West Pharmaceutical Services, Inc. (WST) Earnings Call Transcript & Summary

Welcome to day 3 of Stephens 2025 Investment Conference here at Nashville. I'm Mac Etoch, the Life Science Tools and Pharma Services Analyst. And I'm pleased to be joined by the team over at West Pharmaceuticals. John Sweeney, Head of IR; John McMahon, newly anointed Chief Financial Officer; As well as Shane Campbell, the Chief Proprietary Segment Officer. Maybe to kick things off, I'll turn it over to you for any opening comments, and we'll watch in the Q&A.

Yes. Thanks, Mac. It's great to be here. Really excited. This is my first time -- our first -- my first time attending this conference, and I've been really pleased about the opportunities here. It's also really been with the company for 3 months now, and it's really excited to be part of ratio's a great company and a wonderful opportunity. As you know, there's many secular tailwinds for the company, particularly the growth of our high-value components were a critical component to the supply chain for injectable drugs, one of the fastest-growing segment of the pharmaceutical pipeline going forward. And we also see growth in GLP-1s, and I'm sure we'll get into that as well as Annex 1. And I have not been in a company that has not as many -- as many tailwinds but also the strong competitive position being the market leader in primary containment or elastomers going forward. And such a strong competitive moat. And so when you put all these things together, along with opportunities to drive increased leverage earnings, I see a lot of opportunity for value creation and excited to be here. So I'd also want to introduce Shane and let him speak, but both he and I are relatively new to the company and really excited about the opportunities ahead of us.

Yes. So hi, everyone, Shane Campbell. I have about 6 months with West. So also relatively new, as Bob just said, spent about 20 years of my career with DuPont prior to joining West. So leading a lot of elastomers and polymers businesses, including into the packaging space, which gives some relevant experience to what we do here at West. Much as Bob described, joining West now is just a great position, right, market leader, clear value in its products and the value to the world that we're providing for our customers as well, but not without opportunity for improvement, and that's what really attracted me as well. So happy to go into that in more depth as we go forward. But with that, I'll turn it over to John for an intro.

Hi there. John Sweeney. I'm the Vice President of Investor Relations at West. Delighted to be here, and thanks for hosting us today.

Absolutely. I appreciate the time. Well, maybe to kick things off, could you just give us a quick update on how you're feeling about the business exiting 2025, what you're seeing across high-value products, devices and the broader demand environment towards the next year?

Yes, let me kick that off. What we're seeing -- we feel really good about the momentum of the business, if you look at what we've done over the course of last quarters we see improving underlying momentum in the business, really driven by our high-value components business. That business represented in Q3, 48% of the total company revenues and grew 13% organically. And we've got line of sight and are expecting in Q4 to that momentum to continue to actually grow to low to mid-teens. That -- but we're not just looking at that business is growing. We're actually seeing strong performance in the rest of the business. So we actually are feeling very good about not only the recovery of our core business, and I'm sure we'll probably talk about some of the things around destocking that's largely behind us now, but also some of the key growth drivers such as GLP-1s and Annex 1 I was talking about before. that are really what we see are multiyear growth opportunities going forward. So we're headed with some nice momentum here in Q4 and expect that momentum to continue into 2026.

I appreciate that. Maybe just quickly touching on destocking, as you highlighted, it's largely behind you at this point. So what are you observing in terms of order flow and near-term demand from clients?

Yes, I'll kick it off and then turn it over to Shane as well. I think what we're seeing is throughout the course of this year, a more -- a return to more normalized ordering patterns, which I think is really important. We see that in various types of customer activities and so forth. We also are looking at the pipeline as well as the backlog or the orders that we currently have and are not seeing anyone push out demand or changing in canceling demand, which I think is also a positive. But I know Shane has looked at this in detail in his business, and we can probably talk about it as well.

Yes. I think the -- it was a learning. The destocking period was a learning for us and others in the industry. And I think what it really emphasized for West that we're working on doing differently in the future is just a closer partnership with our customers to understand their inventory levels, understand their true demand. So we're having those conversations now and have a lot better sense of kind of where overall volume is. And it's really a -- it's a win-win for our customers and for us. They don't have to sit on inventory for a number of years and buy early and tie up cash. and we have a more stable and steady sell-through.

Is there any element of more of an inventory catch-up or normalization as you move towards normalization? How sustainable is that uptick towards -- as you move into the next year?

