The key providers of discovery, development and commercialization reagents for next generation therapeutics and diagnostics. We finished 2025 with $40.5 million in revenue, 7% growth. We have over 3,000 active customers. These are active customers that purchase products every year from us. Just to put it in perspective, like, Amgen is one of those 3,000, right? So lots and lots of end users at the end of the day. Over the last five years, we've really taken a business that was grown through the years by providing great quality products for discovery and built out the capability to support these clinical therapeutics and diagnostics. You can see that in our clinical customer growth of 25%. We're now supporting 60 clinical customers, over 70 therapies in clinical trials.
24% of our revenue is from cell and gene therapy. Excited about the business. I think this is a turning point for us, where we have some big milestones coming up in 2026, 2027 around, you know, supporting commercialized therapeutics and diagnostics, about turning adjusted EBITDA positive. I'm just really excited about where we sit as this market starts to recover. We support three primary products in the market. The first is Agar Plates. You can see that picture there. Those look like Petri dishes, and that's exactly right. This is for growing bacteria or fungus, very often used in discovery processes when you're trying to express a protein or environmental monitoring in clean rooms. The second is liquid microbial culture media and supplements. This is the liquid version of growing bacteria.
If you're manufacturing plasmids, for example, you put bacteria in a bioreactor, and you need the food to feed that bacteria. That's what we sell, obviously, in bottles and bags and tubes. And the last piece here, and the largest portion of our business, are molecular biology reagents. Think about your seventh-grade chemistry class, acids, bases, buffers, different solutions to purify DNA or purify RNA or proteins or manipulate different reagents, and things along the way. Widely used across both the therapeutic and diagnostic market segments. From an end market perspective, 50% of our business is sold to biopharma. This includes CDMOs, biotech, large pharma. You can see over 1,000 accounts in this space. The majority of our revenue actually comes from biopharma. We have about 400 accounts in tools and diagnostics, right?
That represents about 30% of our business. The remaining 15% is a long tail of customers for everything from academic to food to animal health right across the board in this long tail of customers. We have 5% of what we call non-product revenue. That's more freight, shipping, stability studies, service fees, expedite fees, that sort of thing. You'll see in our revenue, you know, we have a disaggregation that separates what's called Lab Essentials from Clinical Solutions. Lab Essentials represents what we call Research Use Only products. Those are products for use in research, not for use in manufacturing therapeutics and diagnostics for commercial use. That is the majority of our business, about 75%.
Within there, the largest portion of that, about 80% of that 75% or 60% of our total revenue, is what we call catalog products. These are products that we inventory and ship within the next day when a customer orders. This supports the broad base of customers, a very diverse segment for us, and is very repeatable and predictable, as you'll see going forward here in a minute. The remaining 15% in that 75% is custom products for Research Use Only. This supports where we do some private labeling for some tools customers. We do some private labeling for other types of diagnostic customers that are using this in laboratory-developed tests and like. The other 25% is made up of that other category, the non-product piece, but also 20% in Clinical Solutions.
Unlike the Lab Essentials business, 90% of this Clinical Solutions is custom. This is where customers give us their formulation and ask us to make it in our production under a GMP environment, so they can use it for manufacturing, say, their therapeutic. We have a small portion that is catalog here. These are standardized reagents that just go into their clinical workflow all the time, but the majority of that business is custom. Ultimately, why do we win? Why are we positioned for against some of our competitors here? I mean, the first piece here is this link between research and commercial therapeutics. We have this broad base of predictable, stable, and growing Lab Essentials business with this catalog portion, right? That's where we get these lots of orders every day, ship them out.
They're like $50-$75 per unit here, and that provides this foundation. We can take those customers and migrate them to custom products or to GMP products. You can see on this, on the left-hand side here that as you do that, their average spend goes up significantly. This allows us in the door and helps them go from, you know, discovery through development to commercialization. The second piece is our batch sizes, right? We do lots of work orders every day, right? We can do small batches, and we can do it cost-effectively. The industry has been set up in the space for large batch production of the same product. You do 10,000 liters, and then you get the exact same thing out the door.
In the new areas of diagnostics or therapeutics, what you need is much more smaller custom batches of products, right? Less than 1,000 or 2,000 liters, all the way down to even the hundreds of liters, right? This custom piece of the smaller batch size allows us to serve this better than some of the larger players in the space, which are very good to do the big stuff, but they cannot do the small batch stuff. That ties to the last piece here, speed of turnaround time. If you order a custom formulation in 100 liters, you might be waiting 12 weeks or 16 weeks from some of the other players, where we will get it in production within a week. That is a big game changer for these customers, whether they're working on a clinical trial or a diagnostic.
