Harvard Bioscience at KeyBanc Forum: Strategic Growth Amid Challenges

On Wednesday, 19 March 2025, Harvard Bioscience (NASDAQ: HBIO) participated in the KeyBanc Annual Healthcare Forum 2025. The company, led by CEO Jim Green and CFO Jennifer Cody, addressed both opportunities and challenges. While highlighting growth strategies in new products and market expansions, they also acknowledged pressures from stock price fluctuations and NIH funding changes.

Key Takeaways

• Harvard Bioscience is focusing on new product development and market expansion, especially in bioproduction and organoids.
• The company is navigating challenges like NIH funding changes and stock price pressure due to market conditions.
• Debt refinancing is a priority, with efforts to secure a flexible solution by June 30th.
• Approximately 40% of the business is recurring, providing stability amidst market fluctuations.
• The company anticipates growth from biosimilar development and increased focus on neurodegenerative diseases and cancer research.

Financial Results

• 2024 Revenues: $94 million
• Adjusted EBITDA: Approximately 8% of revenue
• Recurring Revenue: 40% from consumables, software, and services
• Geographic Revenue Split: 50% Americas, remainder between Europe and Asia Pacific
• Customer Segment Split: 50% Academic/Research, 50% Industrial (biotech, pharma, CROs)
• Debt Interest: 8% on $37 million, with $1 million/quarter principal payments

Operational Updates

• New Products: Focus on electroporation and mesh MEA organoid platforms
• Expansion into Bioproduction: Collaborations with top biopharma companies, generating $1 million/year in consumables revenue
• Sales Channel Expansion: New distribution relationships with Fisher and VWR to boost sales

Future Outlook

• Strategic Focus: Growth in bioproduction, organoids, and electroporation
• Tailwinds: Resurgence in biosimilar development and research on neurodegenerative diseases and cancer
• Debt Refinancing: Active efforts to refinance by June 30th to optimize cash flow

Q&A Highlights

• Product Strategy: Driven by customer needs and industrial application
• NIH Funding: Represents 8-9% of business, with adjustments to maintain profitability
• CRO Market: Stabilized with expectations for the new SOHO platform adoption
• Biosimilars: Increased demand for preclinical testing is a positive trend

In conclusion, Harvard Bioscience is strategically positioning itself for growth while addressing current challenges. For a detailed understanding, readers are encouraged to refer to the full transcript below.

Full transcript - KeyBanc Annual Healthcare Forum 2025:

Anna Snipkowski, Associate, Life Science Equity Research Team, KeyBank: Good afternoon, everyone, and welcome to KeyBanc’s Healthcare Conference. My name is Anna Snipkowski, and I’m an associate on our life science equity research team here at KeyBank led by Paul Knight. I’m joined today by the Harvard Bioscience Sciences team, Jim Green, who’s the CEO, and Jennifer Cody, who is the CFO. As a quick reminder, after the introduction, we will open it up for q and a. So feel free to email myself at anna.snobkowski@t.key.com, or you can also post in the chat below if you have any questions.

Maybe to start, I will hand it off to Jen to go over a quick financial overview.

Jennifer Cody, CFO, Harvard Bioscience: Good day, everyone. What I’m gonna do is I’ll give a quick intro of the company, and then I’m gonna hand it back to Anna and Paul to do some q and a with Jim, and, we’ll we’ll start there. So I’m gonna introduce just the company at a high level for those who you are not familiar with it. Harvard Bioscience, I’m gonna skip over some of these things. This presentation can be found on our investor website.

But just at a high level, our company is a provider of life science tools that helps support academic research institutions, CROs, biotech and pharma companies in the full end to end process of drug development. The company has two major areas of the business, cellular and molecular and preclinical systems, each of which make up about half of the business. We have three primary locations. We’re headquartered just outside of Boston, Massachusetts. We have a manufacturing location there, in Minneapolis and also in Stuttgart, Germany, where we also do some of our research and development.

