Bullish indicating open at $55-$60, IPO prices at $37
On Tuesday, KeyBanc Capital Markets maintained their Sector Weight rating on CryoPort Inc. (NASDAQ:CYRX) shares, as the company announced a significant divestiture and strategic partnership. Currently trading at $6.08, the stock has experienced significant volatility, having declined about 22% year-to-date according to InvestingPro data. CryoPort has agreed to sell its CRYOPDP business, which accounts for approximately 30% of the company’s projected fiscal year 2024 revenue, to DHL for around $195 million in cash.
The transaction is poised to substantially transform CryoPort’s balance sheet. Post-deal, CryoPort is expected to have roughly $450 million in proforma cash. This influx of capital may enable the company to pay down approximately $184 million in Convertible Senior Notes due December 1, 2026, and roughly $200 million of 4.0% Series C Convertible Preferred Stock that pays interest in kind. InvestingPro data shows the company maintains a strong liquidity position with a current ratio of 5.29, indicating robust ability to meet short-term obligations.
Furthermore, the sale positions CryoPort to potentially grow alongside its cell and gene therapy (CGT) customers. These customers are anticipated to experience a compound annual growth rate (CAGR) of 31% from 2024 to 2030. Post-divestiture, CryoPort’s proforma fiscal year 2024 revenue from Life Science Services is expected to be approximately 84% leveraged to CGT customers, up from 45% prior to the sale. The company’s current revenue stands at $228.4 million, with InvestingPro analysis showing additional growth metrics and 12+ exclusive ProTips available to subscribers.
The strategic partnership with DHL is set to leverage DHL’s extensive global network and cost-efficient scale, which includes 382 jet aircraft. This collaboration is expected to enhance CryoPort’s market position as it currently delivers 17 approved commercial therapies, with over 10 potential blockbuster launches forecasted by 2030. The partnership is anticipated to further solidify CryoPort’s market share, which stands at over 70%.
The deal is expected to close within six to eight weeks. KeyBanc has released a proforma earnings model to account for the impact of this transaction on CryoPort’s financials.
In other recent news, DHL Group has acquired CRYOPDP, a specialty courier with a focus on clinical trials and biopharma logistics, in a move to enhance its Life Sciences and Healthcare services. This acquisition is part of DHL’s strategy to expand its Pharma Specialized Network, which already generated over EUR 5 billion in revenue in 2024. Concurrently, DHL has entered a strategic partnership with Cryoport, Inc. to bolster global supply chain services in the life sciences and healthcare sectors. The deal is subject to regulatory approvals and aligns with DHL’s Strategy 2030, focusing on temperature-controlled networks and integrated solutions.
Cryoport, Inc. has also been active, unveiling the MVE Biological Solutions’ High-Efficiency 800 C cryogenic freezer, designed for fertility clinics and biorepositories. This freezer aims to improve storage capabilities and enhance workflow efficiency in labs. Additionally, UBS analyst John Sourbeer upgraded Cryoport’s stock rating to Buy, setting a price target of $10, citing the company’s strong position in the cell and gene therapy sector.
Meanwhile, Jefferies analyst Matthew Stanton has adjusted Cryoport’s price target to $6.50, maintaining a Hold rating. Stanton noted that Cryoport’s recent earnings slightly exceeded expectations, but emphasized the need for more clarity on the company’s growth strategy. These developments reflect ongoing interest and activity in the life sciences logistics sector, with both DHL and Cryoport making strategic moves to strengthen their market positions.
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