Repligen Corporation (RGEN) Earnings Call Transcript & Summary

Thanks, everyone, for joining us. We'll kick off our next session. My name is Mike Ryskin. I'm on the Bank of America Life Science Tools and Diagnostics team based out of New York. I'm excited to host Repligen Corp for our next session. We're joined by Jason Garland, CFO; and Olivier Loeillot, CEO. Format of this session is going to be just some brief slides to get us going, and then we'll go into a fireside chat and Q&A. So with that, Olivier?

Thank you so much, Michael. Well, good morning, everybody, and thanks for attending our session. As mentioned by Mike, I'll try to be fast on the deck, but for those of you who might not be very familiar with the company, we thought we would just give you a little bit of an overview about the company. So who are we? So we are really considering ourselves to be the innovation leader in bioprocessing. And every time we are talking to people and what is really differentiating ourselves, it's really all about innovation. So we are supporting both biopharmaceutical and CDMO customers, and we're helping them with a very differentiated portfolio of both hardware and consumable to enable them to manufacture their biological drug more efficiently. So innovation means, yes, we are really launching disruptive technologies. So we like to say that about 80% of our portfolio, we don't really have a direct competitors, meaning we are creating new market segments that were not existing before. We have a pretty global manufacturing presence, almost half of our site in the U.S., the other half in Europe, which is great, particularly with the challenging tariff situation because already about 60% of our portfolio is on dual siding, European and U.S. we are aiming to work to reach about 80% by the end of next year. Another specificity about Repligen, we are 65% clinical, 35% commercial, meaning that obviously, the move of those drugs towards the launch is a real tailwind for us. And then finally, even though people associate us a lot with new modalities because we love it a lot, I mean, see the vast majority of our business is -- 80% is going into traditional protein like monoclonal antibody. So we grew very fast. I mean, you probably are familiar. We were a USD 270 million business in 2019. We did $634 million last year. The midpoint of our guidance for this year is at $725 million. And how did we grow so fast? I mean, we grew by both launching these very disruptive technologies on one side, but also we acquired quite a lot of companies. We acquired about 15 companies in the last 11 years or so. If you have to remember one thing about this presentation is we have a very broad product offering already today. I mean -- and in fact, when you look at the full workflow that is needed for most biological drugs, we have more or less everything apart from these 3 red dots that you're seeing here, 2 on the upstream side, namely bioreactors and cell culture media and one on the downstream side, which is more virus filtration. But we have a play in everything else, which I love. I mean in my past life, I mean, I built the entire A to Z offering of another company's portfolio. I mean that's something we really love because customers who start to really understand what we are capable to support them will now realize we've got a very broad portfolio of products. So what is our value creation equation? It's a combination of the right strategy and the right capabilities, which is leading to the result I showed you earlier. So if you think about strategy, we are really a 100% bioprocessing focused company with some analytical play, but that are directly linked to bioprocessing hardware. The disruptive technology we talk quite a lot is really focused on productivity gains. So partly those days where there is a lot of macro questions on the MFN side, on the tariff side and so on, where pharma company might have more pressure from a cost of goods point of view, we are really happy that we are enabling our customers to be more efficient from a productivity point of view. And then finally, disciplined M&A, we are making sure we have really strong return to create the differentiation. On the capability column, I won't go through all of them. The one I would really pick up here is our culture. I mean we are smaller, we are nimble, collaborative and transparent. This has enabled us to open a lot of doors with big pharma company and big CDMOs over the last couple of years where maybe we were selling them 1 product 2 years ago. Now we're selling them 3 to 4 products. That's going to be another big tailwind for us over the next 5 to 10 years. Results, tenfold increase in revenue in 10 years, EPS from $0.24 to $1.58. And probably even more important is our total addressable market has tripled in the last 10 years, meaning we have a total addressable market of about USD 14 billion today. So if you make the math, I mean, that sales around $700 million, we've got a lot of chances to grow very fast in the next 5 years for sure. And then how do we outpace market growth? I mean, again, I mentioned we are creating new solutions, 80% of the portfolio really being differentiated. The best example is the ATF technology where process intensification didn't really exist back 5, 10 years ago. So we created that market. Its growth is accelerating a lot. Another good example is also launching new resins. We launched a double-stranded RNA purification resin. When you manufacture an mRNA drug, you've got one big [indiscernible] double-stranded RNA. So all of you guys who got the Moderna vaccine injected in your arm, you probably got a bit of double-stranded RNA here. I mean we've got very good technology to get rid of it. So that's another example where we are creating really new solutions. Obviously, where we compete with others, it's all about differentiating our portfolio by having the right technologies is where PAT is playing a big role, but we are also making sure we're going to become bigger in Asia because today, only 15% of our business is in Asia, where most of our competitors are in the 20% to 25% range. And finally, we are making sure we benefit from the mix of products. We are more exposed than others indeed to some of the new modalities, but that's something we like because we see a lot of growth. Half of the funnel of our customers is in new modalities, and we are really very excited to be able to play a big role here. Finally, I mean, our portfolio has evolved a lot during the last 10 years. I mean if you look back from a customer point of view back 10 years ago or so, 81% of our business was done with our top 10 customers. Today, it's only 1/3. In fact, our biggest account in 2024 was only 6% of our sales. So we have a very diversified customer base. In terms of segments, the product mix has changed drastically as well. 10 years ago, we were a ligand company selling mostly OEM ligand to 2 of the big bioprocessing companies. In 2024, that 70% became only 12%. We have a much more diverse portfolio of products across the board, filtration being by now the biggest franchise for us. And then finally, in terms of modality, of course, I mentioned about new modalities. Like 10 years ago or so, we were 95% into monoclonal and so on. Today, we've got about 20% of our portfolio that is outside of monoclonal. So very diversified portfolio, customer base and end markets, thanks to all of the organic investment as well as the M&A we've done. So with this, I will close it here and looking forward to a good discussion with Michael.