You know, the fact that we can reproducibly make their product specifically to them and get that out the door is one of our biggest differentiators. Why, why can we do this and others cannot? I have two pieces here. I'm going to start on the left. This really comes back to how many batches we do a day, right? I have a graph here where the Y-axis is cost per liter, the X-axis is the batch size, right? What you see really clearly is the number of batches today per day will drive down the overall cost per liter significantly, particularly as you get to small batch sizes.
The way we operate, where we can make these catalog products in hundreds of liters all the time, and then if someone needs a custom product, we can slot that in, use the same people, use the same overhead, the same facilities, the same QC to make that happen, really drives down our cost and makes it much more affordable for us to present that product to them and others in the space. On the right-hand side, I've kind of laid out, hey, this is how we do this, right? It's really hard to set up a business to scale this way. Sure, a small company can take some custom orders, but can they do 40 work orders a day and do it effectively? And then having that demand for all those small orders actually gives you a big advantage.
The first piece here is around dynamic capacity. I think this is a really important one that's often missed with our business. The fact that we make these products that go to inventory and custom products using the same overhead in many cases allows us to say, "Okay, we get this big custom order in. Instead of manufacturing these products that go into stock, we're going to use that manufacturing resources to actually make these custom products," and swap seamlessly between these two pieces, right? That allows us to do full manufacturing utilization during that time without having to you know, create a new overhead, right? You know, you can imagine if you were just running this custom, this would be very hard and almost impossible to be profitable, especially at small scale.
The fact that we have this dynamic capacity between catalog and custom products is a huge asset. From a how-do-you-scale perspective, those next two bullet points are critical. We built our own IT and systems right from the ground up that will scale all the way to $200 million of revenue. That's everything from customization of ERPs and manufacturing execution software and everything like that, so that we can actually scale this. We also have our own internal engineering team to make this happen as well. In the integrated supply chain, right? It is Thursday today, and we don't know exactly what we're making on Monday. You can imagine how hard that would be to set up. We need to have all of the right raw materials on-site. Luckily, we have that catalog business to help us with that.
To source them, get them to the right location and out the door, so this supply chain automatically running is critical. The last piece here I just want to touch on is around the know-how. You need to know how to make these formulations if you don't know what's coming in. We can look at a formulation, we can automatically route it through production, knowing that, hey, this product needs to be mixed at a certain temperature, this one needs to be done in a glass vessel versus a bioreactor based on the formulation. That comes from 30 years of know-how. This is why we think that we're in a great position as we start to scale and support these customers. Now I want to transition to sort of what are the key takeaways.
Like where are we now, and why are we so excited over the next couple of years? The first piece here is that we are already now a critical supplier of GMP reagents for therapies and diagnostics. The second piece underneath that, we are supported by this great Lab Essentials business that is not only diverse, but it's grown. It's grown 11% since 2008. As we grow, we're going to drive significant leverage to our P&L. We have some catalysts that are creating some tailwinds. Quickly, I just want to touch on this. This is the number of clinical customers that we've onboarded since 2020. You can see we've gone 13 to 60 with a 25% growth between 2024 and 2025. Purple represents the therapeutic companies.
Orange is the non-therapeutic, more diagnostic or private label. This is looking at those therapeutic companies specifically. We're supporting over 70 therapies in clinical trials. You can see on the top here, what this illustrates is that from phase I to commercialization, we expect about a 30-fold increase in purchases from a specific therapy along the way. On the bottom shows where the therapies we support sit, right? We have five in phase II or phase III, of which we expect at least one to be commercial by the end of 2027, and you can see that scale is about a 10-fold increase when that happens. We have 12 in phase I and well over 55 in the preclinical. These are moving down.
We used to only have three in phase II or III in last year and 10 in phase I. We're seeing the right momentum here. As, of course, as more of these go through commercialization, we'll see some growth. The other clinical customers, like I said, do a lot of private label. We do some work in liquid biopsy and cancer screening. We do some private label of products that are used in bioprocessing for their therapeutic customers. You know, this is also a very exciting end market for us where we're getting some diversity in that Clinical Solutions business. Now, just to touch on the Lab Essentials piece, right? I think this, like I said, may be unrecognized in the space that how diverse this business is.
