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Tuesday, Repligen Corporation (NASDAQ:RGEN), currently valued at $8.4 billion, received a reiterated Outperform rating and a maintained $200.00 price target from Leerink Partners, following the company’s acquisition announcement. Repligen has acquired the bioprocessing desktop portfolio from an undisclosed company, which includes REBEL, MAVERICK/MAVEN, and ZipChip, for $70 million. This acquisition price is approximately six times the expected 2025 sales and five times the 2024 sales. According to InvestingPro data, Repligen operates with a moderate level of debt, with a debt-to-equity ratio of 0.33, suggesting financial flexibility for such strategic moves.
The acquired portfolio, which currently has around 450 installations, is anticipated to contribute approximately $12 million in sales for Repligen in 2025, which is slightly below consensus estimates of $13 million and Leerink Partners’ own estimate of $14 million. For the current year, the acquisition is expected to add $10 million in inorganic sales to Repligen’s current revenue base of $634 million. Despite being marginally gross margin accretive to the company’s current 50.4% margin, the deal is predicted to dilute earnings before interest and taxes (EBIT) by 50 basis points in the current year as Repligen integrates an initial team of about 60 employees from the acquired company.
The acquisition is seen as a strategic move for Repligen, bolstering their upstream capabilities and complementing their existing process analytics technology (PAT) portfolio, which already includes C-Tech. The integration leverages Repligen’s established sales force, which is well-versed in selling into process development and bioprocessing markets. Among the acquired technologies, MAVEN/MAVERICK and REBEL are expected to play a significant role in Repligen’s long-term PAT strategy. However, Leerink Partners views ZipChip as a non-core asset and anticipates it may be a target for divestiture in the future. For deeper insights into Repligen’s strategic positioning and financial outlook, InvestingPro subscribers can access comprehensive analysis and additional ProTips in our detailed research report.
The strategic acquisition is aligned with Repligen’s growth plans, as the company seeks to enhance its offerings in the bioprocessing space. While currently not profitable over the last twelve months, analysts expect Repligen to return to profitability this year, with projected earnings per share of $1.73 for 2025. The initial cost of integrating the new employees and technologies is expected to be offset by operational synergies over time, according to Leerink Partners’ analysis.
In other recent news, Repligen Corporation reported its fourth-quarter 2024 financial results, revealing a slight revenue increase to $167.5 million, up 1% from the previous year. The company’s adjusted earnings per share (EPS) for the quarter were $0.44, a decrease from $0.48 in the fourth quarter of 2023, and below Benchmark’s expectations of $0.50. Despite this, Repligen’s orders increased by 11% during the quarter, although adjusted gross margins declined. H.C. Wainwright reaffirmed a Buy rating with a price target of $180, noting that Repligen’s revenue aligned with their estimates, and the company’s guidance for 2025 projects revenue between $685 million and $710 million. Canaccord Genuity raised its price target for Repligen to $170 while maintaining a Hold rating, citing modest margin expansion. KeyBanc Capital Markets reiterated an Overweight rating with a $220 price target, emphasizing the company’s strong performance and positive indicators for the bioprocessing industry’s growth. Repligen’s recent acquisition of Tantti Laboratory Inc. and the launch of AVIPure dsRNA resin are anticipated to drive future growth. Jefferies analyst Matthew Stanton noted the market’s positive reaction to Repligen’s solid fourth-quarter performance and optimistic 2025 guidance.
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