Rapid Micro Biosystems at H.C. Wainwright: Targeting Growth and Expansion

Published 09/09/2025, 23:30
Rapid Micro Biosystems at H.C. Wainwright: Targeting Growth and Expansion

On Tuesday, 09 September 2025, Rapid Micro Biosystems (NASDAQ:RPID) presented at the H.C. Wainwright 27th Annual Global Investment Conference, outlining its strategic advancements in microbial quality control. The company’s focus on automation and innovation aims to replace traditional testing methods in pharmaceutical manufacturing, while partnerships and market expansion are set to drive future growth. However, challenges remain in achieving ambitious revenue and margin targets.

Key Takeaways

  • Rapid Micro Biosystems aims for a 25-30% annual revenue growth rate.
  • The company achieved $28 million in revenue in 2024, with over half from recurring sources.
  • A partnership with Merck is expected to enhance sales and innovation opportunities.
  • The GrowthDirect platform offers automated, compliant testing solutions.
  • Expansion strategies target the Asian market and new sectors like cosmetics.

Financial Results

  • 2024 Revenue: $28 million, representing a 25% growth rate.
  • Recurring Revenue: Approximately $15 million, over 50% of total revenue.
  • Gross Margins: Improved from negative 55% in 2022 to break-even in 2024.
  • Future Target: Aiming for 50% gross margins by 2027.
  • Revenue Growth: Aiming to maintain a 25-30% growth rate in the coming years.

Operational Updates

  • Installed Base: 170 systems globally, with over 150 validated.
  • Customer Base: Present in 75% of top 20 global biopharma companies.
  • Geographic Focus: Expanding in Europe, North America, and Asia.
  • Merck Partnership: Co-exclusive distribution outside existing customer footprint.
  • New Product: Storility launched in 2024.

Future Outlook

  • Growth Strategy: Expanding customer base and applications, with a focus on Asia.
  • Market Expansion: Targeting cosmetics and personal care through Merck.
  • Manufacturing Capacity: Benefiting from increased investments in the US.

For a detailed discussion, please refer to the full transcript below.

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

Daniel Smith, H. C. Wainwright Equity Research Associate in Biotechnology, H. C. Wainwright: Good morning, everyone, and thank you for joining day two of the H. C. Wainwright twenty seventh Annual Global Investment Conference twenty twenty five. My name is Daniel Smith, and I’m an H. C.

Wainwright Equity Research Associate in Biotechnology. With that said, let me introduce you to our presenter for the session. I’d like to welcome Sean Wurches, CFO of Rapid Micro Biosystems. We’re accelerating the detection of microbial contamination in the manufacturing of pharmaceuticals, biologics, medical devices, and personal care products. Rapid Microbiosystems is traded on the Nasdaq under the ticker RPID.

Sean, the floor is yours.

Sean Wurches, CFO, Rapid Micro Biosystems: Thanks, Dan. And I have Mike Bollier, our head of IR, here with me as well in the meeting room. Thanks to everyone here in the room for joining us, and thanks to everyone online. For those of you online, copy of the presentation that I’m about to go through is posted online. I will try to do my best to keep you updated as to which slide I’m on as I go through things here.

So let’s jump into it. We’ve got our typical public company disclaimers here. So we’ll move on past them and we’ll jump in. So where we’re focused is on a critical regulated part of the global pharmaceutical manufacturing process called microbial quality control. Microbial quality control is a process that all, that’s used with all manufacturing of pharmaceutical products around the world to detect whether there’s any microbial contamination in the drug, the drug substance, the water that’s going into it, all the inputs to the drug as well as the final drug product itself.

The problem with the current environment for that most the companies globally are still using is that it’s using a method that was developed by Louis Pasteur over one hundred and fifty years ago. So it involves a lot of people, a lot of movement of items, it involves a lot of risk of error, and it’s slow. So I will get into this in more detail as we go through the presentation and talk about the benefits of our technology. But our goal right now is to become the new standard in microbial quality control and bring it into the twenty first century. Just to ground us in where we are as a company, in 2024, we did $28,000,000 in revenue.

That was at a 25% growth rate. So that’s something that, as you’ll see, we are endeavoring to continue over the next several years. That included about $15,000,000 of recurring revenue. So over half of our revenue last year was recurring revenue. You see our system down in the bottom right hand corner of the slide here.

We sell a platform technology that I’ll walk through in a few minutes. And a big part of that is consumables that are proprietary to us that go along with and work in the system for multiple applications, all the applications that are heavy use applications in the industry. And our installed base is a critical part of that. So you can see in the middle of the slide here, we’ve placed about 170 systems globally. Over 150 of those have been validated.

