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On Wednesday, 19 March 2025, Rapid Micro Biosystems (NASDAQ: RPID) presented at the KeyBanc Annual Health Care Forum 2025. The company, led by CEO Rob Spignesi and CFO Sean Wertches, showcased a strong performance with 25% revenue growth, driven by strategic partnerships and a focus on recurring revenue. Despite challenges in market dynamics, Rapid Micro Biosystems aims to maintain its leadership in microbial quality control automation.
Key Takeaways
- Rapid Micro Biosystems achieved 25% top-line growth in 2024.
- The company holds 70% of the global top 20 pharmaceutical companies as customers.
- Strategic partnerships with Lonza and MilliporeSigma are key growth drivers.
- The Growth Direct platform addresses data integrity challenges in pharmaceutical manufacturing.
- The company aims for a 50% gross margin by the end of 2027.
Financial Results
Rapid Micro Biosystems reported significant financial achievements, including:
- 25% revenue growth in 2024, with recurring revenue making up over half of total revenue.
- Improved gross margins by over 50 percentage points in the past two years, targeting a 50% gross margin by 2027.
- Cost of goods sold reductions through procurement strategies and manufacturing efficiencies.
Operational Updates
The company has made strides in its operations, such as:
- Implementing a "land and expand" strategy to secure and grow customer bases within manufacturing networks.
- Securing multi-system orders to enhance revenue visibility.
- Launching a rapid sterility test to complete its end-to-end solution portfolio.
- Manufacturing all products in Massachusetts, USA, minimizing exposure to tariffs and NIH funding risks.
Future Outlook
Looking ahead, Rapid Micro Biosystems has set strategic goals:
- Provided a prudent 2025 revenue guidance, with potential upside from multi-system orders and the MilliporeSigma partnership.
- Plans to capitalize on the growing CAR T market, projected to grow at 35% through 2030.
- Expanding into adjacent markets like personal care and cosmetics through the MilliporeSigma partnership.
- Focus on innovation and integration with MilliporeSigma’s portfolio to drive growth.
Q&A Highlights
During the Q&A, several key topics were addressed:
- The "expand" phase of the commercial strategy is a primary growth driver.
- Improving revenue visibility through recurring revenue and multi-system orders.
- The Lonza partnership standardizes cell and gene therapy manufacturing.
- The MilliporeSigma partnership accelerates Growth Direct system placements.
- Focus on reducing material costs and leveraging partnerships to improve profitability.
Readers are encouraged to refer to the full transcript for a more detailed discussion.
Full transcript - KeyBanc Annual Health Care Forum 2025:
Anna Snipkowski, Associate, KeyBank: Hi. Good morning, everyone. My name is Anna Snipkowski, and I’m an associate on the life science space here at KeyBank. It is my pleasure to introduce you to the Rapid Micro Biosystems team, Rob Spignesi, president and CEO, Sean Wertches, CFO, and Mike Bollier, head of IR. First of all, I wanna say congratulations on a great year and hitting a few key milestones such as gross margin positivity and expanded partnerships.
As a quick reminder, after the introduction, we will open up for Q and A. So feel free to email myself, which is anna dot snubkowskikey dot com, or you can also post in the chat below if you have any questions. With that, I will turn it over to Rob to give a quick overview of the business, for those who might be less familiar with the story.
Rob Spignesi, President and CEO, Rapid Micro Biosystems: Thanks, Anna. Appreciate that. And good morning, everyone. And thank you for joining today. So by way of quick background and context, we are focused on a critical part of the global pharmaceutical quality control infrastructure.
It’s called microbial quality control. And this is a process by which regulated, first of all, it’s important to know it is regulated to mandate it by the global regulatory authorities. And it’s a process by which all pharmaceutical companies go through no matter where they are in the world to ensure that their products are free of microbial contamination. So think bacteria, mold, other organisms and are ultimately safe for patients. The challenge is with the methods that exist largely in the world today haven’t innovated in about a hundred years, since Louis Pasteur, invented them.
