All right, good morning, everyone. I'm Tejas Sawant, I cover the life sciences here at Morgan Stanley. Before we begin, for important disclosures, please see the Morgan Stanley Research Disclosure website at morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales rep. It's my pleasure to host Bruker this morning, and speaking on behalf of the company, we have Chairman, President, and CEO, Frank Laukien, and CFO, Gerald Herman. Welcome, guys, appreciate you joining us. Maybe just to set the stage, Frank, you know, twenty-four has been quite the transformational year for Bruker. Multiple acquisitions, top-line growth that's come in handily above the end markets, even though the end markets have been in a tough spot.
Talk to us about how the year has played out so far, you know, versus your initial expectations, and what are you most proud of the last 12 months?
Yeah. Well, first of all, Tejas, it's really a pleasure to be here, and thank you for having us. Yeah. Good morning, everyone. So, 2024, our core business, which is 90% of what we're doing, although right now people talk a lot about the acquisitions, right? Is doing really well. It's doing relatively very well. If you recall, the three prior years, we had organic revenue growth and constant exchange rate growth that was greater than 10%, so outperforming the industry. We are a fast growth company now with our repositioning for the post-genomic era tools. In particular, that's where the funding will be over the next 15 years, more so than the last 15 years, that have been more traditional LC and genomics driven.
So, fundamentally, the strategy is working, and our core business this year, our guidance for organic revenue growth is 5%-7%. And yes, we have a lot of acquisition growth, so our constant exchange rate growth will be in the mid-teens.
Mm-hmm.
So again, transformative four years of cumulative growth over about 70%, so we are a different company today than we are even four years ago. That continues to do well, but we have headwinds. I mean, this year, China is a headwind on the revenue, and biopharma is a headwind.
Mm-hmm.
We have all learned that biopharma headwind hasn't dissipated yet, right?
Mm.
Now we're talking about it. It's something, you know, it getting better in 2025. But nonetheless, if the markets are flat this year, or maybe they're down 1% or 2%, I don't know what the average will be, us being outperforming again by five or six hundred basis points or something in that range, I think is really doing very well. A lot of that has continued strong orders. Some of that is also we use our backlog, which had been at a very high level.
Yep
... previously, because and cushioning this downturn a little bit by bringing down our backlog a little bit. We still have a couple of years to go to bring that to a more normalized five-months backlog level. Right now, we're at seven. So that combination has really cushioned. I think that's the core. That's the story about the core business. The other really important point on the core business, we're continuing to using our Bruker management process to grow our organic operating margin. With our Bruker management process that we've established about ten years ago with the new group structures and very, very capable group presidents, we had expanded over eight years our operating margin by 1,000 basis points.
Mm.
Starting from a lower level, but nonetheless, very, very solid, steady margin improvement, and we've done it the right way to build industry leaders. We've done it with gross margin improvement by 750 basis points, and yes, we also got 250 basis points of operating margin leverage, so it came down very nicely, and that's really what we're applying to the new acquisitions.
Mm-hmm.
I'm sure we're gonna talk about those some more.
Got it.
That's kind of that plus then some very strategic acquisitions when we could do them at attractive value dislocation-
Mm-hmm
... that we have, that we had an extreme value dislocation in 2021.
Mm-hmm.
Some of the assets we purchased traded at $3 billion and $8 billion, respectively. Now, we could buy very strategic assets in single cell, in spatial, in sample to answer molecular diagnostics in a condensed time period, admittedly, that has maybe surprised, that definitely has surprised The Street. But I think it gives us the opportunity to build very high ROIC businesses, and of course, use our management process to pretty quickly build these businesses back towards break even, where they're, where they're not yet, or take their margins, as in the ELITech case, and drive them very significantly higher. So that's the big picture story.
Got it.
Yeah.
Lots to unpack there, Frank.
Yeah, exactly.