Thanks so much, Olivier. Maybe I'll just start with a high-level one. You're about 3/4 of the way through fiscal year '25. There's a lot of moving pieces this year, both from an end market perspective, but also Repligen-specific perspective. Maybe you could just give us a high-level overview of how the year has played out relative to your initial expectations so far? What surprised you to the upside versus maybe what's coming a little bit softer?

Yes. No, Sure. I mean, obviously, we are really happy about how the first half of the year played out for us. I mean, with top line growth mid-teens, 15% exactly, excluding COVID because last year, we still had a significant COVID component coming in quarter 2 after restatement. But orders up 20%, obviously, is something we're actually delighted about. But beyond the number, what I'm really happy about is growth happened across the board. I mean each of our franchises have done extremely well in the first half of the year. Last year, chromatography was a little bit behind. We are not extremely happy about it. Chromatography had a fantastic recovery in the first half of this year. So really played out very well, setting us up for a very strong full year 2025 with, again, orders up 20%. This enabled us to enter in a very strong position for quarter 3.

And what's driving that order strength? If you could dive into that a little bit? How sustainable do you think that is? And if it's driven by any particular segment or if it's a little broader based on that?

Again, beyond the product line, which all did very well, the customer segment also where we're doing very well across the board, maybe with the exception of small biotech, and I'll come back to that in a minute. The real big changes we've seen over the last 1 year was really more on the CDMO side. We had a very strong recovery from biopharma already a couple of years ago, but CDMO were lagging behind. And I've always said, for me, the health of the CDMO business is very important because that's really the best reflection whether the ecosystem is doing well because they are kind of at the end of the food chain. So having had orders increasing by more than 20% at both biopharma and CDMO in the first half was a very strong signal indeed like the entire industry is recovering very well. And small biotech, I mean, we had an interesting quarter 2 because sales were up quite significantly, but orders were still pretty muted. And obviously, we all know like biotech funding is still at a pretty low level. So that is obviously a segment we are watching out carefully. We only have exposure of about 8% of our business to that segment. But in the longer term, I mean, that is a segment we want to see a better recovery for sure.

Okay. In terms of sort of that underlying market recovery, things getting better, working through some of the challenges over the last couple of years that the end market has seen overall. What do you think are the key drivers that we need to see that? I mean in biotech, is it as simple as funding needs to come back and IPO activity needs to accelerate. And then you touched on CDMOs and large pharma. Just sort of what are the indicators we should be looking for that indicates that things have fully normalized?