I won’t go through the all the the detail around them, but but quickly, it’s a very manual, I think, petri dish growth based incubators, pencils, people method that can take, you know, days, if not weeks to get to a result. It’s error prone, costly, and were fundamentally developed before, well before, you know, current, manufacturing methodologies. You have this incongruent situation between current methods of manufacturing and discovering drugs and this legacy fundamental quality control method that is pervasive around the world today. And as you may imagine, it’s resulting in risks and challenges and costs for the industry. It’s under pressure to change from the industry itself, as well as the regulators globally who are enforcing data integrity, new data integrity requirements against which the legacy methods are ill equipped generally to to keep up.
So to address this broad problem, we’ve developed a technology called the Growth Direct Platform, that fully automates and replaces the legacy methods and brings us critical process into the twenty first century where it belongs. There are a number of reasons why we’re excited about our business. First, it’s a large and growing market. We size that at about $10,000,000,000 and growing and that’s a mix of recurring revenue and call it one time system potential. We have strong barriers to entry to include first mover advantage.
First mover is very important in this space because once you get validated and kind of specked into a process, it does become a durable position. We are, in our view, the standard for the industry, the clear market leader. We’re proud to count 70% of the global top 20 pharmaceutical companies as our customers. And it’s also important to note that while we have those top 20 as our 14 to top 20 as our customers, we’re just getting started with regard to full penetration within their network. So, there’s plenty of runway to go with in our current customer set and of course the balance of the top 20 as well as other customers around the world globally.
We address all pharmaceutical modalities, manufacturing modalities, but we’re especially strong in biologics, which is our largest segment as well as cell and gene therapies. So the higher growth segments, but we also address sterile injectables and small molecule manufacturing as well and we’ve got sales and customers in those segments as well. And lastly, we have a high growth and attractive business model where we’ll place our growth direct system, capital equipment sale and pull through a high rate or a high yield of a recurring revenue in the form of proprietary consumables and services. And recurring revenue is more than half of our overall revenue. And that revenue again as I touched on is effectively specked into a GMP manufacturing process and becomes it becomes quite durable and sticky once up and running.
Anna Snipkowski, Associate, KeyBank: That’s a great overview. Thank you, Rob. Maybe just to start with the top line growth you saw for 2024, 25% growth is obviously an impressive figure, especially during a year where equipment sales across the industry have kind of dipped. So, could you just talk about what makes your systems unique and why customers chose to prioritize spend in microbial quality control?
Rob Spignesi, President and CEO, Rapid Micro Biosystems: Right. So, I think it’s important to note our commercial strategy, which is driving that growth, it’s our land and expand. Effectively, we secure a customer and then we seek to expand within their manufacturing network. We do, we talk a fair bit about our larger customers, for a couple of different reasons. But it’s important to note that we have many midsized customers as well.
So we can address all manufacturing modalities as well as any size and scale of customer. But with regard to our larger customers who drive a good portion of our growth, our value prop is resonating and I touched a bit about that in the lead in. What customers get effectively when they partner with us with the Growth Direct. They go from data integrity is a big one. But as I mentioned with regard to the regulators, publishing guidelines and enforcing against data integrity, it’s a major lasting tailwind in the industry and manyI would say most of our customers are interested in data integrity improvement.
So customers can go from a data integrity challenge environment with the legacy and traditional methods to a highly robust regulatory compliant environment, which is a big driver. Costs as well with regard to the legacy method, so and generally efficiency more broadly, we’re able to improve their cost structure and their efficiency. So for example, our system is rapid. So we’re able to rapidly provide results, which allows customers to potentially release product faster to market, to move to the next processing step faster, to find problems faster and potentially shut down manufacturing. So they’re not manufacturing scrap.
And also reducing costs, direct costs, labor as an example, but also indirect costs with errors and potential recall. And it’s also, I think, important to note that we are in some cases, we’re considered a critical manufacturer to our larger customers. And as a consequence of our growth and our position with these customers, we are interacting more with the senior levels of leadership, which helps us be a little more resilient from year to year budget cycles and gives us a bit more visibility as time has gone on here as well.
