Good afternoon, this is the Chorus Call conference operator. Welcome, and thank you for joining the DiaSorin full year 2023 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Carlo Rosa, CEO of DiaSorin. Please go ahead, sir.
Thank you, operator. Good morning, good afternoon to everybody. Welcome to the 2023 full year results. As usual, I'm gonna make some initial strategic remarks, and then the Chief Financial Officer, Piergiorgio, is gonna take you through the numbers. As a general comment, let me say that 2023 was a very busy year. It was the second year after the acquisition of Luminex, and we completed our integration plan with the company. And I would like to say that by December of last year, integration is done. The strategic role of Luminex has been defined. The senior leadership team has been set in place.
The branding of Luminex has been defined, and today, Luminex is a brand that we are using just for our LTG products, whereas all IVD products, molecular and immuno, goes under DiaSorin. From an operation point of view, we have invested heavily in our quality system, and I think it's not worth it that we have closed the warning letter with the FDA, and we have completed our investment in manufacturing in the Chicago plant, and we are on the way to complete also the California plant, where the next manufacturing will happen. As a consequence of a lot of good work from a lot of people, we achieved, I think, a milestone for the company, which has been the approval of our LIAISON PLEX instrument together with the respiratory panel.
This is clearly a milestone, because we got the instrument approved, and therefore, from now on, it's gonna be just assay. We already filed our second panel for the sepsis, for the blood, and then by Q3, we're gonna submit the other two blood panel, and we're gonna complete with the GI early next year. So, it took longer than originally expected, but I think as we discussed, during the presentation on the long-term plan, we decided to hold on until the quality of the product and the platform was guaranteed, and also the quality system of Luminex was set in place properly, and I would like to say results achieved.
When it comes to the immuno, 2023 has been, as we will see later, a very successful year. We had double-digit growth in all the main geographies. Clearly, the U.S. is been over-exceeding expectation. Europe has been growing, solid growth in the European market, which we have been discussing a few times. It's certainly for DiaSorin a more mature market, but notwithstanding that, the strategy is working in Europe. And notwithstanding the fact that China has been a drag, we will discuss about it later. In China, I think we achieved three strategic goals. First one, we have a local Chinese leadership, senior leadership in place.
Second thing, we have initiated, we have started manufacturing of the, of the, LIAISON reagents for the Chinese market, market to follow the China for China strategy and the instrument, with our partner, STRATEC, inside, in, in, on site, and we're gonna have then the instrument clear, for the Chinese market soon. And, the... And the third element, which is, fairly important, we have been, approved under the VBP, and therefore we'll be able to sell in several provinces, our, some of our initial menu. So, notwithstanding the fact that China has been a drag, in 2023, we believe that, 2024 is gonna be, the business, we expect it to be, stabilized, and possibly in the second half, to start to see, growth.
So, if now we get to discuss more specific, the numbers, and we start from revenues. As usual, I'm going to comment my results in, at constant exchange rate. If we look at the total revenues, net of COVID and net of respiratory, the overall business grew 4%, which is in line with the guidelines, notwithstanding the fact that as we discussed in the last quarters, we had softness in our LTG business, and, as we have discussed, headwind in China. But all of this has been offset by a significantly better performance on the immuno business, and the molecular-based business compared to expectations.
When it comes to COVID, 60 million in 2023, which clearly is a very sharp reduction compared to previous year, -75%, I think, in line with what everybody sees. We see that the COVID business continues to decline. We expect roughly 30 million in 2024, at that point, and then we're gonna stop talking about COVID and start talking about COVID as part of the respiratory panel, which I believe is what is gonna happen to this virus. Now, if we look at the three legs, let's start from immunodiagnostics. You know, if you understand, immunodiagnostics is combination of legacy technologies like ELISA.
We have instrumentation revenues inside, but and then we have CLIA, which is lion's share of the revenues. So if we look at the overall immunodiagnostic business, ex COVID, it grew 8%. So very strong growth. If we look at CLIA, both in the quarter and for the full year, the CLIA business grew 10%. So double-digit growth in our CLIA franchise across all the geographies. And this is in spite of, as we discussed, China headwind. You know, in China, our revenues are primarily CLIA revenues. So why is this?