Yes. No, I mean, I think back to the smaller biotech, it's an important component for sure. So when you look at what has happened in the last 6 months, I mean, there has been a lot of acquisition of some of the small biotech company by big pharma because we all know like a big chunk of the small biotechs maybe have less than a year of funding in their pocket today. So that's obviously a potential big challenge. So there has been a lot of acquisition. But beyond that as well, big pharma has started to acquire a lot of IP from China lately, which is quite interesting to watch because when you are a big pharma today, you need innovation to come from somewhere. I mean -- and if it's not coming from the small biotech U.S., it has to come from all the small biotech somewhere else or you have to double down on your own research and investment. And so from that point of view, we've not seen a real slowdown at all from the early phase projects at Big Pharma because they need that to happen anyway because at the same time, they got some of their products moving towards biosimilar. They [indiscernible] expiration of the patent. So they have to launch those new drugs. But it has to come from somewhere. So I would say funding of small biotech is something we need to still track. And if this is not happening, it's really understanding where is the innovation going to come from in the next 2 to 3 years here.

And now that you're seeing that recovery in CDMO, do you think that's durable or anything in particular that you think is driving that? Or it's just simple as budgets being released and customers being more comfortable with spending.

What's interesting about CDMOs because we really like to understand that indeed better and better. So we kind of subsegmented the CDMOs in 3 segments. We looked at the top 3 big guys who are like on a total role. I mean we all know that. I mean they are announcing capacity expansion constantly and so on. As soon as their capacity is ready, they are already considering the next one. So the big guys are really doing very well. At the other extreme of the range, the smaller guys are doing very well as well. And I think where we had questions about how they could benefit or not from BioSecure Act, I mean, I want to say like particularly in the U.S., a lot of the smaller CDMOs have benefited greatly from it where they got a lot of demand coming out of that. Then the middle segment is maybe where there is still some question mark, even though we've seen like some of these mid-scale CDMO starting to get very, very important big deals happening with some big pharma company. I mean there was a couple of announcements being made in the last 6 months. So -- but that's maybe out of the 3 segments, that's maybe the one where we want to see a more sustainable growth coming in the next few quarters here.

Okay. And then looking at business from a different lens, you talked about the various segments, filtration, chromatography, analytics, proteins. You touched on how chromatography was a little bit -- had some fluctuations. But broader picture, these all seem to be trending in roughly the same direction in fiscal year '25. Anything in particular to call out? Or is it really just sort of a broad-based recovery there?

No. I mean we just went through our 5-year strat plan, which we do every year in July. And I was -- every time we go through that one, and I'm looking forward to seeing what the different business unit leaders come with in terms of sales growth perspective for the next 5 years. I mean I have to say for one of the first time in my entire career, I didn't have to stretch anybody because more or less everybody came with very ambitious and very similar type of growth across the portfolio, which we love because people have a tendency to summarize like, "Hey, Repligen is just an ATF company or it's just an OPUS company and so on. We are a very good -- remember the slide I showed earlier, we're a very broad portfolio of products company. And in fact, we expect very similar growth across the entire portfolio in the next 5 years. The only decision we've made is to what we say, supercharge towards the specific businesses because we think there is -- probably to grow even faster than people came with, meaning a little bit more investment into those 2 segments because we think they have the ability to probably grow 2 to 3 points faster than the rest of the portfolio. But there is a lot of alignment across the board, meaning we think we are winning. And what is common with all of these product line is we have a very strong commercial organization and partly the key account management strategy is working beyond our expectations.

Okay. And during your prepared remarks earlier, you touched on sort of the product groups in terms of new modalities versus maps, new modalities is now a much bigger piece of pie, 20%. Can you talk about what's driving that in particular and where Repligen is best positioned to serve those customers?