The company has about three fifty employees. We completed 2024 with revenues of 94,000,000 and adjusted EBITDA just about 8% of revenue. About 40% of our business is recurring in nature, which includes consumables, software, services. And when we look at the split between globally, we’re about half shipping into The Americas with the rest split between Europe and Asia Pacific. And then about half of our business is sold into academic and research as opposed to the other half, which is with industrial customers, biotech, pharma and CROs.

So with that, I’m going to hand it back. We’ve got a lot going on with the company right now, and I’m sure Jim can introduce himself and share a little bit more.

Jim Green, CEO, Harvard Bioscience: Thank thank you, Jan. Yeah. I I thought we should just go ahead and and get right to, you know, what what really is concerning, investors today. Many of you know me. I’m Jim Green, CEO.

I was, many of our investors knew me when I ran Analogic, ten years as CEO there. Many of our institutional investors came here over as operating CEO here. So, you know, just I think, you know, the the question really is what what’s going on with stock price? This company, historically, if you look at our margins in the space that we’re in, we typically sell for our EV. EBITDA is about 15.

So you would typically expect to see us trading at, you know, 15, maybe 18 times EBITDA. And here we are now, we know what the stock price, that’s, you know, really, very much under pressure. You know, some of the things I’ll just give you a little quick highlight of of how we got here. You know, last year, we had, we had, revenues reducing mainly through China and Asia Pacific, with with destocking. You know, felt like we got through that reasonably well at the end of the year.

And also we all know that, you know, life sciences have had some issues, both in The US and in Europe and, you know, but again last year seemed to stabilize pretty well. What what kind of came out of nowhere as many of you know and and are dealing with is is with the change of administration, the change of how NIH is budgeting. That adds a a big piece of noise and and, kinda makes visibility, you know, a little harder for companies like us and others in our space. And at the same time, you know, we were working to replace our debt facility and and, you know, we’ve we we’re now at a point where, you know, I’ve got we’ve got the next few months, so we we expect to replace it. So I know that there’s gonna be questions about, you know, the debt facility that we’re working on.

So you put those things together and, you know, when you’re a small cap company and you got some leverage, that content to scare people away. In general, we’ve always focused on making sure that we have the right level of profitability and the right level of e of EBITDA to fund our our capital expenses. We need to continue to drive new growth and enter these enter new new products into the market at the same time continue to service our debts and pay our bills and and pay our our suppliers and such. So, you know, I thought we’d just take the time to for Paul and Anna to to kind of, you know, let’s walk let’s talk about what really counts. And then and because, again, I you can always take a look at our presentations and learn more about the company itself.

And also happy to talk more some of the technologies if that’s you know, again, as we get through, you know, the next twenty or so minutes for this call. So, Anna, when I turn it back over to you and Paul, if if you wanna walk go go through what some of the burning questions are.

Anna Snipkowski, Associate, Life Science Equity Research Team, KeyBank: Perfect. Thank you, Jen. Thank you, Jim. Maybe to start on a positive note on the new products that you’ve been launching. I know these are in some growthier areas of the market, such as electroporation and that mesh MEA technologies.

So maybe could you just talk to these products? What are the growth rates you expect to see in each of these compared to your base business? And then how will that boost your overall company?

Paul Knight, Equity Research Team Lead, KeyBank: Okay. Yeah. You know, maybe why

Jim Green, CEO, Harvard Bioscience: don’t I just take a minute and walk you through slide eight? Jen,

Paul Knight, Equity Research Team Lead, KeyBank: you wanna can you pull up slide eight for us on the deck?

Jim Green, CEO, Harvard Bioscience: I think it’s one before that. Yep. There you go. Yeah, I think it’s important to know where our products and technologies fit into the drug development cycle. The key ones that I’ll focus on are the one and these are the ones that we’re investing in and do expect and see, you know, growth, you know, growth for in these areas, natural growth.

