Repligen is a leading manufacturer of Protein A, a critical reagent used to manufacture monoclonal antibody-based therapeutics. They also supply several “growth factor” products used to increase cell culture productivity in biomanufacturing.
In the burgeoning area of disposable biomanufacturing technologies, the company has developed and markets a series of OPUS (Open Platform User Specified) single-use chromatography columns used in the biologics purification process. This is the leading edge technology replacing glass columns in the biopharma world.
In addition to Repligen’s core bioprocessing business, they have a portfolio of clinical-stage partnering assets, including two central nervous system orphan drug candidates and a pancreatic imaging agent in Phase 3 development.
Supplier to the Stars
Repligen supplies R&D and commercial scale recombinant Protein A and affinity chromatography resins to world-class partners and customers.
As the original pioneer in recombinant Protein A, chromatography ligands manufactured by Repligen are used in the manufacture of over half the world’s approved monoclonal antibody therapeutics.
Last week, General Electric (GE – Analyst Report) reported 23% growth in bioprocessing compared to 13% in 2Q with Europe (+42%) and China (+162%) standing out. The bodes well for the bioprocessing industry where Repligen both competes with and supplies other giants like Thermo Fisher (TMO – Analyst Report).
But with its proprietary technologies and reputation for excellent quality, this small-cap also trades at a premium valuation because it is an assumed take-over target at any time.
On the Way to $100 Million in Sales Next Year
The good news is that the stock was recently “on sale” down at $25 and found hungry buyers as the entire Healthcare sector, and Biotech (IBB – ETF report) in particular, surged late last week. And the news from GE on Friday in their Q3 report added fuel to Repligen’s fire, especially after Janney Montgomery Scott made a bullish call on the stock. Analyst Paul Knight, CFA, had this to say…
“After the successful launch of OPUS 45 & 60cm columns, Repligen is the only player able to provide a full suite of columns to convert glass column users. With an addressable market of $100-150m, we see more rapid adoption of OPUS in 2016 and 2017 as a key driver of revenue growth. Implementing OPUS allows manufacturing to be standardized from pre clinical to phase II, saves ~100 man hours (compared to glass), and cost savings of 20-30%.”
I recently updated my Biotech Bull Market Drivers report for Zacks Confidential and came away no less bullish than I was at the start of 2015. In fact, many of the stocks I was recommending then were back at bargain levels.
Repligen almost made my short list. But the real point is that as long as money is pouring into the R&D labs of hundreds of life sciences companies, Repligen’s products and services will see solid and growing demand.
Kevin Cook is a Senior Stock Strategist for Zacks where he runs the Follow The Money portfolio.