Maybe you know we'll start with instrument demand. You know, you have pretty heavy instrument exposure. The macro has been challenging, and your instruments are, you know, big-ticket items. They're not sort of, you know, cheap to purchase. So despite that, you've been delivering solid performance year to date. You know, you talked about the 5%-7% organic growth. How has Bruker been able to execute and deliver above-market growth in the challenging macro? Part of that is innovation, and you did launch, you know, a couple of interesting instruments at ASMS earlier this year as well. So just unpack that for us a little bit.
Yeah. No, hey, I don't let anybody tell you that aftermarket is where it's all at. I mean, instruments business is great. Actually, the combination, the balance is great. I like the, I like a, I like a balance. But the instruments business, and we make $20,000 and $50,000 instruments as well, and yes, we make some multimillion-dollar-
Mm-hmm
... NMRs or $1 million-dollar mass spec, mass spectrometers. We have a broad range. But it very often allows you to innovate. You don't just go after the market, you follow the market. It allows you to innovate and create new areas like mass spec-based proteomics. I mean, Team Red's doing a good job with Cryo-EM, right? Those are big-ticket items. We, we don't do that, right? We build NMRs. We're doing a good job there. So there's a lot of opportunity in creating new spaces that you can- that often are instrument, and initially, they tend to be instrument land grab driven.
Mm-hmm.
Even spatial biology-
Mm-hmm
-which we entered more recently, is an example of that. First comes the instrument, and then over time, spatial biology probably will be 60% aftermarket and consumables. Our diagnostics business that we acquired, Tejas, is 85% consumables, right? So we used to be 25% aftermarket, now we're at about 35%.
Mm-hmm.
With these acquisitions, and then the natural development that in proteomics, at first, you sell the MS stuff, the instrument, then you pull through automation and consumables, especially-
Mm-hmm
... especially as you then go into the more translational and clinical research. People wanna have defined solutions.
Mm-hmm, mm-hmm.
Especially when you go into regulated diagnostics then. So over time, Bruker probably will end up at 50/50, and we're moving in that direction. I think that's a good balance, but I'm not at all saying, "Oh, my God," like everyone else, "I wanna be a primarily aftermarket," 'cause I think that does not enable you to innovate the way we've been innovating.
Got it. Yeah, you know, I wanna unpack China a little bit. You know, first of all, it's about sort of 15% of your total revenue.
Mm-hmm.
Maybe just to set the stage, Gerald, one for you. Could you talk about your end market mix in China at the moment?
Mm-hmm.
How large is academic and government exposure in the region for you?
Yeah, China's a-- our portfolio in China is about 50% academic government research, and a relatively modest to 10% in the biopharma space. So the remaining portion of it's industrial research, clean tech, and material science-related elements. And we had, at some point, a much larger semiconductor, metrology-based business there, but a lot of that's, unfortunately not available to us, at least not through the U.S. base. So it's, it very much tilted towards academic and government research markets, which is actually quite favorable under the proposed, you know-
Mm-hmm
... kind of, stimulus programs under the current plan.
China completely gets it. I mean, they have Complete Genomics or Beijing Genomics.
Mm-hmm.
They have huge sequencing centers.
Mm-hmm, mm-hmm.
But their investment in proteomics and in other post-genomic tools, as we call them, they're ahead of the curve in some ways where the science drives us-
Got it
... anywhere. So, I think this will be the stimulus package. Because we are so strong in academia, I think it'll favor academia.
Mm-hmm.
It'll favor big-ticket items.
Yeah.
People don't buy $100,000 bench tops when they get a multimillion-dollar package, and the activity is very significant. So it will be... It, we don't know how to size it yet.
Mm-hmm, mm.
But we think it'll be a meaningful tailwind in 2025, with orders maybe coming in in Q4, and then in the first half of next year.
Mm-hmm.
Probably be a tailwind for us on the P&L in 2025 and 2026.
Mm-hmm.
