Okay, we're on.
Sure. Sure, go on.
Good afternoon, everyone. My name is Matt Sykes, Life Sciences Tools and Diagnostics Analyst at Goldman Sachs, and I have the pleasure of hosting Trey Martin, CEO, and Kevin Herde, CFO of Maravai LifeSciences. Guys, thanks very much for joining me today.
Yeah. Thank you for having us.
Maybe, Trey, I'll start off with you. Just would love to kinda go over how your transition to CEO has been over the last, call it, year, and how you're thinking about the strategy the company has driven away from COVID-related revenues into a more steady state, for the rest of the business, and what your experience has been, and what some of your goals have been, and what you've kind of achieved over the past year.
Sure. Well, certainly, 2023 was an interesting time.
Yeah.
To take the helm, particularly the second half of 2023. I would say I have been really pleased to come in and see that we have an exceptional team. There were highs and lows that were very public for Maravai, with inclusion, you know, in the global pandemic response. What we find ourselves post-pandemic, with a series of, well, four new buildings, a really good cash position, two acquisitions executed during the pandemic, and a fantastic team, an organizational structure, I think, that's ready for our future participation in a more broadly diversified market.
Got it. Maybe just thinking about your strategy to stay with the customer from discovery phase to clinical, can you talk through how we should think about GMP revenue over the next several quarters and understand it's likely to be lumpy, but sort of how long it will take, if ever, for that revenue to show a more stable stream as it becomes more diversified and just sort of as that strategy plays out over time?
Yeah. The, you know, the participation from a product perspective, you know, the CleanCap and other products that are included in R&D programs really were what made all the headlines in the pandemic when TriLink, specifically one of our four businesses, transitioned from really grams of RUO to kilos of GMP product. TriLink had actually been in the GMP service area for mRNA, but only really in the preclinical phase I. And our new Flanders 2 facility gives us the opportunity to participate all the way through clinical commercial scale. We have been actually bearing the costs of those facilities since the second half of last year.
And so as we certify them, as we open them, all, you know, all of the programs that'll be going in there, all the GMP service side will be incremental, and should have nice leverage to it.
Got it. I mean, kind of building on that, can you talk through the utilization of Flanders 1, and Flanders 2 so far, and how we should expect that to trend throughout the year? Obviously, a lot of it's related to revenues coming in, demand coming in, but just kinda how we should think about that utilization levels of those new facilities.
Yeah. Well, it literally, we are in the certification phase for both buildings here.
Yeah.
Utilization has been.
Has been up, yeah.
has been essentially internal, process development, IQ, OQ, PQ audits, and so forth. So we're ramping up from a, call it, a low level of utilization this year, where we have a tremendous capacity capability. I mean, I think it's important to note that it's been a long cycle, during COVID during the pandemic, of capital investment for the company. But as we wind that down here, really in the first half, we have all the facilities and capacity we need for 5-10 years of growth expansion. Flanders I, remember, is our cGMP chemistry supply building with four suites. Flanders II is our mRNA service building with three suites. And let's just say we have a lot of upside, a lot of capacity to fill the plan.
We were public later phase commitments already, which is really a key competitive win because people very rarely wanna be first in a brand new building. But we've got some great customer partners who have already committed. But we'll be, you know, we'll be stepping into a brand new certified building here in the second half and starting to fill it, in plenty of upside, plenty of capacity and room for growth with a lot of leverage.
Maybe just building on that, just this flip- of- question there about those new customers that did join, giving us a new facility. What was some of the feedback that you got from them in terms of, like, the reasons why and, sort of, the choices that they made in order to go with you guys?