Yes. So remember, when I said about what is -- where we are differentiating ourselves is really from a culture point of view, nimbleness, flexibility that's exactly what new modality market needs because, I mean, we shifted from a business where you could enjoy those beautiful huge mass where you would have the same platform working on 100, 200, 300 different monoclonal antibody. And when you were designing in one big monoclonal, you could probably generate up to USD 100 million of sales if you were designing across the board. Now comes new modality where the size of this new modality is probably a fraction of the size of a big monoclonal where maybe if you're lucky, the big, biggest new modality product can be in the USD 20 million of revenue range or so, but more and more finish more in the single digit, maybe USD 2 million to USD 3 million, USD 5 million of openings. For a company of our size, it's still very attractive. Obviously, if you run a business that is in the billions of U.S. dollar, you're thinking like, wow, what an investment needed and so on. So that's probably why we've been much more focused on it and definitely much faster in terms of innovation to really develop and launch products that didn't exist before and where a lot of this company had to use products that were developed and launched for monoclonal and that were not working very well in terms of yield. Now they have a sharp partner like Repligen that is enabling them to increase their yield and productivity very much. And we are much more focused than others on that side because, again, a $5 million business, I take it tomorrow, where if you're 10x bigger, maybe you feel like is it really worth the investment here. So innovation plays a big role here.

Can you talk about the customer mix and maybe some of the concentration risk with new modalities and maybe split between commercial and clinical. And if there -- obviously, there's some major customers with big programs once they get to commercial stages. I mean how are you managing some of that risk?

Yes. So we've decided when we reported out Q2 to be very granular on one specific gene therapy program because we were a bit tired of being constantly associated and blamed for whatever was happening there. So beyond that specific program where we mentioned indeed, it's going to be a 1% headwind this year and potentially a 2% headwind next year, we've been doing really well across the board. But obviously, new modality has been doing a little bit less well this year than the rest of the portfolio, which is why it's even more impressive that we managed to increase our guidance for the full year, meaning, again, back to the fact we have a very diverse portfolio of products and customer. I mean, monoclonal business has been doing fantastic for us so far this year, which has enabled us to increase our guidance for the full year. So as far as new modality, we are still very bullish about it. I mean, just on the gene therapy side, there have been a couple of recent announcements that were extremely positive. Cell therapy is very much on the roll lately, and we are very happy because we are playing a bigger role with the acquisition of 908 on the cell therapy side, but also with some of the cell therapy program embedding ATF technology recently. But ADC, antibody drug conjugate, is also growing very nicely. So it's all about playing across as many modalities as possible. And when you are within one new modality, playing across as many programs as possible so that if you have a headwind on one specific program and that will always happen, you can compensate with the other program you're designing into.

And on the customer side, I mean, we shared it in 2015, 70% of the business is with the top 10 customers. It's much smaller now. Our biggest customer we called out for '24 is only 6%. So I think just by continuing to have a broad base portfolio, we're inherently reducing that risk. And then even within a customer, it's going to be multiple products, it's going to be multiple programs. And so I think from a customer side, very well diversified and continue to do so.

You mentioned ADC, cell therapy, gene therapy. There's still a lot of opportunities there. Has there been any change in terms of -- more on the clinical side, customer investment decisions or priorities in the light of some of the policy changes in the administration in the last couple of months?

We've not seen many, honestly, Mike. I mean, when obviously, the headwind on gene therapy happened and so on, I think there are a couple of companies that more or less at the same time said, "Hey, we made the decision to step out of gene therapy." But we've not seen any other negative signal on that side. And again, one thing I think people have to realize is 50% of the funnel of big pharma companies in new modalities today. And they realize like a lot of the diseases that are not being cured today have a real big chance to be cured with some of this new modality drug. And there are 3 drugs that are in very late stage of development right now that are expecting a very big readout in the next 6 to 12 months. And I think that's going to be absolutely very important for the new modality field to see how these guys make it or not to the market for sure.