Not yet this year, but that's all right. I mean, I think this actually is nice timing for us. It'll also be more spread out than previous stimulus actions-
Got it
... which we're very much focused on a quarter or two, and as I said, China completely gets the post-genomic era. I think this will heavily favor our products.
Got it. So, Frank, just to double-click on that a little bit, is the right way to think about China for you a bit of a, you know, headwind from continued delays before the money starts to flow down-
Right
... at the province level, then you get the orders starting in 4Q, ramping into the first half of next year? And then after that-
Right
... what's the lag in your mind before that translates into revenue generation for you?
For us, typically two quarters.
Two quarters.
Lag, yeah.
Okay.
But the way you described it, yeah, it's a little... I wouldn't call it an air pocket.
Mm-hmm.
I think it's however, demand has been just a little bit anemic recently.
Mm-hmm.
Indeed, there have been anecdotal stories of people saying: "Wow, I'm not gonna spend $500,000 with you now. I'm now getting together with two other researchers, and we're asking for $5 billion for this new center," whatever it may be, right? So, yeah, I think we confirm what some other companies have said in that respect as well.
Got it.
So China is a headwind this year, and we think it'll turn into a tailwind next year and in 2026.
And in the context of your portfolio and the end market mix, Gerald, that you just laid out as well-
Mm-hmm
... how should we think about, you know, long-term growth in China? And what's embedded in your, you know, the 6%-8% organic growth target that you've outlined? What's baked in there for the Chinese recovery eventually?
Yeah, I mean, we're pretty positive about the China economic condition overall. I mean, positive in the sense that, you know, Frank's just outlined, you know, the area in which they really understand is the post-genomic piece, and they also have significant industrial and clean tech activities already underway. So I think a lot of our portfolio is really directed particularly well to that market. I do think it will likely not be at the growth rates that we saw a decade or so ago.
Mm-hmm.
But that doesn't mean it can't be a significant, you know, ongoing geographic market for us and for others. I mean, just to clarify, we don't, we have commercial operations in China.
Mm-hmm.
We don't have...
... R&D operations or production facilities in China. So I think to some extent, we're a little better positioned if it turns out that other things happen from a geopolitical risk perspective, to be in a slightly more favorable position than some of our peers. But, you know, to answer your question about medium-term outlook, we haven't laid out specifically which geographic piece is driving growth in every-
Mm-hmm. Mm-hmm
Across that medium-term outlook. But I would say we've factored it in to be pretty balanced, slower than where we were, you know, maybe five, six years ago.
Mm-hmm.
But certainly not at an unimportant level. It's still a meaningful grower for us.
Now, zooming out, perhaps, I mean, the growth of this industry, to a significant extent, prior to COVID, that decade was driven by China.
Mm-hmm
... and China's thirst for innovation and investment-
Mm-hmm
-and all of that. Over the next two years, we think China will be a tailwind for us because in part of the stimulus. Over the next decade, I think China, I assume it will be normalized growth. I don't know that it will outgrow the US or Europe-
Mm-hmm
for an in
Right.
That may be a structural change to our industry.
Right.
Our industry is changing, and the tools that are changing what gets invested in. Biopharma isn't going back to the boom times of 2021, 2022.
Mm-hmm.
Those aren't. That's not the normal. We're not snapping back to that. I'm convinced that's not the case, which is why we're taking so many proactive actions to adjust our portfolio, to increase our exposure in biopharma, but of course, in biologics and cell and gene therapy-
Mm-hmm
Less affected by IRA and other trends, right? So there will be a new industry fundamentals emerging in the next couple of years, and it's not the old normal, it's not the boom times of 2021, 2022. And for that, that's why you at least will not say, "Well, you should have been more proactive." I think we are rather proactive, and we're doing it very strategically in the way that we think the shape and the contours of this industry will favor in the next decade.