I said over 3,000 customers, but from a concentration perspective, the top 10 of our customers represent only 18% of our revenue. This is very rare in this space. We don't have a single customer over 5% of our revenue here. On the right-hand side, you can see the different end markets we serve and the length of tenure these customers have been with us. Most of these well over 10 years with us, right? This is not new. We're not adding, you know, big customers right away. We've built this block by block, and it's growing, right? I'm just going to jump to this slide. This is the revenue since 2008 of this Lab Essentials business. You can see we've grown on average 11%, and it's relatively consistent.
The one piece, obviously, in the pandemic, we had a big surplus here. That said, you can see the last couple years, we are back onto that 11%-ish growth over time, and we expect that to continue. Very excited about these two pieces. I'm going to hand it to Matt here to talk through how our P&L changes as our revenue increases.
Thank you, Stephen. Yes, we're very excited. We've been spending the last several years building some substantial capabilities, and then because those things are largely built at this point, it gives us a significant opportunity to get towards profitability and then become profitable in the near future. One of those investments, the most significant we have, is that we've built a brand-new GMP production facility, and you can see a picture of our colleagues here celebrating a win on the right. The great thing about this facility is that this, along with the other facilities that we already have, can allow us to grow to about $200 million in revenue without very limited additional capital investment.
It's not just the hard assets, the buildings, the clean rooms, everything else, which are very important, but all the infrastructure around it, in particular the IT infrastructure, and other customizations that we've done in the facility to be able to do many batches a day, as Stephen was mentioning earlier. A substantial investment that is basically completed. Go to the next slide, Stephen. A little bit of the numbers here to show our journey, and this starts in 2022, and the last year is 2025. We have effectively held our revenue constant through a very difficult period in this market. The biotech funding had dried up starting in 2022, and in spite of that, through our efforts, we have been able to maintain this business that grew substantially during the COVID period.
At the same time, we've also worked very tirelessly to pull costs out of the business during this difficult period, and in particular, with the dotted line there, you can see that's the number of people we have to run the business has dropped by about 50% from roughly 300 to roughly 150. That has narrowed the losses substantially, a $7 million adjusted EBITDA loss in 2025, but that puts us in a great position as we look forward and anticipate future growth in 2026 and 2027. In fact, we've laid out there that we do expect to be adjusted EBITDA positive by the end of 2027. Specifically, we've called out that revenue range to be between $52 million and $57 million on annualized basis.
Said differently, $13 million-$14 million revenue quarters will be about the time that we turn Adjusted EBITDA positive. The main thing to think about is, if you want to go to the next slide, Stephen, is the fact that each new dollar of revenue results in about 70% of that revenue dropping through as profit to the bottom line and gross margin in particular, which is what we focused on in this slide. In the graph, you can see the historical 27% margin in 2024. 25% was a significant boost to 33%.
As we grow the revenue further, because of the 70% metric, that's been proven out already, we will be at 55%-60% when we double this business to roughly $80 million, right? Even as we may expect further growth for there, with the leverage we have, we'll be at 65%+ as the company scales. We're very excited about this push towards profitability, and it will come quickly because of this high fixed costs that we have and high contribution margin going forward. Lastly, we'll just talk about a couple of the catalysts beyond what we've already discussed. One of the big ones is the fact that we are making an additional investment in this business.
For the first time in several years, we're investing rather than cutting costs, and we believe it's the right time to do so because of the positive trends in the market, in particular with biotech funding, and other conversations we've been having with customers. We're putting $2 million to work, which is a reasonable size investment for us. We're putting it into resources in the field. First and foremost, that will allow us to expand the number of companies we can engage with. Secondly, we're putting money into promotion and promoting our brand through marketing activities, including things like attending more trade shows as we target a broader customer base that is a good match with our capabilities.
Lastly, we are investing in some resources and tools to help once those leads come in to qualify them and convert them so that we have the best chance of success when our sales force interacts with those. We've got some cool things going, including an AI-based tool. That may have some impact in 2026, more likely in 2027, but that is an upside if some of it we see that benefit happening sooner than later. Next one, Stephen. Then this chart on the right, the purple bars show biotech funding, and the orange line shows a portion of our revenue that is very closely tied to biotech funding, and that's the biopharma revenue that we have from custom products, and generally there's about a three to four quarter lag.