You know, really, it's thanks to the long history TriLink has in supporting this industry. You know, TriLink was a nucleic acid chemistry and oligo business for the last two decades and really enabled early stage discovery work in mRNA through that nucleic acid chemistry. So there, there's a long history there of a very established workflow, you know, over 100 GMP runs, through our company. And it's really, I guess, the experienced, and interactive personal touch we can offer. You know, we bring the technical experience right to the customer. We're not a, you know, we're not a gigantic company. So, we have the ability to connect people and to help them shepherd these programs through. Since it's a relatively new modality, people really like that touch.
Got it. And how should we think about win rates trending since, you know, opening Flanders? It's obviously incredibly early, but you talked about those new customers. You're benefiting from being able to say that if and when a program goes clinical commercial, you'll be able to stay with the same provider. I mean, what kind of benefit has that had, comfort level that you've gotten with customers relative to what it would've been, you know, a few years ago?
Yeah. That and that's a really good point. Again, TriLink has been in the really on the front side, the preclinical and phase I GMP, what we call the service, which is the actual mRNA production process itself. Through the pandemic, of course, went all the way through clinical commercial scale, reagent through product. But the difference before the pandemic and after is that there are many other players in this, let's call it the CDMO side of mRNA production. And it became more because there were more choices that had this this capability, it became more important for customers to hear that you could be a partner all the way through every clinical phase.
Admittedly, we modified the original plans of Flanders II to enable that essentially the appropriate level of, you know, controls, the appropriate environmental situation to enable our participation all the way through.
It's interesting. I reflect back to the time we were working. We did a lot of diligence calls with customers at the time, and they would say that we love CleanCap product, and but it's a shame sometimes we have to leave for some of the senior services.
Right.
At the end. And now, now you're able to go back to them and say, "Look, we can actually do that now." And so, that obviously gives you a stickier customer, but at the same time, I'm sure that feedback loop will likely continue as these new customers come on. And so how have you kinda modified the sort of, I'd say, go-to-market, but the, you know, educating the commercial teams in order to make sure that that's out there?
Well, I like that point because we are, I would say, a product and technology company first.
Yep.
You know, CleanCap is obviously the headline product, but there are others, and plenty more in the works where we want to enable the entire ecosystem from discovery all the way through clinical. Our services exist to help people shepherd their programs through with our chemistry. I, you know, I guess the pitch is who better to help you with the workflow and the process than the people who created the chemistry in the first place. So it, that's really part of our value prop that I think is unique, which is, of course, in what we call the GMP services, but we're also providing almost all of the inputs for that. And again, primarily a product and technology-focused company where service enables the inclusion of the products and technologies in people's programs.
Got it. And Kevin, maybe one for you just about operating margins. I think everyone's aware of sort of the fixed costs you have and the potential operating leverage, that exists in the business model. So it's obviously dependent on volumes, and there's been obviously some volatility, in the top line on a quarterly basis. But if you had to kind of set sort of like a level, of revenue you're able to obtain with your current facilities and think about, like, what then starts getting above that fixed cost burden and generating that operating leverage, you know, where what should how should investors be thinking about it? Maybe if I put it a different way, like, at full utilization, like, what's the margin potential?
Yeah. I think, well, we certainly saw where margins could go when we were near $1 billion in revenue.
Yeah.
Certainly. But that was, you know, one product at scale for a limited amount of customers, and we certainly have great synergies in those large production runs. I think as we move forward, we have both the expanded footprint with Flanders, and again, you know, something like Flanders from an incremental cash cost perspective is in the, you know, $5 million-$10 million range. So it's not a huge burden as far as the operating costs are concerned. That's just the facility costs. And then right now we're sharing a labor pool between the demand at Wateridge, demand at Flanders, so we're able to keep that sort of fungible and move it around based upon demand.
I think as we start to build up the specific funnel for Flanders, then we'll consider whether we have, you know, two separate pools for labor.
