10-Q 1 rgen-20240331.htm 10-Q 10-Q
falseQ1--12-3100007302720000730272us-gaap:RoyaltyMember2023-01-012023-03-310000730272us-gaap:LandMember2024-03-310000730272us-gaap:CustomerConcentrationRiskMembersrt:MinimumMemberus-gaap:SalesRevenueNetMember2024-01-012024-03-310000730272us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310000730272rgen:ExchangeTransactionMemberrgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2023-12-142023-12-140000730272us-gaap:MeasurementInputPriceVolatilityMemberrgen:ContingentConsiderationMemberrgen:RevenueAndVolumeBasedPaymentsMemberus-gaap:FairValueMeasurementsRecurringMemberrgen:MonteCarloSimulationMember2024-03-310000730272rgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2024-01-012024-03-310000730272rgen:TrademarkMember2024-03-310000730272rgen:FlexbiosysIncMemberus-gaap:NoncompeteAgreementsMember2024-01-012024-03-310000730272us-gaap:CustomerRelationshipsMember2023-12-310000730272rgen:ApacOtherMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310000730272rgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMemberrgen:ModifiedTwoZeroOneNineNotesMember2023-12-310000730272us-gaap:ResearchAndDevelopmentExpenseMemberus-gaap:EmployeeSeveranceMember2024-01-012024-03-310000730272rgen:TwoZeroTwoThreeNotesMemberrgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2024-01-012024-03-310000730272srt:MaximumMemberrgen:ContingentConsiderationMemberus-gaap:FairValueMeasurementsRecurringMemberrgen:AvitideFlexbiosysAndMetenovaMemberrgen:MonteCarloSimulationMember2024-03-310000730272us-gaap:BuildingMember2024-03-310000730272rgen:AcceleratedDepreciationMember2024-03-310000730272us-gaap:MoneyMarketFundsMember2023-12-310000730272us-gaap:RestrictedStockUnitsRSUMember2024-03-280000730272us-gaap:AdditionalPaidInCapitalMember2022-12-310000730272rgen:ContingentConsiderationMember2024-01-012024-03-310000730272us-gaap:TrademarksMember2024-03-310000730272us-gaap:CustomerConcentrationRiskMemberrgen:PfizerMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310000730272rgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2023-12-060000730272us-gaap:RoyaltyMember2024-01-012024-03-310000730272rgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2023-12-140000730272us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2023-12-310000730272rgen:MetenovaHoldingAbMemberus-gaap:DevelopedTechnologyRightsMember2024-03-310000730272us-gaap:PrincipalOwnerMember2023-01-012023-03-310000730272rgen:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwentyTwentyFourMember2019-07-190000730272us-gaap:CommonStockMember2023-12-310000730272rgen:TwoZeroTwoNineteenNotesMember2023-03-310000730272rgen:ContingentConsiderationMemberrgen:RevenueAndVolumeBasedPaymentsMemberus-gaap:FairValueMeasurementsRecurringMemberrgen:MonteCarloSimulationMember2024-03-310000730272rgen:SubscriptionTransactionsMemberrgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2023-12-140000730272us-gaap:EmployeeSeveranceMemberus-gaap:CostOfSalesMember2024-01-012024-03-310000730272rgen:MetenovaHoldingAbMemberus-gaap:TradeNamesMember2024-03-310000730272rgen:AcceleratedDepreciationMemberus-gaap:CostOfSalesMember2024-01-012024-03-310000730272us-gaap:SalesRevenueNetMember2024-01-012024-03-310000730272rgen:MetenovaHoldingAbMemberus-gaap:TradeNamesMember2024-01-012024-03-310000730272us-gaap:RetainedEarningsMember2022-12-310000730272rgen:FacilityAndOtherExitCostsMemberus-gaap:CostOfSalesMember2024-01-012024-03-310000730272srt:ExecutiveOfficerMemberus-gaap:EmployeeStockOptionMember2024-03-310000730272us-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMemberrgen:CustomerNumberOneMember2023-01-012023-12-310000730272rgen:TrademarkMember2023-12-310000730272us-gaap:FairValueInputsLevel3Member2024