Inotiv at H.C. Wainwright: Strategic Growth and Future Goals

On Wednesday, 10 September 2025, Inotiv Inc. (NASDAQ:NOTV) presented at the H.C. Wainwright 27th Annual Global Investment Conference, outlining its strategic transformation from a $20 million business to a $500 million contract research organization (CRO). Led by CEO Robert Leisure, the discussion highlighted the company’s focus on integrated services and customer satisfaction, while also addressing challenges such as market competition and operational optimization.

Key Takeaways

• Inotiv has grown significantly over the past 7-8 years, becoming a fully integrated preclinical CRO.
• The company focuses on serving small and mid-sized pharma companies, with 80% of revenue from clients using multiple services.
• Recent operational improvements include a 30-35% reduction in facility footprint and a 34% reduction in IT systems.
• Inotiv reported a 25% year-over-year award growth in its Discovery and Safety Assessment (DSA) segment for Q2 and Q3.
• The company aims to achieve long-term EBITDA goals of $70 million to $100 million, driven by strategic investments and customer metrics.

Financial Results

• Q3 year-over-year revenue increased by 34% in Research Models and Services (RMS) and 8.9% in DSA.
• The DSA business reported a 25% year-over-year award growth in both Q2 and Q3.
• The DSA segment operates at a run rate of approximately $190 million, with plans to increase this by 10% to meet EBITDA targets.
• Inotiv’s addressable market is estimated at $25 billion, with the DSA business representing a small portion of this market.

Operational Updates

• Inotiv has reduced its facility footprint by closing 10-11 facilities, with further optimization expected in the next six months.
• The company has developed an enterprise study management system to enhance project tracking.
• IT systems have been consolidated, resulting in a 34% reduction, which aims to improve efficiency and consistency.

Future Outlook

• Inotiv plans to build on its strong foundation, focusing on brand development, capability enhancement, and efficiency improvement.
• The company sees potential M&A opportunities in the next 2-3 years to further expand its services.
• Growth in the DSA segment is expected to be a key driver, with the capacity to increase by 40% without additional infrastructure investment.

Q&A Highlights

• Inotiv’s growth strategy is centered on expanding discovery capabilities and serving clients who use multiple services.
• The company is focused on leveraging its existing facilities to maximize growth potential in the DSA segment.

For more detailed insights, please refer to the full transcript provided below.

Full transcript - H.C. Wainwright 27th Annual Global Investment Conference:

Matt Keller, Vice President in Equity Research, H. C. Wainwright: Alright. Well, good afternoon, everyone, and welcome to our next session. Again, welcome, and thank you for joining the H. C. Wainwright twenty seventh Annual Global Investment Conference.

My name is Matt Keller. I’m a vice president in the equity research department, and it is my pleasure to introduce our next company and our next presenter. With us, we have Robert Leisure, the CEO of Inotiv. Robert, the floor is all yours.

Robert Leisure, CEO, Inotiv: Thank you, Matt, and thank you, HC Wainwright, for inviting us today. So, do I have a I think okay. I think we have a presentation today. So we’re gonna go a little bit about our history of Intuitive. We’re we are about a seven, eight year old company that we’ve it’s an older company, but we got involved seven or eight years ago.

It’s a $20,000,000 business, and we’re now about a $500,000,000 business. We’re a contract research organization, focuses mainly on the preclinical market from discovery to first in human through the IND phase. It’s predominantly focused. We also, over the last two or three years ago, bought the research models, we’re fully integrated. So we provide all the services, we’ve been building this over seven years, and now we are fully integrated.

So we also have the research models, where we board and breed or import all the research models required to do drug discovery and safe and safety assessment. In addition to being being fully integrated, have our own transportation system now that we can transport animals throughout The US, and then we can also provide them all their feed and the diet. In addition to being in The US, we have locations throughout Europe. We think we have a large addressable market, it’s $25,000,000,000. Of that, we’re a fairly fairly small player in this market.