So that'll be one toggle for us moving forward. But I think as you correctly pointed out, it's really, you know, the absolute revenue levels that we're generating through some of these plants. When we're down at a lower level, like we were close to the Q1, you could see the margins are gonna be in the teens as we saw in the Q4, when we're up in the mid-70s. They're substantially higher. I think over time, where we see this now is we have all the facilities we need, as Trey said, to support at least the next 5 years, and not have to tilt up any more buildings. And because of that, you know, our cost structure is sort of 70% labor and facilities at this point.
I think we have the capacity to move substantially forward because we are not near the capacity that we can potentially get to. So I think as we ramp up, the high incremental margins are gonna continue to be very strong, but it's gonna be driving revenues through Flanders II as well as maintaining and hopefully continuing to increase the discovery revenue supported at Wateridge, to give rise to margins that, you know, we feel can move back up to, you know, 30% in those 30%-40% over time as we ramp up, as we build this business and continue to grow it. And the reason why I feel pretty comfortable about that is we know what our raw material inputs are. They're very well defined. We have sticky price points, good customers.
Because of that, I think the incremental margin profiles, each incremental dollar is gonna come with a very high incremental margin because of the consistency in pricing and the attributes of our products. That's both true on Biologic Safety Testing.
Mm-hmm.
We moved that into a new facility. That's gonna support their five-year plan. And we continue to see, of course, very strong EBITDA margins from that business as well. So I think, you know, what we're happy about as we sit here today, both with the absolute capacity that's available to us, which we think, you know, where we can triple the business without adding more walls quite easily, as well as, the additional capabilities that you mentioned that we didn't used to have. So we're opening up a new revenue channel, in the back half of the year to do phase II, phase III commercial builds, and still having solid price points and being able to leverage this cost structure, across the - across all the different lines on the P&L. But specifically, we're gonna be leveraging G&A.
We're gonna be leveraging our fixed costs, and then we can toggle our labor, as volume comes in pretty quickly. So I'm able to keep good margin control.
What would you point investors to in terms of KPIs to kind of measure this progress? Obviously, it'd be a little, you know, volatile in the near term, but is there anything you should be pointing that investors should be looking for to see this progress?
Yeah. I think there's a. I mean, I tell you what, we certainly look at it. I think it's both the sort of leading indicators that are more qualitative, meaning there's not in the financials, and that's sort of the participation in the number of programs.
Yep.
We've talked about that a little bit over time, you know, how much CleanCap's involved in various programs where we think our market share is. That was very CleanCap-specific, and we're broadening that out. We're bringing that capability actually in-house now through our business insights group to really look at all the different phases, all the different programs over the broader market and understanding, you know, our penetration into that and how fast that market's moving. I think what we're encouraged by when we look at this, and we'll share some of this as we refine it, is there's still a lot of programs moving into that preclinical phase in areas where we participate in either directly mRNA therapeutics or the broader cell and gene therapy space.
So I think that is a nice part of the funnel, to see progress.
We haven't seen as many people progress in the later stages yet, but I think that's what's coming over the next five years is that progression into therapeutic applications of our technologies and services, outside of just the, you know, our participation in some of the vaccine programs. And that's really gonna be the sweet spot for someone like Maravai. So how well are we participating in that phase moving forward, and how's that overall? How are we able to then stack, you know, these additional customers in, and then hopefully, as they move through the pipeline, then have a new annuity by being participating in their commercially approved products, which, you know, as we know, there are very few right now using mRNA. But, you know, we feel very good about the future.
Financially, certainly revenue, gross margin, EBITDA margin, but leading indicator, how's our market share progressing, and how's the market looking from a trajectory and then an advancement perspective, particularly when you start to flex away from some of the vaccines and getting into some of the more therapeutics where we're likely to have multiple products involved in some of those programs.
Got it. Super helpful. Thank you for that. Thinking about sort of the biopharma and market, what do you think the potential impacts from IRA? Have you seen customers pushing out, pausing, or canceling programs as they reevaluate sort of the economics of it?
Yeah. I mean, I think we've seen some of that, certainly. I think everybody has.
Yep.
