Bio-Techne Fiscal Q4 Revenues Climb 15 Percent

NEW YORK (GenomeWeb) – Bio-Techne said today that its fiscal 2018 fourth quarter revenues were up 15 percent over Q4 2017. On an organic basis, revenues grew 9 percent year over year. 

For the three months ended June 30, the firm reported revenues of $180.3 million compared to $156.6 million in Q4 2017, besting analysts' average estimate of $174.8 million. 

The firm reported that in Q4 its diagnostics revenues rose 2 percent year over year to $33.1 million from $32.6 million. Protein platforms revenues rose 21 percent year over year to $32.3 million from $26.8 million, and biotechnology revenues grew 18 percent to $115 million from $97.2 million. 

Bio-Techne President and CEO Chuck Kummeth said in a statement that the firm's recent acquisitions of Quad Technologies and ExosomeDx expands the company's runway "into the growing and scalable markets of cell therapy and cancer diagnostics, markets that already know our brands for research reagents and tools." 

He added, "Our Advanced Cell Diagnostics platform finished the year with over 30 percent organic growth… [We] are hopeful that Medicare will approve reimbursement for ExoDx Prostate IntelliScore, a urine-based test, to assist physicians in determining the need for a prostate biopsy in patients with an ambiguous PSA test result."

Medicare approval will support rapid adoption for the technology platform, he said.

On a conference call to discuss the results, Kummeth noted that it was a tough year overall for its diagnostics division with the timing of original equipment manufacturer orders resulting in a 2 percent decline in organic revenues in the fourth quarter and a 1 percent decline in organic revenues for FY 2018.

An industry trend toward continuous glucose monitoring led to a reduction in the need for glucose controls, which also impacted revenues, he said. "However, we did see strength in our hematology controls and point-of-care diagnostics kit and reagents manufacturing, and we expect the strength of these product lines to continue to increase in fiscal 2019 and offset the decline in revenues for glucose controls," Kummeth said. The company anticipates expanding its facilities to accommodate the growth in demand for these growth areas of its diagnostics business.

The firm had previously noted its intention to expand from research tools into diagnostics and therapeutics tools. "With the purchases of Quad Technologies and Exosome Diagnostics, we have accomplished both," Kummeth said.

He said that Exosomes Diagnostics has advanced the use of exosomes in liquid biopsy diagnostics, and noted that the cell-derived vesicles have key advantages, including their abundance in most bodily fluids. Exosomes can also be isolated during all stages of the disease relatively easily, and they provide insights into the status of the tissue of origin, he said.

Exosome Diagnostics' EPI test has a rule-out sensitivity of 92 percent, he said, adding, "We are quickly becoming a company for cancer research, diagnosis, and cancer research."

In its biotechnology division, Kummeth noted, core products continued to perform well with broad growth across all product lines within the segment, including proteins, antibodies, and assays. The firm has validated "a growing number" of antibodies using advances in CRISPR gene-editing technology.

Protein platforms came roaring back in the fourth quarter with nearly 20 percent organic growth for the quarter and full year, he said. The biggest story in protein platforms this year has been its automated western blot platform, which appears to have crossed the chasm from demand by early adopters to use by more mainstream customers in their workflows. The technology grew 30 percent year over year in the quarter and 25 percent for the year, Kummeth said.

Bio-Techne's Q4 net income was $40.9 million, or $1.07 per share, compared to $27.6 million, or $.74 per share, in the prior-year quarter. The firm reported adjusted EPS of $1.34, besting analysts' average estimate of $1.29 per share.

Bio-Techne's R&D expenses for the fourth quarter were up 2 percent to $14.0 million from $13.7 million, while SG&A expenses rose 34 percent to $65.3 million from $48.6 million.

For full FY 2018, Bio-Techne's revenues increased 14 percent to $643 million from $563 million in FY 2017. Its diagnostics revenues for the full year grew 3 percent to $110.1 million from 107.1 million in 2017.

Revenues from the protein platforms segment increased 22 percent to $111.9 million from $91.5 million, and biotechnology revenues were up 16 percent to $421.5 million from $364.5 million.

Bio-Techne's net income rose to $125.4 million, or $3.29 per share, compared to $76.1 million, or $2.03 per share, in FY 2017. Adjusted EPS for FY 2018 was $4.54 per share, exceeding the Wall Street average estimate of $4.43 per share.

The firm's R&D expenses for the year rose 3 percent to $55.3 million from $53.5 million in the prior year, while SG&A expenses rose 20 percent to $240.6 million in 2018 from $200.4 million in 2017.

Bio-Techne finished the year with $122 million in cash and cash equivalents and $59.8 million in short-term investments.

In mid-morning trading on the Nasdaq, Bio-Techne's shares were up almost 8 percent to $181.52