These are these products are technologies that are essential in the product development or in the drug development cycle. So typically, when when as the development cycle works, you know, a a research company or a pharmaceutical company is working on a new compound. If they’re working on a new compound and it’s a, you know, a new generation where they’re having to actually edit, the genes or edit the RNA or DNA, or is doing some type of a CRISPR CRISPR procedure, it’s, it’s a reasonable assumption that they’re using our BTX technology, for the creation of these compounds. BTX has been, it’s one of our core product lines and technologies and it’s probably somewhere in the neighborhood of eight to 10% of our revenue. If a once a compound’s created, the next step is immediately to go to cell based testing.

And that’s where we are a leader in both patch clamp and microelectrode array systems. So once you have a compound, you’ll typically wanna see how it how it affects an individual an individual, self. And I have to apologize, my computer seems like it wants to go dead on me, so I’m gonna plug in.

Paul Knight, Equity Research Team Lead, KeyBank: Here we go.

Jim Green, CEO, Harvard Bioscience: So again, we’re a leader in, in electrophysiology testing, so our patch plan systems. And then if things go well at the individual cell level, they’ll go to groups of cells and they’ll move to our microelectrode array systems. And that’s where you’re testing a group of cells and that’s essentially kind of a proxy for, typically it’s the brain or the heart, those are areas that you really wanna test quickly. We’ve introduced recently a new a brand new technology where, and we call it the mesh m e a organized platform. So instead of just having a small group of cells that’s sitting in a sitting on a microelectrode array, you actually grow a proxy for the organ.

You actually grow a brain. Typically, it’s based on stem cells, from, you know, even individual even individual people. And you we can test with our system. We can now we can now instead of cells that maybe live only a day or two, these cells and brain cells and such or these brain organoids we’re seeing live up to a year. So you can really start to get a good feel for how a compound affects a, a brain, someone’s brain or someone’s heart tissue.

And you can not only tell if it’s a compound, is it helpful, but you also wanna know, very importantly, is it harmful? So it can act as a filter to help establish which compounds really should go into the next level of testing where a lot where you were starting to spend where you’re starting to get into the millions of dollars of spend. So this is I look on the left hand side, selling molecular technologies, we report this out as and it’s typically it primarily sells into research departments at pharma companies and biotechs and also into academic research sites. On the right side, the preclinical products, this is when you’re starting to do the testing with small animal models. If the, if a compound looks like it’s going to be safe, it’ll then go to large, to small animal model testing for safety and toxicology and then to large non human primate testing.

And here in both these cases, we are the leader. Most every drug that goes through the large CROs and the large pharma companies who’ve used us for many years, will will need to use our implantable telemetry systems to collect the physiologic data from these populations of animals and that’s what’s used to generate the report to the FDA that said, that indicates that this drug is now safe and effective and ready to move into bioproduction and into, into use with humans. So if we go to the next slide, we’ll just go into what are, what are some of the areas that we’re investing in. You know, I look at our core business, which is about 80% of it, and that’s our, it’s made up of our main systems, our data systems. We’ve introduced a new product called, Soho for shared housing.

And with this, this is an adaption now to be able to use the to use do the testing, in the animals in a in a shared housing environment instead of an individual environment. So this is an area where I I see this section is really the base that grows with the market. If the market has headwinds, we will see headwinds. The two areas of expansion for us is into high growth of bio production and electroporation. That’s one area where we’re expanding and I’ll talk to you a little bit about that in a minute on the next slide.

And then the other area that’s really exciting is expanding into the use of organoids and how organoids will make a difference here in the drug development process. So if we go to the next slide and I’ll just take a second to tell you about the new products and how that’s going. And again, as part of our base business, just, just this week at Society of Toxicology, we introduced our new SOHO platform. This is a platform of implantable devices that no longer happy do you have to have an individual animal and an individual cage where you’re monitoring the health of the animal. But you can actually implant the animals with these systems and they can live in groups of how in in a shared environment like they typically live.

