Good morning and welcome to the second day of the J.P. Morgan Healthcare Conference here in San Francisco. My name is Tavon Wilson. I'm an associate in the healthcare group based in New York. I'm pleased to introduce and host the Bio-Techne team here: Kim Kelderman, the CEO, and Jim Himpel, to my right, who's the CFO. Kim?
Oh, thank you, Tavon. It's always a pleasure being here, and it's exciting to be here for the third time for myself. We have a very exciting 2026 ahead of us, and I'm really looking forward to going through the presentation, which will start with an overview of the company and then followed by a double-click on the strategy going forward. But before I get into the data, I would like to draw your attention to our Safe Harbor statement, which you can find on our website, www.bio-techne.com, under the Investor Relations section. Now, let's start with the content and, of course, with a very important part, which is our mission. Our mission is to improve the quality of life by catalyzing advances in science and medicine. This is what drives us every day.
It's what excites us, and this is how we create value for our customers as well as for our shareholders. As I mentioned, I will first give you a snapshot as to where we are as a company. So who are we? Bio-Techne, we are headquartered in Minneapolis. I have 3,100 colleagues working out of 34 global locations. Over the last 50 years, we've built a differentiated portfolio of protein-based core products, which we can leverage to then address very unique applications and therefore serve very high-growth markets. We report in two segments: the protein sciences segment, you can see here in the middle, as well as the diagnostics and spatial biology segment. And in protein sciences, we have 7,000 proteins - I say 6,000 proteins, maybe 7,000 later this year - but for now, 6,000 proteins. We have 400,000 antibodies and a vast menu of immunoassays.
We have a nice portfolio of proteomic analytical instrumentation, and it's very relevant across our markets, but also very much so in very high-value growth applications such as cell therapies. Going to the diagnostics and spatial biology segment, here we build a unique position in spatial biology, and that's on the backbone of our RNAscope portfolio as well as an automated instrument called COMET. We have a precision diagnostics tools business in which we have very sensitive, easy-to-run molecular tests that we sell to laboratories. We've also established ourselves as a leader in diagnostics, reagents, and controls, and those serve critical applications such as hematology and clinical chemistry. Now, moving to the right side of the slide, where you can see that we've achieved $1.2 billion in revenue in 2025.
And the breakout is that we have 81% coming from consumables, 9% from instruments, 7% from services, and 2% from royalties. Now, noteworthy is that 12% of these revenues out of the 81% are actually consumables directly pulled through by our installed base, by our instruments. Now, this highly differentiated consumable-rich portfolio, of course, allows us to have an industry-leading profitability profile. Now, if we double-click on the revenues, you can see on the outer circle here on the left that we have 73% of the revenues coming from protein sciences, 27% coming from the diagnostics and spatial biology business. Now, that percentage came down a little bit over the last year. Even though fast-growing, it came down, and that is mainly because the divestiture of our Exosome Diagnostics business late last fiscal year.
If we go to the inner circle on the 9 o'clock position, you can see 41% of our revenues coming from our core reagents. These are the proteins, the antibodies, and the small molecules. Now, those give us leverage into fast-growing new areas such as cell therapy, where you would use GMP versions of those core reagents. And right now, the cell therapy business is 7% of our revenues. We have a highly differentiated position in the proteomic analytical instrumentation, and that has grown to 25% of our revenues. The core diagnostic controls for IVD are 12%, and then the precision diagnostics tools that we sell into reference labs are 4% of our revenues, spatial biology 11%. Now, if we go to the top right, you can see that with our differentiated high-quality portfolio, that we've built a strong position in the biopharma segment.
51% of our revenue is coming from there. 20% of our revenue is coming from academia, and we like that position because it really fuels innovation, and it is driving early market adoption in that segment. 16% from diagnostics, and then 13% from distributors that we use to address APAC and parts of China. From a geographical point of view, 58% of the revenue is from Americas, 15% from APAC, including China, and then 27% coming from Europe. And in the next slide, I will complete the Bio-Techne overview by summarizing the foundations of our success. And this will explain why we have such a strong competitive advantage and why we can continue to build out defendable positions.
