantastic asset compared to competition. It's still the only system where you can run randomly a regulated assay or a laboratory developed test assay. And this is also allowing us to take some shares in the U.S. as well.

So when you think about the 3 platforms and COVID has strengthened the diagnostics business there. Your installed base grew pretty significantly. Just where do you see the most opportunities kind of over the next couple of years across the 3 on QIAstat-Dx, NeuMoDx or digital PCR?

That's a good question. I think in terms of magnitude of growth, the main potential is on QIAcuity, digital PCR, clearly. There are less players. We have all seen that Roche is coming, but they come with a nonintegrated platform. So I'm still confident that the superiority of QIAcuity is prevailing. But in terms of percentage of growth, yes, that's probably the most promising. Followed by QIAstat because syndromic market is very much growing. More moderate for NeuMoDx because it's a more mature market, but still because of the added value of the platform, we need to target double digit for us. But the market is growing in a more mature way, I would say. The infectious disease PCR market is probably growing at something like 5% per year, whereas the syndromic market is growing probably at 15% per year, as I said before. And the digital market is difficult to know at how much it's growing, but it's clearly more than 30% per year.

And let's move on to QuantiFERON a little bit, pretty nice growth there throughout the last several quarters, but comps are starting to get more challenging as we move into the second half to the year. Just any update on the outlook there?

It's a very good product. And so we clearly execute on what we have told you many times. Remember, we said that 2020 was a blank year because of reallocation of resources because of COVID, but we would catch up to the -- with the pre-COVID level at the end of 2021. We ticked that box. From a development standpoint, we told you we would extend the application around interferon gamma testing with Lyme in Europe, done. We said we would launch [ nofer ] on latent TB testing dedicated to emerging countries, done in the last quarter. In addition to that, we have been endorsed by the WHO, so we are on track basically to start basically in our implementing this solution in the emerging countries. The partnership with DiaSorin is working perfectly well. Any time we convert a QuantiFERON customer to DiaSorin Liaison, we do it at a premium price. So the customer is seeing the value of that automation, which is good. And I know that some people are telling us yes, but competition is also increasing. PerkinElmer has bought Oxford Immunotec and [ BioMarin ] with the test of their [ ridars ]. But this is not really where the competition is. We acknowledge that. We believe that means that more people are going to defend the value of latent TB testing with us, which is good. The main competition is still skin test. If you look at the U.S. only, it's 16 million, 1-6, 16 million of skin tests per year. This is where the real competition is here is -- so it's a franchise of roughly, which is going to go now at $300 million. We have a guidance for this year at $310 million. This is really one of the field where I think we could potentially beat the guidance. I'm not taking any commitment as of today, but this is where -- what we could think year-to-date. We are still leading it, investing in it. It's solid. And beyond 2022, we should think about, as I said before, a 12, 13 CAGR percent of growth rate, and not only for 2023, so.

And I guess just maybe beyond '22, just how does some of that testing menu expansion into Lyme disease and other areas drive that growth?

It's very not of big magnitude at the moment and won't be relevant really from a revenue standpoint, in my view, before 2024. And why do I say that? Because it takes time. The Lyme testing market is probably one of the main untapped diagnostic need. And at the moment, you have basic solution, which are immunoassay solutions, which are testing or detecting IgG and IgM. In New York or in Maine or New Hampshire, many clinicians are not even prescribing tests because they say it's not going to be quick enough, it's not detecting the -- what we are doing on Lyme, and this is the beauty of the test, is that we are creating a new algorithm between QuantiFERON and IgG, IgM. So we leverage IgG, IgM, and we leverage the presence of DiaSorin because they claim to have 50% market shares on their market. So the goal will be to transform those customers that are already testing for Lyme with our new algorithm, and basically convince more clinicians that now we have a test that is detecting Lyme earlier, so it's worth prescribing it. But it takes time. It takes medical education. Health care is tremendously innovative, but the users of health care are very conservative. When they have been working for years on a technology or on a system, takes time. But it will happen. If we continue to generate clinical data, it will happen. I expect revenues above the 10 million mark, if you want, starting in 2024. For QIAreach, which is the solution for the emerging countries, the same. We are on track because we got endorsed by the WHO. But once you have that, you need to each -- to go to each emerging country, to their Ministry of Health, it takes time. It's a lot of red tape. So I don't expect a lot of revenue in '22 and '23. It should start in '24 as well. But it's good to start now, obviously. So those are waves of growth and further growth for QuantiFERON. This is why it's key to do it now.

And we haven't touched on the genomics business, but that's also growing well. Can you just talk about the outlook for this year? And what's been driving that growth?