So we we have two market segments, really RMS and the what we call the DSA, discovery and safety assessment. We RMS is research models, which is about two thirds of our business, and then the discovery and safety assessment business. As we look at our business today, we have been working on over the last couple years, how are we going to integrate and optimize the organizations. So as I said, our start starting point was was through the acquisitions and growth, and we started up about eight or nine new services. And then about two or three years ago, what we were was a company that we’re selling fourteen, fifteen, 16 different services individually.

We’re conglomerate companies that we’re selling those individual services. So the key is how are we going to integrate those services, how are going to rebrand ourselves, and how are we going to take our value equation to our customers. And there are two critical things that we wanted to do. One is we wanted to be able to be a full service research organization to do drug discovery and development, not just sell unique services, but how do we integrate those services. And the second thing that that was very important is how do we deliver speed and on time.

If we were go back seven years ago, what are the what are the things that were that were really compelling us to build this business? That’s why I went to conferences, I could hear our key customers ask for two things. And one was, we need we need a CRO that can serve the small and middle market. The perception was other CROs are more focused on getting large pharma as a customer base, and they felt that they had unique needs. And the second was they wanted somebody who would return a phone call time, what they called timely, and could deliver timely.

And for us, I I think time is defined as when are the venture people or when did the c suite people envision the time being done. Many times in a project, science can can change, and the scientists may wanna change the timeline. But as as most people know, the c suite, in the venture capital world, they’re gonna run out of money at some point. And those and the and the and the board and the c suite wanna make sure you’re hitting their time frame, not not elongating the the the science. So by having all the services and if we integrate them, if we’re gonna do additional science upfront, how do we take that time back out of the end?

And and if we can do the histology and the pathology and the send and the data and the reporting, there may be times that that are for on behalf of our client, we need to accelerate a project to make sure we still meet those timelines. So how do we develop that company? So over the last two or three years, we’ve been working on our integration and optimization. So the integration is on the DSA business, and how do we integrate and how create a project management system that allows us to communicate as one company, know where our projects are, and also know be able to communicate effectively with our customers and accelerate the speed and make sure that we can we can meet those expectations. In the optimization, it was basically in the RMS business, how are we gonna optimize our sites?

So we so we we have reduced our facilities by 3035%. So we’ve closed 10 or 11 facilities without losing with rarely out losing any capacity. That gives us ability to really focus our capital expenditures. And then we’ve we’ve got the transportation system, allows us to leverage our transportation and use more of a hub and spoke approach, be much more cost effective, be much better with animal welfare, much more compliant, and focus on compliance on the structures we have left. So how are we doing on that?

On the optimization, we should we’re in our last site facility optimization right now. We’re building out one more facility that we have, and that should be completed over the next six months. As we do that, we’ll close three other facilities, and that’ll allow us to take out some additional costs that we’ve talked about. West, how are we doing on the DSA side? Very pleased with how we’re seeing the DSA aligned.

We now, as we develop these systems, have much better customer matrix. And as we have these matrix correct. As we have these customer matrix, we’re able to then determine are we delivering on time and it has our customer satisfaction as we can see all those customer matrix. And where there are many more than that that we look at. And not only do we deliver on time, but what hour of the day do we deliver according to when we’re supposed to?

What are the customer complaints? Do we enter things right the first time? As we do all these things right and we see our customer performance improve, I think we’ve started to see our ability to gain market share improve. And that’s really what we’ve been focusing on the last two years. As we go back through this, again, our acquisition strategy, you can see over the over the five years is a little bit what we talked about, some of the things that we acquired, and then some of the capabilities that we added.

This was all in order to make sure we were that full service DSA organization. So most of these are discovery and safety assessment, with the exception of maybe in V Go or area and those were those were mainly our our key RMS facility acquisitions. So we talked about the integration and optimization, how we’re going about building one. So we talked about, again, branding, commercial commercial organization. And about eighteen months ago, we we really started doing selling with a science.

And before that, we’re selling individual services. Now we include our salespeople, our scientists much more involved in our selling process. We’ve we’d as I said, we developed our enterprise study management system. This was critical to how we’re gonna track our projects and make sure that we’re on time. Site optimization was critical to cutting costs, optimizing our animal welfare, optimizing our efficiency, and how we operate.