Got it. I want to pick up on what you just mentioned in China, that, you know, the right kind of exposure and then, you know, the mix shift within even the academic budgets towards the newer modalities is providing you a degree of insulation. Does that sort of carry over even to the U.S. and Europe? You know, we get questions around flattish NIH budgets-
Mm-hmm
and pressure in Horizon funding.
Completely, yeah. I mean, if I look at academic and government budgets, so maybe two aspects. One that I've mentioned a couple, maybe, but not here yet, right? We've always been, we, Bruker, have always been strong in academic and government budgets, but 10, 20 years ago, it was the Department of Chemistry and Earth and Planetary Science and Physics and a few others, right? Biology, of course. Today, that's still the case, but the much better funding is in academic medical centers. Major cancer centers are a big part of our demand.
Mm-hmm.
Neurodegeneration research, autoimmunity, and yes, all the way to cardiovascular and other areas, and those are very well funded, so first of all, we're primarily now in the better funded part of academic research, if it's... Second, it's that trend. I mean, it is like an ocean, and yeah, the ocean goes up and down a little bit. But wow, what does it get allocated to? Is it more genomic sequencing? Is it another SNP project?
Mm-hmm.
Is it another-
Mm-hmm
WGS project? And those don't stop, but there'll be less funding, and thank you, they also are becoming much more affordable. I mean, some customers said, "Look, look, Frank, I have more money to spend on proteomics because the sequencing chemistries are now relatively inexpensive.
Right.
So they can do all their sequencing and they do more, but you know, it's. There's more budget available for other things. Anyway in Europe, in NIH, in the U.S., and Japan, China, for sure, the allocation towards multiomics, proteomics, structural technologies, interaction technologies, the greater complexity that we now realize that life and disease has. It's not all in the genome. It's not the blueprint for life.
Mm-hmm.
It's maybe 10% of the information-
Mm-hmm
-that's needed. So the bad news is, it's much more complex. The good news for Bruker is, it's much more complex, and there's a lot more opportunity there.
Mm.
So that fundamental secular shift in how we do disease biology, biopharma gets it completely. They've already adjusted. NIH and so on is a little slower.
Mm-hmm
But it's coming along as well.
Got it.
That's the most fundamental reason of why we're a fast growth company today that's outgrowing the markets.
Got it. Switching to biopharma, Frank, you mentioned a couple of times that, you know, we're not going back to, you know, the 2020, 2021 levels of funding. But biopharma still remains the fastest growing, sort of like, end market and tools. And then you also mentioned, you know, the right kind of exposure there, the newer modalities.
Right.
One of the questions that we've been getting is, you know, some of the preclinical CROs have been talking up a spike in weakness in June, July.
Yeah.
Largely pointing to IRA and patent cliff concerns.
Mm-hmm.
Have you noticed that in terms of your conversations? And secondly, as far as the newer modalities, like cell and gene therapy, are concerned, does pipeline reprioritization impact that modality? Mainly because, you know, pharma companies might want to prioritize larger indications first.
... Excellent questions. I wish I had the answer to all. I don't have the answer to all of these questions, but I know they're completely relevant. I agree that our pharma exposure, which has gone from 10-15%, things like the old Berkeley Lights, the Beacon instrument, that's going 70-80% into pharma. Even the NanoString spatial technologies maybe go 20-30% into pharma. And we're doing more and more with proteomics and other NMR and other tools. So our pharma exposure is probably gonna go towards 20%, maybe eventually 25%, 'cause I agree with you that it's a fundamentally healthy market, despite IRA and temporary price controls, temporary pressures. I think it'll be a different R&D environment. I think biopharma will not be the standout.
I think there's other clinical research at major medical centers. There is Clean Tech research. There is very advanced metrology in support of AI. I think it'll be more balanced-
Mm-hmm.
to where biopharma is fantastic, but it's not, "My God, there's biopharma, and then there's the also-rans, everything else.
Right.