-03-310000730272rgen:AcceleratedDepreciationMember2024-01-012024-03-310000730272rgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMemberus-gaap:CommonStockMember2024-03-310000730272us-gaap:AdditionalPaidInCapitalMember2023-03-310000730272rgen:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwentyTwentyFourMember2019-07-192019-07-190000730272us-gaap:CommonStockMember2024-03-3100007302722024-04-290000730272rgen:RestrictedStockAndPerformanceStockUnitsMember2023-01-012023-03-310000730272us-gaap:DevelopedTechnologyRightsMember2023-12-310000730272rgen:MetenovaHoldingAbMember2024-01-012024-03-310000730272rgen:NotesMember2023-12-140000730272rgen:ZeroPointThreeSevenFivePercentageConvertibleSeniorNotesDueTwentyTwentyFourMember2019-07-310000730272rgen:ZeroPointThreeSevenFivePercentageConvertibleSeniorNotesDueTwentyTwentyFourMember2024-03-310000730272rgen:RestrictedStockAndPerformanceStockUnitsMembersrt:ExecutiveOfficerMember2024-03-310000730272rgen:ContingentConsiderationMemberrgen:MeasurementInputProbabilityOfSuccessMemberus-gaap:FairValueMeasurementsRecurringMemberrgen:AvitideFlexbiosysAndMetenovaMemberrgen:MonteCarloSimulationMember2024-03-310000730272rgen:FlexbiosysIncMemberus-gaap:CustomerRelationshipsMember2024-01-012024-03-310000730272us-gaap:RetainedEarningsMember2024-01-012024-03-310000730272rgen:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwentyTwentyFourMember2023-12-3100007302722024-01-012024-03-310000730272rgen:MetenovaHoldingAbMemberus-gaap:DevelopedTechnologyRightsMember2024-01-012024-03-310000730272rgen:FlexbiosysIncMemberus-gaap:CustomerRelationshipsMember2024-03-310000730272us-gaap:CommonStockMember2024-01-012024-03-310000730272rgen:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwentyTwentyFourMember2019-07-310000730272rgen:FacilityAndOtherExitCostsMember2024-01-012024-03-310000730272us-gaap:ProductMember2023-01-012023-03-310000730272us-gaap:ResearchAndDevelopmentArrangementMemberrgen:NGLImpactAMember2023-01-012023-03-310000730272us-gaap:EmployeeSeveranceMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2024-01-012024-03-310000730272rgen:ExchangeTransactionMemberrgen:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwentyTwentyFourMember2023-12-310000730272us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310000730272rgen:TwoZeroTwoThreeNotesMember2024-03-310000730272rgen:NonExecutiveMemberrgen:RestrictedStockAndPerformanceStockUnitsMember2024-03-310000730272rgen:ContingentConsiderationMemberus-gaap:FairValueMeasurementsRecurringMemberrgen:AvitideFlexbiosysAndMetenovaMemberrgen:MonteCarloSimulationMember2024-03-310000730272rgen:MetenovaHoldingAbMemberus-gaap:CustomerRelationshipsMember2024-01-012024-03-310000730272rgen:ContingentConsiderationMemberus-gaap:FairValueMeasurementsRecurringMembersrt:MinimumMemberrgen:AvitideFlexbiosysAndMetenovaMemberrgen:MonteCarloSimulationMember2024-03-310000730272us-gaap:EmployeeSeveranceMember2024-01-012024-03-310000730272rgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMemberrgen:ModifiedTwoZeroOneNineNotesMember2023-12-142023-12-140000730272us-gaap:TrademarksMember2023-12-310000730272us-gaap:CustomerConcentrationRiskMemberrgen:PfizerMemberus-gaap:SalesRevenueNetMembersrt:MinimumMember2023-01-012023-03-310000730272us-gaap:PrivatePlacementMemberrgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2023-12-140000730272rgen:ContingentConsiderationMemberrgen:ManufacturingLineExpansionsMemberus-gaap:FairValueMeasurementsRecurringMembersrt:MinimumMemberrgen:ProbabilityWeightedPresentValueMember2024-03-310000730272rgen:FairValueOfEmbeddedConversionOptionMemberrgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMemberrgen:ModifiedTwoZeroOneNineNotesMember2024-01-012024-03-310000730