That’s really how you wanna evaluate how a drug is affecting an animal, not just their their physiologic health, but their behavioral health. How are they doing? Are they getting up? Are they finding their food? Are they fighting?

That kind of thing you really wanna know. The other area of the neck the second area is electroporation and bridged bioproduction. You know, here we’ve talked about now the adoption of some very large companies starting to buy from us. One of the largest initial launches here, which started last year, was with a top a top biopharma company. And we’re this this first large volume use is being used for a, for an RNA or for for a vaccine type, a new vaccine that’s that’s being used with, companion animals.

Now, why would we be interested in that? Well, the interesting is we’re also, you know, working with a number of companies for human use for these. Like, for instance, if you look on this slide, you’ll see we have a company that’s working with us now on CAR T cell therapy. We also have a company with a new generation therapy. And these are these are not small companies.

These are the big biopharma biotechs that are working with us on this. But it takes a while, and time to get through the process to really go into production where you’re having volume in these new drugs for humans. But by by being able to use the same technology and applying it to, to companion animals, That’s why we’re seeing with this first use of the first version of this, of this vaccine, we’re already up to about a million dollars a year of consumable. And this particular, and it’s a top five pharma company. They, you know, they’re now working to adapt it to another another vaccine and it’ll be one that’s, that’ll be developed and, and it’ll be using the same technology, but it’ll be sold into Europe also for companion animals.

So that gives us an exposure not just to, you know, the developing new, therapies for humans, but also the higher volume therapies for for again for, for companion animals. And the last area is the mesh MEA organoid platform. You know, we introduced this last year. It is expected to be a big part of our growth, you know, late in the year Q4, we placed 10 new systems, with early adopters, including the Mayo Clinic and Stanford. The NIH actually recently adopted this technology for neuro testing.

And for this year, for twenty twenty five, we expect to expand into a number of leading academic sites and also, government labs, both in The US, UK, European Union, including the NIH. And then in the long term for us, and you’ll see this already starting to happen, is to adapt this technology for higher consumable use by industrial users. That means big pharma companies, you know, you look at at, you know, some some of the companies that we’re working with, companies like, you know, Roche and other very large players who work with us who are very interested in starting to adopt some of this technology and, again, developing that pipeline. So, anyway, that’s kind of a look at what’s what I see as the main drivers right now of new technologies, new products that are going to be driving incremental growth for our company going forward. So, Anne, I’ll turn it back to you.

Anna Snipkowski, Associate, Life Science Equity Research Team, KeyBank: Thank you, Jim. That was very helpful. Maybe just going a little deeper on some of those products you just touched on, I can imagine that as the pipeline gets more complex and we move towards more cell and gene therapies, CAR T, ABCs, that people will start to rely on your products even more. So maybe just what are you seeing there? I know you mentioned you saw a customer adopt your electroporation for a next generation therapy.

So maybe just what you’re seeing, there would be great.

Jim Green, CEO, Harvard Bioscience: Yeah. Yeah. I mean, with our because, biotechs and pharma companies, because they know us and have worked with us for many years, you know, it’s it’s it’s, it’s not like we’re a garage shop coming in to talk to them about new technology. So, you know, they’ve used our BTX technology in their academic environment. They’ve also been used to using us in, in their discovery departments, the research departments of the pharma companies.

And now we’re working now that we have this in a version of the product that is CGMP compliant, you can now use this if they if they use this to create a drug, they can now use this to go into bioproduction with us. So it’s it’s it’s a fairly long sales cycle, especially if it’s gonna be bioproduction for, you know, large scale use. So those tend to have they tend to develop a little slower. But by having, you know, a lot of them in play at the same time as these products as these therapies come out and as they start to be as they start to need to produce these in a bioproduction environment, they’ll need to do that for the preclinical phases and then the early stage clinical phases. So it gives us a chance to really get our product in there for early adoption.