Okay. You touched on ATF a number of times in your remarks already. Obviously, a lot of concern here over the last couple of months and quarters about a potential entrant from a competitive product. Could you just take a step back and sort of walk us through your position there? How important ATF is to you and just sort of what makes that such a unique growth driver for you?

mean I tell you, will there be a competitor one day on ATF, of course. And I mean, almost wishing it's happening sooner than later because it's going to help indeed evangelizing even more process intensification and probably accelerating the growth of that type of technology. I mean we are seeing very little today, which again doesn't mean it's not going to happen tomorrow. The real competitor to ATF today is TFF, which we happen to have as well a very good play at. And then we are winning a lot on the TFF side for process intensification as well because we've got 14 years of experience in process intensification. I think the combined [indiscernible] -- combined 250 years of experience of people in process intensification. And as you all know, I mean, the pharma industry loves to know who they are dealing with and somebody who knows about the specific technology. So those 14 years of experience developing what we know is the best technology and the leading technology in the market today makes us feel very confident about our ability to stay very strong in that market for the next 10 years.

And we have a lot of penetration within the top pharma and the top CDMOs with ATF. So that's the good news. Even better news is many of them only are using it for one drug or one product in one program. So there's a lot of opportunity for expansion that can come with that as well. And this is when Olivier mentioned supercharging certain products. This is one that we absolutely see as a big growth driver for us going forward.

Okay. All right. Going back to sort of the underlying view of this year and maybe the setup for next year, you talked about the order growth. Maybe you could dive into that a little bit more in terms of what you're seeing on consumables versus equipment, how the equipment demand has shaped up and just sort of your forward thinking on that.

Yes, Mike. So we've been doing really well in terms of consumable order now for the last 7 to 8 quarters. So what was lagging behind was more equipment. Even though I have to say out of the last 4 quarters, now we have 3 quarters where order intake on equipment was really nice. So the anomaly for us was more quarter 1 where we did see -- well, quarter 1, there were 2 reasons. First of all, comps were quite difficult for us because we had the highest ever hardware order delivery in quarter 1 of 2024. But also it's the fact like we've seen some projects being delayed from quarter 1 to quarter 2. So the fact we rebounded in the high teens growth in quarter 2 for hardware make us feel like we're doing the right things. So we are very confident about hardware because we really play in 2 fields. One is the ATF hardware. The other one is the downstream hardware. ATF hardware, you would say like in the toughest time, I mean, probably people are going to accelerate process intensification because that can enable them to achieve better cost of goods and less CapEx requirements. And then for the downstream part of our portfolio, we are definitely gaining market share because we've got very strong technology, which are combined with our PAT technology, FlowVPX, which is now included in 25% of our downstream hardware sales and which is becoming a huge differentiator, where a lot of customers who bought competitors' hardware in the past are asking us now to even install our PAT technology into competitors' equipment. So we think -- I'd like to make the analogy to iPhone when you had the first iPhone with a camera, you said, I don't need a camera. I mean my camera is of much better quality. Now 10 years later, you're buying the new iPhone just because of the better quality of the camera. So that's kind of what we're thinking is going to happen with our hardware where people start to realize like they can't probably live without having the ability to measure protein concentration life. And next year, we're going to launch a second technology that's going to enable people to measure protein aggregation as well. We think like this is going to become so important for them to run their manufacturing efficiently that it's going to become mandatory for them to buy our systems.

As we look ahead to 2026 and just sort of as we approach next year, just high-level thoughts on where you think the industry overall is going to go. And you called out some of the specific headwinds you have with that one customer? Any other moving pieces we should keep in mind?

No. I mean we all know like before COVID, the industry was typically growing anywhere between 8% and 12%, 8% being a bad year, 12% being a very good year. I don't see any reason why we're not going to be back to those trends because -- and probably this year, we're already back, but probably more towards the lower end of the range. The only 2 big changes that happened between COVID and now is probably China on one side and new modality on the other side. You would say China is set for a really significant rebound probably from next year onwards, even though I'm always cautioning a little bit people by saying, it's not because the biopharma end market is probably going to be back to very nice double-digit growth from the second half of next year onwards, that's the way to win for us, European and U.S. bioprocessing company is going to be the same because there is much more local competition today than there was 5 years ago. So that's why at least from our side, we are working on what I think is a very differentiating in China for China strategy now to make sure we're going to take advantage of the end market growing in very nicely. And then new modalities, we talked quite a lot about earlier. It's all about the ability of bioprocessing company to win by being faster to develop the right innovation to be able to support those customers' growth in the next 5 to 10 years. But I think the 8% to 12% is probably the right target. And we, as Repligen, we are confident we can grow faster than this 8% to 12% by 5 points or so, and that's what has happened at least so far this year in the first half.