Yes, we don't think that there has been a "catch-up" where they had taken their stocks below kind of normal levels and then are trying to recover. Based on our conversations with customers, we do expect kind of a more normalized going forward. We are -- as Shane was mentioning, in constant conversations with our customers, we are seeing some -- many of them are asking to expedite where we can, which is a good sign. But we don't feel like that is a symptom that they had taken their stocks down too low and are trying to kind of restock. I think it's in line with kind of underlying demand.

Got it. And you emphasized better visibility lately and more predictable growth as you exit 2025. So what's changed operationally or in customer behavior that gives you that increase confidence?

Yes. I think Shane talked a little bit about this. I'll turn it over to him to some of the things that we're doing in the processes that we've put in place and continue to put in place in terms of that spirit of continuous improvement. Some of the things like the S&OP process and our quarterly conversations with customers.

Yes, for sure. The S&OP process. And what we're really thinking about, too, is for our high-value product components, specifically, there can be a little bit more volatility, right, and then some of our standard business that's just a little bit more predictable. Sometimes it's legacy business that is recurring year-over-year or very often, I should say, not sometimes. And so we're confident there where we see more fluctuations like the company saw during COVID. That was a surprise, right? It was hard to predict that in advance. And West made a lot of investments over time to support that business. GLP-1, which as you said, I'm sure we're going to go into more detail. That's another growth area, right? And fortunately, we have some level of flexibility with investments that we've made in the past. And I think we're going to continue to look at our business in that way to ensure that we've got the flexibility to support business that isn't always quite as predictable as some of our standards. So we're thinking about it differentially in that way also, which helps us, I think, stabilize to some extent.

Yes. And just to add on that, if you go back West was a critical component to the COVID delivery of the vaccines and so forth. And what that ended up doing is placing COVID volume ahead of everyone else, just given the importance of that and the government intervention. That increased lead times quite substantially and required companies when they did produce or purchase more than they would normally have. And then as we've gone through this kind of destocking period, I think you've seen less of that kind of situation certainly with -- and we've invested in the capacity to be able to kind of manage that, I think, better than we had given that time frame.

Appreciate that. Maybe before diving a little bit deeper into the proprietary products and Shane, pretty interesting background. You've been a number of different companies, but what attracted you to West? And where do you see opportunities to put your skills out to work?

Yes. I touched on this briefly in my intro, but I'll go a little bit deeper here. I mean, as I said before, West is just an outstanding company. It's been in business for over 100 years, right, has been delivering high-value products to the market for longer than I've been active professionally for sure. And so I saw a very strong base. But I also -- I think one of the things that really impressed me the most is we have a CEO that Eric Green, who's been in place for 10 years. And Eric recently made a change in our operating structure, right, moving to operating units to drive accountability versus -- and collaboration versus kind of functional units that reported into him as West has grown over the past decade. And that's something that really attracted me. I think that cross-functional collaboration and clear accountability that I have now for the proprietary segment has unlocked a lot of value. And it's just a testament to Eric's leadership and really is ability to realize that there may be a different model that can drive even more value kind of an openness to change versus just relying only on what's worked in the past. And allowing us to identify additional efficiency opportunities, additional ways to support growth for our customers. And so it was really a combination of all of those things that drew me to West.

I appreciate that. Maybe just looking at as we think about high-value products, GLP-1s, Annex 1 represents two pretty strong secular tailwinds in addition to the core biologics and biosimilars growth. Just on Annex 1. I believe you highlighted 375 projects as a net number. But what portion of projects have transitioned to commercial revenues thus far?

Yes. I'll start, and then Shane can add. Annex 1, we see as a multiyear kind of opportunity for us and really excited about the ongoing momentum there. As a matter of fact, as you know, we've increased our contribution of growth from 150 basis points of growth in earlier this year to 200 basis points of growth. And we think we're still in the very early innings. So as you mentioned, that 375 is an ongoing project. Once the project is completed, it kind of finishes and then moves into commercial production. So you can get a sense for the amount of opportunity that we have. If we size the opportunity in Europe, it's roughly 6 billion pieces as an opportunity to potentially upgrade. We're still in the very early innings of that. And so if we think about kind of our ongoing pipeline of opportunity, it's greater than the 375, the ongoing -- the work that we're doing right now in 375 is current projects, the ones that we've actually completed are less than the number of 3.75. So we're continuing to build the opportunities, which gives us an opportunity to continue to deliver that growth, we think, over multi-years.

Well, not just adding new projects into the commercial flow, but how long would you say it takes an average-sized project to reach its full run rate potential?