Over the last 50 years, we created a durable and differentiated product portfolio, which gives us a balanced exposure to established and emerging applications across fast-growing end markets, where we can be successful through our portfolio leverage from our protein and antibody content. This resulted in a strong reputation as a scientific leader, which helps us to inform the areas of innovation to unlock further high-growth areas. In addition, we've built a lean and nimble organization with a culture of ownership and accountability. This enables us fast and impactful decision-making. Now, this is an admirable position to be in, but what is the strategy for our portfolio going forward? For that, I will guide you to the next couple of slides. First off, our portfolio creates leverage across various growth factors.
Basically, these growth factors here on the left-hand side of the slide are the stages a program would go through from discovery all the way to commercialization, and that's how we segmented the markets. The first one would be the discovery of novel biological insights, and this is driven by scientists in academia and basic biopharma research. We have the development and manufacturing of advanced therapeutics with a clear focus for us on cell-based therapeutics, and then enablement of precision diagnostics, which is across basic IVD and specialty laboratories. As you can see, our products map really nicely across those three growth verticals, and this gives us broad access, and it gives us the advantage of serving and observing emerging and existing applications, and therefore, we have picked various growth verticals, and here I mention three of those, three of those applications.
And each one of these applications we will double-click on. One, of course, cell therapies, the other one, proteomic applications and drug development, and then spatial interrogation. So let me get to the first one. These slides actually have three columns in it. The first column is our starting point and how it creates leverage. The second one to customers' unmet needs, and then the third one is about how it guides our innovation and how we will create runway and the trends that will help us grow into the future. So for this one, the cell-based systems and therapies, we have created, and we're early movers really on the GMP portfolio that we've developed for CAR-T and stem cell-based regenerative medicine and organoids. There we've selected certain proteins, small molecules, and culture to then create GMP versions of these products.
Our dedicated GMP facilities, they provide security of supply, of course, manufactured under the right regulations, and then create scale for our customers, all the way from smaller quantities in research through the clinical stages and then all the way up to commercial scale. We have 700 GMP customers that are in 85 clinical trials, and they all enjoy our high bioactivity and lot-to-lot consistency of our products. Our ProteinSimple instrumentation is well-positioned in proteomic analysis, including QA/QC, and this is mainly used in cell-based therapy workflows. And then Wilson Wolf. We currently own 20% of the company, and we have an agreement to acquire the balance by the end of calendar year 2027, and this will bring us to G-Rex. G-Rex is a disposable bioreactor in which our customers can grow their cells efficiently and cost-effectively.
Now, to the unmet needs, it's typically around robustness, cost-effectiveness, scalability, and actually the same is very much true for organoids as well. The nice thing is that we're perfectly positioned to address these needs, and our innovation is aligned as such as well. So therefore, we will continue to launch high-performance AI-designed proteins, further elaboration of the form factors where we have the ProPak cytokine delivery system. This delivery system gives you the right concentration, the right volume of proteins or cytokines for your cell therapy, and it really enables industrialization and therefore scale at a good cost of these therapies. And then we want to continue to drive robust organoid solutions. So our position and our innovation positions us really nicely to enjoy the growth runway, and that is driven by the drug development progression and the scale-up of companies going through their clinicals.
It's driven by the increased number of drug approvals, such as in CAR-T and RegenMed, and then, of course, the continued adoption of organoids, so our offering has created a real formidable position in our $2 billion TAM, and it's growing at 20%, and I think that's a very durable market in front of us because we're pretty nascent still there, and I think there are even chances for acceleration down the line. Our second application that I want to highlight is the high-value proteomic applications in drug development. This is mainly addressed by our ProteinSimple analytical instrumentation, which by definition is easy to use, very cost-effective, and has high sensitivity to analyzed proteins. Now, that, of course, gives us a great position in the proteomic analytical technologies. We have three main platforms there.
The first one is Simple Western, which is a fully automated high-quality Western blot, which gives you quantitative and reproducible results. We have automated ELISA platforms. This one is called Ella, and Ella provides fast, reproducible multiplex biomarker analysis across all stages of development, all the way from discovery to QA/QC testing and manufacturing. Our biologics franchise has Maurice, the instrument Maurice. It's a true workhorse, and it delivers high-resolution and reproducible data for biologics as well as for complex molecules. Those three platforms have been relatively successful, and we are very proud of the capabilities, and we amassed an 8,000-instrument install base across these three platforms. Now, to the unmet needs, very important is the ease of use, cost efficiency, scalability, and then the proteomic data coming off these instruments needs to be formatted to enable AI. This is a big one.