So first of all, a word on our genomics strategy. It's always helpful to remind you that I think we took the right decision at the end of 2019. I know it was painful because we had talked about that project for so long before, but we took the right decision when we decided to drop the development of a full system at QIAGEN, and we focus where we are good. And we are good in chemistry and we are good in bioinformatics. We are leaders. And it proved successful. Universal NGS chemistry had a double-digit growth profile pre-COVID. There is no reason it's going to go below double digit because we continue to bring application, microbiome, microbial infections as well, on one side. The other component here is the bioinformatic, it took a hit during the COVID because laboratory stopped spending money there, but we are back on track, over double digit. We recently invested at the end of Q4 on more foot on the ground. And therefore, you see the first quarter at 16% growth for the total UNGS. I think it's a good translation that being platform-agnostic at the moment for QIAGEN is the right thing to do. We can sell our informatic or our chemistry solution to BGI, to Element, to Thermo, to Illumina, and that's the right thing to do. Now as you have seen as well, we start to have also some partnerships that are a bit more sometimes substantial. We have a partnership with Illumina for companion diagnostic. This was signed 2 years ago, 2.5 years. We recently signed a deal with Element to basically validate the workflow with our chemistry and their platform. We are perfectly open to do that with other players if it makes the life of the customer easier. But QIAGEN will not go back into the development of a fully fledged system. We focus on bioinformatics and chemistry. And if we do that and if we continue to launch new application, double-digit growth should be the norm.

Great. And you touched on it briefly and I received a question in from the audience earlier on the companion diagnostic side. Any way to size this business and just talk -- can you talk more on just where QIAGEN's technology lies?

Sure. The size is difficult to say because there are very different techniques. QIAGEN is a molecular player in companion diagnostics. So we are relevant for pharma starting at Stage 2 or Stage 3, not before. So our market is the market when pharma really moving into their -- obviously, the development of their drug. That doesn't mean that sometimes it doesn't fail, obviously, but we are coming rather late with our solutions. That doesn't mean that the market is small, but it's a very specific market. Definitely, we are the leader on PCR companion diagnostic. We have 35, what we call framework agreement with pharma companies. But we need to catch up also on NGS companion diagnostic. And because for some time, we had no relevant platform, we could not really compete. We could compete with the fact that we are extremely experienced at getting [ sedecks ] approved by the regulatory authorities, but we didn't have the installed base NGS. We filled that gap with a partnership with Illumina. What is interesting for us is we have an increasing demand from pharma on our digital PCR solution for companion diagnostic. So that was not necessarily planned 2 years ago. This is now in our pipeline. So the way you should see it is our portfolio here is going to be still massively PCR over the coming 3 years with increased share of wallet with NGS platform and digital PCR platform.

And a follow-up to that, who do you see as the key competitors on the companion diagnostics side?

I mean, obviously, for example, Foundation is a competitor. I mean, especially, I mean, with their alliance with Roche Pharma. There are many sometimes unicorn kind of competitors. You see, for example, Guardant can be one. And so -- but they are much more limited. I mean, obviously, we take them into account, but we believe that QIAGEN has this specific positioning to pharma that we have this exceptional expertise in getting a product approved and regulated. And also, we are probably now the only company able to offer solutions to pharma on PCR, digital PCR and NGS, that's an asset. Competition will continue, but it's manageable.

Sure. And to shift gears a little bit to China. Any way to size the revenue exposure there for QIAGEN? 1Q growth was around 10%. As we're in the second quarter here in COVID lockdowns, have you noticed any impact there? And just comment on any general supply chain issues within China as well.

So first of all, the market and the size for QIAGEN. QIAGEN China is less than 10% of our $2 billion plus revenue, so it's manageable. Second, the situation. First, anticipation. I don't want to be complacent, but on this, we are -- we have been quite proactive. What do I mean by this? We saw as early as end of January, because of the situation of Hong Kong, that there will probably be lockdowns in China because of their zero-COVID policy. And therefore we preshipped products before the end of Q1 to China. And this is what explains as well the good double-digit performance of Q1, basically because we have brought inventory before the lockdown to customers. And we knew that there will be obviously an impact on Q2, but it's perfectly under control. So limited exposure. Our guidance, the new guidance for 2022, the $2.12 billion top line, is factoring a scenario for China of 6 to 8 weeks complete lockdown, especially in Shanghai. And this is where we are at the moment. If it goes to more, we have a second scenario of 10 to 12 weeks of full lockdown, but that would not create a massive difference of revenues, and it would be manageable. So we feel pretty good about this. Overall, on the long run, the China policy is not changing. It's a massive trend towards localization of health care, and you have to be local if you want to strive there. By the way, there is no clear definition of what local means in China, and it's on purpose. It's a gray area so that it allows them to basically pick and choose. How can we survive there? First, we are already local. We have a manufacturing and development site in Shenzhen, which is helping us sometime to localize some products. So we are still authorized to participate to local tender or national tenders. The second value, and we are probably one of the few, if not the only company, we have a second brand on China, which are products that are sold by a completely different team marketed by a completely different team and those are local products there. So the headquarter of QIAGEN China is in Shanghai, the headquarter of our second brand, it's in Beijing. So I think that in a normal situation, if the zero COVID tolerance policy is at the point halted, between those 2 activities targeting 10-plus percent growth per year in China is doable. But make no mistake, we will have to continue to localize product. If not, we are going to be out. That's the way it is. We don't see the impact on VBP at the moment on China for us, for molecular techniques, but it will come, clearly. So we need to basically continue to be as local as possible. and limit also the exposure of the company because nobody knows what's going to happen to that market. On supply chain, thanks to COVID, we have started way before the situation of now, to try to avoid a strong dependence on suppliers from Southeast Asia, China or Southeast Asia. Obviously, I'm not going to tell you that we are completely immune to the supply chain issues, but I think it's manage. At the moment, we have some specific issues, for example, on electronic LED boards for instruments, but it's under control. We review very precisely the situation on a weekly basis. We have multiplied [ pre-reannual ] contract. We have accepted some time to even pay a bit more as long as we could have safety stock in our suppliers. So I mean, like every company, we look at it there are some impact, but it's controlled.