Yes. It's a really good question. It depends on the complexity of the program. But on average, it could take anywhere from 12 to 18 months to upgrade the product from its current -- into kind of the Annex-1 version. And they complete throughout the course of the year. So think about the 200 basis points this year is value that will also result in incremental value next year plus the ongoing opportunities to continue to complete. And we see this continuing throughout the course of the year, not just in Europe but increasingly also opportunities to upgrade products in the U.S., while Annex 1 is a U.K. -- excuse me, U.K. European regulation. We are seeing some of our companies look to want to standardize their supply chain and so taking opportunities in Europe and having the same products for the U.S., so they have flexibility in their supply chain. So we see this as an ongoing opportunity going forward.

Another portion of the segment that's driving growth is GLP-1s, as we mentioned. We've been an increasingly larger number -- a larger portion of revenue both proprietary products but also contract manufacturing. So maybe it would be helpful to level set for audience here today, just how much revenue you're generating from GLP-1s, where you see it going and how this relationships have trended?

Yes. Let me just address one other important point on Annex 1 because I think it's important. These are the same products before and after. And so once we have these added value services, we can actually scale the production very quickly because we know how to do it, it's not necessarily a totally new product. It's just adding some products that are already -- or services in. So that's the thing that we feel really good about. In terms of GLP-1s, it's continued to grow as a component of our business. In Q3, it was 17% of total company revenues broken out between 8% of our of revenues being on the contract manufacturing side and 9% being on the elastomer side. And for we don't have dedicated lines. I'll let Shane talk about some of the opportunities going forward here. But we do have across our business. But we do expect to see this continuing to grow over time, just given the patient population penetration, some of the ongoing, what I would say, tailwinds in terms of access, most recently with the Trump administration covering for Medicare and Medicaid and the more access for patients, that's beneficial for West. And I don't know if you have anything that you would want to add?

I think you covered it really well. It's clearly a growth area for us. I think we're well positioned with the existing products on the market, and we're working closely with some of the generics that are coming on as well as some of the products that are out there today are going off patent in the next few months and years. So I think we're well positioned. It's an important part. It's not the only driver of our growth, of course, but it's one we're happy to participate in, and we're going to continue to participate in.

Question on GLP-1 -- so GLP-1, do you supply pretty much all the majors?

So the question is does West supply all the majors?

We don't talk about individual competitors -- or excuse me, customers, but what I would say is we have a very high participation rate in GLP-1.

Do you have a view on the talk about the injectables?

And then the follow-up question is whether or not the pill will have much of an impact versus the injectables.

Yes, it's something that's obviously been a topic of conversation, we think there will be a role to play for both injectables as well as oral GLP-1s. I think if we look at our conversations as well as external. Our modeling suggests that orals will be roughly 30% of the GLP-1 population by the -- by 2030. But both injectables as well as orals will grow throughout that course of that time frame. I would say we're in a unique position at West because we do participate on the contract manufacturing side as well. And so we have insight into the opportunities to bid on volume requirements on the injectable side across multiple customers. And so we have the visibility, not only on that side, which helps inform our view on kind of what capacity is necessary to continue to support the expansion of injectable GLP-1s going forward.

Appreciate it. Maybe just a follow-up on that audience question. It's GLP-1s are becoming a larger portion of the portfolio at this point. How does the company manage those relationships just given the higher customer strategic importance?

I mean we try to support all of our customers, right? I think certainly, the ones that are growing quickly, we pay very close attention to, but there's a lot of products in our portfolio that are also really important life-saving drugs as well. So Certainly, the growth of GLP-1s over the last 12 months has been significant. We see it as continue to be significant. So our relationships with the key participants and the emerging participants in that space is critical and paramount important. So yes, I mean, I would just answer it that way.

Yes. And I would just add, we've got a strategic accounts program, which for certain customers, we have a more regular interaction with and work very closely with them to understand what their expectations and needs are from a growth perspective because as we build out capacity and ensure to invest for the future, it does take some time to invest. And so those customers that has changed as we do that for every customer, but certain customers, we have much more in-depth conversations to ensure that we have the capacity in our network to be able to continue to supply the demand that they are asking for.

Maybe touching on a few of the specific products that I think recently you had a press release run an integrated packaging offering, but it's being used in more heavily discussed topic. So I believe the company just announced this. Can you just remind us of the importance here both from a customer and competitive perspective?