Anna Snipkowski, Associate, KeyBank: That’s great. And then on the same point, you talked about land and expand. So are you seeing customers that have previously placed one order either move to a different facility in a different geography or start to make multisystem orders as their therapies roll out?
Rob Spignesi, President and CEO, Rapid Micro Biosystems: Without question. I’d say I would say a major piece of our growth driver is that expand phase. And as you may imagine, that’s a core part of our strategy. So customers will typically acquire initially one to a handful of systems, validate those systems in their manufacturing environment and then expand from there. And the beauty one of the beauties of our system in our approach and our technology is customers can expand in multiple dimensions in multiple ways.
Again, we’re a high volume, high capacity system that automates the vast majority of daily routine use test volume in any facility. So, customers can automate a single test across multiple geographies. Customer can automate multiple tests in a site network or geography or any kind of combination thereof. So, we have multiple ways we can expand with customers and customers can and do prioritize that expansion based on where they want to solve problems in a priority order.
Anna Snipkowski, Associate, KeyBank: And then I think something we have seen is that when ASPs are at the higher end, you can sometimes have lumpier quarters and that could be harder to predict. So maybe just in terms of revenue visibility, how do you think about this evolving over time?
Rob Spignesi, President and CEO, Rapid Micro Biosystems: Yes. So we generally expect visibility to improve over time. To your point, it’s still a capital equipment sale to a certain extent. Although recurring revenue, as I mentioned, is becoming more of a feature of our business, which is a driver of improved visibility as our recurring revenue consumables and services can tend to smooth out and give us forward visibility. But I think with regard to growth direct system sales in particular, one of which I mentioned is we are a critical supplier in some cases and have a priority status is our belief in some of our larger customers.
We interact with the senior levels that gives us a sense of a strategic view and with that, rollout intentions, which is helpful. We’re seeing we have a number of multi system orders, which we talked about on previous calls that helps us with for visibility as well. And clearly, part of our commercial strategy is to continue to work with customers on that expand phase and secure multi system orders in our funnel that will translate into placements, which helps with visibility. And then we can touch on this as well, but our recent relationship with Millipore Sigma, we envision will also help with visibility as that larger commercial force gets up and running here and provides for visibility as well.
Anna Snipkowski, Associate, KeyBank: I guess on that same point, you talked about multi system orders, your pipeline seems strong. So maybe just touching on 2025 guidance and some of the moving parts there, it seems that some of your growth assumptions could be conservative or just room for upside. So could you just talk about where you could see upside with your?
Sean Wertches, CFO, Rapid Micro Biosystems: Yeah. I’ll I’ll take that one, Anna. I think it it’s important to kind of start this conversation out with our philosophy around guidance. You know, especially entering a new year, I think we we want to be putting guidance out there that’s prudent and achievable. And we think that’s what we’ve done.
As we look at that, I think there’s a couple of really important things that are meaningful context, but also areas for potential upside should things go in a different direction. And I’ll kind of hit those as we go through this. First one is, where is the market right now? What’s customer behavior look like? We have not seen a meaningful improvement in the scrutiny, the level of scrutiny that we had seen over recent quarters in terms of capital purchasing.
Having said that, we are seeing customers still make capital purchases where there’s a compelling value proposition. And we believe we bring a compelling value proposition to our customers. So, should that area start to loosen up a bit from what we’ve been seeing, that could be an opportunity for upside for us. I think we’ve also not included any of our larger multi system orders in our funnel in the guidance at this point. So, clearly, we think there’s opportunity to convert some of those into actual deals this year.
But we’re taking that approach because those customers the process for larger multi system orders tend to be more complex, tend to involve more decision makers and tend to be a little more binary where a decision gets made or it doesn’t. And that’s something that we want to manage very, very carefully here. And then the third one is MilliporeSigma. We do have a relatively small commitment in year one and much more meaningful commitment in year two, which would be 2026. But we haven’t assumed anything in terms of contribution from MilliporeSigma in system placements in 2025.