272rgen:FlexbiosysIncMember2023-04-172023-04-170000730272rgen:MetenovaHoldingAbMemberus-gaap:CommonStockMember2023-10-022023-10-020000730272us-gaap:RetainedEarningsMember2024-03-310000730272us-gaap:OtherIntangibleAssetsMember2024-03-310000730272us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310000730272us-gaap:OtherIntangibleAssetsMember2023-12-310000730272rgen:FlexbiosysIncMemberus-gaap:DevelopedTechnologyRightsMember2024-01-012024-03-310000730272rgen:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwentyTwentyFourMember2024-03-310000730272rgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2023-12-3100007302722024-03-310000730272us-gaap:RetainedEarningsMember2023-01-012023-03-310000730272rgen:StockOptionAndIncentivePlanMember2018-12-310000730272rgen:TwoZeroTwoNineteenNotesMember2024-03-310000730272us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-03-310000730272rgen:ContingentConsiderationMember2023-12-310000730272rgen:SubscriptionTransactionsMemberrgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2023-12-142023-12-140000730272rgen:FlexbiosysIncMemberus-gaap:TradeNamesMember2024-03-310000730272rgen:ContingentConsiderationMemberrgen:ManufacturingLineExpansionsMemberrgen:MeasurementInputProbabilityOfSuccessMemberus-gaap:FairValueMeasurementsRecurringMemberrgen:MonteCarloSimulationMember2024-03-310000730272us-gaap:RetainedEarningsMember2023-12-310000730272srt:NorthAmericaMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2024-01-012024-03-310000730272rgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMemberrgen:ModifiedTwoZeroOneNineNotesMember2024-03-310000730272rgen:FlexbiosysIncMemberus-gaap:TrademarksAndTradeNamesMember2024-03-310000730272us-gaap:DevelopedTechnologyRightsMember2024-03-310000730272rgen:FlexbiosysIncMemberus-gaap:CommonStockMember2023-04-172023-04-170000730272rgen:ContingentConsiderationMemberrgen:RevenueAndVolumeBasedPaymentsMemberus-gaap:FairValueMeasurementsRecurringMembersrt:MinimumMemberrgen:MonteCarloSimulationMember2024-03-310000730272rgen:FlexbiosysIncMember2023-04-170000730272rgen:TwoZeroTwoThreeNotesMember2024-01-012024-03-310000730272us-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMemberrgen:CustomerNumberOneMember2024-01-012024-03-310000730272us-gaap:CostOfSalesMember2023-01-012023-03-310000730272rgen:ZeroPointThreeSevenFivePercentageConvertibleSeniorNotesDueTwentyTwentyFourMember2023-12-310000730272rgen:MetenovaHoldingAbMember2023-10-022023-10-020000730272rgen:TwoZeroTwoNineteenNotesMember2024-01-012024-03-3100007302722023-03-310000730272rgen:FlexbiosysIncMemberus-gaap:DevelopedTechnologyRightsMember2024-03-310000730272rgen:UnvestedOptionsMember2024-01-012024-03-310000730272rgen:ContingentConsiderationMemberrgen:RevenueAndVolumeBasedPaymentsMemberrgen:MeasurementInputEarnoutDiscountRateMemberus-gaap:FairValueMeasurementsRecurringMemberrgen:MonteCarloSimulationMember2024-03-310000730272us-gaap:ResearchAndDevelopmentArrangementMemberrgen:NGLImpactAMember2024-01-012024-03-310000730272rgen:FacilityExitAndOtherExitCostsMember2024-01-012024-03-310000730272rgen:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwentyTwentyFourMember2023-12-1400007302722023-01-012023-03-310000730272rgen:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwentyTwentyFourMemberus-gaap:CommonStockMember2019-07-190000730272rgen:MetenovaHoldingAbMember2024-03-310000730272us-gaap:PrincipalOwnerMember2024-01-012024-03-310000730272rgen:ContingentConsiderationMemberrgen:ManufacturingLineExpansionsMemberrgen:MeasurementInputEarnoutDiscountRateMemberus-gaap:FairValueMeasurementsRecurringMemberrgen:ProbabilityWeightedPresentValueMember2024-03-310000730272rgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2024-03-310000730