And then as they grow, if it if it turns out that we can’t meet high volume for them, they may they may have to reformulate and go to another, you know, very large supplier and and, you know, they’d be putting out a lot more capital to be able to do that. But we’re as I see it, you know, we are a, we’re a low cost, low risk bridge into that first stage of bioproduction. And then depending on the drug itself, it may or may not need to be, you know, ten million doses. It might be an orphan drug where there’s only fifty thousand doses a year or something like that that’s required, but it does take this new technology where you’re having to actually edit the, the the the stem cells to create the the use of this to actually create the fundamental drug itself. So that’s a big again, that’s why why we’re we’re we’re looking at specific areas where our products are compelling, again, in the creation of the drug, then in the cellular based testing, now with the use of organoids, and then you get and once you get through those phases and you’re now into in vivo testing, you know, we are the leader there too, well known.

So if if somebody like Pfizer has used has been using us for thirty years, they’re gonna wanna keep using us or if they even if they outsource the the testing to, you know, Charles River or or somebody because they wanna have that longitudinal data from thirty thirty years or so of these kinds of drug development they’ve been doing. So

Anna Snipkowski, Associate, Life Science Equity Research Team, KeyBank: And then maybe just talking about how you think about new product launches and what’s next for har HarvardBio. Is a lot of your product launches in response to what customers are expressing to you in terms of what they need, applications more specific to certain therapies? Or what are you seeing as, like, a big need in the market?

Jim Green, CEO, Harvard Bioscience: Yep. That that’s a that is exactly what happens. You know, many of our products, you know, we we we don’t think that we’re smarter than our customers, so it’s often our customers who help us understand what needs to be done, what is that unmet need. And, you know, example of that would be, for instance, when they were when we found that some some large companies were using our BTX to create drugs and were asking us, why can’t we go into production with this? And we said, well, okay.

We know how to do that. We just need to go. We’ll need to update the system for to make it CGMP compliant. You need, you know, longitudinal traceability of your supply chain for that. And then we also found that companies, you know, big pharma companies were buying our AAA systems, and we had originally, it had been designed and been in use in clinical applications for probably twenty five years.

So again, we got pulled into it and asked, well, why can’t you make this, CGMP compliant and and allow us to be able to do, you know, validation of materials and biomaterials in our q in for QC in our in our production. And we said, well, I guess we could do that. And so we learned from that. And we but we were we also were proactive in some areas. We’re very well known, you know, with the with in the in vivo testing.

So there, we went to the large CROs and the biopharma companies and said, look, here’s what we do in telemetry. What do you think about the next step? And what we learned there was clearly a need to go to shared housing. So first for simplicity, for being able to use less space, for in their labs, but also just a more efficient natural environment, for, for the animal models. And, you know, that leads us to develop new products.

It really is based on what are the needs of the customer, what does it make sense that we can do and still sell into our space where we have a right to be there and we have a technology that’s compelling.

Anna Snipkowski, Associate, Life Science Equity Research Team, KeyBank: Yeah. That’s very helpful. And I guess just continuing on that point, who are well, obviously, your existing customers are probably some of those early adopters of those new products. But what’s your strategy to expand to a new customer base and maybe even larger, more industrial sized customers?

Jim Green, CEO, Harvard Bioscience: Yeah. That I mean, that that’s our fundamental philosophy is to take what we’ve done, perfect the technology in the academic environment and in the research environment at the big pharma companies, and then adapt that to their needs on the higher volume utilization where there’s much higher volume of consumables. It’s a much it’s more of a razor razor blade type application. For us, it’s a natural transition and it doesn’t have to reach out to customers that we don’t already know. To me, it’s very critical that we that we stick to where we have a reputation, a technology, have a sales channel that that, that is recognized.

And speaking of sales channel, one of the things that we’re doing now in Europe, we’ve always used, you know, the big distributors to help augment our sales because we just didn’t have that many salespeople to call on all the sites. So groups like Fisher and VWR, we used extensively throughout Europe and other parts of the world. And we have a formal relationship there. And with that, that’s a big part of our of our growth and prospecting for product for product sales. Well, we’re just now in the process of adapting that and rolling that out in The US.