So to the extent they’re able to get up and running and and start pulling some things into the year, that would be upside to the guidance that we have we have out there as well. I think the approach we take is important to us. You know, it’s it’s served us well. I think over the the past couple of years, we’ve it’s been nine quarters in a row now that we’ve met or beat our revenue guidance, and we want to continue that as we go forward, of course.
Anna Snipkowski, Associate, KeyBank: And then kind of related to maybe a longer term outlook, just looking at one data point, Evaluate Pharma, the CAR T market is expected to grow at about 35 through 02/1930. And I know that’s somewhere you have a strong position. You’re involved with 100% of the CAR T market. So would you expect to kind of grow alongside these therapies as those therapies ramp to their full potential?
Rob Spignesi, President and CEO, Rapid Micro Biosystems: Yes, Anna. We would. And it’s, as you may imagine, part of our strategy to be the provider to the, for cell and gene broadly, but specifically into CAR T. We have a very, very strong position. I believe it’s a bit below 100% now given I think there’s a recent approval, but I don’t think the point is still made.
And our value proposition, as we touched on earlier in the discussion, resonates quite strongly, with pharmaceutical manufacturing broadly defined. It has an especially strong position against the CAR T manufacturers and all the certainly the ones that have been commercial and large volume are current customers. It’s just given the high volume of testing that’s required for that therapy, the very, very fast turnaround, in some cases, two weeks, the pain to pain time. The criticality of accuracy and the intolerance, I would say, for errors given that the speed is important because typically there’s a a patient, a time critical patient waiting for the therapy. And this is typically a therapy of, sort of last last option for for for for many patients.
So the, our system, the turnaround time, the speed, the automation, the data management is a is a very, very strong fit. So that’s a perhaps a bit longer way of saying, we we do plan on growing with the CAR T market and is a fundamental plank in our growth strategy to make sure that we secure those new therapies that are getting approved and coming to market.
Anna Snipkowski, Associate, KeyBank: That makes sense. And I kind of want to touch on some of those recent partnerships I mentioned in the beginning, like Lonza and Millipore. I was just wondering, maybe starting with Lonza, they’re rolling out your GrowthDirect system with their limb system to their cell and gene therapy manufacturing network. Just could you tell us what you think about this partnership and how this will expose you to new customers, especially in the cell and gene space?
Rob Spignesi, President and CEO, Rapid Micro Biosystems: Yes, sure. So I think it’s important to note. And for those listening, the white papers on our website, it’s really good it’s a really good example. Lonza created a white paper that’s now public and it’s available on our website. And it’s a good think it’s a good case study for a lot of what we’ve been chatting about today and it kind of walks through why Lonza wanted to automate, how they did it with the growth direct, why the growth direct was selected and and how it was actually executed.
So it’s really good case study if people are curious on why customers adopt us and how do they roll it out globally. But quickly Lonzo is looking to standardize and automate their, Sell and Gene portfolio. They also mentioned one of their sites in Switzerland, is a biologic site, also has a growth direct. So it just touches on the point that we’re outside Celent Gene as well. But they want to achieve a few different things.
They want to reduce costs, increase time to result, increase standardization, and compliance, and go to a paperless lab with complete walkaway testing. So, they selected the growth direct, as as as a centerpiece of the automation and then and then and then married it with their Moda EM platform, which is effectively a, a lab information management systems platform software platform that manages the environmental monitoring program. So we worked with Lonza hand in glove to enter into, to have these systems communicate with each other and interact with each other. And that became the platform, that was that was rolled out and is rolling out across across Lonza’s Lonza’s platform. Many of our customers, have rolled out this way.
Some actually use Moda, others do not. You know, the takeaway is that, the overarching value prop that Lonza and goals that Lonza was trying to achieve is, I think, similar to what many of our many of our customers endeavor to achieve. I think Lonza did it in a very elegant and and had a had a fantastic write about it. But at the end of the day, I think it’s a and the article touches on this, it’s a good example of what industry should dois doing. And to your question, yes, we do think it has a great impact could have a great impact on our business with regard to how we’re perceived to interact with to partner with to grow these large customers for those that are already partnered with us.