And sourcing transportation was critical to being able to optimize. So all these things kind of go together. And then in the NHP business, the NHP business has changed significantly. One of the reasons we got in the RMS business is because the importance of NHPs in safety assessment historically, and in the future. We thought it was gonna be a very volatile market.

We want to be able to control our destiny with this. It has been very volatile. We have been able to control our destiny. We have significantly diversified our customer base, the countries that we buy from, and our supply base. We’ve also changed and and significantly invested in domestic boarding and breeding and contract breeding for for third parties.

And so we’re we’re pleased with with with how our AHP business has been topped off by, I think I said in our q three release, our recent AAALAC audits were where we got exemplary ratings, which is which is a very highest rating you can get from AAALAC. So now what what do we have, you know, we’re looking at where do we go from here. We have a great foundation. We wanna continue to build our brand. We wanna continue to develop.

We wanna continue to improve. I think what we also have something is is, you know, we have a DNA and and m and a. I think in the next two to three years, we’ll see opportunities again. We’re very we have a very accretive engine in which and a lot we can build upon. So I’m very proud of where we are today.

The DSA growth, we talked a little bit about and the and the importance of of this. This will be our, I think, our key driver in the future, how we’re grow and grow our margins. In the last two quarters, we reported 25% year over year award growth in q two, and twenty five percent twenty I think 27%, maybe q two, twenty 5% year over year award growth in q So very pleased with with the growth that we’re starting to see. We’re, you know, very interested coming to these conferences and listen to what other people are seeing. Making sure we wanna verify is our growth coming because of we can see our customer matrix, we know what we’ve done with their branding, we know what we’ve done with their selling.

And, you know, then we’re also following what the industry is. But overall, our DSA business is about 200,000,000, which is a very small piece of a very large pie. So I don’t know that we’re we don’t we’re not making an excuse that our our growth is dependent on industry tailwinds. I think our growth is dependent on how well we can do and how well and how we can deliver for our customers. And hopefully, last two quarters are indication of what is what is possible.

Our r m s margins, these are just a couple of the indicators that we’ve we’ve talked about. The site optimization that we went through, the importance of driving down customer complaints, the importance of reducing our cost, and then, you know, finally the evolution of the NHP business. So we can see that, you know, what we’re really focusing on is Colony Management Services revenue. And as you can see from the blue line, that is the that’s the amount of of inventory we have on hand that belong to third parties. The orange line is what we have.

So what we’ve what we’ve become is we’re not a bank holding a lot of NHPs available for sale. What we’re now doing is selling and holding it for when people need them. And those are important services. So I don’t wanna it operates a little bit like a hotel would. You you you and so we’ve been building that capacity, and I think it’s a much better reoccurring business model for us than what we had in the past.

In addition, the fact we significantly diversified our our supply base and our customer base. Other key infrastructure investments we made with integration, strategic investments in IT. We’ve reduced our IT systems that we have on them by 34% and continuing to to make our IT systems consistent across, give us the ability to help really focus on how we communicate internally and and with third parties. And then what is very, very important in our industry, we have a heavily regulated industry, and enhanced compliance is really very critical to everything that we do. So I think we’ve you know, to the extent that we’ve been through some challenges in the past, our industry has been through some challenges, one of the things I’m very proud of is that every time we come through the challenges, we’ve gotten much stronger as a result of it.

So we can either shy away from those challenges or we can own them. And when we own them, we get much better. And as a result, I think even the downturn in the industry that we’ve seen in the last two two years, I would tell you that is is probably we’ll get back two years from now, we’re probably gonna look about that was that was probably a good thing for us because it became we became more open to change. Our management team and our employees were more open to change, and we changed, I think, more aggressively and faster than we would have if everything was if we had a lot of tailwinds in our industry. So I think we’ve become a much better company again over the last two years.

Here we talked about some of the the financial results and the year this is q three specifically, where the rev year over year revenue increased on the RMS business by 34% and by 8.9% the DSA. Those look like big numbers, of course, but ’24 was a down year for for our industry. So we we expected it to come back. And this, you know, hopefully, the what we’re seeing, the increase in awards, this this trend can can continue. But we started seeing in our DSA business, our discovery business start recovering in q one of this year, where we saw increase year over year in awards.