When funding goes up in the industry, we will see that three to four quarters later in our revenue line, and that's been pretty good predictor in the past when it goes up or down. As you may be aware, Q4 2025, as shown in the chart, was a very strong biotech funding quarter, and it's continued here through Q1. We don't have a full quarter yet, but it's been another strong quarter. If this persists, this could be an upside as well. We haven't baked that into our guidance, but I think if what we expect happens, then it'll be a positive for our business also in 2026.
Lastly, this is for 2026 or beyond, we are taking now that we're in a stronger position to look at M&A opportunities and collaborations as well. There are some potential products that we could add to our portfolio, some of which are listed here, that would be additive to the story. In addition, there's a possibility of geographic expansion because we are 95% of our revenue in the U.S. There are some nice opportunities, particularly in Europe. It could be some other businesses that represent these product or geographic fits that we'll look at, but only if it makes sense. We are not compelled to do this, but if it makes sense, the right value's there, and it doesn't push out our timeline to cash flow positive, we will look at these transactions.
This is our team, and these are the people that make it happen, extremely important. I think importantly, this team has been together for three to four years already through this difficult period and we have a wide range of expertise and we're all very excited about the future. Just to conclude the deck here, Stephen highlighted the two aspects of our business. This very steady, you know, research-based catalog business is the foundation, and that's growing at a healthy clip. On top of that, we have this exciting Clinical Solutions business, which the number of Clinical Solutions customers keeps growing, creating further future potential as they move down through clinical trials and spend more with us.
As these things work together in tandem, these are our financial targets that we have on the right-hand side. We believe that 20%-25% top-line growth is well within reach, 60%-65% gross margins, and 25%-30% Adjusted EBIT margin. Happy to talk more about the business, but thank you for your interest here.
Great. Thanks for the update. The biopharma customers, if those products get FDA approved and into the market, those custom products, is that a Clinical Solutions product or a Lab Essentials product?
Clinical Solutions products. Clinical Solutions represent all of our products made under GMP. Those would need to be made under-
Mm-hmm
GMP, and that'll be in Clinical Solutions.
Is that a more profitable product for you than the lab products? The Lab Essentials?
Yes. I would say generally so. The unit economics and the Clinical Solutions products are better than the Lab Essentials, although the Lab Essentials certainly has a healthy profit margin too. On the margin, yes.
I assume if a product goes into production, the order to you goes up by a magnitude of 10 at least, right?
Yeah. It's about a tenfold increase from phase II, phase III to the commercial. That's, you know, often these clinical trials are for small numbers of patients, 20, 30, and then, of course, they're treating much larger population bases. We expect about a tenfold increase.
Just sorry, I don't remember. How many products do you have in phase II and phase three at this point?
We have five therapies we're supporting in phase II or phase III, and we expect to start supporting a commercial therapy sometime in 2027.
All right. Because I'm looking at your guidance for 2026, you know, you know, mid-single-digit top-line growth. Then you think you'll hit break-even by the end of 2027 and, you know, to get to that $55 million runway, you know, you're looking at 20%+ growth in 2027. Is that assuming some of these products getting to the clinical stage or?
Yeah, I do. There's a couple of reasons why we think that's going to happen, Jim. I mean, the first thing is just about the guidance in 2026. Yeah, we basically assume that growth will be similar to 2025 growth, but there are some upsides to 2026 itself, which is that our commercial investment pays off sooner and also that this biotech funding if it persists where it is, that could also impact us in 2026. 2027 is certainly going to be a bigger growth year for the reasons we just talked about, both biotech funding and the investment, but also due to the fact that we have you know, at least one customer that's going to turn to a commercial phase customer in 2027 where we see those volumes multiplying significantly. Yeah, it seems like a large percentage.
Obviously, we're a small company, so the dollars don't need to be that huge to get to those kind of numbers, particularly when you have some that may, you know, see a tenfold increase. We're feeling pretty good about that growth for both this year and 2027.
Now that you have your production facility complete, I assume that revenue, the majority of that extra revenue just drops right down to the bottom line.
Yeah. We'll use that 70% rule. I mean, certainly it's going to vary. There's going to be some higher and lower than that 70%, but I mean, we do have some variable costs, but there's a very high fixed cost. Yes, it'll be highly profitable revenue as it comes in.
The biotech pharma funding, you measure just the number of IPOs there or, you know, how do you measure that?