Therefore, our innovation is very much aligned. Our priorities are to deliver new applications across our platform. This, of course, drives the increase of our TAM. It drives the number of placements of instruments, and it increases the consumable pull-through of our install base. Very important because it drives growth in several dimensions. Simple Western Leo was a fantastic launch of a high-throughput Western blot instrument. We have an upcoming launch of ultra-sensitive immunoassays for Ella, and then we're, of course, working on the AI insight generation for proteomic data. The growth runway is continued adoption of automated Western blot for manual solutions. Ella applications growth into neuro and possibly inflammation, and that is, of course, on the back of the ultra-sensitive cartridge that we're launching.
And then the search of novel advanced biologic therapies, such as the monoclonal antibodies, the antibody drug conjugates, as well as the cell and gene therapies. Now, that gives us a highly differentiated position in a $4 billion addressable market. So also very, very interesting position to be in. Now, to the last application I want to highlight, spatial interrogation, and this mainly across translational and clinical development. The backbone for this is our RNAscope portfolio. RNAscope gives you detection of RNA on a single molecule sensitivity and a single cell resolution. And that in intact tissue. There we have 75,000 probes across 450 species, a truly market-leading portfolio. And by the way, we can make any probe that you would like to have in addition to the existing ones.
The second very important consumable stream to the spatial biology solutions is our antibody portfolio, where we are creating critical content for panels. And then, of course, the third most important part of this business is the differentiated spatial platform that we have acquired a couple of years ago called COMET. This is a true multi-omic platform, so you can look at RNA as well as DNA in parallel using the RNAscope and using our spatial antibodies simultaneously, and that gives you true multi-omic analysis and is therefore a real new innovation driver. We have a very strong and growing installed base for COMET. The unmet needs, they are really centered around enabling transcriptomic tools to support genomic medicine and eventually to define a standard of care for multi-omic spatial interrogation.
Now, here on the right-hand side, you can see a range of innovation priorities highlighted that will allow us to leverage and expand our current position, and there we've tapped into the attractive, fast-growing market where we have quite some runway, so in summary, a leading automated multi-omic position in the $5 billion spatial biology market. Now, I want to round up our strategic overview with sizing the total addressable markets that we serve. Here you can see the breakout into the three growth factors I talked about earlier from discovery, manufacturing, and commercialization of new therapeutics, and of course, the enablement of precision diagnostics. In total, we are serving a $27 billion market with significant growth potential.
Now, at the bottom here, you see that our real unique position in there is that our core portfolio broadly addresses each and every one of those three markets, and it enables our leadership in key high-growth applications. And therewith, we will be able to deliver sustained above-market growth. Now, if we go to the next slide, this is actually the testament to this statement, the sustained above-market growth, because over the last five years, we grew our revenue 10% CAGR, right? And this was a period with quite some turbulence and headwinds in there. If you think about it, part of our fiscal 2023, all of our 2024, and all of our fiscal 2025 had quite some headwinds in it. It started with large pharma portfolio reprioritization because of the IRA. Biotech funding has been under pressure. The Chinese economy has had their issues.
And then uncertainty in academic over the last year definitely was a headwind as well. Now, in spite of these headwinds, we have been able to grow all the way from and through COVID and beyond. And in fiscal 2025, we actually delivered 5% organic revenue growth, and that obviously is pretty strong under the circumstances. Our profitability is also pretty good at 9%, and that's because we focused on productivity across the board, cost management, and of course, we always balance that with investments in strategic and in fast-growing applications. So the financial performance really shows our competitive moat and the value our customers place on our products. Now, that brings me to my very last slide, basically explaining how we will continue to grow this moat, right? You see the three bubbles, the top left one.