I think it's just that that's part of the 2025, 2026 picture where I think there will not be that snapback or the old normal being the new normal. We're investing in it, but I'm also very glad that I'm not 60% dependent on biopharma.
Got it. Fair enough. You talked about, you know, your backlog being, I think it's about seven months at the moment, and two-year path to getting it back down to five. I guess one of the questions that we often get is: Do you have enough of a backlog to bridge you to the other side of the macro headwinds? And, on that note, I mean, the book-to-bill number, I think it's 0.95 or so at the moment. Talk to us a little bit about, you know, how you see that trending. And second, I mean, there's a lot of investor focus quarter to quarter on that book-to-bill number, as you guys know, right?
Mm-hmm.
So, how do you think about that number internally? I mean, is it as much of a point of focus for you?
It is, and it's more of an annual thing, but do you wanna take that?
I'll make a couple comments, you can follow. So first of all, I mean, I was here a year or so ago. You were kind enough to invite me, and we talked a little bit about book-to-bills. I think the broader story is for us to look at book-to-bill over an annual period, not on a quarterly basis. And as you've just heard, you know, we have demand swings, we have revenue performance, largely due to the scale of some of the instruments we have. If you have a $10 million instrument that moves from one quarter to another, it skews your book-to-bill ratio. So I think, generally speaking, I'm trying to steer investors further towards an annualized look at book-to-bill, and we will report that on an annual basis. So that's the first point.
I think the second is, generally speaking, the core business performance has been very healthy, both from a demand perspective, and you see the revenue performance already reported. We're in some choppy waters, as we've already just talked about biopharma and some headwinds on China, but fundamentally, the overall demand position is pretty solid. So there may be some ups and downs, but I think generally speaking, we're quite positive about where we are from a book-to-bill perspective.
Right. If I needed backlog for two more years of economic downturn, I don't expect another two years of economic downturn.
Mm-hmm.
But now, I read what you're writing about other companies and what people were saying at-
Mm-hmm
... Wells Fargo, right? And now it's not so much the snapback talk, but more: well, if we go from low single-digit declines to low single-digit market growth in 2025, and then maybe to whatever the new, new market growth-
Mm-hmm
In this industry will be in 2026, we're completely set up for that. We would be set up for a longer period of weakness, which we actually don't expect. And with our backlog, it's helped us navigate this year very nicely in terms of growth, right? And further organic margin expansion. We could withstand a longer downturn-
Mm-hmm.
But that's not what we're expecting.
Got it.
We expect that the market would go... Well, you know, it's. I don't have specialty leads either, but I would assume that it'll go from low single-digit decline to at least low single-digit growth next year.
Got it.
Remember, rather than 6-8% may be a good average figure, but we're really looking at outperforming by 200-300 basis points, whatever-
Mm-hmm
the market brings organically.
Sure.
On top of that, next year, because of the acquisitions, we'll still have 2%-3% M&A growth.
Mm-hmm.
That's just the tail of what we've done already.
Right.
That's not signaling new M&A.
Right.
We're on a bit of an M&A breather.
Right.
Integrating and making profitable, or more profitable, the acquisitions that we've done with our very successful Bruker management process.
That's actually a perfect segue to my next question. Frank, you know, another life sciences CEO told me earlier this week that, you know, companies rarely die of starvation, but they can die from indigestion, right? And on the other hand, I kind of see where you're coming from.
They rarely die of starvation, but they can die of indigestion.
The acquisition yeah. And so, you know, I can see why you pulled the trigger on the assets that you've picked up over the last few months here. They've landed on top of each other more because it's an opportunistic time to pick up those assets, right? And so talk to us about the Bruker management process and how it's playing out, you know, with the integration of those assets. And then second, do you need to stick the landing on each of these deals to meet your medium-term outlook, or is this more of a opportunistic shots-on-goal approach?
Okay, a number of good questions, right? Yes, I mean, of course, we indeed did these $1.6 billion of multiple acquisitions, including three larger ones and some other bolt-ons, all with assets where we had been in touch with almost all of them for a very long time.
