REPLIGEN CORP [RGEN] Filings

10-Q 1 rgen-20240630.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to___________

Commission File Number 000-14656

REPLIGEN CORPORATION

(Exact Name of Registrant as Specified in its Charter)



Delaware	04-2729386
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

41 Seyon Street, Bldg. 1, Suite 100 Waltham, MA	02453
(Address of Principal Executive Offices)	(Zip Code)

(781) 250-0111

Registrant’s Telephone Number, Including Area Code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Common Stock, par value $0.01 per share	RGEN	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:



Large accelerated filer		Accelerated filer	
Non-accelerated filer		Smaller reporting company	
Emerging growth company	

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock on July 26, 2024 was 56,006,498.

Table of Contents


		PAGE
PART I -	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	3

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2024 and 2023	4

	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2024 and 2023	5

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023	7

	Notes to Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36

Item 4.	Controls and Procedures	36

PART II -	OTHER INFORMATION

Item 1.	Legal Proceedings	38

Item 1A.	Risk Factors	38

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 3.	Defaults Upon Senior Securities	38

Item 4.	Mine Safety Disclosures	38

Item 5.	Other Information	38

Item 6.	Exhibits	39

Signatures		40

PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

REPLIGEN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, amounts in thousands, except share data)


	June 30,			December 31,
	2024			2023
ASSETS
Current assets:
Cash and cash equivalents	$	809,146		$	751,323
Accounts receivable, net of reserves of $1,823 and $2,122 at June 30, 2024 and December 31, 2023, respectively		123,245			124,161
Inventories, net		190,528			202,321
Assets held for sale		1,016			—
Prepaid expenses and other current assets		34,983			33,238
Total current assets		1,158,918			1,111,043
Noncurrent assets:
Property, plant and equipment, net		204,599			207,440
Intangible assets, net		379,813			400,486
Goodwill		985,613			987,120
Deferred tax assets		678			1,530
Operating lease right of use assets		131,450			115,515
Other noncurrent assets		853			1,277
Total noncurrent assets		1,703,006			1,713,368
Total assets	$	2,861,924		$	2,824,411
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	20,910		$	19,563
Operating lease liability		12,129			5,631
Current contingent consideration		13,936			12,983
Accrued liabilities		57,851			50,533
Convertible Senior Notes due 2024, net		69,481			69,452
Total current liabilities		174,307			158,162
Noncurrent liabilities:
Convertible Senior Notes due 2028, net		517,725			510,143
Deferred tax liabilities		36,305			40,466
Noncurrent operating lease liability		143,518			126,578
Noncurrent contingent consideration		—			14,070
Other noncurrent liabilities		3,707			3,789
Total noncurrent liabilities		701,255			695,046
Total liabilities		875,562			853,208
Commitments and contingencies (Note 10)
Stockholders' equity:
Preferred stock, $0.01 par value, 5,000,000 shares authorized, no shares issued or outstanding		—			—
Common stock, $0.01 par value; 80,000,000 shares authorized; 55,902,860 shares at June 30, 2024 and 55,766,078 shares at December 31, 2023 issued and outstanding		559			558
Additional paid-in capital		1,585,782			1,569,227
Accumulated other comprehensive loss		(44,243	)		(37,431	)
Accumulated earnings		444,264			438,849
Total stockholders’ equity		1,986,362			1,971,203
Total liabilities and stockholders’ equity	$	2,861,924		$	2,824,411

The accompanying notes are an integral part of these condensed consolidated financial statements.