Over the last 50 years, we've built a differentiated proteomic core portfolio with broad access to all three strategic markets we talked about. Our science capabilities really guide and help identify critical applications, existing ones as well as emerging ones, and for and within those applications, our customers have certain problems that they want industry to solve. And that really helps us develop as well as acquire scalable and differentiated solutions that customers are really waiting for. Now, once we do that, we, of course, go back to the first bubble, and we leverage our core portfolio to then build out these applications to drive further growth and further adoption, and that helps us boost our growth rates. Now, in summary, on the right-hand side, we are addressing $27 billion TAM, growing at high single digits.
We are building out a durable position across high-value, high-growth applications and to continue to outperform the market. We are pursuing impactful innovation, and innovation as well as M&A will remain a key ingredient to our DNA. Our high-value portfolio and lean operating structure helps us deliver industry-leading operating margins, and we always target between 35% and 40% operating margins, and that, of course, is industry-leading and a fantastic position to be in. Now, thank you for your interest in the presentation part of our session, and with that, we'll go to the Q&A session with Tavon.
Thank you, Kim. So I have a few prepared questions here, Kim, and as you kind of get settled there. So we'll go through a few mix of questions here. So one, we'll go through trends.
We'll go into protein sciences, diagnostics, spatial biology, and then lastly, going into maybe some insights into the future. So I'm looking for innovation and things like that. So I guess starting with trends, how would you characterize current trends across your core and markets, and then how do these compare to what you saw exiting fiscal year 2025?
Yeah, thanks for the question. Obviously, we have the markets that were a little constrained that I will highlight here. The biotech industry was really challenged. In Q1, we saw a decline of high single digits in biotech, but we also talked about green shoots, improving conditions. We talked about the funding in biotech improving. As you might remember, the first half of the calendar year, 2025, funding was dismal, right, so it was negative 20% or so. But then the Q3 of the calendar year had 7% increase year over year, and then Q4 actually was really off to the races with 90% increase in funding, and that eventually will come trickling down in life science tools, so that's a good indicator. We also saw in the biotech area more M&A and licensing activity, so that's a good indicator for improvement.
Interest has continued to come down, which is also a good indicator for improvement. So overall, we are positive about the direction that the biotech industry is heading into. Academic is a separate story. We feel that it is stabilizing. It's 20% of our revenues, 8% coming out of Europe, where there is pretty steady performance with mid-single digits. But in the US, it certainly, as of February last year, was relatively turbulent. And we went through a valley there with negative mid-single, negative high single, and now the last quarter, negative low single digit declines. But we feel it's stabilizing. You hear the rhetoric is more around a flat budget versus negative 20%, right? And what we certainly can see is the shift in the grants, the targets that the grants and what they target if it comes to the research.
It was very much earlier around the vaccinations and infectious diseases, and it's now shifting much more towards chronic diseases, which read much better on our product portfolio, so overall there, we also feel that things are improving, and one thing that we are certain about is that our comps will improve as of February, and then last but not least, the trend in large pharma, there we are actually very, very happy because we had three quarters or so of double-digit growth, we were a little bit worried about the most favored nation negotiations, etc., but that seemed to have been resolved relatively quickly, and as you hear at the conference this week, lots of positivity and investment going forward, so we are very bullish about that end market, and it's really driven our growth over the last couple of quarters.
Okay. Thank you. I do want to double-click on one thing that you mentioned briefly in your presentation, and that's China. And so we know that China has been an end market. There has been definitely volatility over the last few years, but we know that biotech has seen some consistent growth over the last two fiscal quarters. So what do you think is kind of unpacking that, and do you see that as a trend to continue in the future?
Yes. So China is 8% of our revenues. And yes, we had two quarters back in the black, and we feel that's something that we continue to achieve and that could accelerate. We always mentioned that we feel that China will be the fastest-growing region. Again, maybe not at the same speed as 10 years ago, but it's still a very promising region. Biotech funding has been good. The Chinese government has issued their 15th five-year plan. And again, life science funding is a high priority, and so funding has been good. On top of that, the biotech companies in China have been able to get some real good licensing deals and therewith foreign funds coming into the country. And I think that's definitely more bubbly and therefore more activity in that area.
Therefore, I feel that it is definitely conducive to further growth and further acceleration and much healthier than it has been over the last couple of years.