Moreover, Moda is there are installations in other customers that have Moda installed that we are not yet in. So, I think that that could create an interesting commercial pathway as well.
Anna Snipkowski, Associate, KeyBank: And have you seen any of that indirect impact so far, just like given Lonza’s reputation, other customers maybe adopting more growth direct systems or new customers entering your pipeline?
Rob Spignesi, President and CEO, Rapid Micro Biosystems: Yeah. I think, you know, it’s hard it’s hard to put a put a direct link to it. But I think, generally, I think, generally, the, it’s created a tailwind with regard to, a fantastic company like Lonza, among the largest not the largest CDMO out there, you know, selecting us. We announced Samsung not too long ago as well. Not all of our most of our customers are not publicly announced for a couple of different reasons.
So without question, it provides a fantastic stamp of approval and credibility for our business with other customers as well.
Anna Snipkowski, Associate, KeyBank: And then touching on Milapore Cigna, which was more recently, could you just describe some of the biggest benefits and the biggest motivation of this joint venture? And what is it involving having a bigger commercial team to market the Growth Direct?
Rob Spignesi, President and CEO, Rapid Micro Biosystems: Yes. So, the relationship directly addresses the three primary priorities that we speak about quite often. So it is directly designed to impact those three top tier priorities, which again is to accelerate growth direct system placements, it’s number one. Number two is accelerate gross margins. And number three is innovate new products.
So first with accelerate growth direct system placements. So at its core, it’s a worldwide co exclusive distribution agreement. And by co exclusive, we mean Rapid Microbiosystems will still sell direct to customers, but Merck Millipore Sigma will also have access to technology, not only in the pharmaceutical manufacturing end markets, but other end markets as well to include personal care, cosmetics, med device and other. As you may imagine, their sales team is quite a bit larger than ours. So, the strategy there is to have deeper and faster penetration of the growth rate across the worldwide markets, again, not only in pharmaceutical, but in adjacent markets as well.
It’s important to note that Rapid Microbiosystems will still perform all installations and services on any system sold, whether it’s through the Rapid Microbiosystems direct channel or through the Millipore Cigna channel. The second plank in the agreement is designed to improve gross margins, so much of which we procure, especially with regard to our consumable, Merck Miller, Poor Sigma sells in their product portfolio. So, the focus there is to agree to a procurement agreement, a purchasing agreement to reduce our cost of goods sold and increase gross margins more quickly than we would have without the partnership. So, we’re very, very excited about that. And there’s a number of exciting opportunities for acceleration of gross margin improvement.
And the last one thing is also important is product development. So, part of the contemplation around the partnership is that our product portfolio fits hand in glove effectively with MilliporeSigma’s current portfolio. So we see them in a lot of labs. We’re in a lot of labs around the world. So there’s clearly an opportunity to have our current products integrate and operate more smoothly together.
And then, of course, there’s contemplation around developing new technologies and products and services together going forward.
Anna Snipkowski, Associate, KeyBank: You touched on adjacent markets that Millipore will expose you to, and I think this expands your strategy, quite a bit. So what do you think the biggest opportunity is here? And what consumable application will they be using?
Rob Spignesi, President and CEO, Rapid Micro Biosystems: Yes. So, the biggest opportunity is likely personal care. Potentially, there are some opportunities in the food and beverage market, but I think personal care is to include cosmetics is probably the most organic adjacency. It’s almost the size of pharmaceutical manufacturing based on our most current research. So it’s a very, very sizable market and the growth direct can address it.
We have not gone after it largely due to commercial team size and focus. So we’re very excited to get access to that market through the Millipore Sigma team. I would say all of our applications are relevant to that market, with the possible exception of sterility. But importantly, just because the way those products are manufactured, it’s not always a sterile environment. In many cases, it’s not just a sterile environment.