Mm-hmm.
In 2021, and even early 2022, you know, we also pay attention to ROIC and things like that, so this was just the wrong time to pull the trigger. We would've overpaid, right? I think on the other hand, there was an opportunistic always has this flavor of, oh, you're buying stuff that's not strategic. We seized the opportunity of valuation dislocation with some of these assets being, I mean, ELITechGroup we bought at a fair market price, right? That was not, that was not a bargain. But some of these other things, they were in distressed assets, so you could buy something that was worth billions of dollars previously, at very low valuations.
Mm-hmm.
Very attractive for us as a buyer, and we did that because they were good strategic fits. But some of them are fixer-uppers, right? But we have the management process to do that. To your second question, a Bruker management process, as I said, at a high level, over an eight-year period, we had a thousand basis points of margin expansion with that process. It's distributed nicely over the three groups, so I really have three CEO-quality people that are doing this together with us here, so it's not all a centralized activity-
Mm-hmm.
to where we have. And we don't have indigestion. We really manage this very nicely.
Mm-hmm.
Thank you to that CEO who we thought we don't have that issue. We have a good process. We have an outstanding team. We have a very good track record of not only growing things organically, but also in incorporating previously money-losing acquisitions. I'll give you two cases of previously money-losing acquisitions.
Mm-hmm
... that we fixed the right way with cost cutting, but also reinvestment and making them into market leaders. One we've owned for a while, that's Bruker AXS. I, I bought that from Siemens when it was a $50 million, number three in its market. Today, it's number one in its market, at about $300 million revenue. It was consistently losing a little bit of money under Siemens.
Mm-hmm.
Today, that's one of our medium performers, so about 20% operating margin, going into the low 20s%. Very good story. My colleague, Mark Munch, in the semiconductor metrology, he did the Jordan Valley Semiconductors acquisition. It was a startup with $20 million of revenue and an easy-to-remember number. They lost about 10% operating loss margin. Today, they're a hundred million segment, hundred million revenue-
Mm-hmm
... segment market leader with operating gross margins well above 60%, gross operating margins well above 30%. Key enabling technology for actually, this is the metrology you need-
Mm-hmm, mm-hmm
... so that TSMC can make Nvidia chips. They need a few other tools, not only ours, but that's it. It wouldn't work without our tools. So beautiful example of building up something. And the last one is actually also very indicative of Bruker, 'cause we built up the MALDI Biotyper-
Mm-hmm
... clinical microbiology business, essentially from scratch over the last 15 years. But from nothing and from scratch. It's today a greater than $300 million business with greater than 60% gross margin, greater than 30% operating margin. And yes, we've taken that as a platform to add the sample to answer molecular diagnostics business of ELITechGroup.
Mm-hmm.
The combined run rate of our infectious disease diagnostics is now $500 million.
Mm-hmm.
Yes, that's 60%, 70%, 80% aftermarket consumables even in the aggregate, if I combine the two, it's still above 30% operating margin. Of course, I wanna grow that. That's the stuff that pulls up our margins while we push up the margins in fixing NanoString, which is very fixable, taking a lot of cost out and reinvesting in its faster growth. Those are some maybe concrete case studies or examples.
Right, right.
When you hear something amorphous, Bruker has a great management process. We do, but there's really very specific evidence, plus the overall eight-year evidence track record is terrific.
Fair enough.
Yeah.
To be clear, that comment was not about Bruker. That was just... general comment.
I'm getting too defensive here.
Um-
Yeah
... I wanna double-click on NanoString. You know, you, you've guided to, I think, it is $10 million a month in revenue contribution.
Yeah.
What's the path to 15%-20%? I mean, is some improvement over 10% just a function of being back on the market in Europe? Or what exactly do you need to do to rehabilitate that growth trajectory there? And perhaps more interesting, Frank, from your perspective, talk to us about the combination of, you know, NanoString with CellScape. What could we see you do there, from a hardware perspective? Is there a path to integrating those two instruments at some point?