Yes. Sure. We launched a product we're calling Synchrony. It's a prefillable syringe, and it's unique from what's on the market today in that we're essentially bringing together all of the components. So elastomer glass, the needle itself and bundling them together, right, creating a single system from a single supplier that can be used in a master drug file different than what's available today, right? So today, the supplier or the customer would have to purchase all of those somewhat separately or have multiple different packages that go into their filing. And so this is a simpler opportunity for a customer to bring a product to market, bring a drug to market. And we believe it's something that it's going to enable pharmaceutical companies to streamline their design, accelerate the regulatory submission and ultimately secure a reliable and predictable supply chain. So we're very optimistic about this. The customer feedback so far has been very positive. We're officially commercially launching it in Q1. We did announce that at CPHI worldwide last month, as you said, Mac.

Fundamentally, how do you stay ahead of the competition with innovations like that? How do you do what you do that allows you to be ahead of the current on innovation?

So before you answer, the question is how do you stay ahead of the curve when it comes to product introductions like this?

Yes, I'll start and then turn it over to Shane. I think one of the things that's, I think, perhaps underappreciated about West is our scientific connection with our customers. So they are -- they see us as the experts in the interaction of the elastomer with molecules. And so we have a unique position where we're working very closely early on as a drug is being developed to ensure that they have the right containment system to ensure sterility efficacy and continue reliability going forward. And so we take that knowledge and are able to build that into kind of our innovation pipeline, which helped inform some of the things that we were just talking about with the prefilled syringe. But more importantly, what are the next generation of technologies and elastomers. And we just brought on a new CTO, and I know that Shane and he are working on how do we ensure that we've got innovation going forward? And maybe you can talk a little bit about some of the things that we're talking about there.

Yes, you set that up really well, Bob. I mean I think that partnership between our customers including our sales organization, our marketing organization, leveraging both the knowledge that our customers have about their future needs and then also sometimes what we see that the customers may not yet see as a trend in that, as I mentioned, that elastomer and drug interaction and then partnering very closely with R&D to make sure that the innovations and the items we're investing in are the ones that have the highest likelihood of success and they're going to be the ones that our customers really have a demand for. So it's kind of a combination of all those things. And so as Bob said, I've been working really closely with the new CTO as well, who, I think, joined right around the time you started. So he's roughly 3 months in as well.

And I would say if you look at the level of spend that we have within the total company. We spend about 2.5% of sales. But all of that is within the proprietary business. So focused on exactly what we were just talking about.

Maybe touching on another product portfolio delivery devices, particularly SmartDose and SelfDose have been a little bit more of a conversation lately and ongoing investment for West. So you bring on these automated lines in 2026, how are you thinking about the broader strategy for that business, both in terms of?

Yes. It's a great question. And so we've got a two-pronged strategy on SmartDose 3.5. One is continuing to drive down cost and we've been on that journey this year, every quarter, we've been able to be continuing to improve our cost per unit. That's largely on the manual lines that we currently are producing on today. But we have, as you mentioned, an automated line that's on track for coming in first quarter of 2026 that will ramp up over time. That will not only provide additional capacity, but also lower cost. And so that's the strategy of evaluating how do we continue to drive value and cost down within that business as it. But we're also looking at -- are we the -- and we've talked about this before, are we the best home for this business going forward. And so both of those evaluations are ongoing. And we do expect to have an answer on that before we give formal guidance at the end of the year. End of our -- when we give guidance for 2026, excuse me,

With that in mind, how do you think about maybe the broader strategic fit within the portfolio just as you make these considerations?

Yes. So outside of SmartDose 3.5 that we do have some other devices within our portfolio. And I think these devices are really well positioned, right? These are -- this is a strong portion of the portfolio. We see strong organic growth with them. particularly our CZ and our admin systems businesses or product portfolios there. And it's really driven by the trends in biologics and the overall trend of self-administration with the shift kind of from hospitals to home care. And so they're really well positioned there. We like them. They're operating well. And so yes, that is a continued area of drive and growth for us as we go forward.

I appreciate it. Maybe before we move on to the Contract Manufacturing segment, I'll see if the audience has any additional questions.

Just one more just on glass with the innovative system that you were referring to, is that something that you ever think capability you have yourself or [indiscernible].

So the question is whether or not West will have glass opportunities within their portfolio, so to say.

Yes. I think we feel -- given our strength in elastomers and the differentiation there and the fact that we work with all manufacturers. I think we think we're well positioned to be able to work the way we are today. And I think we can achieve our aspirations without necessarily needing to have glass in our portfolio.