This is clearly because, as far as the U.S., we have a combination of a very successful hospital strategy together with critical mass in the commercial organization that we have reached in the U.S., thanks to the investment and the Luminex acquisition. When it comes to the European market, with strong, strong growth in volumes in Europe, that certainly pushed the business. If we now look at the immunodiagnostic in the region, to me, U.S. is remarkable because full year is 14% growth for immuno and 14% with CLIA. If we look at quarter four in North America, we had an acceleration when the business has been growing 18%, with a clear growth of 16%.
So it means that, not only in the U.S., the business has been doing well, but, the growth has, has been accelerating toward the end of the year. If we look at Europe, immunodiagnostics, full year growth 8%, Q4 growth 8%, so it's, fundamentally Q4 is in line with what we have seen for the previous quarters. If we just look at the CLIA component, overall it has been growing between 9% and 11%. So full year, 11% and 9% in Q4. Again, when it comes to Europe, is, most of the growth has been, driven by increased volumes of pull through, through, our very large, install base.
ex-Europe, ex-North America, which is a combination of many different markets, as said, negative performance in China, solid growth in other geographies like Brazil, Mexico, Australia and India, which are countries where we perform, where we have a direct presence. With the overall rest of the world has been growing 7%, which is good. As said, this includes also the Chinese drag, which have been more than compensated by the solid growth everywhere else. And I said before, to me, what was very relevant in immunodiagnostics is the VBP we are in. And at this point, we have access to all the tenders that are covered in all the provinces that are covered by the VBP.
Now, if we move to molecular diagnostic, and again, I look at molecular diagnostic, it's a little bit more complicated here because you have three components. You have the COVID, which we exclude. We do have a respiratory with that I wanna deal separately because, as we discussed a few times, the seasonality has been fairly awkward, so comparison 2022 to 2023 is complicated, and then the rest of the business. So, sorry, one more element, as we discussed, we have lost a contract with for cystic fibrosis for one of the major labs, and the effect of this contract has been felt in 2023 and now slightly in Q1 2024, and then at that point, it's gonna be completely even out.
So if I now look at the molecular-based business, net of respiratory, net of COVID, net of LTG, okay? So the business is very resilient. It grew 6% with an acceleration in Q4. In Q4, the growth was actually double-digit, 10%. What's behind this? We do have our Luminex offering that is the traditional DiaSorin and the MDX business, which is growing double-digit. And we do have the Verigene I technology holding pretty well. As we have discussed a few times, this business for the Verigene I that we inherited through the acquisition is primarily non-respiratory. And in that, clearly it is primarily U.S.-based, and it is holding up very well.
As a consequence of one factor, which is the fact that, as we discussed, we are already using the Flex concept on Verigene 1, although the management of the Flex credit is more complicated than what we expect on the VERIGENE II, and this is providing clearly a very attractive proposition for a segment of the market. And this is why we are extremely comfortable and confident that once we're gonna be providing with the LIAISON PLEX the full automation, the hands-on time, which is practically zero, because everything is fully loaded into a cartridge and PLEX, we expect this to be a very interesting proposition for customers.
If we now look at molecular respiratory, -12% versus 2022, but a big, big dive in Q4, -29% is expected because of the seasonality of the flu season in 2023 compared to 2022. Okay, so we're actually, if we look at the budget, we've been doing better than we expected in Q4 of 2023. So when it comes to our molecular franchise, if I can summarize it, VERIGENE I base holding up nicely. Great opportunity for respiratory that today makes a relatively small part of our revenues. A confirmation that the Flex concept, even if is a little goofy, if I may say today, on the VERIGENE I platform, is an interesting proposition for customers.
I've been reading some of the comment, commentaries, from the market about the fact that there could be ethical problems about this, and honestly, I don't understand where the comments are coming from. The market does accept the flex is an opportunity, and we don't see any ethical issue with allowing the customer to select which assay they want to run on their patients. If we now move to the LTG, briefly on the LTG, it's, as said, it has been a difficult 2023 because of the destocking. Overall, the business is relatively stable, declined 4%.