Yeah. There's a lot of reports out there that combine biotech funding from a IPO, private placements, but also venture capital. You know, all the pieces together for biotech funding. We just track that on a monthly basis, and like Matt said, Q4 was a great increase. We really need to see this sustainable, right? There needs to be lots of companies. So far, Q1 also looks like that, so we're pretty confident it's going to continue through the rest of the year.
Well, the fact you're investing that extra $2 million I think means that you're fairly confident that that's sustainable.
Yeah.
You know, can you give us a sense? You said part of that will go to an expanded sales force. You know, how big is your sales force now and how big will it be once you expand it?
Yeah. We've already done the expansion. We decided to do this in the fall, and so we actually started the new individuals in January. It's a pretty small sales force in the field. We don't need many people. Less than 10 in the field, and they're very focused on the target opportunities that are out there. We have a team internally that does a lot more of what we call the farming, right? The customer service and then managing existing customers, identifying which customers then can be migrated to that customer GMP. This is a, you know, just a couple individuals that have a ton of experience in the space around tools, diagnostics in large pharma.
The fact you're U.S.-based, is that a competitive advantage and, you know, because of the tariffs? Is that helping you?
It can, it can be. I mean, certainly there's lots of groups that want to buy from a U.S.-based manufacturer, and so we are one of those. The onshoring is probably a more of a tailwind if and when that happens, right? We're starting to see some movement there in building facilities, but it'll take a little bit of time till the actual orders start rolling in from some of the onshoring of the manufacturing therapies.
I think about $20 million you have cash on hand, plus your line of credit. Is that enough to get you through cash break-even?
Yes. Yes, Jim, we believe so. We have the $21 million at the end of the year in cash and liquid securities. We have, as you mentioned, a $5 million unused line of credit also. With this kind of, you know, profitability, the 70% drop through, the growth rates we're expecting, especially heading into next year, we feel confident we have the capital to get to cash flow positive with our organic strategy. If we have some kind of an M&A deal that works out, that would be a separate consideration. To just execute our organic story, which is very strong, yes, we do.
You know, the revenue growth you're anticipating, is that mostly from going deeper into the existing customer base you have, or is that growing customers overall?
Ask that again. I'm sorry. Is the what?
Do you expect to get to those, you know, those higher revenue numbers by selling more to your existing customer base or by adding new customers?
Yeah. I mean, I think, you know, in the U.S., we actually cover almost all customers to a certain extent, so it's a little bit more migrating. It's more new clinical customers, right? Getting to the right GMP customers and then onboarding them and going down that pipeline. Also don't forget that Lab Essentials business has been growing 11%. The combination of the Clinical Solutions ramping up and that baseline growth 11%, that's why we think we can get to 20%-25% growth.
The Lab Essentials business is primarily a catalog business. You know, how do you grow it so consistently?
It is. 80% of that is catalog, and we are differentiated in that catalog business by the breadth of portfolio we offer. We offer all the formulations customers would want in whatever size they would want, and that has to do with our manufacturing capability. A lot of the growth also comes from these private label and the other customization we do in that remaining 20% of that Lab Essentials business, right? Where we're benefiting from being a supplier to cancer screening companies or to spatial genomics companies or to enzymes being used in sequencing or to sequencing companies, right? We tend to get into these sort of high growth areas early stage and then expand within there, and that has proven since 2008 as a great business proposition.
The sales team you have on hand now, I mean, is that primarily selling the Clinical Solutions products or?
Yeah. I mean, I think they do both. They absolutely do both, and then they're really looking at these higher value opportunities and not, say, the small academic and others that will buy maybe a couple thousand dollars a year. That is done through our distributor partners in the U.S. They're more focused on these custom larger value order opportunities, whether it's tools diagnostics or clinical solutions. I will say historically, the last three years, we've been much more focused on the therapeutic side, hence the investment now more in the tools diagnostic side, because I think there's a big opportunity there for us to grow.
All right. We are at time. I mean, is there any closing comment you want to make?
Yeah
to set up the investment thesis?
I think you've heard it. We're excited. We think this is a good business. We've worked very hard to put ourselves in this situation and are excited to enjoy the next couple of years of seeing the strategy come to fruition. I just want to thank you again, Jim, and Sidoti for the support. We have a great line-up of meetings this week and always appreciate coming to the show.
Yeah. Thank you. I mean, you were with us a few months ago and, you know, you're back here. You can definitely see significant progress, you know, in that time. Look forward to seeing you again, getting another update.
Great.
Thank you, Jim. Thank you, everyone.