I think, you know, when we dive into the numbers, there's a few dynamics. I think, you know, when you look at discovery, I think you're still seeing a very nice level of customer base. You're seeing some of that over the last six quarters or so, that the ordering volumes of that base just be down. So I think that's market reflective, budget reflective, and probably project prioritization a little bit in the R side. On the GMP side, we are seeing more of a stacking of programs versus trying to move them all forward at the same pace.
Mm-hmm.
I think that's just an economic reality that's hitting most of our businesses in our space. And I think it's temporal. I mean, people will take their lead or most advanced programs first, and then they will kind of make priority decisions thereafter. But, you know, I think what we're encouraged by, even in light of that market constricting a little bit over the last six quarters, is that people aren't necessarily abandoning programs. We're not seeing a lot of customers, other than some that are having some financial issues, but not hitting us to that much material impact, walk away from this modality, right? I mean, people are still very encouraged by it.
I think that there's still a substantial amount more money than we thought there was gonna be at this stage when we look back to our models from four or five years ago. And that's kind of was the basis for some of our initial investments. So I think we've kind of getting through this period in 2023 and maybe the first half of this year where that's been a factor. We think it's leveling, and we're hopeful to start to see this start to pick up again.
Got it. And then emerging biotech. Biotech funding had a pretty good Q1. It seems like it's continuing. Trey, I think you mentioned on the call that it was like 30-ish% or so of revenues. Could you maybe talk about what benefit you could see from that funding environment? What kind of lag period there is.
Yes.
Seeing that funding versus actual spending taking place, and what is kind of baked into your expectations for this year?
Yeah. Kevin mentioned that we've started basically, we now have our own internal business intelligence team focused on this question of market, of pipeline. And we can say the biggest number of ads has not surprisingly been in the preclinical. That is, of course, harder to put a pin on because it's not specifically filed and registered. But there are a lot of preclinical starts in mRNA. And remember, mRNA is not just, for infectious disease vaccines. It's protein replacement therapy. It's oncology. It's also, you know, in many cases, part of a CRISPR program where the endonuclease is expressed with an mRNA. But it's also a tool for making cell and gene therapies. So, broadly, we look at the mRNA-specific market, but also the cell and gene therapy market and the CRISPR market as really our three-legged stool.
And we see a great number of program starts in the preclinical - not only, frankly, the small and mid-caps that you're quoting, but also several big pharmas are just starting their mRNA programs. Knowing that the endpoint is successful, knowing the safety and efficacy, thanks to, you know, the quick proof and the pandemic, I think the platform is widely being embraced at all strata. But specifically, because mRNA is quick and economical, there's an opportunity for a lot of small and mid-cap companies to do program starts. And we're definitely seeing that in the preclinical side.
Got it. Within your customers' programs, where do you expect to see the largest opportunity in the next several years in terms of cell and gene therapy, mRNA vaccine, mRNA therapies, CRISPR? Like, as you kind of think about those opportunities, how do you think about sort of ranking those in terms of potential?
Well, since the infectious disease vaccine path is proven already, it's not surprising that when we did our last third-party study, that was about 40% of the programs that were in case. But, you know, certainly, you know, a way of making vaccines in a matter of months rather than a matter of quarters, using in vitro transcription rather than chicken eggs, you know, with traditional vaccine approaches, completely logical to follow that through because we know the clinical safety and efficacy works. We know the delivery works and everything else. I expect that oncology continues to grow. I believe in our last third-party study, it was in the mid-20s% of total programs. And there you have something completely unique and enabling, the ability to personalize, you know, the message to essentially encode very custom one-off new antigens for people.
So I think that's probably the most enabling area. But we, you know, than any given market report you look at has the growth between cell and gene therapy, mRNA, and CRISPR all in the mid-20% to high 20% market growth ranges. So I would say it's anyone's game, but we like all three of those markets and the growth rates therein for sure. And the great thing, I think, fundamentally about mRNA is that it's a platform. So I've already said this, but the way you make an mRNA for an infectious disease vaccine, the way you make it for a personalized oncology treatment, the way you make it for a protein replacement, the way you make it to express the endonuclease in a CRISPR assay is the same. It's fundamentally a configurable medicine.
It's the order of the A, G, C, and U and the messenger. It might have a different cap. It might have different UTRs and tails, but at the end of the day, you're just configuring that order of bases to do all those different things. So I expect it to be an immensely powerful platform for the next generation of medicine. And, I hope they all take off, but certainly there's a lot of different shots on goal available there.
Okay. It's like me asking you to pick your favorite child, so it's not.
Yeah. Right. Exactly.
Not gonna happen.
Exactly.
I get it. I just wanna kind of understand a little bit better in terms of the customer behavior in sort of the earlier stages. So what are the barriers for customers and search providers halfway through the program? For example, the customer was with you in discovery but wanted to switch to competitor as a move to clinical commercial. What are the barriers to doing that regulatory otherwise? I understand phase II and beyond, you kind of get specked in, and it's very challenging to do that. Just prior to that, is there some level of switching that does take place?
Well, in service, yes.
Yeah.
Certainly there's the competitive – I mean, this is a double-sided coin, right? If someone's a customer, they're sticky and from their previous approach, and you can do that, of course, in preclinical and, so in many cases, phase I, but the later you go in a program, the less likely that switching behavior is to happen. Because of our position as a product provider, if we, for example, bid on but don't win a CDMO-type contract to do the what we call the GMP service, we still ship reagents to the person who does. So that's an advantage of having both layers, you know, and being, again, primarily a product and technology company. The service is enabling, and the service is incremental to our growth and certainly our margins.
But we can still participate in programs even if we don't win that service contract. And I would say as, through the pandemic, as many of the major CDMO providers added mRNA capability, that CDMO service side of mRNA became more competitive. And we, you know, in that world, you can see people choosing different partners for phase I, then phase II, then phase III, and so on. But the product and technology inclusion in a program itself is very sticky. And we just hope to add to that market share, whether we have the service or not.
Got it. And so the follow-up question to that is, as you speak to your commercial teams, and a lot of the focus, I'm sure, is winning that discovery business and then keeping them into GMP services. But another part would be going after programs that are in someone else's discovery.
Right.
Where you can then convert them to your GMP services. Given some of the switching costs, it's a little bit tougher. So how do you think about balancing the resources and time of your commercial team to focus on one or the other or some combination of the two?
That's, yeah, that's a great insightful point. The vast majority of our GMP programs are people that started with us in discovery. The barrier of switching, the activation energy to do that is lowest, of course, preclinical. So that's why we, as you've quoted, we like to focus on winning in discovery, staying with our customers, and enabling all the way to all the way through the process. So our focus is primarily there, but it has been a not insignificant build for us, both in facility but also in team and capability to do the program management to uplevel it so that we go from phase I to phase II to phase III to clinical capability as well.
You know, there's a significant QARA component of that, and there's program management of that at a different level than preclinical and phase I GMP. So we have invested in commercial, I would say, both outside and inside, with the inside focused on the GMP services going all the way through clinical commercial, and the outside primarily focused on trying to win in discovery.
Got it. And could you kind of walk us through what a typical volume uplift could look like as a customer moves from discovery to clinical and clinical commercial? I remember a slide from not your most recent R&D day, but a few R&D days ago where there was a 10x uplift.
Yeah.
Which is sort of the kind of benchmark that we at least use to think about it. But maybe just digging a little bit deeper in terms of what that volume uplift looked like as the customer traveled through those different stages for Maravai.
Yeah. Lawyer answer is it depends, right? So in GMP services, you have the fundamental service. In our case, we're bringing products in that we make. And we have, of course, all of the other ancillary and associated parts of a project that are included in the quotes like analytical services. We've been public about our recent investments in what we call our Analytical Sciences Center of Excellence, the ASCE. But typically, you're gonna see $1-$9 million go to high single-digit millions, go to $10-$99 million, and that sort of one, two, three . If, you know, if you look at a normal distribution, that's where the mean would be in those three stages.
Got it. It would kind of be helpful to better understand what your kind of hit rate is for customers moving from preclinical to commercial at this stage. I know it's early, but is there sort of a hit rate or win rate you guys have kind of discussed?
It is. You know, if what you're looking for is what the graduation rate is.
Yeah.
By phase, it is early for that, I would say.
Okay.
You know, we track cold customer and all the other traditional metrics that most people do. When we do follow-up with cold customer, it's not a dead program. In many cases, in the last three or Q4s, it's been delayed funding or strategic delay, as Kevin said, you know, pipeline rationalization, all sorts of other reasons that so you could say we could say it's gone cold after some number of quarters, and everybody's different on that. But in many cases, when we do these follow-up calls, we're not counting, you know, a graduation rate where we can say, "Okay, 60% go from, you know, phase I to phase II, 30% go." I just don't think it's mature enough for that.
We've had so many disruptions to a normal, a normal environment that I don't think we can necessarily count on the data set we've got over the last Q4s.
Yeah. I'd probably add to that too. There's two different dynamics. I'd say one is, let's say we're selling a specific product. Let's say it's one of the clean cap family of caps, you know, it's a fungible product in the hands of our customers, right? I mean, it's not tied to an indication.
Right.
Specifically. So a lot of times, we're dealing with large customers. They'll buy a volume of it predominantly for a certain program, but then they'll be able to use it across their portfolio. And we don't always have visibility to that. I mean, we're very agnostic with regards to what it's used for, frankly. Secondarily, you have the services side where we know very specifically what they're looking to build and what it is. But those will come and go, and they're not our programs, right? So again, knowing that we are at very first and foremost a product and technology company for the entire space and not necessarily economically vested in a specific program, meaning we're not structuring things where we have royalties and things of that nature, right?
We're providing goods and services, and these are the products and programs of our customers.
That leads us to a little bit of a disadvantage in understanding, you know, the timing and cadence of their ordering patterns. And then you have the natural volatility and uncertainty related to phase graduations. So we'll see someone place an order, go away for nine months, and then come back and place a much larger order or not come back for that specific program. So, you know, we, we deal with all of that, and that's, again, at these revenue levels that we're at today, why we see that quarter-to-quarter variation where it's just not a sequential build. Parts of our business certainly do that and have over time, but some of the bigger, chunkier orders have those other dynamics that, you know, make it a little bit frustrating to forecast in the short term, certainly.
Got it.
Yeah.
Just shifting to Biologics Safety Testing. So you're used by all the CAR- T and gene therapies approved by the FDA. How should we think about growth in this segment? Is it driven by number of approvals in this space, or is there kind of solid growth within earlier phases of development? Just.
Yeah. I'll take that to start. It's really in the development. You know, what's the biologic development programs? How are those growing? Because the number of kits that are used are tied more to the product development process development cycle 'cause you're always testing for the overexpression of host cell contaminants anytime you tweak the process. So you're using the Cygnus-branded kits and our services quite frequently during the development process and as you're getting ready to lock formulation and finalize. Once you get approved, like in the case of the 21 therapies that were currently approved, in all 21 out of 21 use a Cygnus-related kit, and as it is seen as the gold standard, then you really move to just lot release.
That could be once a month, once a quarter, depending on how many builds they make to support demand.
So we actually see an inverse relationship from development to approval. So for us, it's about keeping that development funnel and the number of programs growing. And I think we see that market in the 10% range as far as growth. We've always outperformed the market a little bit just based on the breadth of our products and then the custom side of that, as well as the related services to look for potentially other contaminants in those host cells and then those products. And then we're starting to see some nice momentum in progress with our MockV test as well. So that's a market that obviously doesn't exist today in the predictive viral clearance. And so those things are additive.
And so we've, you know, we see the market growing 10%-ish and probably over time be able to outperform that by 200 basis points because of those last two factors.
Got it. Could you walk through some of the partnerships that you recently signed with Lonza? Do you expect to accelerate these types of deals going forward? And then maybe talk through how it came about and that mostly can them coming to you or going out to them and.
Yeah.
How do those work?
Yeah. Well, there I'm glad to say there's been a lot of inbound interest. And, in no small part, that's because CleanCap remains the best solution for efficient, high-yield and high-purity production of mRNA. And we know, of course, in this competitive industry, that, you know, obviously, we are not present on every continent. We don't have all ranges of capacity, and it would be probably not the best strategic move for us to try to build that. So there are tremendous partners in all these different geographies, Fuji in Japan, Lonza in Europe, where we have, you know, exceptional top-tier CDMOs who are interested in having, you know, our technology available to their clients. And it basically reinforces what I've been saying about product and technology first.
You know, and we wanna be an enabling, differentiated solution for all mRNA, you know, products. So, anywhere we can drive the inclusion and our participation, we'll do that. But specifically, we're choosing the top-tier CDMOs in these different geographies who are interested in partnering and can enable, you know, widespread inclusion of our solutions.
Yeah. I wanted to ask a question just because I think it's an interesting point you made where you've got the differentiation with CleanCap.
Mm-hmm.
That's leading you to those types of discussions, that are much broader and helpful to the business. You had a slide, I think, in your last R&D day that showed sort of CleanCap versus ARCA versus enzymatic.
Right.
ARCA, I think CleanCap's got a yield and workflow advantage.
Right.
Enzymatic, it's a little workflow. But could you just talk about the competitive landscape?
Mm-hmm.
Where we are today? And we have gotten a lot of questions from clients on enzymatic seemingly improving, without a lot of kind of data behind that. But I would love to get your view.
Mm-hmm.
On where you see CleanCap from a competitive differentiation standpoint, even over the next few years in terms of the defensibility of that business.
Yeah.
Given how it's so important in the sort of future of Maravai.
Yeah. So the CleanCap is not only a product, of course, or in this case, four different.
Yeah.
Products with, you know, obviously, a few more, in the works, but it's also a process. The process is the co-transcriptional capping or the inclusion of the cap reagent in the same step as the IVT or the in vitro transcription. That leads to, of course, fewer days of production, better yield, and so forth. What I'm actually excited about as a biochemist is our ability to modify these reagents to add different capabilities than existed. So M6 is the first version of this, let's call it the new generation of caps that still have all the workflow advantages of co-transcriptional capping, but we can start to tune them to have different in vivo or biological effects. In the case of M6, it's higher- efficiency translation into protein.
So what's exciting about co-transcriptional capping is not only that it's a workflow or production improvement, but there's also an opportunity to differentiate performance of the medicine at the end of the day. And that's the first of what we hope will be many improvements to all aspects. But it shouldn't surprise you that enzyme providers are big proponents of the enzymatic solution. CleanCap providers are big proponents of the CleanCap solution. It's not an accident that our last two acquisitions were a very differentiated nucleic acid chemistry company called MyChem and an enzyme production company called Alphazyme. We would like to participate in and enable all aspects of the ecosystem, whether your approach uses more enzyme. We have the capability to enhance scale.
Alphazyme is world experts in enhancing scale and lowering unit cost of high-purity enzyme, or driving, you know, through the nucleic acid chemistry. It's all part of the same ecosystem, and we wanna have differentiated solutions everywhere we can in that ecosystem.
Got it. With that, we're out of time, but.
Well, that's great.
That's probably a good end point.
Yeah.
Yeah. Thank you very much. Appreciate it.