Not at the instrument, but at the workflow level and the combined results. Let me back off to the-
Yeah
... beginning of your question.
Mm-hmm.
Yeah, if you recall, NanoString, before they went into Chapter Eleven, before they got barred, temporary injunctions in Germany, and then in all of the European Union, and then they lost the GeoMx case in Delaware, right? One hit after the other. When we acquired them as an asset deal, so we didn't take the corporate infrastructure, the public company infrastructure, a lot of costs had come out already. We modeled it at $10 million run rate per month, and that's a good run rate for this year.
Mm-hmm.
The first, you know, two, three months came in roughly like that, and that's a good, that's, that's good for planning, right? When will it grow back towards the previous, you know, $170 million? I think it's gonna be over two years. So it'll still be mildly dilutive next year, and then, you know, near breakeven in 2026. That's, that's the plan. And it will take fixing up that European, reinstating, putting together that European sales force, but also building a lot of confidence in that team.
Mm-hmm.
I mean, they had lost everything, right? They were kind of despondent. We have a highly motivated, very aligned, well-trained, also in terms of management process and financial discipline and execution, team in Seattle. We went from five facilities. By the end of this year, we'll be in two facilities in Seattle and, and Bothell, Washington, which is much less expensive, and you don't always need to be downtown. We will also reinvest in... We're pushing forward on product development-
Mm-hmm.
-on the CosMx, which competes with Xenium.
Mm-hmm.
We have already announced this hero experiment.
Mm.
-of doing the entire genome, so all 18,000, 19,000 express-- doing the gene expression on all these protein genes, all the entire human genome first, and that, on the discovery side, I think will be so far ahead of anybody else that we'll have a huge advantage. We have somewhat lower throughput-
Mm-hmm.
-and efficiency on the smaller plex, translational clinical research, so someone else is ahead on that.
Mm-hmm.
We acknowledge that.
Mm-hmm.
We intend to catch up with that and leapfrog that, actually. But those are things that are on our roadmap, and these are some new technologies and even chemistries that we bring in. So we, we're not gonna merge the two instruments-
Mm-hmm.
but we're bringing in other bar coding and
Got it
-chemistry schemes, other approaches in software, that will also technologically strengthen the NanoString product line.
Got it.
One more aspect, if I may. Without NanoString, we had budgeted tens of millions of OpEx per year to build a really big spatial biology channel.
Mm-hmm
... to compete with Akoya, to compete with 10x and NanoString and all of those folks. The cost avoidance at Bruker, by being able to have this right off the bat and use that NanoString channel, they go into all the same labs, the same salespeople, and even service and field applications people, and so on, can all be cross-trained. So I will have one spatial biology channel, courtesy of that NanoString. Much larger business with a much larger installed base, right?
Mm-hmm.
I can plug in two things. First of all, the spatial proteomics CellScape that you mentioned.
Yeah. Yep.
There, we're number three, and we wanna catch up with Bio-Techne-
Yeah
and Akoya, right? And they're doing a good job. It's a nice, growing area in spatial proteomics. And then, if you recall, you probably don't recall, we acquired - we in-licensed from Harvard Medical School three and a half years ago, Acuity Spatial Genomics.
Mm-hmm.
I really mean spatial genomics in the DNA structure, the chromatin structure, the chromosomes, not transcriptomics.
Mm-hmm.
Everybody can do that. That's much, much harder, and this doesn't exist today-
Mm
... so therefore, you haven't heard about it. We're launching that in early 2025, probably around AGBT. That, again, does not need its separate channel, but it can all go into that channel, which is why strategically, even more than was obvious from the outside, for us, Bruker, as a new owner, this is such a good asset to be with Bruker, 'cause it'll be our spatial biology channel and platform with covering transcriptomics, NanoString, proteomics, and soon also, this truly differentiated spatial genomics, which nobody else does yet.