And validation is a really important part when you’re implementing new technology into a GMP environment. And we believe that we have world class capability there, and we’ve developed our validation methodology with a group of our largest customers. In fact, there’s a white paper that was published a few years ago talking about that. And we’ve got engagement and consistency and regulator acceptance of that validation methodology, which is really important. In over 20 countries, we’ll look at a map of where our customer sites are in a little bit.

And then as you look at what types of customers we’re in, we’re in 75% of the largest top 20 global biopharma companies, and we’re in 86% of the approved CAR T companies. So as we’ll talk about a little bit later, our technology, plays very well in high volume, high intensity test environments, and more complex biologics and cell and gene therapies are one of the areas where that resonates very well. In terms of kind of where we’ve been and where we’re going from a financial standpoint, we’ve had strong consistent revenue growth over the last several years, a CAGR of 28% over the last few years. As we look forward kind of into the 2025 and over the next few years after that, our goal over that time period is that we will have an average growth rate between 2530%, which is line with what we’ve been doing. So we’re trying to keep that going, which we believe we can do, driven by the items that are listed on the right.

I’m going to touch on pretty much all those areas as we go through the rest of the presentation here, so I won’t do that here. Very big focus area for us as well as gross margins. In 2022, we were negative 55%. We broke even in 2024. Q3 twenty twenty four was a very important point in time for us as we flip positive on margins.

We have continued that. Expect to be meaningfully positive this year and continuing on this trajectory as we go forward the next few years with a goal of exiting 2027 with gross margins around 50%. So lots of things we’re doing there as well. Product costs are a big part of it. I’ll talk about Merck in a second.

There are opportunities with our partnership with Merck to add to that that are tailwinds to the margin expansion story and plans that we have. So an area where we’ll continue to focus and have what we believe is a clear pathway to getting up to that range over the next couple of years. I mentioned Merck a minute ago. Merck, Millipore, Sigma, we entered into a partnership with them about six months ago. It’s got a couple of key prongs to it.

Prong one is co exclusive distribution. So they have the right to sell our systems and our consumables globally outside of our existing customer footprint. So our customer footprint is protected So we can continue to to expand with customers in that footprint. They have a commitment to buy systems from us this year and next year. This year, it’s a a modest number.

Next year, it’s a meaningful number. So we will work with them to to place those systems in 2026, and that will be a meaningful contributor to the year is our expectation. One really important aspect of why we did the deal on the commercial side is that we have a relatively limited sales force, extremely focused on pharma and high volume pharma. Merck has a much broader sales force that we are leveraging where they are calling on areas like personal care, like cosmetics, like medical devices. So they have the ability, we believe, to expand us into those areas where we don’t have much of a footprint at all right now and continue to drive growth for us through those markets as well.

Beyond the commercial side of things, on the supply side, Merck supplies a number of things that go into our consumable products that we don’t currently buy from them. So we are talking with them right now actively. There are some things already in process in terms of looking at using them to do things like supply media where there could be additional tailwinds to our margin expansion story that that can provide. And then we’re looking at innovation. If you go into a lot of the labs that our systems are in and look around what’s on the counters, a lot of that is Millipore Sigma equipment.

So we’re talking to them about ways that we can work together both on existing technology and working them together, workflows, things in customer sites today, but also looking at our our future road maps for development and saying, are there things that it makes sense for us to kind of bring together or to do on together on our, on a stand alone basis? So there’s a lot happening in this world. We’re very excited about the opportunity, and there’s a lot of interaction between the companies that goes on on a regular basis. Importantly, at the bottom here, I think really critical things for us that we’ve talked about before the Merck deal, it’s just that this deal fits very well for us. It’s all towards these three things at the bottom of the slide here: accelerating growth direct system placements, our number one strategic priority expanding our gross margins, and driving innovation.

It really fits for us. So we think it makes a lot of sense for us. Moving to slide seven. Now I’m going to shift gears a little bit and talk a little bit about the problem we’re trying to solve. I don’t know if anyone here or anyone on the call has been in a traditional MicroQC lab, but this is what it looks like.

You see lots of paper, people, petri dishes, incubators. It’s a very manual environment. Things are getting handled and pushed around and written down by people all over the place. You can see on the right here what some of the challenges that that creates are. There’s a lot of testing that has to happen.