But importantly, our bioburden product, it would be the functional equivalent in some ways to a sterility test in that environment. So, we could see a mix shift into more bioburden applications, which is good news for us because that creates positive gross margin mix for us. So not only the volume increased volume of growth direct systems and services generally, but an application mix shift would be accretive to our gross margins.
Anna Snipkowski, Associate, KeyBank: Got it. And then you’ve also had some internal expansions through different product launches. So you just mentioned sterility, which won’t be involved with some of your newer end markets. But just how is that launch going? And maybe just some background on it for those unfamiliar?
Rob Spignesi, President and CEO, Rapid Micro Biosystems: Yes. So, we launched a rapid sterility mid last year and it’s as I touched on earlier, our business strategy here is to capture the vast majority of test volume in any pharmaceutical manufacturing environment. So, the standard microbial quality control tests are environmental monitoring testing, which is the highest volume typically in a manufacturing plant, water testing, product slash bio burden testing, and sterility testing. That that that is the vast majority of of the microbial tests. So our strategy is to go out there and capture all that recurring revenue on a proprietary platform.
So we had, before the mid last year, we had environmental monitoring, water, and bio burden available. Now now we’ve launched sterility. So sterility test is a critical end of line test that a sterile manufacturing plant, something injectable drug, a CAR T, an injectable drug, sterile injectables, biologics, would go through to ensure the finished product, it’s actually they’ll actually sample the the syringe or the vial, is actually sterile and ready for a patient use. So a very, very important test. The the traditional method takes about two weeks if everything goes well.
It can be longer than that if there’s a retest. So it’s another two weeks. So it can be it can be quite a long time to get a result. And typically, these companies don’t ship to market while they’re waiting for a sterility test to come back. So our tests can do it in as quickly as three days, a final result and a time to detection and as early as one day.
And this test is as soon as you detect the first organism, it’s an instant fail. It’s still a bit different than the other tests. So time to detection is very, very important as well. So call between one to three days, if customers want to be conservative, maybe as long as five days, but dramatically faster than the standard two weeks, so customers can again ship to patients faster. This also we touched on this in a different context, but this also gives us a deeper access to to markets such as vaccine manufacturing, sterile injectable manufacturing, and really all segments that require a sterile format.
We’re quite excited about it.
Anna Snipkowski, Associate, KeyBank: And I know this market has a few more competitors than your other products. But do you think having a more complete end to end portfolio sets you up for greater market share?
Rob Spignesi, President and CEO, Rapid Micro Biosystems: We do. So, yes, to Anna’s point, this market has got some, obviously, some legacy, I’ll call technology enabled solutions out there. But we knew that coming to market, so we developed a, we think, a very compelling value proposition. But also, we have the Growth Direct platform that many of our customers that we would expect over time to adopt really already have with regard to environmental monitoring, water, and or bioburden. So they’re used to the system, they’re used to the benefits of the system, they’re used to how it works.
This this really growth rate is is effectively, the same growth rate as our other platform. So there’s a there’s a user synergies and benefits with regard to our platform, and it just it just creates a, a, we think, lowers lowers the friction for adoption and creates a stronger value prop versus other options out there.
Anna Snipkowski, Associate, KeyBank: Yeah. That makes sense. And then just some areas of further expansion that, I’m not sure that you’re in right now, but just GLP-one is obviously a hot topic recently. So is there a possibility to expand in that market? And would it be more sterility with injectables?
Rob Spignesi, President and CEO, Rapid Micro Biosystems: Without a doubt, GLPs is on the is high on the radar. But really, it’s a GLPs are a great example of our full strategy. So those manufacturing modalities and those customers could use growth threats across all of our entire platform, EM, water, bioburden and sterility. All those are used in reasonably high quantities by the GLP-one manufacturers.
Anna Snipkowski, Associate, KeyBank: And then another question that often comes up with investors is profitability. And one of your focuses obviously has been to improve gross margins, which you were able to achieve, I think, in March. So could you just talk about some of your further efforts to reduce measures that you’ve already taken advantage of?