Got it. Fair enough. Just quickly on the proteomic landscape and the evolution there, you've launched the Alpha two, you know, timsTOF instrument at ASMS earlier this year. And there's been some sort of movement in the space, you know, Thermo bought Olink. So as you think about the broader landscape, not just on the mass spec side, but also on the targeted front, can you just talk about your portfolio positioning there? And I think you've done PreOmics and you've got the investment in Biognosys-
Biognosis.
-as well.
Exactly, yeah.
Um-
So the mass spec-based proteomics with PreOmics-
Yeah
consumables and automation, CRO, and the best software for mass spec-based proteomics from Biognosys. We have a beautiful coverage. Thermo's done a good job with that Astral instrument.
Mm.
That does a very nice job. We have advantages in some areas, so that's a two-horse race there for sure-
Right. Mm-hmm
... in a very fast-growing area-
Mm-hmm
So that's good. The slightly broader perspective of initially, the mass spec-based proteomics couldn't really participate very much in the largest part, growing part of proteomics, which is plasma proteomics.
Mm-hmm
... or large-scale epidemiology studies. So those, you essentially went to Olink, or you went to SomaLogic, which is part of Standard BioTools now. But their mass spec-based has the huge advantage that it has 99% accuracy, not 85%, not 95%. 99% is essential. And we now have the throughput and robustness, and probably factor of five in better economics. I think there'll be a big shift in that favors mass spec-based proteomics in this liquid biopsy biomarker or large-scale U.K. biobank or whatever it may be.
Mm-hmm.
Epidemiological studies, where you need more than check-the-box proteomics, but you don't know which are right and which are wrong. You need the 99% specificity at the better economics, and now with the throughput and robustness. Having said that, these other areas have a right to exist, and, I mean, there's companies like that I think are much more sensitive than Olink, like an Alamar, we're a minority investor.
Mm-hmm.
So we think in some of our CRO offerings, we're combining the tools.
Got it.
For Alzheimer's research, we think some of the MIDPLEX panels don't have to be on mass spec with ultimate sensitivity. So we're taking a pretty broad, holistic approach to proteomics, and we're not just a purveyor of mass specs or timsTOF.
Perfect. We're out of time, but I'd be remiss if I let you get off the stage without, you know, asking you. You're in the unenviable position of having a point estimate for 25 EPS out there, and it's a target. I get it. It's not a guide, but-
It's an interpolation.
It's an interpolation, but it did make it on a PowerPoint slide, I suppose, in your deck. So-
That's correct.
You know, as you think about that number, how should we think about the degree of downside risk from NanoString operating loss? Or do you have enough levers, you know, between the ELITech accretion, cost outs at NanoString, and the base business, you know, benefiting from maybe not a full rebound, but continued improvement in biopharma and China, to essentially have enough of an offset in the portfolio at the bottom line?
Yeah. No, I mean, we're very comfortable with our multiples. But what-- May 17th, we gave our medium-term outlook for 2017, and yes, there was a PowerPoint with an illustration, so I completely... We're very optimistic that we'll have very fast EPS growth in the next three years, which is implied after very fast revenue growth and more recently, also inorganic. And, you know, that does bake in some China tailwind, not something ex-
Mm-hmm
... extraordinary, but we think it'll get turned from a headwind into a small tailwind, at least again.
Mm-hmm.
That does bake in some biopharma recovery. If we don't have it now by midyear-
Mm-hmm
... but we think we'll have some of it next year, even if it doesn't go back to historical boom levels. So with that, I'm really quite comfortable that there is enough takes, right? That we are on a good track this year, next year, over three years, and longer term.
Perfect.
Yeah.
This was great. Thank you so much, guys, for joining me.
Thank you.
Appreciate it very much.
Thank you very much.
Thank you. Thank you, all.