REPLIGEN CORPORATION

Condensed CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, amounts in thousands, except per share data)


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Revenue:
Product	$	154,038		$	159,133		$	305,348		$	341,754
Royalty and other revenue		35			36			71			75
Total revenue		154,073			159,169			305,419			341,829
Costs and operating expenses:
Cost of goods sold		77,314			79,307			153,705			161,152
Research and development		10,575			9,706			21,813			21,860
Selling, general and administrative		64,697			48,966			126,383			105,136
Contingent consideration		—			1,791			—			3,026
Total costs and operating expenses		152,586			139,770			301,901			291,174
Income from operations		1,487			19,399			3,518			50,655
Other income (expenses):
Investment income		9,411			5,964			18,404			11,450
Interest expense		(4,981	)		(274	)		(9,872	)		(544	)
Amortization of debt issuance costs		(520	)		(457	)		(1,003	)		(914	)
Other (expenses) income		(215	)		528			(3,751	)		605
Other income, net		3,695			5,761			3,778			10,597
Income before income taxes		5,182			25,160			7,296			61,252
Income tax provision		1,861			5,096			1,881			12,359
Net income	$	3,321		$	20,064		$	5,415		$	48,893
Earnings per share:
Basic	$	0.06		$	0.36		$	0.10		$	0.88
Diluted (Note 12)	$	0.06		$	0.35		$	0.10		$	0.86
Weighted average common shares outstanding:
Basic		55,884			55,705			55,838			55,648
Diluted (Note 12)		56,434			56,858			56,477			56,932

Net income	$	3,321		$	20,064		$	5,415		$	48,893
Other comprehensive income (loss):
Foreign currency translation adjustment		(1,531	)		(6,068	)		(6,812	)		(2,795	)
Comprehensive income (loss)	$	1,790		$	13,996		$	(1,397	)	$	46,098

The accompanying notes are an integral part of these condensed consolidated financial statements.

REPLIGEN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, amounts in thousands, except share data)


	Three Months Ended June 30, 2024
	Common Stock
	Number of Shares			Par Value			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings		Total Stockholders' Equity
Balance at March 31, 2024		55,841,318		$	559		$	1,571,811		$	(42,712	)	$	440,943	$	1,970,601
Net income		—			—			—			—			3,321		3,321
Conversion of debt		2			0			(53	)		—			—		(53	)
Exercise of stock options and vesting of stock units		40,560			0			842			—			—		842
Tax withholding on vesting of restricted stock units		(7,658	)		(0	)		(1,234	)		—			—		(1,234	)
Issuance of common stock pursuant to contingent consideration earnout payments		28,638			0			5,202			—			—		5,202
Stock-based compensation expense		—			—			9,214			—			—		9,214
Translation adjustment		—			—			—			(1,531	)		—		(1,531	)
Balance at June 30, 2024		55,902,860		$	559		$	1,585,782		$	(44,243	)	$	444,264	$	1,986,362


	Three Months Ended June 30, 2023
	Common Stock
	Number of Shares			Par Value			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings		Total Stockholders' Equity
Balance at March 31, 2023		55,644,301		$	556		$	1,544,956		$	(31,121	)	$	426,101	$	1,940,492
Net income		—			—			—			—			20,064		20,064
Conversion of debt		6			0			(3	)		—			—		(3	)
Exercise of stock options and vesting of stock units		36,184			1			32			—			—		33
Tax withholding on vesting of restricted stock units		(9,631	)		(0	)		(1,547	)		—			—		(1,547	)
Issuance of common stock pursuant to the acquisition of FlexBiosys, Inc.		31,415			0			5,243			—			—		5,243
Issuance of common stock pursuant to contingent consideration earnout payments		42,621			0			7,229			—			—		7,229
Stock-based compensation expense		—			—			5,483			—			—		5,483
Translation adjustment		—			—			—			(6,068	)		—		(6,068	)
Balance at June 30, 2023		55,744,896		$	557		$	1,561,393		$	(37,189	)	$	446,165	$	1,970,926