Think one of the things we’ve talked about before is in a high volume site, the number of those petri dishes that get used in a given year could be up to eight miles high in the sky if you stack them all together. It’s it’s huge volumes in some of the larger volumes facilities, but it’s required in all facilities. Data integrity is a problem. You can get something wrong on what you’re writing down. You can get something wrong on what you’re counting.

You can input something wrong when you type what you wrote down into the computer. And you can also write something down that you meant to write down incorrectly. So falsifying information. And that can be a problem too. And all of this is manual.

So it’s paper based, slow. It it just it’s it’s not the kind of thing that belongs in today’s, you know, technologically advanced pharmaceutical manufacturing environment. So this is how we look at it. You kind of look at the, earlier up the work stream here, you’ve got discovery and research, next gen sequencing. The technology has advanced significantly over the past few decades.

You look downstream, you look at bioprocessing and manufacturing and all the things that are happening in that world today, also has advanced substantially. And then you look at where we are playing QC and analysis, you’re still stuck in the mid-1800s. So what we’re trying to do is bring that area into the twenty first century in line with what you see upstream and downstream and bring this area of micro QC into the twenty first century. So how do we do that? This is our platform, the GrowthDirect platform.

It’s a system which you can see there on the left. High capacity. It can run consumables for water testing, bioburden testing, and environmental monitoring testing all in the same system. We offer all of those cassettes in our proprietary consumable offerings. We also have a sterility version of the system that can be used for the final sterility test that has to be done, which is a very critical test, final product release, and have a consumable that’s proprietary for that as well.

Data and software, typically what customers will do is they will connect their LIMS systems that control their labs into our system directly. So you don’t need to go into the screen that you see here on slide 10 and enter things in manually. You’re actually doing it through your daily process with your lab management system. The instructions get sent over automatically and our system will tell you what you need to load in. Basically all you’re doing once you’re using our system in a GMP environment is taking samples, loading them on the system, pressing a button to go, and you’re walking away.

So fully automated technology from that standpoint. And then we talked about validation. We have a team of people globally who is very experienced and qualified working with customers to get this technology validated for them. We continue to work on ways to do that faster and better because that enables faster routine use of systems, gets consumable pull through starting faster, and and can accelerate revenue growth from that perspective as well. So with that platform, what’s our value prop?

Data integrity. This system’s locked down, 21 CFR 11 compliant. You cannot falsify data in the system. The system will give you the result. You cannot change that.

So that’s really important to the regulators. Operational efficiency, you can make decisions faster. One example we’ve talked about is we had a client at one point who was manufacturing biologics. They found out that they, under the traditional method, they had a seven day test. They found out at the end of that seven day test that they had a mold contamination.

So seven days of biologics manufacturing scrapped, and you’re seven days into mold contamination that you’ve now got to go try to stop. We can give them that information typically in around a day, day and a half. So you would have gotten that information, stopped manufacturing scrap, and started fighting that mold contamination five and a half days sooner. So that’s where speed can matter. Speed can also matter from a supply chain standpoint.

So you want to release product. You don’t want to stack up seven days’ worth of production and stick it in a warehouse and have to wait for it to get test results. With our technology, you typically get that result a lot faster. You can keep that supply chain activity moving. You have less warehouse space.

Those things are also relevant to value prop that we talk about. And then humans do a lot of things well. They just don’t do menial, repetitive tasks well. And so you don’t want people walking into a big walk in incubator on a Friday afternoon and trying to count whether there’s 110 or 112 contamination CFUs on that cassette. So getting people out of the process is a really valuable part of this as well and enables the rest of the value prop.

So on slide 11, so in addition to the good things that we can provide, the market is providing tailwinds as well. This is a large market. If you transitioned the entire global pharma market to our technology, it’s about a $10,000,000,000 market. About half of that is hardware, about half of that is recurring consumables. The regulators hate the manual method, to put it bluntly.

In many places, they’ve implemented rules that requires multiple people to double check counts now, so you need more labor instead of less labor, which we can bring to the table. They are looking at this area more than they ever had before, and they’re writing regs around it to create more work and make it more difficult under the manual method. Industry change, cell and gene therapies, even lots of the complex biologics. To make those products is more complex than it is to make a tablet. The amount of testing that’s required to make those biologic products in particular, but even vaccines, serial injectables, requires more work, more testing, and therefore they’re looking for answers faster.

They’re looking for faster results and technology like ours can provide that. And then manufacturing capacity, an important one, especially these days as lots of companies, I think the numbers are in the hundreds of billions of announced dollars of investment that are going to come into manufacturing capacity and pharma in The US given some of the tariff activity and other things that are happening in the global macro environment. So we’re excited about that too. I think that’s another area where we expect to see tailwinds over the coming years as as that manufacturing activity starts to move over. On slide 12, just a few points on our growth strategy.