So that’s gonna give us a whole another level of prospecting, feet on the street. I’ve got, you know, maybe I’ve got seven or eight people trying to cover, you know, a group of academics and and pharma companies where, you know, Fisher has 900 people out there and a website that people are typically are buying from. So getting with them on their platform makes a lot of sense for us, expands our prospecting, and that turns into expansion of of new new sales for us.

Anna Snipkowski, Associate, Life Science Equity Research Team, KeyBank: And when are you expecting to maybe see some of those commercial sales hit your top line from BWR?

Jim Green, CEO, Harvard Bioscience: Yeah. Well, for us, typically, in the past, it’s been, you know, they would come to us because somebody wanted it and they wanted it to be on their paper because they had a contract with them. So we it would be it would be a lot of it would be work to do it, and not to mention their sales folks would not necessarily be compensated for that. So, this we’re work we’ve been working on it now. I mean, it takes a few months to put something like that in place.

It might might overall take even longer. But we’re expecting to have that in place here over the next few months, and start to see that be feeding into our prospecting, by mid year. That that’s where we and we I really that that’ll be a measurable, bump in our in our business with that because of that.

Anna Snipkowski, Associate, Life Science Equity Research Team, KeyBank: Okay. Perfect. Thank you. And then maybe just moving, you talked about it a little bit in the beginning, but just around NIH, we could just spend a minute to talk about your exposure there, what you think downside risks are, and maybe what you’re seeing initial conversations shaking out to be?

Jim Green, CEO, Harvard Bioscience: Yes. Well, in with NIH, of course, I think it was it was kind of, I think it kinda came out of nowhere where all of a sudden, I don’t know that any of us had had predicted that, that the election would change, the way funding and the way, NIH and and in some ways academic research is funded, you know, but it did. What we’ve seen with it is, it’s been it in in in some cases, you know, research, grants that were already in place had to go back and be resubmitted. Things that were already funded tended to not really be a problem, but, you know, that’s still there was still nervousness. I think it’s important to size what is NIH.

I I and, you know, it’s not it’s not a perfect measurement, but, you know, our business overall, you know, it’s a little over a little under half of our business is academic, academic research. With that then in The US, it’s about half of that. So, so let’s say you go from, I don’t know, 45,000,000 to half of that. You’re maybe at, you know, a little under 25 for the all of academics. And then NIH NIH itself and NIH and its NIH grants is about 30% of that.

So, you know, you’re down to somewhere around, you could argue it’s 8 or $9,000,000 of our, our again, they made eight or 9% of our business. So, you know, and that has or has been some delays there. We we saw that with some of the early adoption so that that, you know, we so we are seeing a little bit slower a little slower in getting, you know, orders through. It’s not that, like, we’re losing them, but it’s more like they have to resubmit. And there, you know, there has also has also shaken some of the other academics.

I think they’re a little worried like, well, is there something else that’s gonna affect us? So, you know, the way I see it is I look at that and, you know, I what I’m trying to judge is, do I just need to plan for this lower rate right now? And, you know, I’ve identified, what I what I what I see q one looking like, you know, and that will include, you know, some impacts as we see so far from NIH, you know, with academic funds and such. You know, but with that, I mean, if it’s if it stays at that level, I mean, for us, that’s not the end of the world. You know, we we continue we continue to stay very lean.

We’ve already identified some areas that that we’re gonna be taking some further reductions in to make sure that we’ve got plenty of cushion. You know, should should revenue stay at this lower level right now that I’ve predicted that I’ve shown for q one if it were to stay like that? You know, what what I’m gonna do is I’m gonna continue to lower my cost base. I’m gonna make sure I’ve got that I deliver the EBITDA that has enough you know, make sure that I have the ability to fund my CapEx and, and pay my, you know, fund my debt facilities and so on, and then continue to, you know, pay my suppliers and customers and employees and everything. So it really comes down to just keeping our head down and, you know, those those the investors who know me know that I know how to do this and is not the first time we’ve had this had to sit back and keep our head down and get through, you know, some kind of questionable times.