Sean Wertches, CFO, Rapid Micro Biosystems: Yes. Sure, Anna. Thanks for that. I think this is a journey we’ve been on for a little while now. I think over the past two years, we’ve improved gross margins by over 50 percentage points.
So, I think we’re pretty unique in the rate of improvement that we’ve been making. And the areas we have opportunity and to continue to be areas of future opportunity, number one in that list being reducing the material cost of our products, and particularly focused on consumables and our EM consumable. So, you know, there are multiple ways we do that. We do that. There’s a procurement strategy around that.
So, can we find different vendors, get leverage relationships or volume for better pricing, to actually make the purchase price of the items less expensive? There are things we do around the composition of the product. So, things like material changes or even r and d projects for larger things to change or remove the material and, therefore, the cost that goes along with that. We have an automated manufacturing line, which is running well, but we have continued an additional opportunity to make that more efficient, which would drive product cost down in that area of the business. And we shouldn’t forget about our service business, which, you know, if you look at last year, you could see in the second half of the year, we we got up in the 50% range on gross margin service.
There’s more opportunity there from a productivity standpoint, to to continue to improve that as well. So we’re on a a nice trajectory, probably not gonna continue quite as steeply, but we think there’s meaningful annual, opportunity to continue to improve that move toward the 50% range by the end of twenty twenty seven, which is the goal we’ve previously stated publicly. I think the other thing important to note in this area, Rob touched on it, this is one of the key areas that we’re starting to focus on under our agreement with MilliporeSigma. So Rob touched on some of the consumables, for example, where we match up very, very well in terms of what they sell and what we consume. And we don’t purchase any of those items from them today.
So meaningful opportunity there, we believe. We expected it could go beyond that. So it could go to things like warehousing, leveraging their global footprint, where we pay external parties at market rates to do that right now. Maybe there’s an opportunity there. Or freight, similarly leveraging their network there.
So these are things that we have teed up and are exploring right now. Our target is to get this all figured out and in place within six months of when we sign the deal. So we are in that window. We are aggressively, getting into these conversations. And and, I think that’s upside to margins in the latter part of this year, and we definitely expect it to be additive to our margin improvement starting in 2026.
Anna Snipkowski, Associate, KeyBank: Perfect. And then just moving to another area of concern for investors recently, basically, with the news around tariffs and NIH funding. If you could just give an overview of your exposure in these areas and whether you see this as a risk in 2025?
Sean Wertches, CFO, Rapid Micro Biosystems: Yes. So, on tariffs, we manufacture all our products within twenty minutes of where we are now in Massachusetts. So, everything’s made in The U. S. We do have some items we buy from Canada.
So, if you look at the environment today, there’s a bit of exposure that we believe there may be some mitigation for. So, not something we view as a big feature right now, but obviously, it’s a really dynamic area. So, as things change, we’re staying on top of that and we’ll continue to assess whether developments have impacts or likely impacts or not. But right now, we don’t view that as a significant area based on where things sit today. I think on NAH funding, we’re typically dealing with products that are either commercial or very close to commercial.
So, in terms of our business, minimal impact from that for us. But it is something that could impact our customers. So, it’s something that we keep our
Rob Spignesi, President and CEO, Rapid Micro Biosystems: eye on from that perspective as well. Yeah. And that would probably, we’re not prevalent in the research, academic research or research broadly environment. We have got this. So I mentioned we’re more downstream in the manufacturing environment, which has got less of a NIH impact versus research.
Anna Snipkowski, Associate, KeyBank: Okay. That’s helpful. So pretty minimal exposure. And if anything, it would just be on the good things with with Canada. But we’re almost out of time.
So I just wanna thank the entire team for answering all the questions. And I feel like that was definitely very helpful to the audience and those newer to the rapid micro story. So thank you.
Rob Spignesi, President and CEO, Rapid Micro Biosystems: Thank
Sean Wertches, CFO, Rapid Micro Biosystems: you. Thank you, Anna. Thanks, everyone. Thank you.
Rob Spignesi, President and CEO, Rapid Micro Biosystems: Thank you all.
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