And the safety assessment business, we started seeing that increase probably in q two of this year. And we’ve seen now those those trends continue in q one, q two, and q three. One of the things that we did in April or May, I believe, was it May May or June 1, May, is we had an investor day. And one of the the things people really wanted to see, what are your how can you get back to 70 to a 100,000,000 a year of EBITDA? What are your what and and at that time, we based it off our q two run rate.

Now we’ve updated this, what we call bridge to our long term goals. We don’t provide guidance at this time. But our bridge to our long term goals, and what we did is we annualized q three and basically saying what are what are some of the key metrics it’s gonna take to get back to 70 and to a 100,000,000 of cash flow. And I think some of the long term decisions we made over the last two years and continue to make today are critical to this. So we are seeing some of the discounting that was taking place a year ago is is is not taking place to the extent that it is today.

And I think as we do a much better job delivering on our quality and on time delivery, We’ve seen a a much less focus on discounting or request for discounts. So I think we’re gonna see some pricing improvement. We also because the the awards increased awards, I think we’re gonna see some revenue improvement Mhmm. On the DSA business, and then we have modest revenue on the RMS business. So in in this model, you know, we’ve we identified maybe a 10% volume growth to get to the $70,000,000 range.

Last month, our DSA business was on a basis of about a 100 run rate of a 190,000,000. So if we can get that up 10%, we we generally see as 50 to 60% of our revenue dollars go to our bottom line because of the leverage we have in our business. So we think this is something that’s attainable and we’re striving to get there as soon as possible. And then we then we, you know, furthermore, know, what’s it gonna take to get to to a 100,000,000 and what that run rate of of $600,000,000. So I think with the infrastructure, the integration, the systems we’ve been able to put in place, I now think we have a a a good path to achieving some of these goals that we’ve set for ourselves.

They’re really rooted in in customer matrix, and I think, you know, that it it it it’s gone now from looking at what are the key awards that we get every day to what are the customer matrix. As long as we take care of our customers, I think our awards are gonna be strong. Our momentum is is been pretty good. Very pleased with what we’re seeing, and I think that we have a very good future. So thank you very much for your time today.

And if there are any questions, I’d be happy to take those too.

Matt Keller, Vice President in Equity Research, H. C. Wainwright: Alright. Fantastic presentation. We do have a moment for questions. Is there anybody in the room who would like to ask one? Yep.

Yep. And just a quick question. Is the goal to build a full service clinical development CRO or stay in preclinical early stage CRO?

Robert Leisure, CEO, Inotiv: Right now, we are we are mainly a preclinical early stage CRO. We where we’re actually focusing a lot of our growth right now is on discovery. And so we’ve built out in the last two years or three years our discovery safety system. We’ve built out our discovery capabilities. We’ve built out the ability to do medical device and surgery, biotherapeutics, genetic toxicology.

So if you look at where some of our growth is coming from now, it’s coming from those specific segments. We do have bioanalytical, large and small molecule bioanalytical, and we do get asked to sometimes to take on clinical analysis, very small part of our business. So less than five percent, and then then our, you know and it is mostly all small and middle sized pharma. They’re looking for to outsource all the all their development. And one and so I think we have 80% of our dollars are coming from site from customers who are using multiple sites, multiple services at this time.

And that’s that’s been growing. So I think that’s what we’re gonna we’re gonna continue to to focus on. And we have we do have the capacity probably at this point to grow. I know on the DSA business 40% without, you know, without using any more brick and mortar. Okay.

Matt Keller, Vice President in Equity Research, H. C. Wainwright: That might be it. For those attending the conference or those that are virtual with us this year, please feel free to have any follow-up questions for Robert and the team. I’m sure you can reach out, and they’ll be happy to answer anything that you might have. I wanna take another moment to thank everyone for attending the conference this year, and thank you again for the presentation. Thank you, Robert.

Thank you. Yep.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.