How do we grow? First thing we do is we we get new customers. So the good news is we have 15 of the 20 largest global biopharma companies as customers, there are plenty of new customer targets out there for us as well in our funnel. Across biopharma, CDMOs are a big part of our business. It’s not just biologics.

That’s an area that has been a big focus area for us. It’s serial injectables. It’s vaccines. It’s even oral dose solid tablets. There there are value props that make a lot of sense for customers like that given our speed.

Once we’ve got a customer, it’s land and expand. So we are going after those customers, talking to them whether it’s going to a few new sites, expanding an existing site to some new applications, or a combination of the two. They’re typically we talk about it as waves where customers will implement a technology, then pick some sites or new applications, and they’ll move there. Then they’ll expand again. So it doesn’t tend to happen all in a big bang, but there’s constant progress that we’re working with on to expand further and further across applications and geographical locations and sites.

You can see that there, new geographies. We have historically been, you’ll see this in a minute on a customer map we have, focused on Europe and North America. We have been investing in Asia, and we’ve had some success there. So we are seeing a growing footprint in Asia as well. So the technology has traction globally.

And then other things outside of that land and expand strategy to help us grow new products and services. We launched Storility last year. Still pretty early days in that, but have high hopes for that as you look forward in terms of a new system and new application for us, things like our MobileArm software. Software margins, always attractive, a tailwind for us on our margin expansion activity and something that we’re seeing growing interest from the customer base. So continuing to bring new things to market that we can use to drive revenue growth.

And I talked about adjacent markets. I think Merck is a big factor in that part of this growth strategy. We expect them to continue to look at opportunities in what are similarly sized markets, huge markets, of the amount of testing that happens at things like cosmetics and personal care. On slide 13, unfortunately the folks online are not going to be able to see this version of the slide, but for the folks in the room, you can see the logos here. This is one of our favorite slides that we like to show.

You can see the types of companies that are customers today. We talked about the 75%. You can see the map on the right. You see we’re roughly 40%, 45% North America, 40%, 45% Europe with that growing footprint in Asia. With all this said, there are well into the thousands of potential sites that we’re going after.

So I’d say we have plenty of room for additional penetration with existing customers to grow, and then there’s a lot of new customers we haven’t even gotten to yet. So you can see the segments there with biologic, cell and gene, CDMO, personal care, small molecule. Everything’s in play, and there are value props that we can apply to pretty much everything across the board there. And then slide 14. This is a wrap up slide here.

So in terms of the value prop and why we see value in our business and why we’re excited about our business, this kind of summarizes it for you. Large and expanding market. The $10,000,000,000 market, we did that study at the time of our IPO, it was four years ago. So the market has been growing since then. So it’s actually higher than this now.

And I think you’ve seen some things modulate here, but I think growth is still something that we feel very good about in terms of global growth rates of the businesses and the products that are targets for us. Strong barriers for entry. There’s still low competitive intensity out there. We still think we have the only fully automated technology that’s out there. First mover advantage, 170 systems placed around the world already, Many with multiple systems and multiple sites per customer.

So again, this this wave of of expanding with customers is something that we’re very focused on. Industry leading platform. We’ve got that good footprint, 75% with or 75% of the top 20. But beyond that, we’re we have plenty of other mid sized and smaller customers. We have interesting customers that have come onboard recently in areas like Radio Farm.

Some things related to products that are are more ancillary or things like, I think you would have seen Aldevron’s logo on the previous slide, so viral vector type activity, things that are inputs into some of the newer technologies. Those are also candidates to be customers for us, and many of them are. Talked about advanced pharmaceutical manufacturing CAR T being at the forefront of that. We have all but one, I think, of the currently approved CAR T, FDA approved CAR T products as customers right now. Continue to drive toward that, But biologics is very much in the same boat.

Still very complex manufacturing processes, very good targets for us in the business. And then the business model. RZR RZR Blade, over half of our revenue is recurring revenue right now with a growing installed base. We expect that to continue to be over 50% over time and in fact grow over the longer term. And that’s high yield revenue.

The way we think about that is 100,000 to $150,000 on average of pull through per year in a routine use system, plus we’re selling a service contract for an average of roughly $50,000 a year. So think 150,000 to $200,000 per year of of recurring revenue per system as we kind of continue to expand that that that that customer base. So we’re excited. Happy to have you all here and look forward to talking to many of you as we continue on. Thanks.

Thank you. Question? Yeah. Just and kinda address.

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