But we have seen that the destocking has been pretty much completed with H2 last year, and we're already seeing 2024 light at the end of the tunnel. So this business is now more stable. We see our partners gaining business, and this is reflected by the royalty rate and the royalty increase, that increase of royalties that we see as part of the contracts we have. And therefore, we are more optimistic about 2024. This destocking life science event I think is behind us, and we are more positive about the future. I'm gonna make a few specific comments about three programs, MeMed, Lyme, and QuantiFERON. When it comes to MeMed, the JUPITER study is ongoing.
I remind you that the Jupiter study is a study that is intended to guarantee access to the five payers. The study is ongoing, it's on time, and we expect the study to be completed sometime by the end of this year, beginning of next year. We are on track there. We continue to build momentum on MeMed. We have a very strong funnel of hospitals that have been testing the product, and we start to see adoption of the product. As said, I believe we will draw some initial conclusions about this business by the end of 2024.
To me, when it comes to the clinical validity of the product, we continue to see that whatever has been claimed by MeMed has always been delivered by all the clinical studies we have conducted. So clinically, the product makes a ton of sense, and as discussed a few times in the past, what's very relevant now is the effort of education that where we have decided to invest heavily in the U.S., and we start to reap the benefits of this program. When it comes to Lyme, that is another key program for DiaSorin, and it's part of the alliance with QIAGEN.
Clinical study completed last year, as promised, it's been, the filing has been done, in December 2023, and we expect this product to be approved in 2024. We are also discussing with partners in the US about the possibility of co-marketing this product. Because, again, this is gonna be another situation where it's gonna be key the education, in this case, of GPs. And therefore, learning from what we had to do with MiMed, I think that we are better prepared now to work on the online. The third program is the QuantiFERON. Reflecting on what QIAGEN has been reporting, clearly this is a very successful program.
It is a very important product for us, for our hospital strategy, and is working very well together with the rest of the menu we have on our system. We are working with QIAGEN on the registration of the LIAISON in China. The product has not been launched in China yet, and so we are gonna be working with our partner, QIAGEN, to get the registration in China in 2024, and start commercializing the product as well in this very relevant market. So, I'm gonna leave now the podium to Piergiorgio, who is gonna take you through the numbers, and then I'll take questions at the end of PG presentation. PG, please.
Thank you. Thank you, Carlo. Good morning and good afternoon, everybody. As usual, in the next few minutes, I will walk you through the financial performance of DiaSorin in 2023. And I will also make some remarks on the contribution of the fourth quarter. Please, let me remind you that, consistently with what we did over the last earnings calls, to better understand the performance of the business, I will mainly refer to adjusted P&L items. So that, I would like to start with what I believe are the main highlights of the period. 2023 total revenues at constant exchange rate, decreased by 14%, whereas the reduction at constant perimeter of consolidation, which means without the contribution of the flow cytometry business, which was carved out in February 2023, has been 12%.
This result is a combination of the expected fall in COVID sales, down by EUR 195 million, partially offset by growth in the ex-COVID business. To be more precise, this growth is a result of the combination of a very good performances we heard of the immuno franchise, which grew 8% in the year and 10% in the quarter, despite, as we said, the weak performance in China. With immuno sales in 2023, decrease mid-single digits compared to 2022. A slightly negative result of the licensed technology business, which recorded a decrease of 1% in the year and 4% in the quarter, from the known issues of the destocking of consumables implemented by some major partners, and also because of a generalized softness of the life sciences business, as reported by most of the players in this space.
The negative trend of the molecular franchise, that's leg, down by 8% in the year and 17% in the fourth quarter. 2023 adjusted EBITDA closed at EUR 375 million, or 33% of revenues. Q4 2024 margin at 32% of sales, has been impacted by some extraordinary one-off manufacturing costs and an unfavorable sales mix. 2023 full year EBITDA reduction compared to 2022, EUR 140 million or 27%, is attributable to the drop in COVID sales, and therefore, to the corresponding worsening of the operating leverage. Lastly, DiaSorin generated almost EUR 210 million free cash flow in 2023, down EUR 107 million compared to last year. Once again, this variance is driven by the fall in COVID sales. Now, if we move to the P&L lines.