	Six Months Ended June 30, 2024
	Common Stock
	Number of Shares			Par Value			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings		Total Stockholders' Equity
Balance at December 31, 2023		55,766,078		$	558		$	1,569,227		$	(37,431	)	$	438,849	$	1,971,203
Net income		—			—			—			—			5,415		5,415
Conversion of debt		2			0			(107	)		—			—		(107	)
Exercise of stock options and vesting of stock units		152,481			2			1,786			—			—		1,788
Tax withholding on vesting of restricted stock units		(47,109	)		(1	)		(8,856	)		—			—		(8,857	)
Issuance of common stock pursuant to contingent consideration earnout payments		31,408			0			5,742			—			—		5,742
Stock-based compensation expense		—			—			17,990			—			—		17,990
Translation adjustment		—			—			—			(6,812	)		—		(6,812	)
Balance at June 30, 2024		55,902,860		$	559		$	1,585,782		$	(44,243	)	$	444,264	$	1,986,362


	Six Months Ended June 30, 2023
	Common Stock
	Number of Shares			Par Value			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings		Total Stockholders' Equity
Balance at December 31, 2022		55,557,698		$	556		$	1,547,266		$	(34,394	)	$	397,272	$	1,910,700
Net income		—			—			—			—			48,893		48,893
Conversion of debt		6			—			(3	)		—			—		(3	)
Exercise of stock options and vesting of stock units		176,394			2			60			—			—		62
Tax withholding on vesting of restricted stock units		(63,238	)		(1	)		(11,139	)		—			—		(11,140	)
Issuance of common stock pursuant to the acquisition of FlexBiosys, Inc.		31,415			0			5,243			—			—		5,243
Issuance of common stock pursuant to the contingent consideration earnout payments		42,621			0			7,229			—			—		7,229
Stock-based compensation expense		—			—			12,737			—			—		12,737
Translation adjustment		—			—			—			(2,795	)		—		(2,795	)
Balance at June 30, 2023		55,744,896		$	557		$	1,561,393		$	(37,189	)	$	446,165	$	1,970,926

The accompanying notes are an integral part of these condensed consolidated financial statements.

REPLIGEN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, amounts in thousands)


	Six Months Ended June 30,
	2024			2023
Cash flows from operating activities:
Net income	$	5,415		$	48,893
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		33,648			31,237
Amortization of debt discount and issuance costs		7,727			914
Stock-based compensation		17,990			12,737
Deferred income taxes, net		(2,634	)		(2,196	)
Contingent consideration		—			3,026
Non-cash interest income		—			(2,023	)
Other		(172	)		574
Changes in operating assets and liabilities, excluding impact of acquisitions:
Accounts receivable		(1,245	)		(4,606	)
Inventories		10,474			(2,508	)
Prepaid expenses and other assets		(1,999	)		(11,530	)
Operating lease right of use assets		(16,349	)		6,487
Other assets		364			(888	)
Accounts payable		1,547			(3,871	)
Accrued expenses		8,366			(26,234	)
Operating lease liabilities		23,867			(4,544	)
Long-term liabilities		(101	)		154
Total cash provided by operating activities		86,898			45,622
Cash flows from investing activities:
Acquisitions, net of cash acquired		—			(28,099	)
Proceeds from maturity of marketable securities held to maturity		—			102,323
Additions to capitalized software costs		(2,619	)		(2,075	)
Purchases of property, plant and equipment		(13,154	)		(16,749	)
Other investing activities		11			—
Total cash (used in) provided by investing activities		(15,762	)		55,400
Cash flows from financing activities:
Proceeds from exercise of stock options		1,788			62
Payment of tax withholding obligation on vesting of restricted stock		(8,857	)		(11,140	)
Payment of earnout consideration		(7,375	)		(7,298	)
Other financing activities		(303	)		(12	)
Total cash used in financing activities		(14,747	)		(18,388	)
Effect of exchange rate changes on cash and cash equivalents		1,434			(2,436	)
Net increase in cash and cash equivalents		57,823			80,198
Cash, cash equivalents, beginning of period		751,323			523,458
Cash and cash equivalents, end of period	$	809,146		$	603,656
Supplemental disclosure of non-cash investing and financing activities:
Assets acquired under operating leases	$	23,860		$	831
Fair value of shares of common stock issued for contingent consideration earnouts	$	5,742		$	7,229
Fair value of 31,415 shares of common stock issued for the acquisition of FlexBiosys, Inc.	$	—		$	5,243

The accompanying notes are an integral part of these condensed consolidated financial statements.

