2019 jefferies healthcare conference · independent investigation and analysis of the company and...
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2019 Jefferies Healthcare ConferenceManagement Presentation
June - 2019
This presentation has been prepared by the Company. No representations or warranties are being made with respect to these materials. Except for historical information contained herein, the matters discussed in this presentation are forward-looking statements about expected future events and financial and operating results that involve risks and uncertainties. We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. We have not independently verified any of the third-party or publicly available information included herein nor have we ascertained the underlying assumptions relied upon therein. As a result, any market, ranking and other similar industry data included herein, and any estimates and beliefs based on such data, may not be accurate and complete. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates” and “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could” are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements. All forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control, including, without limitation, risks and uncertainties related to economic, market or business conditions. These and other important factors may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, the recipient agrees that neither it nor its Representatives are entitled to or will rely on the forward-looking statements and other information contained herein. The forward-looking statements included in this presentation are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statements, either to reflect new developments, or for any other reason, except as explicitly required by law. In all cases, recipients should conduct their own independent investigation and analysis of the Company and its business, assets, financial conditions and prospects.
This presentation presents certain “non-GAAP Measures” as a supplement to results presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These non-GAAP Measures, such as Adjusted EBITDA, as well as other statistical measures, are presented because management believes these measures provide additional information regarding the Company’s performance and because we believe they are useful in evaluating operating performance compared to that of other companies in our industry. In addition, management believes that these measures are useful to assess the Company’s operating performance trends because they exclude certain material non-cash items, unusual or non-recurring items that are not expected to continue in the future, and certain other items. The non- GAAP Measures are not presented in accordance with GAAP, and the Company’s computation of these non-GAAP Measures may vary from those used by other companies. These measures have limitations as an analytical tool and should not be considered in isolation or as a substitute or alternative to net income or loss, operating income or loss, cash flows from operating activities, total indebtedness or any other measures of operating performance, liquidity or indebtedness derived in accordance with GAAP. Past performance may not be a reliable indicator of future results. 2019 totals are “unaudited” and final audited numbers may differ from the totals presented within.
These presentation materials do not constitute or form part of an offer to sell or issue, or a solicitation or an offer to purchase or subscribe for, any securities of the Company. The information contained in these presentation materials may not be reproduced, disseminated, quoted or referred to, in whole or in part, without the express prior written consent of the Company.
Disclaimer
June - 2019 2
Management PresentationAgenda
Maravai LifeSciences Overview
Our Businesses
Bioprocess Impurity Testing
Oligonucleotide Synthesis
Protein Detection
Business Update
Financial Review
Q&A
3June - 2019
Our Mission is to Enable the Miracles of Science
Maravai – medieval Italian word for a miracle.
In science, they’re all around us. Genomics. Tumor pathology. Biotherapeutics.
Maravai LifeSciences catalyzes the growth of successful pioneering life science companies by providing the expertise, capital, processes and systems so that they can continue to serve scientists to improve human health.
We help scientists bring the miracles of science to life.
4June - 2019
Maravai LifeSciences Overview
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Differentiated Product Offerings
Maravai is a brand leader in each of its three operating segments, offering differentiated products to researchers and OEM customers worldwide
Bioprocess Impurity TestingClear worldwide leader in ELISA
kits to detect impurities in bioprocessing
Enable the production and commercialization of safe and
effective biotherapeutics
Protein DetectionPioneer and leader in research