As said, the 2023 total revenues at EUR 1,148 million decreased 16%, compared to 2022. This variance is driven by COVID and the flow cytometry business. During 2023, we recorded some EUR 24 million FX headwind, mainly driven by the US depreciation against the euro. Full year adjusted gross profit at EUR 749 million decreased by 17% compared to last year, with a ratio over revenues of 65%, broadly in line with 2022, which closed at 66%.... The carve out of the flow cytometry business, alongside all the initiatives aimed at improving operation processes and containing costs, allowed us to preserve margins, despite the reduction in revenues, COVID revenues, and the tail of the inflationary pressures.
Q4 adjusted gross margin at 65%, has been, as I said before, negatively impacted by some extraordinary one-off manufacturing costs, which we are not expecting in 2024, and by an unfavorable sales mix, mainly lower sales of consumer goods in the LTG business. 2023 adjusted operating expenses at EUR 466 million, decreased by 1% compared to 2022, with a ratio of the revenues of 41%, vis-à-vis 35% of last year. The worsening of the operating leverage ratio is entirely owed to the reduction in COVID sales. Moving to Q4 2023, adjusted operating expenses decreased compared to last year by 2%, with a ratio of the revenues aligned with the full year at 41%. Full year adjusted other operating expenses are better than 2022 by EUR 60 million.
The difference with last year is mainly driven by the combined effect of some positive one-off elements booked in 2023, and, even much more relevant, I would say, some negative, non-recurring expenses booked last year, such as the payback provision booked in Q4, you might remember of, the cost of the hive down project, some negative effects and severance costs. As a result of what just described, year-to-date adjusted EBIT, EUR 283 million, or 25% of revenues, has decreased compared to 2022 by 32%. Adjusted interest income at positive million euro is better than last year by EUR 8 million, mainly because of the improved yield on our cash investment, whereas the adjusted tax rate at 22% is in line with 2022.
Year to date, adjusted net result at EUR 224 million, 20% of revenues is lower than previous year by EUR 95 million. Let me now move to the net debt position. At the end of 2023, the net debt was negative for EUR 776 million, vis-a-vis EUR 970 million-- EUR 907 million at the end of 2022. Thus recording an improvement of EUR 130 million or almost 15%.
This variance has been mostly driven by the operating cash generated during the year, and by the proceeds of the sales of the flow cytometry business, partially offset by the payment of just short of EUR 60 million dividend to our shareholders in May 2023 and EUR 28 million. Lastly, let me move to 2024 guidance, as usual, expressed at previous year exchange rate. The guidance confirms what we presented in December 2023 during the Capital Market Day, and it is calling for an increase in revenues, ex-COVID, of 5%-7%, with COVID stays at EUR 30 million, and an adjusted EBITDA margin of 32%-33%. Please note that we have built in our assumption an average respiratory season.
Moreover, please consider the 2024 guidance does not include any possible additional impact from payback in Italy, consistently with the position taken by the company during all of 2023. In the light of the latest legal development. Regarding this matter, let me please remind you that DiaSorin, as many other diagnostic companies, I would say, as most of our diagnostic companies, decided to continue its legal dispute, which might take three to four years before reaching its conclusion. We will keep on monitoring the evolution of this complex and ever-changing situation and update investors as soon as something will change. Now, let me please turn the line to the operator to open the Q&A session. Thank you.
Thank you. This is the Chorus Call Conference Operator. We will now begin the question and answer session. Anyone who wishes to ask a question, may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Siya Noor, Morgan Stanley. Please go ahead.
Hi, good afternoon. Hi, Siya Noor from Morgan Stanley. Thanks for taking the question. I have two. The first one is just on your 2024 guidance. So you reiterated the growth guidance despite a somewhat earlier than expected approval of the LIAISON PLEX platform. Is this just conservatism? And could you comment on your revenue contribution expectations from this platform for 2024 and 2025?
You, you said, I think you said there are two questions or just one?
I can ask the second one as well, if you like. So the second one, I think, is just how do you plan to share your progress on the LIAISON PLEX with the market? Would you be open to, for example, providing installed base figures, a sales contribution, et cetera?