REPLIGEN CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Summary of Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by Repligen Corporation (the “Company”, “Repligen”, “our” or “we”) in accordance with generally accepted accounting principles accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”), for Quarterly Reports on Form 10-Q (“Form 10-Q”) and Article 10 of Regulation S-X and do not include all of the information and footnote disclosures required by GAAP. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 22, 2024 (“Form 10-K”).

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The business and economic uncertainty resulting from global geopolitical conflicts, supply chain challenges, cost pressure and the overall effects of the current inflationary environment on customers' purchasing patterns has made such estimates more difficult to calculate. Accordingly, actual results could differ from those estimates.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

The Company made no material changes in the application of its significant accounting policies that were disclosed in its Form 10-K. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of only normal, recurring adjustments necessary for a fair presentation of its financial position as of June 30, 2024, its results of operations for the three and six months ended June 30, 2024 and 2023 and cash flows for the six months ended June 30, 2024 and 2023. The results of operations for the interim periods presented are not necessarily indicative of results to be expected for the entire year.

Assets Held for Sale

An asset is considered to be held for sale when all the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that the disposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete the sale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively being marketed for sale at a price that is reasonable given its current market value.

Recent Accounting Guidance

The Company considers the applicability and impact of all Accounting Standards Updates (“ASU” or “ASUs”) and other recently issued guidance or rule decisions on their condensed consolidated financial statements. Updates not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s condensed consolidated financial position or results of operations. Recently issued accounting guidance that the Company feels may be applicable to them is as follows:

Recently Issued Accounting Guidance – Not Yet Adopted

In March 2024, the SEC adopted final rules under SEC Release No. 33-11275 requiring public companies to provide certain climate-related information in their registration statements and annual reports. As part of the disclosures, registrants will be required to quantify certain effects of severe weather events and other natural conditions in a note to their audited financial statements. The rules were immediately challenged in a number of lawsuits, which were subsequently consolidated by the U.S. Court of Appeals for the Eighth Circuit. In April 2024, the SEC announced that it is staying implementation of the new rules

pending resolution of the consolidated litigation before the Eighth Circuit. The Company is assessing the effect of compliance with the new rules on its condensed consolidated financial statements and related disclosures.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures.” ASU 2023-09 enhances the transparency and decision usefulness of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. ASU 2023-09 will be effective for the Company in its income tax disclosure included in its 2025 Annual Report on Form 10-K and will be applied on a prospective basis. However, retrospective application is permitted. Early adoption is also permitted. Besides a change in income tax disclosures, the Company does not expect the adoption of ASU 2023-09 to have a material impact on its condensed consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 820) - Improvements to Reportable Segment Disclosures.” ASU 2023-07 will improve reportable segment disclosure requirements, primarily through enhanced annual and interim disclosures about significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”). The disclosures required under ASU 2023-07 are also required for public entities with a single reportable segment. ASU 2023-07 will be effective for the Company for annual periods beginning on January 1, 2024 and interim periods beginning on January 1, 2025. The amendments of this guidance apply retrospectively to all prior periods presented in the condensed consolidated financial statements. Early adoption is permitted. Besides presentation in the segment footnote for its interim reporting, the Company does not expect the adoption of ASU 2023-07 to have a material impact on its condensed consolidated financial statements.

Fair Value Measurements

The Company uses various valuation approaches in determining the fair value of its assets and liabilities. The Company employs a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:


Level 1 -	Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 -	Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities.

Level 3 -	Valuations based on inputs that are unobservable or significant to the overall fair value measurement.

The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value

hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level input that is significant to the overall fair value measurement.

Fair Value Measured on a Recurring Basis

Financial assets and financial liabilities measured at fair value on a recurring basis consist of the following as of June 30, 2024 and December 31, 2023 (amounts in thousands):


	As of June 30, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Money market accounts	$	735,008	$	—	$	—	$	735,008
Liabilities: