My name is Matt Stanton. I'm on the life science tools diagnostics team here at Jefferies. Happy to have Maravai back at the conference with us again this year. Raj, thanks for being here today. Maybe just to kick off, if we go back, you were appointed CFO about a year ago. I think it was late June of 2025. A lot of actions over the last year, cost side, operationally, commercial, R&D engine. For those folks kind of dusting off the Maravai story, giving it a fresh look, what are two or three things you and the team are most proud of the last 12 months as we look back? Then maybe looking ahead, what are some of the items you're most focused on the next six to 12 months?
Yeah. Great. Thanks for having us, Matt. Yeah, kind of dusting back and looking at what we've done over the last now give or take 12 months. We started out by taking more than $65 million of cost out, generating EBITDA savings and exceeding our original target that we had of $50 million and basically did a financial and operational reset of the company. Importantly, I think more than that, we kind of looked at the organization and streamlined it, removed a bunch of layers that existed when we walked in just to create a much better alignment across all our different functions, from commercial to operations to quality, and ensured that as we were getting back into customer engagement, we were leveraging that whole restructuring process. On the commercial side in particular, we established clear accountability and ownership across product lines.
It's been a much improved execution initiative from when we took over that, just in terms of the order visibility, mainly within GMP and discovery, and getting that order trajectory filled. We felt really good about that. On the innovation side, ModTail was introduced, and we are seeing tremendous traction with the large pharmas and biotech with that. Beyond CleanCap now that's become a pretty exciting thing for us. When you ask me what makes us proud, I think it's kind of reflected in all the changes we made in the first quarter, delivering $65 million of revenue in the first quarter, $20 million of EBITDA. For the first time in six quarters, we delivered positive free cash flow. All those things kind of, it feels like it's all been put in place.
I think going forward, as you look at the next 12 months or so, or for the balance of the year, we're not changing the recipe. It's still about commercial execution, making sure that the operational discipline we have continues to translate through to favorable gross margins, free cash flow. We've got a lot of exciting things on both ModTail in terms of GMP introduction by the time we finish the year, along with GMP enzymes for which we've already started to take orders. That's another thing that we're going to be focused on to make sure we kind of leverage that into our revenue growth.
Okay. That's great to level set. Maybe touch on the demand strength. You've talked about a little bit, but 1Q, nice beat and raise on the demand side. I think one thing that's maybe overlooked or a little underappreciated is that a lot of the demand improvement to date has been around the commercial execution you talked about, right?
Right.
Biotech funding is better. Biopharmas may feel a bit better, but a lot of that's been tied to commercial execution. You talked about a little bit before, but just maybe dive a little bit more into what you've been doing on the commercial front.
Yeah.
Is that true? It's been mostly commercial, and so maybe some of this biotech funding, et cetera, is still on the come in terms of the demand side.
Yeah. Agreed. I think certainly the funding environment helps. That's an enabler. Really, before that macro shift happened, we really were focused on the execution, and that's continued to work for us both on the GMP consumable side and discovery. Like I mentioned, it's been great in terms of getting order visibility. I think one data point I'll give you is on the discovery side, as we've mentioned before, we really started Once we did the segmentation on what drives revenue there, we focused our book of business into orders that are under 15,000, orders that are greater than 15,000. Everything under 15,000, which is a long tail of customers resulting in very small revenue, has been relegated to e-commerce and marketing initiatives.
That enabled us to let our sales reps focus on driving the bigger orders in discovery, and that's been resulting in healthy order trajectory and order velocity that we've seen over the last few quarters. Yeah, on the commercial side, that's been really the most of it.
Okay.
Yeah.
Maybe just jumping a little bit into the business, TriLink GMP, I think Or TriLink overall is kind of expected to grow mid-teens this year. A big piece of that is the GMP consumables. Maybe just unpack for us a little bit where you're seeing the demand in terms of either products within TriLink or also by customer. Is this all kind of tied to mRNA? Is it cell and gene therapy, oligo, some of these newer modalities? Where are you kind of seeing the biggest vectors of demand?
Yeah. I think if you look at from an order standpoint, a lot of our revenue comes from CleanCap. Along with that, you've got ModTail. We have some custom mRNA products. Beyond that, as you think about GMP enzymes, oligos, even though they're a smaller part of our business, are still seeing some growth. Finally, from ModTail, subsequently again when we get to the GMP part, that's going to drive some of the revenue. In terms of, a lot of that is still coming from mRNA therapeutics, cell and gene therapy, gene editing, a little bit more from kind of oncology, even though infectious diseases is now a lesser part of it, we're still getting some from that area as well.
Okay.
Yeah.
On orders, I think commentary there has generally been pretty upbeat. Maybe just unpack for us a little bit what you're seeing on order demand between discovery and GMP on the TriLink side. Are you starting to see some of that biotech funding show up? Also just maybe remind us, in terms of from when that demand came. Is it two quarters, three quarters, kind of what's been the historical lag between better funding and your business? Which I think generally is shorter cycle relative to some other folks.
Like I alluded to from a commercial standpoint, just our focus and customer engagement on discovery has enabled us to land orders faster. Our forecasting is better. We're getting larger repeat orders. The discovery business is filling up quite nicely. Same thing on the GMP side. Our order volume and the deals that are going to make up the revenue number is pretty much locked and loaded at this point. In terms of discovery, our line of sight is 60 to 90 days. As that order volume is continuing to grow, we still have to keep an eye on ensuring that the variability in this business is managed. Having said that, we see just really favorable trends on the discovery side. I'm sorry, what's the second part of the question?
Maybe just on the discovery piece, I think you guys have done a good job kind of segmenting that.
Below 15,000, and that's maybe been picked up by e-commerce above.
Yeah.
15,000. Just help us with, is the lower kind of academic government, the larger orders, bigger customers? How do we think about the trends you're seeing between the lower tail and then also those?
Yeah.
I think 15+.
Yeah.
$15,000+.
On the research side, that's mainly early stage and discovery, and funding there is stable. Not great, but stable. We've seen modest growth there. Again, if you look at academic, that's 5% or less than 5% of our business. We're not exposed to that. On the discovery side, the funding is a lot healthier. When you take that funding kind of environment and then couple that with the execution, we are seeing a lot more goodness in that part of the business.
Okay. Can you remind us on the discovery side, I think historically you've kind of talked about a 60/40 split.
No, it's more like 70/30.
Okay. That's a function of the 15 plus growing faster.
Yeah.
Okay.
Absolutely.
Okay.
Absolutely.
That should continue to kind of maybe mix shift up over time. Is that fair? Yeah.
100%.
Okay.
Yeah.
Okay. As we think about 2026, like I said earlier, nice upside on 1Q. Even setting aside kind of that $14 million of GMP CleanCap.
Yeah.
That was pulled into the quarter, delivered in the quarter. You also raised the guidance for the year, $5 million top line, $11 million on the EBITDA side. As we look for the remainder of the year, you talked about kind of orders line of sight to what's spoken for. What are some of the additional pockets of potential upside? I think maybe China could be one. Some of these newer product launches you have, maybe even better activity levels on the clinical side. How are you kind of thinking about some of the potential upside levers even after coming off what seems to be a very strong order?
Yeah. I think we'll continue to see growth on the GMP consumable side. We've looked at conversions from discovery to GMP, and we are seeing 22% growth in customers year-over-year. As that has been kind of transitioning, we feel pretty good about some upside developing from that. I think additional upside could come from, although we've modeled in very modest growth from GMP enzymes, we could see a little bit more growth coming from there. We have not modeled anything yet for GMP ModTail, but just ModTail in general so far, what we've seen in terms of 70+ customers that have been buying bigger orders and placing repeat orders, you could see a little bit of upside from that as well. I think along, China's going to come back.
We've talked about Cygnus missing in the first quarter. That's going to be made up. We see some upside from that as well. Yeah, I think from a geography standpoint, as we continue to get traction on both discovery and GMP, we'll get a few upside levers there.
I want to touch on China in a minute, but maybe to go to ModTail. You talked about it's a product you launched last year, 70+ ordering customers as of 1Q. I assume it's probably even higher today. I think the launch has seemingly tracked ahead of expectations. Maybe just talk about launch to date, where you're seeing the most demand and customer feedback. Why is this product kind of seemingly resonating so strong so quickly with folks?
Yeah. It is basically with the larger pharmas is where we are seeing a lot of uptake from ModTail. as we think about the feedback that we're getting from customers, in vivo CAR-T applications is where there's a lot of positive feedback that we are getting from customers. again, we've been getting demand for as customers move to GMP, there's a demand for that, and that was the voice of customer that we kind of channeled into making sure that we are going to have GMP capability in the ballot in the second half of this year.
Okay.
Yeah.
On the GMP launch later this year, I guess, how big a deal is this? Is there a margin lift from this as well? How should we think about the deployment of this, and then is there any way to quantify, I guess, the opportunity here, right? Is this a $2 million out the chute? Is it $ tens of millions? It sounds like the demand is pretty strong, but how do we kind of dimensionalize the move here?
Yeah. I think the demand is robust, and it's too early to call out what the outlook is going to be. We feel pretty confident that as it starts to get traction, why this product couldn't have the same kind of cadence and growth level as CleanCap. That's kind of we're thinking about. We're doing some modeling right now, really, I think for the future, as long as this continues to get traction and we have both it in pre-clinical and as you move through GMP, it's going to create a nice growth engine.
Okay. Maybe just one more, last one on ModTail. I think it was 70 ordering customers. How do you think about adding more customers versus going deeper? It sounds like a lot of these are larger pharmas. Is there kind of an opportunity to go both more customers, but also deeper at these customers? Do you have a visibility into?
Yeah.
How many programs they're using from a site?
That's right. There's penetration with existing customers and potential for new customers. In fact, you know I think, I know you're going to touch on China, but you d uring our recent trip to China, we think that ModTail has the opportunity for us to get to some of that product differentiation and price challenges that you face in a country like China, right. If you bundle ModTail with CleanCap and mRNA, we think that that can help us overcome some of those challenges in China.
Okay.
Yeah.
I guess on China, near term, you talked about earlier distributor timing in 1Q. I guess just to be clear, you expect to recoup that through the remainder of the year, have pretty good line of sight on that. Is that fair?
Absolutely, yeah.
Okay.
Yeah. It had nothing to do with kind of underlying demand. We've got line of sight to the demand. It was just really kind of a timing pattern. That's coming back. We expect China to be mid-single digit growth for Cygnus, and the Cygnus business is also going to stay on track to that level.
Okay. Maybe before we get into kind of the opportunity ahead on China, just maybe remind folks today your presence in China, it's like high single digit % of your mix. I think there's maybe some confusion, TriLink, Biologics Safety Testing, or Cygnus.
Yeah.
Just level set us on kind of what you're doing in China today before we kind of hop into the opportunity ahead.
Yeah. Today in China, it is Cygnus only.
Okay.
We have no TriLink sales in China. The long-term opportunity, given the research level that's happening in China, the number of companies that are engaged there, it's a significant amount. We think that's an opportunity, which is why we were there talking to customers and figuring out what our manufacturing, commercial, and distribution footprint can be in for TriLink. More to come on that, but at least we are kind of laying the foundation and doing some kind of diligence work right now.
Okay. Then maybe, you're doing the diligence now. How do we think about kind of cadence in terms of before this becomes a reality? Do you need local manufacturing? Can you ship and use a distributor? How soon could we see TriLink in China?
Yeah. I don't think you'll see anything meaningful this year, but as we start to lay the foundation for both commercial manufacturing distribution footprint, that's going to be more of a 2027 story.
Okay.
Yeah.
Is any of this tied to kind of the licensing deals we've seen, or is this more just pure demand within China?
Pure demand within China.
Okay.
Yeah.
Okay. Maybe shifting gears over to MockV. Still fairly small today, but a product that's been growing very healthy, I think double digits, maybe even triple digit clip here and there off a small base.
Yeah.
Talk about demand trends in MockV, ability for this to remain kind of a durable, healthy, double-digit growth driver ahead.
Yeah. I think one bit of good news on MockV, first of all, is we were granted a new U.S. patent, that enables us to continue strengthening our IP moat there on MockV. It's growing off a small base, again, growing extremely well, it's very robust. We continue to see repeat orders. We continue to see Cygnus getting traction with MockV. Really kind of pleased with where that's going. I think some of the regulatory stuff has been going well, as you think about can MockV replace some of these expensive viral clearance services. That part is continuing to go well. Right now it's still kind of a little bit of a wait and see in terms of how we can clear those regulatory hurdles.
Most of the activity is in the post-IND kind of pre-BLA, and then we are getting some companies that want to work with Cygnus on kind of post-BLA type of activity with MockV. At least that's encouraging.
Okay. For those who are less familiar with the viral clearance market, kind of what's the value prop of MockV? It sounds like these existing kind of legacy viral clearance studies are very expensive. Is it cost?
Yeah.
What's kind of resonating with customers?
It is cost and kind of early detection and early kind of indicators that these companies would face. If you've got a product that helps you kind of navigate that's the whole game there for MockV.
Okay. Just on the regulatory front, is this all? I think you talked about IND early stages. Do you kind of need to get in there and spec in, or could we see a case in a year or two where this is moving into a phase I, phase II? Do you kind of need to start early and plant the seeds and see them move through the clinic?
The latter.
Okay.
Yeah.
Okay. You touched on it a little bit earlier when we were talking about some of the discovery stuff, just I think e-commerce has been a big focus. You kicked off with that. Where are you in the e-commerce journey? How big a deal has pulling those 15,000 and under orders onto there been?
Yeah.
Maybe just give an update on kind of where we stand with e-commerce today.
Yeah. E-commerce has been a great story for our orders under 15K, and like I said today, under 15K there's no sales touch whatsoever. All the order processing, the coding process itself, any friction in the system has been completely removed. We saw record Q1 revenues that flew through that channel, but it's a small base, right? We're now kind of starting to turn that on. We did a launch for Europe through e-commerce. We're adding oligo products to that channel, and just broader kind of workflow automation. All those things will continue to evolve with e-commerce.
Okay.
Yeah.
You touched on it a little bit, improving friction. Is there any other benefits, margins, attach rates, ability to kind of track reorders or target folks? What's some of the other kind of benefits on the revenue or margin side from successful deployment of e-commerce?
Yeah, I think you're right. As you get those efficiencies and the less kind of touch that we have, the more automated you can make it and the broader mix of products that you flow through this channel is going to result in margin improvement for us.
Okay.
Yeah.
Do you have a theoretical benchmark of where the e-commerce mix could go someday, or just continue to kind of mix, shift it up? Is there a benchmark that you guys are going to?
Yeah, it's going to continue to evolve.
Okay.
It's a little too early to say how big this can get, but really again, with that type of automation and the focus that's on AI today, that's going to continue to get more efficient, and we can pump more stuff through it.
Okay.
Yeah.
On gross margins, 1Q mid-60s, obviously had the benefit from the $14 million CleanCap, but even excluding that, gross margins are still I think high 50s, right?
Yeah.
Remind us what are you penciling for gross margins for the year, and then how are you also thinking about kind of the pathway ahead after some of the cost actions? Obviously, high 50s is pretty good based on where we were not too long ago.
Yeah.
About further expansion.
Yeah, I think you're right. In Q1, we benefited from a really nice, rich mix of GMP consumables, coupled with the fact that we had that COVID CleanCap order. Again, if you normalize for that, we were still in the high 50s, as you said. I think for the balance of the year and where we'll end up, it'll kind of remain in that high 50s coming off a year where we were in the 40s last year. I think as we continue to grow our GMP franchise and discovery, that mix is going to continue to be favorable on gross margin. As we kind of look ahead, I think that mix is going to drive gross margins a little bit higher, but that's kind of where I see it going.
Okay. Outside of mix, is there anything operational or do you feel pretty good? I mean, is there sites or are there other little things?
Yeah, I think from an operational standpoint, given that we've kind of restructured the business, we've said based on our current model, we've got so much leverage to scale this business up literally, and every dollar that we pump through the P&L now adds zero cost, and 70% of that falls to the bottom line. As a function of continuing to drive that revenue up, coupled with the mix of products we have, we'll start to generate incremental margin.
Okay
Profile. Improve that profile, rather.
Okay. On that margin profile, the incremental, I think you guys are signed up for 70% drop through. Just talk about in terms of, we talked about some of the R&D engine earlier. Does that need to move up any higher, or do you feel kind of good about what you're spending on R&D today and kind of what's coming out the pipeline in cadence?
Yeah, we feel pretty good about it. I think in terms of initiatives that we want to drive within the company, R&D is one place that will get some incremental dollars to make sure that the innovation will continue to fuel our growth.
Okay.
Yeah.
Circling back to the commercial initiatives we didn't cover earlier, just is there an opportunity to better cross-sell either Cygnus to TriLink to Cygnus, within their respective franchises? I think ModTail customers, you noted a majority of those are ordering other TriLink products. How do we think about kind of the cross-sell opportunity, either within either respective business or together?
I think within TriLink, again, the amount of focus that we've put on commercial execution, the tools that we've given our sales teams, all of that is we're getting organized around customer workflows and making sure that our customers recognize that we're not just a CleanCap company, but we've got a portfolio of products. The way our sales teams are now approaching that with our customers and engaging with them has already started to get that cross-selling opportunity fulfilled, to the point that you made, with people that are buying ModTail are also starting to buy other products. The innovation engine, coupled with the customer focus that we have through our sales teams, is driving that. Cross-selling between Cygnus and TriLink, I'm not seeing much of that, but I think within those two businesses, Within TriLink, we're definitely seeing that.
Okay.
That's what we want to see anyway.
Okay. Maybe quickly, we can touch on just balance sheet capital allocation. Yesterday, you guys announced kind of a refinancing, pushed some of the maturity out. Maybe just run through a quick logic behind that.
Yeah.
I guess just refresh us on what exactly you did and why that made sense.
Yeah.
Now.
There was some overhang on the whole refinancing PA. It was going to be current this year. People were asking: What are you going to do with this? I think the outcome that we landed with right now, given the current market conditions, we're super pleased with what happened, right? Our long-term debt went from $243 now down to $150, plus we have a revolving line of credit to pull on. From a liquidity standpoint, we feel good. I think the rates that we got are the best we could have done. We had SOFR plus three. Now we've got SOFR plus five. We just feel good about kind of just removing that overhang that we had out there. That's it.
Okay.
Yeah. Feel pretty good about it.
No major impact kind of P&L. It's more overhang removal.
Yeah.
Interest remove. Yeah.
Yeah.
Okay.
Yeah.
Okay.
Just kind of improving our risk profile and making sure that wasn't really. Yeah.
Okay. You talked about the revolver, just with the balance sheet, I mean, how do you think about capital allocation? Are you guys a lot of heavy lifting the last year or kind of smaller tuck-in something you're looking at? How are you guys kind of thinking about and prioritizing?
Yeah.
M&A today?
I think as I've maintained over the last six months or so, when we first started, really organic growth has been the focus and kind of resetting the business. M&A was not on the cards. I did mention once we kind of got past that, we would start to think about if we should allocate capital and deploy it if should we see something that makes sense. We're just going to be opportunistic. There's nothing on the horizon that warrants any attention. If there is a complementary portfolio that we can get, we will certainly look at that.
Okay.
Yeah.
Maybe just going back to some of the demand strength from earlier on. I think you talked a little bit about mRNA, but maybe just talk a little bit about indications, right? I think we've moved well beyond just vaccines, right? There's oncology. Are there one or two kind of areas you'd point folks to in terms of where you're seeing incremental demand, setting aside kind of a legacy vaccine demand?
Yeah.
Most excited? Because there is a much more diverse customer and clinical pipeline today.
Yeah.
Than a few years ago.
Definitely. I think from moving away from vaccines more into kind of oncology and other cell and gene therapy, but mainly oncology is where we see the next kind of readouts and opportunity and programs advancing. That's kind of where we are seeing-
Okay.
Some goodness.
Then maybe just talk briefly just in terms of pricing of the portfolio. I mean, kind of what annual pricing looks like for you guys today. Is there any difference between the two businesses? How do we think about kind of pricing within some of that attractive incremental margin profile you laid out here?
Yeah. Let's take it business by business. Cygnus, as you know, is kind of like the gold standard. Given how much traction we have with customers and Cygnus's stickiness enables us to kind of leverage price and get some premium. That happens on a yearly basis. On TriLink, it's more kind of product differentiation dependent, and as we get more newer products, as we've launched, whether it's GMP enzymes, it's ModTail, IVD kits, we'll continue to make sure that we get that price premium where applicable.
Okay.
Yeah.
Is it fair to say generally kind of bioproduction market type pricing a few-?
Yeah.
Points a year is kind of the ZIP code, I think, going forward?
Yeah.
Okay.
Exactly.
All right. With that, we're just about out of time, I think we'll leave it there. Appreciate it.
Okay.
This was great. Thank you.
Thanks, Matt. Appreciate it.