... Okay, we reiterate 2024 guidance, and notwithstanding the fact that we got a couple of months early approval. I don't think that the number, a couple of months of approval, or time to market, will change at all the 2024 contribution. We continue to expect launch of the platform in May, June timeframe. And this has to do with the fact that we are gearing up the manufacturing, the equipment, the place, and we are conducting post-approval clinical studies to generate enough publication to support the product. As you know, when the product is not yet approved, yet, you are limited in your ability to run the, to run these market studies. So, we continue as planned.
As far as how we plan to share with the market, to be honest, we don't know yet. Because in the past, we have been providing the platform in different ways, number of platforms, installed, revenues, and so forth. As soon as, you know, H2 comes, we will give to the market enough visibility to allow investors to understand the progress of this platform. By the same token, we don't want to give them too much. So it's going to be balanced, but certainly you will have a visibility of how the program goes.
Understood. Thank you so much.
Next question is from Maja Pataki from Kepler Cheuvreux. Please go ahead.
Hi, good afternoon. Thanks for taking my questions. Just, if we look at the placement story of the ARIES platform, you know, replacing the ARIES onto the XS platform. If we look back last few years when you were, for example, when you were taking the Siemens ELISA business and converting it, you know, you always had a expectation of percentage of clients that you were able to convert, that you never assumed 100%. I was wondering if you would be willing to share with us what your expectations for the conversion are from the ARIES to the LIAISON MDX platform?
Then I was wondering if you could give us a bit of an understanding what the share of revenues that you're currently generating on the VERIGENE I platform are, with regards to how many of your customers, or how much of revenues is generated on, let's say, 50% of the panel, and how much on 100%? Just so we have a bit of an understanding how that could translate into the LIAISON PLEX. And then just lastly, for just to understand what you mean when you say, "By the end of the year, we should have an initial conclusion about the MeMed business." Are you talking about whether you think that the long-term potential could be greater or whether it's gonna take you longer? Just some clarification on that will be super helpful.
Thanks a lot.
Hi, Maya. Look, ARIES, first you need to understand that the ARIES was a relatively small business. And so the replacement that we expect is around 70%. But, if, you know, we are, we are taking away the ARIES from the market, for a different reason, because it's adding complexity without adding any meaningful contribution to revenues and/or profitability. So it was, it has been an, a non-successful platform that we had to retire from the market to focus our people on the many platforms that are actually coming to the market from DiaSorin. So 70% replacement, but don't, don't lose sleep out of it. When it comes to VERIGENE I, look, if the question is how much is respiratory, no more than 20%.
Traditionally, this business was respiratory at the beginning, but you need to understand something when... And sorry for the technicality. The VERIGENE I platform was originally very successful for the sepsis. And maybe I already explained this once, but you know, it doesn't hurt to repeat it. It was very successful as a platform for sepsis because the blood panel is not using PCR, it's direct detection. And one of the controversies of using PCR in blood for sepsis is that you have a ton of false positives that are creating a slew of problems. And the appreciation of this technology has always been that it does have the sensitivity needed to provide viable clinical information to the clinician. And by the way, the plex is gonna be exactly the same.
So for the blood product, it's gonna be non-PCR based, but direct detection. It initially, when it was launched, it didn't, it did have great success in respiratory, but then because of the fact that respiratory, nothing to do with COVID, but respiratory volume went up, Luminex was pushing a lot, rightfully so, for the development of the respiratory market. Then, the platform per se became obsolete for that application, and this is why today, most of the business is non-respiratory, is more GI and blood-related. And this is why we say that the launch, and this is why we have been focusing on the respiratory panel for the plex first, because to the contrary of bioMérieux, for example, public data, for them, respiratory is 70% of the business.
For us, it's very limited, but the market, the vast majority of the market today is respiratory. And let me say that, conceptually, I disagree with the comment that there is no space for a respiratory box. There is ton of space for a respiratory box, because that is the bulk of the market. Last but not least, MiMed. I think you heard me saying this comment before. MiMed is an incredible product, and clinically is a very relevant product, and it does, it does provide a helpful tool. What is the problem? The problem, as said, is that it's not a reimbursement issue, because today you are reimbursed under DRG.