Got it. Got it. Thank you. I think it's a good time to maybe transition over to protein sciences. And so we'll start with cell therapy. And we talked about FDA a little bit into your response there, but just even taking a step back, we know that a lot of your large cell therapy customers have fast-track designation that could lead to some accelerated approvals, and that could be substantial headwinds as well. I guess, what do you think about that topic, and could you give us a little bit of an update?
Yeah, it's very important to us. Of course, cell therapy has been growing very fast for the company. We grew it to $80 million in cell therapy, and $60 million of that is the GMP proteins. Two of our customers, larger customers in the GMP proteins, received fast-track designation, which is fantastic news for those companies. Obviously, very important treatments that they're working on and accelerated review by the FDA, which is great news, but it does create an air pocket for us as a company. We've talked about the quantification of it. We had 200 basis points headwind in Q1, 400 basis points in the current, the last quarter, Q2. And then still some headwinds in H2, but much less if it comes much less compared to the overall company's volumes.
So our guide was low single digits for the year, and we have assumed zero orders for the balance of the years from those two customers. We believe that typically it's minimally 18 months or so for those customers to get approved. Of course, there will be some work in manufacturing and validation, so we'll see some orders, but we're not counting on them. It's great, though, that these customers will make progress to approval because we know in our models for those treatments, they can become a year five, $40–$50 million customers each. And then when they're more at maturity, they could become $80–$100 million customers each. So very, very inspiring for the future, but yes, a shorter-term air pocket that we'll have to go through.
Got it. Moving slightly over to GMP proteins. And so we know that historically, GMP proteins were historically, sorry, 20% of growth in the longer term. But has something changed there? Do we expect to see a lower level of growth going forward, or where do you see that line of business?
The outlook for that part of the business has remained pretty much the same. Yes, we talked about the air pocket, but if you look at the number of clinical trials in cell and gene therapies, actually, still increasing, and then more interesting for us is that the mix in the clinical trials is definitely skewing to cell therapies a little bit away from the gene therapies, and the cell therapies obviously read much better on our portfolio, and in fact, year over year, the cell therapy number of trials increased by 57%, so that is a real good indication. Now, our products, we're one of the early movers, very high quality. We can scale, so we have plenty of access points into that market, and therefore, we think that the 20% is very achievable once we get through the air pocket or underlying the air pocket.
That might even accelerate. Once one or two or three of these customers enter commercialization, there is a true step up in the growth rate.
Got it. And I think last on protein science is Wilson Wolf. I know you talked about that and the acquisition will be complete by the end of calendar year 2027, but you already own sort of 20% of the business currently. So I guess broadly speaking, where does Wilson Wolf sort of sit in the entire portfolio?
Yeah, Wilson Wolf, and I mentioned earlier, they bring the G-Rex, which is typically a one-liter disposable bioreactor. It's very efficient, very cost-effective, and it is currently being used in 45% of all the clinical trials going on globally. So a fantastic position. And this bioreactor, while you want to grow your cells, you would then utilize GMP proteins, the cytokines, the small molecules. And as I mentioned already, we've designed the ProPak, which gives you a closed system to put all these high-value reagents into the bioreactor. And it really enables scaling as well as industrialization of the cell and gene therapy market. And that's, I think, the missing link at the moment. So that will really help addressing the future growth. And then the go-to-market, I mean, those are the same customers as our GMP proteins and that will use the G-Rex.
So there's also synergies on the go-to-market and how we can collaborate. We're already doing so, but that certainly will improve, increase while we own it.
Sure. Sure. We can move on to diagnostics and spatial biology. And so when we think about that, maybe let's take a step back for a second, just broadly speaking, products and the end markets you're addressing with the business.
Do you mind saying that again?
Sure. No. So, discussing the spatial biology, where are the products and primary end markets you're addressing?
Yeah. Thanks for asking. The spatial biology franchise, I'm very proud of it and how we've built it. Actually, it addresses the translational and clinical part of the market. I talked about the market being $5 billion. The translational and clinical part is about 75% of that. If you think about, as a scientist, you'd really want to know which RNAs are active. So you want RNA detection on the molecular level that we can provide with the ACD RNAscope portfolio, and I mentioned 75,000 probes and the vast opportunities you have there. On the other hand, these RNAs, they typically become a protein or they block a protein from popping up, and that means that you really would like to see what happens on the protein level, and for that, we're building critical panels based upon our spatial antibodies, and those are fantastic consumable revenue streams.