products for labeling and detecting proteins in tissue
Immunohistochemistry improves risk assessment, prognosis and
treatment decisions in cancer and other disease states
Oligonucleotide SynthesisNiche leader in oligonucleotides with a focus on highly modified
RNA
Products contribute to breakthrough genomic discoveries that are driving precision medicine
Maravai LifeSciences Overview
21% of revenue 48% of revenue31% of revenue
June - 2019
Our Operating Focus
June - 2019 6
Market leader with sustainable market positions in attractive, high-growth markets
Leadership in attractive markets
Wide portfolio of products backed by decades of scientific investment and supported by hundreds of thousands of scientific citations
Differentiated products
Specific investments in quality systems, ensuring manufacturing consistency and continued reputation for excellent product quality
Focus on quality
Direct scientist-to-scientist application supportand best-in-class customer support
High-touch customer and technical support
Maravai LifeSciences Overview
March 2014Formed Maravai LifeSciencesSan Diego, CA
April 2016Acquired Vector LaboratoriesBurlingame, CA
December 2017Acquired Glen ResearchSterling, VA
December 2016Acquired Solulink product
September 2016Acquired TriLink BiotechnologiesSan Diego, CA
October 2016Acquired Cygnus TechnologiesSouthport, NC
Oligonucleotide SynthesisProtein DetectionBioprocess Impurity Testing
Established 1996
Established 1978 Established 1987 Established 1984
Maravai LifeSciences OverviewHistory of Maravai LifeSciences
June - 2019 7
8
Proven Management Team with Significant Life Sciences Experience
Carl HullChief Executive Officer, Co-founder
Eric TardifPresident, Co-founder
Kevin HerdeVice President, Chief Financial Officer
David WeberVice President, Chief Commercial Officer
Mike HoustonChief Scientific Officer
Brian NeelCOO, Oligonucleotide Synthesis
Christine DolanCOO, Bioprocess Impurity Testing
SolopakDivision of Smith & Nephew PLC
June - 2019
Maravai LifeSciences Overview
TTM EBITDA Margin
43%
TTM Adjusted EBITDA
$55mm
TTM Organic Revenue Growth
16%
Employees
298
Customers
5,682
2018-2020FOrganic Revenue
CAGR
XX%TTM Total Revenue
$128mm
Sellable SKUs
7,237
Sq. Ft. of Lab and Production
Facilities
86,000
Maravai LifeSciences OverviewMaravai by the Numbers
9
Note: TTM metrics as of April 30, 2019
June - 2019
10
Protein Detection
Bioprocess Impurity Testing
Oligonucleotide Synthesis
48% of revenue21% of revenue31% of revenue
Protein DetectionBioprocess Impurity Testing
Oligonucleotide Synthesis
June - 2019
Our Businesses
Our Businesses: Bioprocess Impurity TestingBiologics Manufacturing Process
Host Cell Protein (HCP) TestingBiological drugs are manufactured in cells, like E. coli. Normal cell growth processes result in impurities, including host cell proteins. Purification steps seek to eliminate these impurities. Testing kits are used to verify the removal of impurities
Upstream Manufacturing Process Downstream Manufacturing Process
Grow Proteins Harvest Purification Bulk Drug Substance Collected Final Drug
June - 2019 11
Protein DetectionBioprocess Impurity Testing
Oligonucleotide Synthesis
Gold Standard Immunoassays to Detect Impurities in Biologics Manufacturing
Meeting Customer Needs
• Gold standard assays, backed by a 30+ year reputation
• Addressing regulatory need for continuous monitoring of impurities
• Customers seek trusted partners to avoid high switching costs
Host Cell Protein ELISA KitsMore than 20 “generic” kits targeting various host cells
Custom Assay ServicesProcess specific assay development services and orthogonal testing methods to characterize impurities
Other ELISA and DNA KitsBroad range of kits to detect DNA or proteins
June - 2019 12
Our Businesses: Bioprocess Impurity Testing
Protein DetectionBioprocess Impurity Testing
Oligonucleotide Synthesis
Our Businesses: Protein Detection
Immunohistochemistry and ImmunofluorescenceDetecting the signal emitted by the target of interest requires a host of reagents with specific affinity to the primary antibody and to amplify and preserve the signal
Tissue processing
Primary antibodies & antigen detection
Secondary antibodies
Visual detection & labeling
Imaging & analysis
Slide processing
June - 2019 13
Protein DetectionBioprocess Impurity Testing
Oligonucleotide Synthesis
Immunohistochemistry Workflow
Our Businesses: Protein DetectionHighly Characterized Reagents to Detect a Range of Antigens in Tissue
Meeting Customer Needs
• Over 350,000 scientific citations
• Quick turnaround order fulfillment
• High touch customer support
VECTASHIELDMounting media and other reagents
VECTASTAIN and ImmPRESSAvidin-biotin complex and enzyme polymer detection kits
Secondary AntibodiesBroad range of proprietary, highly purified secondary antibodies with specific affinity to most primary antibodies in use
June - 2019 14
Protein DetectionBioprocess Impurity Testing
Oligonucleotide Synthesis
Our Businesses: Oligonucleotide Synthesis