You know, they got a beautiful CPT code of $280, but that doesn't mean anything, if not, it's gonna be, $280 is gonna be the reference for the private insurers, right? But in the real market today, it's DRG money. The problem is educating physicians, and educating physicians takes time and effort. The question to me is not how big, because the market is enormous. The problem is: how long does it take for these physicians that are overworked, overwhelmed, to get into their head the fact that they need to use this new algorithm, right? And how do you do that? Through ton of publication and ton of visits in the hospital segment, to explain to them why, why MeMed.
You know, the digital marketing campaign, you know, I feel like a dinosaur when I'm talking about this, but, you know, it's all digital these days. All said and done, Maja, this is why I'm saying very pragmatically, you know, DiaSorin is a very pragmatic company. By year-end, we're gonna draw conclusions about the time it takes, not the opportunity. And I keep saying, I would welcome another player on this market that would join forces to educate, because this market requires education, and then it will really generate interesting opportunity for the few players that will be present on the market.
Okay, Carlo, just a quick follow-up. What I was trying to understand, actually, but super interesting background on Verigene I, was just more, how much of the sales that you're generating today with Verigene I comes with customers using 50% of the panel, and how much is it, like, full panel run? I guess you do have some-
Yeah.
Some data on how much it's used, if you could share that with us.
Listen, most of the customers today that we have are using single panel. Single panel, meaning blood. Don't forget, blood is three panels, is so it's three different multiplexing. And then the respiratory, few respiratory customers we have are respiratory, just use resp. And then we have a subset which is doing GI as well. But I see the piece with a view. The view is the fact that customers today, you know, we love this business with providing multiple panels, because everywhere I've seen, I've seen more than one box. So I see today that our coexisting with some competitor systems. I see competitor systems actually coexisting, where the using the system for one panel and, you know, system for 50 panels.
And last but not least, when it comes to respiratory, also, you need to understand the usage. Why, why are you using inpatient, outpatient, and so forth, is also dictating some of the use of the technology. I think that we will introduce a different concept, that today is there with Verigene I, but limited because, you know, we have a very small market share. We are going to introduce a concept of, okay? So, and, I would expect that customers may like to use BioFire for certain set of, certain set of patients, and, you know, use a cheaper technology that makes more sense for a certain subset of, of, of patients.
So I believe this, there's gonna be a fragmentation of the market, but, you know, it's not that it has happened already few times in the immuno, immunoassay business, as you know that, as you know, we know very well, huh?
Great. Thank you very much for the explanation.
Yep.
The next question is from Alfonso Biondo BNP Paribas Exane. Please go ahead.
Hi. Hello, thank you for taking questions. Maybe just a quick follow-up on Maya's question.
... So, the capacity of your Chicago plant and, I guess, how much you want to get to. Many of your VERIGENE I customers will need to be upgraded in 2024, 2025. That will prevent you or not from acquiring new customers for a couple of quarters. And lastly, do you feel that the LIAISON PLEX could be in a more end-to-end competition with, for example, the Spotfire from bioMérieux with the 15-plex daily throughput on the run time? Thank you.
Listen, I'm not going to share capacity numbers because I, to be honest with you, that's appropriate information. I think we have enough capacity, clearly, otherwise it would be foolish to make our numbers of capacity, you know. When it comes to Plex, I just want to make sure you're asking the question whether Plex is going against the Spotfire. Do you mean Plex or NES?
Oh, the Plex, Plex. Sorry if I Plex.
Okay, no. Plex, Spotfire is a different system that goes into a different segment of the market. The Plex is a traditional platform for hospital use, so it goes against those platforms, like the BioFire or, you know, the Roche platform and or the Qiagen platform. The NES is the natural competitor for the Spotfire when it comes to the five-plex or four-plex, if you like it, with the flu, RSV, and Covid. Sorry, Hugo, I don't remember.
Min contribution.
No, the mini contribution said, no. We don't give a mini contribution because we are monopolistic in a sense on the market today. So sharing the information of the market, the opportunities is pretty much diffusing confidential information, so we don't.
No, okay, that's fair enough. And just going back on the second question, how long do you think it will take you to upgrade all of the VERIGENE I installed base and how many clients are left here?