Know, but at the end of the day, our main businesses are just, you know, they’re up and running and fine. You look at our, you know, our in vivo business with DSI and what what’s happening there. I mean, it’s rock solid. Our gross margins are the best. It you know, really, it’s a great business.

And, you know, with some with some, you know, visibility issues in in some part of academics, we just, you know, we just get lean, and continue to drive new products. So these new products are designed to drive growth in the business. And if it even if it is off a lower base, it just means that we’ll be growing off a slightly lower base. And if that’s the case, you know, with my operating leverage, you know, a new dollar of growth, you know, should drop down $60.70 cents. So even if, you know, again, again, because we were very lean, that growth drives dramatic profit improvement very, very quickly.

Anna Snipkowski, Associate, Life Science Equity Research Team, KeyBank: And are there certain products that are more at risk to the NIH? Would it be on the research and discovery side versus the preclinical applications? And then also base business versus some of those growthier areas.

Jim Green, CEO, Harvard Bioscience: Yeah. No. I I think that’s exactly right. Well, where we expect to see some some of that, as far as the slowness, and we’re seeing it more on the CMT, the cellular molecular side, which is which has more exposure to academic research. But you’ll also notice some of the new products that we’re introducing are in that space.

So we’ll have some level of offset and improvement in that space. Now it may not be as fast into academics, but we do expect it to continue to to grow nicely into the biopharma companies, the larger industrials. Our in vivo business, again, it’s it’s running fine. You know, we’re gonna continue to feed those horses that are running well. And and some of the products that are, you know, having some where we have some delays, we’re just gonna stay lean with it.

Hopefully, now with the expansion of getting more, prospecting out there through distribution, that will help us overcome that too. But again, at the end of the day, even if I’m gonna run lower on this on this run rate, my new growth will be incremental to that, and I will see I will continue to see nice improvements in EBITDA and free cash flow.

Paul Knight, Equity Research Team Lead, KeyBank: Yeah. I would also argue, Jim, that the NIH cut is only 8%. I mean, I get that there might be a stunned silence for a little while, but I don’t know what you’re seeing from NIH activity. I know it was paused for a while, but, you know, it doesn’t seem like it

Jim Green, CEO, Harvard Bioscience: Yeah. I I think you’re right, but but I don’t I think we also see that in general, there’s just kind of a hesitancy when they see NIH, kinda hesitating, you know, and and NIH funded grants. You know, that that does that does kinda give, you know, to focus on some of these universities, give them give them some pause that they should maybe be a little, you know, be be a little more careful. And as I expect, there’s you know, it takes a few more signatures to get something through, double check and check and so on. So, yeah, that just means it slows some things down until that really gets picking back up.

But like you say in the meantime, I mean, if that’s affecting whatever eight or 10% of my business, you know, I still got the rest of my business, you know, that’s selling into areas that are really not affected so much by what NIH is doing, but really affected by the number of new drug starts. And as the as the pharma companies start to pivot now back toward real expansion into neurotest you know, neurodrugs, disease diseases of the age and cancer. That’s gonna drive volume and volume for our products.

Paul Knight, Equity Research Team Lead, KeyBank: Is your CRO market improving?

Jim Green, CEO, Harvard Bioscience: You know, I think as I see it, CRO seems to like it stabilized nicely. It’s kind of at its, I would almost say, normalized run rate. I don’t see anything big up or down at this point. You know, last year, we did see there was a couple times when I think because of the big jolt in interest rates, you know, and, you know, we saw that that some of the large CROs had started to push out purchases. You know, we saw that specifically in a couple of areas, you know, but that seems to be behind us.

So, I mean, that that really should be, you know, a nice base business for us. And as you know, we’re now introducing the new Soho family, and that’s getting a lot a lot of interest and a lot of traction. So we we just introduced that at Cytotoxicology. You know, we expect that to start penetrating. You know, we’ll see more of that starting to be adopted by CROs.