Okay. I mean you just touched on China there. Maybe we'll dig into that. Still a relatively small part of the business, you're underexposed to China relative to most other companies in the space, underexposed to APAC as well. What's your strategy? You talked about local for local being more and more important. Can you get a little bit more granular on that? And how do you see that playing out over the next couple of years for you?

Sure. I mean our presence in Asia is definitely too low. I mean we're only 15%. So our target is to at least move to 20% of our sales in 5 years being in Asia. I think the strategy in China is very different from the strategy out of China. So in China, we talk quite extensively about really working with local partners probably to start with as an OEM partner and later on, we'll figure out what the play should be. Outside of China is to definitely have a bigger presence locally and probably focusing on some of the big potential customers in the 3 main regions that are Korea, Japan and Singapore and then making sure indeed, we've got a bigger player in Asia for Asia or for some of the specific part of our businesses here.

On the topic of local competition, I mean, that's been a concern for U.S. or European vendors for a number of years. You're saying you think it's becoming a bigger and bigger piece of the story.

Yes, sure, yes. I mean what not only because 5 years before, you maybe had one local competitor on each portfolio -- part of the portfolio and now it's probably up to 3 to 4. But on top of it, I mean, from a quality point of view, those guys have really improved quite drastically. I mean, so where probably 5 years ago or so, people would have had a lot of question mark about working with those guys. I mean the quality has improved quite a lot. And they are still struggling probably from a pure innovation point of view, which is why, again, I think we have a [indiscernible] real good play out there because we are the most innovative bioprocessing company, and this is what those companies still need. So I think by finding the right partner and combining their local manufacturing capabilities with our innovative products, we think we have a really good opportunity down there.

Are those competitors more focused in more niche parts of the market or any bigger players that are emerging? Just sort of what does that local marketplace look like?

Yes. It's -- so [indiscernible] are still more specialized, but there are a couple of companies that have become much broader as well. So there are at least 2 companies that are now beyond just having one of the modality, but maybe 2 or 3. I don't think there is any one yet that has got the full offering, but it's fair to assume like 3 years down the road or so, one of these companies will probably be across the board, I would imagine.

Okay. And in terms of China demand and China end market overall, I mean, there's been a lot of news in terms of gradual recovery in pharma and biotech in China in terms of local pharma and biotech. There's been a lot of news in recent months in terms of partnerships with multinational pharma, maybe even straight up acquisitions. How do you see that impacting the demand? And where are you targeting that?

Yes. What I think is really the big game changer that took place in the last 6 to 12 months in China is all of the money that is being injected with all of these U.S., European pharma company acquiring IP from some of these local Chinese companies because they were forced like 5, 6 years ago or so by the Chinese government to switch from being biosimilar developer to becoming innovative drug developers. But what they were missing was cash because the reimbursement prices of biosimilar went down so much like those local companies were struggling to generate any profit at all. But now with all of the cash that is being injected, I think that will really accelerate the development and the launch of some of these innovative drugs. And keep in mind, almost 50% of antibody bispecific drugs funnel is sitting in China today. I don't have the exact number on ADC, antibody drug conjugate. I won't say it's almost 1/3, if not 40%. So they have a lot of funnel that just need money to be able to accelerate and launch those drugs. So that's why I do believe the biopharma market is going to start growing a lot. And it's only probably 18% of the China population today that has got access to the drug, where in U.S., Europe, we are probably around 85%, 90%. So just from a population point of view, there is a huge growth potential for those people to get access to those drugs as well.

Okay. I want to make sure we got about 10 minutes left. I want to make sure we touch on M&A. You mentioned earlier in your presentation, I think you called out 908 specifically, but you've done about almost a dozen deals in the last number of years, really build out the portfolio. What do you see as M&A in terms of how important that is to the strategy going forward? And where are there still gaps for you to address?