Appreciate it. All right. Well, maybe touching on the Contract Manufacturing segment. It's been -- there has been a strategic shift in that business recently, so focusing more on the higher value capability customer projects. Can you just touch on the actions being taken today in the long-term vision?

Yes, it's a great question. So for the audience, our contract manufacturing business is roughly 20% of our revenues. And what we have been focusing on is how to -- at a lower margin than the total company. But what we've got is employing a strategy to provide more value-added services for our contract manufacturing customers that will help improve not only the value that we provide to our customers, but also improve the profitability. A great example of that is drug handling. And let me maybe explain a little bit about what that is. So today, we do manufacture pens and auto-injectors for certain customers today. Those one of those customers actually asked us if we could do drug handling. So what is drug handling is actually taking the -- we don't do the sterile fill finish but a cartridge and then that has been produced by somebody else and actually assemble the final product. That is something that requires additional steps for us in terms of cold storage, additional QA/QC to ensure that the product is the right product put into the pen and so forth. But the value for our customer is actually you have a more continuous supply chain there as opposed to us taking our pen, giving it to somebody else that establishes that should reduce the variability because there's less touch points as well as increase the cycle time for it. So there is an opportunity to add these higher value kind of downstream opportunities within our contract manufacturing where we think we're uniquely positioned do that versus some of our competitors. It's an opportunity to increase our scope of opportunity within contract manufacturing, but also increased the profitability of that business going forward.

Just on that example, are you cutting with production line of the customer? Or is the product facility in the earlier phase of the ingredients?

Yes. So the question was, are we co-locating with a customer? Or is the product coming to us in short terms, the finished product in the cartridge is coming to us. So we are not doing the fill finish and the sterilization of that cartridge that has the API. They're sending that to us. And then we are taking what we had at the front end, which was assembling the pen components and then actually marrying it up with the final API and then producing the finished good. And so -- we have it. It's co-located with the initial manufacturing of the pen. But it does require additional handling from a cold storage investment for us as well as additional quality and regulatory requirements to ensure that we've got segregation as well as making sure that the product that comes in is, in fact, at spec.

You mentioned it's a higher margin product offering? How do those margins compare to what the underlying contract manufacturing business?

We're in active discussions with multiple customers on building that capability. I would say it's helpful, but it's not the sole thing that we would be looking to potentially fill that with. But we do think that it provides an opportunity and an expectation that we can handle a higher value opportunities going forward, which is helpful for our contract manufacturing business in general.

I appreciate the context there. And maybe thinking about the broader portfolio as a whole. Pricing has really supported margins over the past few years as supply conditions normalize, how do you see the pricing environment changing moving into 2026?

Yes, I think we've talked before, we continue to see 2% to 3% price opportunity as we go forward on an annual basis. I think the other trend that we've talked about a little bit is the improvement in the upgrade from -- due to Annex 1 and some other trends like that, that are moving products from kind of a standard product and lower margin to a higher-priced, higher-value product. And so we see that as being accretive to. We can't count that in mix rather than price, but I think that's also an important part of our growth story.

So it sounds like customer conversations are still fairly constructive despite.

Yes. Yes. So I would say they're still fairly constructive. I think there's still value and understanding overall of whatever it is that's increasing and providing.

And then maybe just looking at tariffs, you spent several years localizing production capacity across your global network. If tariff structures or trade policies were to shift in 2026. How well positioned do you feel West is today?

Yes, I'll take that, and I'll add Shane. I think we're -- I think one of the compelling opportunities that West has is, if you look at our supply chain network, we've employed a local foot local strategy for many years. And so we've got the ability to provide product primarily through local manufacturing close to the customer supply chain already today. And as we think about the opportunities around shifting tariffs -- we've got a couple of strategies to employ. First of all, we're looking at ways to diversify our own supply chain to eliminate incoming tariffs from our sampling. We also have the ability to pass on certain tariffs if there's an incremental cost. But we're also working with customers to potentially move products from one facility to another to help them, and typically, it's from Europe into the U.S. to help reduce some of the tariff costs. This also has the dual benefit as we think about some of the investments that many of our customers now making in the U.S. to be able to scale up capacity. As we mentioned before, we've made some significant investments over time. In capacity during the COVID time frame that we now can leverage as more investment and more manufacturing capacity is coming here into the U.S. And so we're working very closely with our customers to be able manage that. And I think that's a unique opportunity that West has in the marketplace.