We’ll see. We expect that to also be really compelling into the, into research areas for pharma companies and and academics. So we’re we continue to feed that space.

Paul Knight, Equity Research Team Lead, KeyBank: And then, you know, the last I bit bit here, you know, I know the debt refi, you know, what that’s due, what, June 30?

Jim Green, CEO, Harvard Bioscience: That that’s right. And, you know, we’ve we’ve contracted with, investment bank to help us, you know, put put a whole series of potential lenders in front of it because I, you know, I like having somebody else work work that for me and then bring that to me. I do I can do the we can do the analysis on, you know, with, you know, with the term sheets as to who we wanna work with. We wanna be careful. We I you know, but as it is right now, you know, I’m paying, you know, on that 37,000,000, I’m paying about 8% in interest, but I’m also paying a million dollars a quarter down on the principal.

So as far as dollars out of pocket and cash flow, you know, if I end up with something that, you know, on a private placement that has, you know, maybe it’s, I don’t know, 12 or 13% interest rate, net net. I’ll probably be paying less than what I’m paying today as far as servicing it, but I just need to make sure I get the flexibility and then I take the noise out with investors that there’s just some worry that I that I’m not funding. So, you know, I don’t I don’t expect that to be a problem. We’re already looking at, you know, a number of interested lenders on this, and I’ve got I got you know, I have to work over the next couple months to get that get that completed and get it behind me.

Paul Knight, Equity Research Team Lead, KeyBank: Yeah. Okay.

Jim Green, CEO, Harvard Bioscience: My last

Anna Snipkowski, Associate, Life Science Equity Research Team, KeyBank: question would just be on some potential tailwinds in the industry. Obviously, we’re seeing biosimilars and GLP ones. But just on biosimilars, this is obviously drugs that are going off patent redeveloping in the pipeline. So is there any upside opportunity there as preclinical research and discovery of biosimilars, starts to happen?

Jim Green, CEO, Harvard Bioscience: Yeah. I I think so. I mean, I I think what’s interesting is, you know, during COVID, that really pretty much, tied up the whole, the whole cycle of of new of new drugs. And then GLP ones, as we know, everybody had to have a GLP one. And now as as that’s now finishing up, you know, there’s the assumption is that we’re now gonna get back to, like you say, the not just the biosimilars, but the focus from HHS.

And what you hear is, you know, from the government is they want to see drugs and their and vaccines and therapies. They wanna see them go through the full clinical phases. That means full preclinical testing and that means utilizing our technology. Our cellular based technologies using our organoids, we believe, and then our our in vivo testing, all of that has has to be done now. That that’s a good tailwind for us.

And then, you know, the move back to the focus in in government on funding and pushing toward the needs of the aging population. The aging demographic, the needs there, it’s it’s the focus is, you know, neuro neurogenic diseases, you got Alzheimer’s, you got epilepsy, you have the neuro based diseases, you got the needs of late stage cancer and all the opportunities there for, you know, using some of these new, you know, gene edited type of applications. Those are all gonna need to go through that cycle. So we’re you know, those that’s where the real tailwinds are gonna come. And much of it just comes down to, you know, the market stabilizing and getting back to what is it the what is it the the end market needs.

And with that end market needs, that’s our aging demographic and what we need for, you know, our parents and grandparents. Those are that’s gonna get a lot more focused now, and and that’s a that for us in the long run is a good tailwind.

Anna Snipkowski, Associate, Life Science Equity Research Team, KeyBank: Well, thank you, Jim. Thank you, Jen. That was a very helpful overview of the business and addressing some of those concerns like NIH, but we have time for today. So good luck with the rest of your meetings, and have a great rest of your day. Thank you so much.

Jim Green, CEO, Harvard Bioscience: Thank you, Shannon. Thanks, Anna. Thanks, Paul. Appreciate it.

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