How many clients, again, can't share, but I'm not really sure. I said before, we do have a business which is GI in blood, and, you know, blood is full panel, is coming next year and, GI is coming in 2025. So at the end of the story, year one and year two are not necessarily be cannibalization, because again, we start from a very small respiratory business, and therefore, I see that this would be incremental contribution. Yes, you know, we may cannibalize some of the existing base for respiratory, but it's new customers.
New customer, meaning that, you may go to, it may be a VERIGENE I customer and get plex, and now he's doing a respiratory also, also with us in that sense. And so I'm talking about new placements and not necessarily new customers, but this is not gonna be cannibalization at the beginning simply because we, we don't have the assays on the plex. So the VERIGENE I base is built on a different, on a different, different panels.
Okay, that's fair. Thank you. Thank you.
The next question is from Shubhangi Gupta, HSBC. Please go ahead.
Hi, thanks for taking my question. I have two, please. So first, on licensed technology business. So there has been destocking of consumables, and you mentioned you're optimistic about the consumables in 2024. Could you maybe talk about the phasing of this for 2024? And second on the MDX, currently it has been launched in the U.S. Do you have plans to expand it into other countries? Thank you.
Okay, let me start from the net. No, the short answer is, we believe that the opportunity for many reasons is in the U.S., and we're gonna be, we are focusing all our support to the U.S. market, with one single exception, which is the Italian domestic market, and that more to do with sentiment reasons, right? I mean, we are an Italian company, so we decided to invest in our own country, but then it's just the U.S. Everywhere else is more opportunistic. When it comes to the LTG, you know, we will be talking about it when we will talk in May, when we will be discussing Q1.
But what I'm seeing is that, you know, the horrific numbers that were coming in 2023, horrific in a sense that eventually we did -4, and some of the life sciences players were minus double digits. What I see already in H1 some better numbers. And this is why I'm saying I'm more optimistic about this franchise, which clearly did impact the LTG in 2023, because we were expecting high single-digit growth, and we ended up with low single-digit decline. And that's very unfortunate because of the immunodiagnostics super performance our regular LTG business would clearly have taken overall the LTG business to the high end of our forecast.
But again, in 2024, I'm more positive. So let's wait and see. In, at least I'm more positive for one simple reason, that this talking has been destocked, so the stock is empty, and therefore customers are now buying on, on a regular basis.
Thank you. The next question is from Odysseas Manesiotis, Berenberg. Please go ahead.
Hello, thanks for taking my questions. I had one QuantiFERON relating to VIDAS. I mean, so in view of potential competitive launches in this market coming from a diagnostic major, from your point of view, how sticky are the contracts you have here with your partner and the clients and the end user, basically? What makes you confident that you'll be able to maintain your competitive position? And I'll ask a couple of follow-ups after.
Look, our business is made of contracts with platforms, and on the platform you have more than one product, right? I don't know if you were in the business back in the vitamin D days, but the vitamin D days were very tough because, you know, I remember the definition of one-trick pony. Vitamin D was the assay that DiaSorin was selling at the time. And so all of a sudden, eight different competitors showed up within two years. You had volume growth and price decline, and, you know, today we're still holding to 30% market share worldwide. This is not a vitamin D story, it's a completely different story. DiaSorin is a completely different company, and I'm saying that we do have a business together with Qiagen that sits on multiple platforms, very fragmented business.
So with the exception of a couple of very large private customers where we have long-term contracts, is a hospital business. And therefore, this hospital business is linked to the fact that there is a system there that is generating a good chunk of values with 10 different products. Okay. Then, you know, whenever Roche, because we, we can name the gorilla by name, whenever Roche and if Roche is gonna show up, let's see what they have. We just say they have three tubes, four tubes. You know, I heard 10 different stories on the market about the product. Let's see the product, let's see the strategy, and then and let's see how we're gonna react to that strategy. But today, I cannot bang my head against the wall, against a competitor that doesn't exist.
Thanks for that. Very clear. Secondly, on the Jupiter study, the sample size for the study seems quite a bit wider than the pediatric indication you were initially targeting. Is it right to think that you're going wider to begin with when taking into account recent feedback from, I'm guessing, your additional U.S. sales force here, or is the plan to still start in pediatrics?