So it's very important, but it's not critical at the same time. So that's why when we rolled our Q2 earnings call, we said we really need just modest M&A to be able to double the size of our company in the next 5 years because just organic growth is going to pretty much bring us there. But at the same time, I mean, we've got about USD 700 million of cash today and with the aiming of doubling the size of the company in the next 5, we're going to generate a lot of cash in the next 5 years. So we are going to obviously watch opportunities. And if we find a good opening where we are really bringing a very differentiating technologies that ideally bridge one of the 3 product gaps we have in the portfolio and that brings the right financial either from a top line growth or from an EBITDA accretion point of view, we might consider doing a bigger one in the next 5 years as well. But we don't absolutely need it to double the size of the business here.

Okay. So in those gaps you called out, cell media, bioreactors, virus and activation, are those the areas you're specifically targeting? Or could it be technology plays or maybe something complementary...

More than bridging those 3 gaps because there are very little. The company is available for that. It's going to be really looking at what are the breakthrough technologies that are being developed. And if we feel there is a segment that we might not have a play at all today, but that is a real big game changer because the technology is absolutely unique, we might move forward. So it doesn't have to be absolutely one of the 3 areas we're talking about here.

Jason, maybe I'll pivot to you for a second. Let's talk about the margin opportunity going forward, both from a gross margin and operating margin line, a couple of moving pieces in fiscal year '25 again and go-forward plan. Just talk about your priorities for investment in the business and where you see margins going over the near-to-medium term.

Yes. I mean so if you look at the longer-term view, we've talked about trying to get probably about up to the 30%-ish work towards that from an EBITDA perspective. I mean the equation is going to be, look, every year you come in, you're going to have inflation from the salaries that you pay, just overall inflation, you got to make up for that with pricing, which I think we do a good job there. With the growth in the supercharging sort of mix of what's going to grow faster over the next several years, I think we're going to see a little bit of mix lift, if you will, from that. We've got to generate productivity in our factories. That's the day-to-day operating efficiencies, and that could be optimization of the network and looking at our overall sort of footprint. And then we got to -- and that kind of helps get you to that growth on the gross margin side. It's probably 100, maybe to 200 on the range kind of annually over the next few years. And then to drive the operating margin or the EBIT level of margin, it's managing OpEx, right? And so we ultimately need to grow our OpEx at a rate lower than our sales growth. But we got to do that while we're also just balancing the investments we need to make to be what we call fit for growth. So what we needed in our people, our processes, our infrastructure systems, what we needed to go from $100 million to $700 million, $800 million is very different than to be able to double in the next 5 years. And so we need to strengthen that in a lot of ways. And so that's where we're going to be focused on driving some of those investments, but again, managing it in a way where we still get that volume leverage, if you will.

Maybe you could talk about price as a lever, where is price for now in fiscal year '25 and just sort of any opportunities to correct that a little bit more?

Yes. We typically get kind of low single-digit price. We will go out with kind of announcements higher than that and then work with our customer base and land kind of in that low single digit. We'll see that again this year. I think what's interesting is, again, with the differentiated portfolio we have, we often get challenged, "Oh, don't you have more pricing power." And I think we're just very balanced in how -- the best way to create new competition is to overprice your customers, for them to feel that you're being too aggressive there. So we find the right balance in that equation. And we'll continue to do that.

All right. Just got a couple of minutes left. We'll go with our usual closing question, Olivier, Jason. What do you feel is most underappreciated or misunderstood about Repligen or maybe if there's any selling points you want to keep in mind going ahead to 2026, like what's top of mind for you?

I would really repeat something I mentioned a couple of times already. We have a very broad portfolio of products. So don't think we are just one product or the other. I mean I was myself really impressed when I joined the company 2 years ago to see the breadth of the portfolio we have. And I think we've done an amazing job to train our sales organization to be able to really sell the entire portfolio, which is why we are maybe selling one single product to all of these big pharma 2 years ago. So now we are selling 3 or 4 to those guys. And it's just the beginning of the story, we've got much more than 3 or 4 products, but also people are just starting to understand the capabilities we have. So that's going to be a huge headwind. So our business is very derisked compared to what it was 10 years ago, of course, where we were mostly depending from 2 businesses and now it's across like multiple products, multiple customer base and so on. That's really the key message here. And we are very confident, fantastic start of the year. So yes, we are very excited here.

All right. Sounds good. Thanks so much. Thank you, everyone.

Thank you.