The one thing you really need is a unique instrument that is high throughput and fully automated. And that's what the COMET brings us. That gives you then capabilities in multi-omics. And then most recently, we also launched an RNAscope, which gives you the capability of looking at protein-protein interaction, which is also pretty unique in spatial. So overall, that portfolio is doing really, really well. And I'm really happy with the position we're in.
Okay. More of a getting towards a broader macro question here. So we know that academic and biotech funding uncertainties are about, right? And so when you think about that from the business of spatial biology, what do you think is going to take to have an improvement in demand there?
Yeah, I think the normalization of the markets is a foundational improvement because that business has large participation in academic as well as in biotech. So the underlying improvement of the markets is an important one that will help all those float higher. But then again, we also are working on the pull-through, right? So every instrument right now pulls through about $45,000 per year per instrument in consumables. Adding the RNAscope as well as our spatial biology antibodies on there, we are aiming to get a $90,000 pull-through of our reagents on this instrument per year. So that really would help the growth. In the meantime, the multi-omic capabilities and the new capabilities in proximity scope for the protein-protein interaction are very important innovations just as well. And that will give us meaningful growth.
Okay. Thank you. We'll switch now to more insights in the future, innovation, and things like that. And maybe just to kick off, let's look into calendar year 2026, 2027. What kind of gets you the most excited about the business?
Most excited? Well, as I talked about, our DNA being an innovation and guided by, of course, our broad market know-how. Innovation is very important. It has been and it will continue to be. We spend 8% of our revenues in R&D, and we have really transformative new products coming to the market. We have a group of AI-designed proteins, and we will continue to launch those because their heat stability as well as the hyperactivity are true enablers in cell therapy. I mentioned the ProPak. We will broaden the different prototypes in that portfolio. We launched Leo, which is the 100 capillary high-throughput automated Western blot system. If you look at that, 24 plex results within three hours is really record-breaking, so a very, very inspiring launch. Ella has already fantastic market adoption, is entering the diagnostic space. Some companies are using it as a diagnostic tool.
And then on top of that, the launch of our ultra-sensitive cartridges in the second half of this second half of our fiscal year in the upcoming quarters is going to be bringing us into the neurodegenerative as well as the inflammation area. And that's also very, very exciting. I mentioned already the RNAscope for spatial is a real novelty. And then I'm excited to see the traction we also generate in the molecular diagnostics business. It's a little smaller, so we don't talk as much about it. But if you look at our exosome-based ESR1 detection kit, it gives you the ability to look at the ESR1 monitoring. And with that, you can truly improve the life expectancy of patients by doubling it. I mean, that's a fantastic tool that we're providing into the market that has a real change on patients' experiences.
And then last but not least, the Oxford Nanopore kit for carrier screening is a very interesting tool too to improve the quality of health. So yes, basically new product introductions.
Great. Good. And it sounds like a lot more to come there. So excited to hear that. I know we've got about less than two minutes left, so I'll wrap up with just one question here. So getting into fiscal 2026 specifically, are you still anticipating low single-digit growth for the year? And what are the primary assumptions behind this?
Yeah, I mentioned it earlier. We still expect low single digits. That's what we said in our previous earnings call. And we don't revise that up until our next earnings call in a month from now. Yeah, I think that we are going to get through this air pocket that we mentioned earlier, right? That's really what's driving our results at the moment. In the meantime, I talked about our assumptions in improvement of underlying markets. And you can then do the math. We will talk about the headwinds and quantify them. So then you can do the math as to what is the underlying business doing minus the 400 basis points for Q2 and then what our actual result is. So I think that air pocket as well as improving markets are really what's driving the low single digits.
Great. Got it. I know we have about 30 seconds left. Any final thoughts that you want to leave with the audience?
We talked about innovation being part of our DNA. M&A is that as well. We are less than one times levered. We would like to continue our M&A streak and, of course, very educated, very disciplined. We would like to build on our cell therapy business, our organoids, as well as our proteomic analytical research instrumentation, as well as our core portfolio. That's our interest from that point of view and is still a very important pillar of the company.
Thank you, Kim. Thank you for your time.