Enabling Genomic MedicineMaravai specializes in complex nucleic acid synthesis chemistries, providing highly modified nucleic acids to corporate partners and researchers for therapeutic and diagnostic applications
BiopharmaLife Science Tools Research Clinical Diagnostics
June - 2019 15
Protein DetectionBioprocess Impurity Testing
Oligonucleotide Synthesis
Nucleic Acid Applications
From Specialty Chemicals for Oligonucleotide Synthesis to Complex mRNA Synthesized Under GMP Conditions
Meeting Customer Needs
• 20+ years of complex oligo synthesis experience allows us to address applications at the forefront of genomics
• GMP capabilities for therapeutic development programs
• OEM partner to provide components for advanced research and regulated products
Phosphoramidites & Specialty ChemicalsBroad range of high-purity reagents for in-house oligonucleotide synthesis
Messenger RNAHigh-quality, broad range of mRNA for a variety of applications
DNA / RNA OligonucleotidesReliable, scalable broad range of oligonucleotides
Custom NucleotidesAccurate and high-purity custom synthesis services, including highly complex oligonucleotides
June - 2019 16
Protein DetectionBioprocess Impurity Testing
Oligonucleotide Synthesis
Our Businesses: Oligonucleotide Synthesis
Bioprocess Impurity Testing Five new product launches (record): 1 Generic Kit: EndonucleaseGTP™, MAC™
MultiAnalyte Controls, Generic Kit for Protein A and two custom CHO kits. Executed well attended Mass Spec Services Webinar; new revenue stream created Published CHO competitor assessment technical brochure – thought leadership
Protein Detection Continued uptake of two truly new products (Vibrance and TrueVIEW). Fully owned Burlingame, CA facility continues to attract interested buyers due to re-zoning
with a $30M to $35M fair value range.
Oligonucleotide Synthesis Production efficiencies continue to improve on time delivery reaching > 90% levels. Strong reagents growth driven by capping products: Clean Cap and ARCA. mRNA Scale up – Delivered a 5 gram GMP job and ramping up 10 gram GMP run (2H 2019). Successful ISO audit in April.
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Business Update
June - 2019
YTD 2019 Highlights
18
San Diego Facility Expansion
Maravai LifeSciences and TriLink BioTechnologies Headquarters
105,000 sq. ft. facility with adjacent expansionopportunity
50,000 sq. ft. of custom designed manufacturing and laboratory space
Five ISO Class 7 and ISO Class 8 engineered GMP customer suites. Class 5 finish/fill hoods
mRNA, Oligo and custom chemistry pilot scale up suite (synthesis andpurification)
Custom designed solvent deliverysystem
June - 2019
Current Year Business Update
Strategic Focus
Continued revenue and EBITDA growth across all business segments
Investments in commercial resources to further international growth
Continued integration of a single overhead structure across the business
On-going evaluation of acquisition opportunities to complement organic growth
Investment in new San Diego facility to further consolidate operations and provide increased
capacity for rapidly growing Oligonucleotide franchise
June - 2019 19
Current Year Business Update
Revenue Performance
Post Maravai
June - 2019 20
2016 2017 2018E
Financial Review
$57 $61 $64 $68$76
$85
$104
$124
2011 2012 2013 2014 2015 2016 2017 2018
Pre Maravai Post Maravai
Revenue by SegmentRevenue ($mm)
Note: Historical results presented on an adjusted pro-forma basis to present full year comparable results from M&A
Oligonucleotide Synthesis
Bioprocess Impurity Testing
Protein Detection
$85 $104 $124
2016 2017 2018
$36 $45
$53
2016 2017 2018
$34 $41
$49
2016 2017 2018
Revenue ($mm) Adjusted EBITDA ($mm) FCF ($mm)1
• Each acquired business generates significant cash flow, with sufficient critical mass in their individual market segments
• Adjusted EBITDA margins at ~43% with historical organic revenue growth in excess of 20%
• Integration activities completed resulting in solidified business processes, combined commercial organization and shared corporate services, and accelerated growth from investments
• High cash flow conversion and capital expenditure light business model
21
Financial Review
1 FCF calculated as Adjusted EBITDA less capex
Strong Growth, Margins and Cash Flow
June - 2019
Continued Growth and Momentum into Q2 2019 March 2019 set a record for single month revenue and EBITDA. April 2019 TTM revenues were $128M with EBITDA of $55M. Revenue growth of 16% over TTM ended April 2018. EBITDA growth of 18% over TTM ended April 2018.
EBITDA Margins and Cash Flow Conversion Continue to Maintain at Industry Leading Levels Pricing trends remain favorable across all businesses. Expenditure control with focused spend in commercial areas to drive growth. Overall YTD 2019 EBITDA margin of 45%.
Governance 2018 financial statement audit complete with an unqualified opinion from EY. 3 years of audited financials now completed.
22June - 2019
Financial ReviewYTD 2019 Highlights
Q&A