But first, you need to understand the study is a MeMed study, right? So I wanna make sure, and we have a confidential agreement with MeMed, so there are certain things that I cannot say. However, the target is not just pediatric. And by the way, what we have seen today from the... You know, we started, as we have discussed, that looking at the pediatric as a first-hand opportunity because of all the reasons that make a ton of sense. But eventually, when it comes to the use, usage, today we see that you have a good mix of pediatric and also typically pediatric and elderlies. Okay? The Jupiter study is not restricted just to pediatric, by the way.
Okay, and again, what we are learning on the market, as we discussed, I think last time, is that once the physicians see the value, they expand the usage, clinically, okay? Expand meaning expand the population. This is the first point, which is very relevant. The second one, which is even more relevant, is that we are having more success with mid-sized hospitals than with very large institutions, and I think we did comment on that as well. And this is because in the mid-sized hospital is where there is a severe need for technologies, whereas the very large institutions have plenty of technology that they can use, you know, to actually assess the status of this patient. So as said, and then as I was commenting with Maja, we are learning on the way.
It's a journey, right? It's a new assay introduction, a new concept, and we are learning that the market is taking the product and using it in the best way clinically and also in their clinical practice, and-
... Thanks, Carlo. That's, that's very clear. And, and then for PG, so could you please update us on what R&D capitalization looked like this year and last year, just to get a sense of whether the, busy pipeline has had a big change here or a big impact?
So overall, our CapEx in 2023, and we have a similar number plan for 2024 and 2025, is around EUR 100-110 million. That number includes everything from, you know, the installed base that we place, which, as you know, stays on our books because we operate a reagent rental business model, like most of the players in the space. Your point is valid. You know, we are currently investing a lot to bring all of those new platforms and products to the market. So off the top of my head, I mean, once you take out installed base, which, as I said, remains on our book.
Once you take out the investment for, you know, the Chinese manufacturing plant, Chicago, and so on and so forth, I believe we're talking about, let me say, EUR 40-50-ish million of CapEx out of the EUR 100 million I was mentioning.
Thank you very much.
Thank you.
The next question is a follow-up from Maja Pataki. Please go ahead.
Yeah. Thanks, and I'll keep it short. Carlo, just quickly, can you help me square your guidance on molecular ex COVID for 2024, which seems to be quite conservative. If I remember correctly, you're guiding for flattish revenue development. But as you have elaborated in the beginning of the call, you're seeing really strong growth in your base business. Verigene I is holding up well. You should see some additional revenues from the respiratory panel on LIAISON PLEX. Is it the uncertainty around how quickly you can convert the ARIES clients onto the LIAISON MDX? Or where, you know, where do I take this, how do I square it?
So, Maya, this is PG. Hi. I will-
Hi.
-try to take it. So, the guidance for 2024 is total top line, when we said, 5%-7% ex COVID, and then we said COVID revenues of EUR 30 million. That is the official guidance. Then I think you are referring to the document we put together for the Capital Market Day back in December, where we are directionally also giving some indication on where we see the business developing amongst how we see the business developing amongst the three legs. So the immuno, the life science, and the molecular. And there, what we said, is, you know, flattish molecular business, excluding COVID. So I guess, just to make sure I understand the question, I guess this is the number you're referring to, right?
Yes, exactly.
Okay, cool. So there, as you just said, you know, there are several moving parts. One, the ARIES business, we need to start to understand that we, the starting point is give or take EUR 200 million worth of business, right? Without COVID. You had there, you know, ARIES, not big by any means. We're gonna convert, as Carlo said, 70% of the business. So there you have, a little bit of, you know, headwind. Then, we made some assumption on the contribution of the plex, obviously. We made some assumption on when the plex was gonna get to the market. We made some assumptions on, what would happen to the VERIGENE I and the so-called non-automated assets.
So when you put all of those elements into our mixer, let me say, what came out, it's a flattish, kind of, directionally growth, of, the business. Is it conservative? I, I don't know. I believe it's the guidance. It's, you know, it's a, it's a, it's an estimate we feel comfortable with, let me put it in that way. And then, you know, if, it will be better, we will comment, along the year during the quarter end course.
Great. Thank you very much.
Mr. Rosa, there are no more questions registered at this time.
Thank you. Thank you. Thank you all. Thank you very much.
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