I believe earlier this year, you had a little bit of a shift and where some sort of products were manufactured which created a little bit of a headwind has that been resolved at this point?

Yes. We're -- we have a -- I'll start and then let Shane add to it. So we did have a bit of a load imbalance as a result of some changing customer requirements earlier in the year. And what we've done throughout the course of this year is hired additional labor. So it wasn't necessarily a machinery capacity was around labor capacity in one of our plants in Europe. We hired most of those folks by the end of Q3 and are ramping that up quite nicely and feel good about the progress.

Yes. Yes. I mean the only thing I'd add is that we're continuing to focus there, like every -- and I think as we go through into 2026, we're going to see that constraint relieved even further.

Well, just on that point, I think CapEx has been running a little bit above historical averages, just given the automation and capacity build out. So how would you think -- or how should we think about normalized levels as you look towards exit 2025 and look into 2026?

Yes, it's a good question. And so one of the things that we have been investing disproportionately in CapEx anywhere from 10% to 15% of revenue over the last several years. And we think we're -- our view is that we're going to be able to live into some of that capacity over the next several years. and get back to our historical levels kind of on a glide path to 6% to 8% of revenue in CapEx, I'd say that's a combination of maintenance of existing CapEx as well as growth. It's probably 40-60 going forward. I think we're going to end this year roughly slightly higher than that range, but much lower than we did in the years before. And I feel -- as we think about 2026, I it's reasonable to assume we'll be in that sweet spot.

Maybe Just to wrap up, I'd like to turn it over to you for any closing comments that you might have. Anything that you want to get across the investor base.

Yes, I'll start and then maybe turn it over to Shane. I think I'll start somewhat as I was finishing. I think there's a number of growth drivers at West with the newer leadership team coming in and looking at the business, I think that we're on the path of getting back to improved execution. The market is -- we're benefiting from market recovery as well, the elimination of destocking. And we've talked a lot about GLP-1s and they certainly have been a core component of our growth. But I want to emphasize that West is not just a GLP-1 story. If we look at the core business in ex GLP-1s. Every quarter, that business has continued to grow, given the underlying momentum that we see, it went from negative in double-digit in Q1, roughly flattish, slightly down in Q2 to mid-single-digit growth in Q3, and our expectation is that momentum will continue. And when we look at our market shares, we are by far and away the market leader within elastomers, 70% to 75% market share. But as you look out, the fastest-growing area is really around biologics. And when we think about our participation rate in biologics, it's higher. It's higher than 90%. And so -- and that's on new products that are coming to market. So we feel very good about the position of West how we continue to grow and recover and get back and execute -- continue to execute in the marketplace. So I'm excited about it. And I don't know, Shane, if you had anything else to say?

Yes. No, I would just add to it. I mean, I fully agree with all the things you highlighted around the growth opportunities and there's a lot of tailwinds there, but we've also got opportunity on the efficiency and productivity side to drive margin improvements even further than what we have today. So we're working already and continue to work on automation, working on yield loss, right? So improving our quality. So we're even more robust there procurement strategies. All of these things, I think, are going to continue to be accretive to our margin and continue to drive cost down. And so optimism for me as well. It's one of the reasons I joined, and I've been very happy to see that there's the openness and the support for it within the organization to go after some of these opportunities that we have in front of us here, too.

So if you have 80% plus market share, you're implying in all biologics that come into market, how are you managing price in those relationships? Is it inflation? Is it -- are you trying to win on price to maintain that market position. How do you think about that?

Yes. So just real quick before we run out of time. Pricing is an area that I think we've been generally in the 2% to 3% window. I do think that there's more opportunities to ensure that we're sharing in the value that we're creating with our customers. So it is a -- what we look at because we have kind of a made-to-order in almost a unique SKU customer. We don't have price list. We really work with them to make sure that we understand what we're providing to customers going forward. We are not the price -- we are a price premium in the market because we think our quality and reliability affords us that ability, and we'll continue to do that going forward. So we don't think price is a lever as being the low-cost entry is what our pharma customers are looking for or needing what they want is assurance of supply and high-quality repeatable business. And particularly in biologics, when you think about our price per unit versus the value of the drug, it's a relatively small piece. And so we feel like there's continued opportunity to get smarter about pricing but -- and feel very comfortable about the 2% to 3% going forward. And in addition to the high-value mix, biologics are almost all high-value products, which typically are higher priced than the standard products.

Well, Bob, John, Shane, I think that's a great place to wrap. Thank you for joining us here, Stephens.

Thank you.

Thank you.