And just while we're on macro, any thoughts on the inflationary environment in pricing? And what have been your customer conversations around that?

So by background and by experience and like a dog on price increases, and QIAGEN obviously was doing price increases before my tenure as CEO, obviously, but we do that systematically every year. We start in December and implement it fully in January. And this year, we are going to press a second price increase. And what I like is that at least for the last 2 years, we become also extremely more granular. What do I mean by this? Is that you cannot only focus on price increase for your products. You need to obviously increase price on the deliveries and the freight. I mean, we are impacted by, obviously, those costs, so we try to pass part of it. It's already done. You need also to increase prices on items that are a bit less under the radar screen -- a bit more under the radar screen. And by this [ I mean this aldiso ]. So we do that systematically. Passing prices increase is good. But if you do not control the level of retrospective discount that you have then after during the rest of the year, it's sterile. So we extremely -- we control this extremely well. So there will be a second price increase in June. We have equipped all our managers with a very precise situation of what's the impact of inflation on our own P&L so that they can discuss on facts with their customers and not -- it's not about greed, it's basically saying Sir, this is what I'm paying extra and what I would like to share with you. Does it work all the time, 100% you get what you want? No, it's a negotiation, but I still that -- despite that inflationary context, we should be targeting a 50 to -- a 50 basis point net impact on price increase this year.

And just to touch on M&A and the outlook there on capital deployment. QIAGEN also recently announced a deal with the recombinant enzymes in the sample prep business. Just could you discuss a little bit on M&A outlook?

Here as well, I think we are clearly executing on what we have been telling you. The first focus is organic execution quarter after quarter, is to deliver on what we committed to you. And we said last year that we were thinking again about capital deployment, and we said we had one priority about bolt-on acquisitions, say, $40 million to $0.5 billion. But one of the main criteria for me is how readable is it for you? What I mean by this, do you see it completely natural. In other words, there is no way we are going to do M&A to spread the company thin again. M&A will serve either the core or the 5 pillars, and it has to be clearly seen, especially by you, it's a plug-in, clearly. We started to execute Poland enzyme, completely fitting in the rest of our enzyme activities headquarters in Beverly, Massachusetts. We use enzyme ourselves for some of our developments. Sometimes we don't have all the enzymes we need, so we buy them. So from a cost of goods standpoint, we will have a first positive effect. And second, we sell those enzymes all over the world to companies like bioMerieux, [ Safin ] and so on. So we will continue to reinforce that. And those are very healthy margin sales as well. I believe that we have on our pipeline, the potential to sign 1 or 2 more deals before the end of the year. But obviously, I cannot take any commitment here because it takes 2 to sign a deal. And it has to make sense from a valuation standpoint. The market was overheated, at least last year. We need to make sure about -- that the price we pay is the right price. And I do not hesitate on [ holonpsycheurs ] like me or we do not hesitate to drop the case when it's massively rewarding the investor of the current target and not our investors, we drop the ball basically.

Great. And then so I guess in the last couple of minutes here, just to wrap things up, you unveiled the 5 pillars of growth at the deep dive around 2 years ago. Just when you look to this year and then beyond, where do you see -- of those pillars, which one is going to be driving the most sustainable growth for the company?

All of them. No, I don't want to be facetious but so far, we are executing here again. The beauty of having 5 is that if one is less active than the others, you can compensate with the others. That's good, but all of them are executing at the moment. But there is something that I realized, and I would perhaps finish with this, is that I probably made a mistake 2 years ago when I presented the 5 pillars of growth strategy. It's a good strategy for me. It's a normal strategy for [ a medical ]. Focus, focus, focus. Don't [ spread it too thin ]. But -- speaking about 5 pillars of growth, I feel that sometime I gave the feeling to the market that the rest of the business was not growing. Clearly, the core was not growing. UNGS, we saw it's double digit. For example, companies like this, it is double digit. Liquid cancer is double digit. There is no reason for this to change. We are just trying to say a mid cap needs to invest massively where we can take between #1 and #3 position in the market. If we cannot address that, then it's going to be a tough comp. And this is what we try to do, clearly.

Thierry, thank you for participating today. And thank you, everyone in the audience.

Thank you so much for your time. Thanks for the interest, guys. Thank you.