272rgen:ContingentConsiderationMemberrgen:ManufacturingLineExpansionsMemberus-gaap:FairValueMeasurementsRecurringMemberrgen:ProbabilityWeightedPresentValueMember2024-03-310000730272rgen:ExchangedTwoZeroOneNineNotesMemberrgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2023-12-142023-12-140000730272us-gaap:TrademarksAndTradeNamesMemberrgen:MetenovaHoldingAbMember2024-03-310000730272us-gaap:SellingGeneralAndAdministrativeExpensesMember2024-01-012024-03-310000730272rgen:FacilityExitAndOtherExitCostsMember2024-03-310000730272rgen:FairValueOfEmbeddedConversionOptionMemberrgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMemberrgen:ModifiedTwoZeroOneNineNotesMember2023-01-012023-12-310000730272rgen:StockOptionAndIncentivePlanMember2024-03-310000730272us-gaap:CommonStockMember2023-01-012023-03-310000730272us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-03-310000730272rgen:ExchangedTwoZeroOneNineNotesMemberrgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2023-01-012023-12-310000730272us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310000730272rgen:TwoZeroTwoThreeNotesMemberrgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2024-03-310000730272rgen:ExchangedTwoZeroOneNineNotesMemberrgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2023-12-140000730272rgen:FlexbiosysIncMemberus-gaap:TradeNamesMember2024-01-012024-03-310000730272rgen:ZeroPointThreeSevenFivePercentageConvertibleSeniorNotesDueTwentyTwentyFourMember2024-01-012024-03-310000730272rgen:TwoZeroTwoNineteenNotesMember2023-01-012023-03-310000730272us-gaap:PatentsMember2023-12-310000730272us-gaap:ProductMember2024-01-012024-03-310000730272us-gaap:CommonStockMember2023-03-310000730272rgen:ContingentConsiderationMemberrgen:ManufacturingLineExpansionsMemberus-gaap:FairValueMeasurementsRecurringMemberrgen:MonteCarloSimulationMember2024-03-310000730272rgen:ExchangeAndSubscriptionAgreementsMemberrgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2023-12-140000730272rgen:InflationReductionActOfTwoThousandTwentyTwoMember2021-01-012021-12-310000730272us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2024-03-310000730272us-gaap:CommonStockMember2022-12-3100007302722022-12-310000730272us-gaap:RetainedEarningsMember2023-03-310000730272rgen:RestrictedStockAndPerformanceStockUnitsMember2024-01-012024-03-310000730272us-gaap:PatentsMember2024-03-310000730272rgen:MetenovaHoldingAbMemberus-gaap:CustomerRelationshipsMember2024-03-310000730272us-gaap:AdditionalPaidInCapitalMember2024-03-310000730272us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-01-012023-03-310000730272srt:EuropeMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310000730272us-gaap:EmployeeSeveranceMember2024-03-310000730272rgen:FacilityAndOtherExitCostsMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2024-01-012024-03-310000730272us-gaap:MoneyMarketFundsMember2024-03-3100007302722023-01-012023-09-300000730272us-gaap:AdditionalPaidInCapitalMember2023-12-310000730272rgen:ContingentConsiderationMember2024-03-310000730272srt:MinimumMemberus-gaap:PrincipalOwnerMemberrgen:SpectrumIncMember2024-03-310000730272rgen:ExchangedTwoZeroOneNineNotesMemberrgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2023-12-310000730272us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310000730272us-gaap:AdditionalPaidInCapitalMemberrgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMemberrgen:ModifiedTwoZeroOneNineNotesMember2023-12-142023-12-140000730272rgen:MetenovaHoldingAbMember2023-10-020000730272us-gaap:ResearchAndDevelopmentExpenseMemberrgen:FacilityAndOtherExitCostsMember2024-01-012024-03-310000730272rgen:FlexbiosysIncMemberus-gaap:NoncompeteAgreementsMember2024-03-310000730272rgen:ContingentConsiderationMemberrgen:MeasurementInputEarnoutDiscountRateMemberus-gaap:FairValueMeasurementsRecurringMemberrgen:AvitideFlexbiosysAndMetenovaMemberrgen:MonteCarloSimulationMember2024-03-310000730272us-gaap:FairValueInputsLevel3Member2023-12-310000730272rgen:FlexbiosysIncMember2024-03-310000730272srt:MaximumMemberrgen:ContingentConsiderationMemberrgen:ManufacturingLineExpansionsMemberus-gaap:FairValueMeasurementsRecurringMemberrgen:ProbabilityWeightedPresentValueMember2024-03-310000730272rgen:TwoZeroTwoThreeNotesMemberrgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2023-12-310000730272rgen:AvitideIncMember2024-01-012024-03-310000730272rgen:AcceleratedDepreciationMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2024-01-012024-03-3100007302722023-12-310000730272us-gaap:NoncompeteAgreementsMemberrgen:MetenovaHoldingAbMember2024-03-310000730272us-gaap:ResearchAndDevelopmentExpenseMemberrgen:AcceleratedDepreciationMember2024-01-012024-03-310000730272srt:EuropeMemberus-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMember2024-01-012024-03-310000730272rgen:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwentyTwentyFourMember2024-01-012024-03-310000730272srt:NorthAmericaMemberus-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMember2023-01-012023-03-310000730272rgen:ApacOtherMemberus-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMember2024-01-012024-03-310000730272us-gaap:CostOfSalesMember2024-01-012024-03-310000730272us-gaap:CustomerRelationshipsMember2024-03-310000730272us-gaap:NoncompeteAgreementsMemberrgen:MetenovaHoldingAbMember2024-01-012024-03-310000730272rgen:ContingentConsiderationMemberrgen:RevenueAndVolumeBasedPaymentsMemberus-gaap:FairValueMeasurementsRecurringMemberrgen:MeasurementInputRevenueVolumeDiscountRateMemberrgen:MonteCarloSimulationMember2024-03-310000730272rgen:NonExecutiveMemberus-gaap:EmployeeStockOptionMember2024-03-310000730272srt:MaximumMemberrgen:ContingentConsiderationMemberrgen:RevenueAndVolumeBasedPaymentsMemberus-gaap:FairValueMeasurementsRecurringMemberrgen:MonteCarloSimulationMember2024-03-310000730272us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310000730272rgen:FlexbiosysIncMember2024-01-012024-03-310000730272rgen:SubscriptionTransactionMemberrgen:OnePointZeroZeroPercentConvertibleSeniorNotesDueTwentyTwentyEightMember2023-12-14iso4217:USDxbrli:sharesxbrli:purexbrli:sharesrgen:Segmentrgen:Daysiso4217:USD

 

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 March 31, 2024

OR

 

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 April 29, 2024 was 55,875,894.

1


 

Table of Contents

 

 

 

PAGE

PART I -

FINANCIAL INFORMATION

 

 

 

 

 

 

Item 1.

Financial Statements (interim periods unaudited)

 

 

 

 

 

 

Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023

 

3

 

 

 

 

Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three Months Ended March 31, 2024 and 2023

 

4

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2024 and 2023

 

5

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023

 

6

 

 

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

 

7

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

25

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

33

 

 

 

 

Item 4.

Controls and Procedures

 

33

 

 

 

 

PART II -

OTHER INFORMATION

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

35

 

 

 

 

Item 1A.

Risk Factors

 

35

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

35

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

35

 

 

 

 

Item 4.

Mine Safety Disclosures

 

35

 

 

 

 

Item 5.

Other Information

 

35

 

 

 

 

Item 6.

Exhibits

 

36

 

 

 

Signatures

 

37

 

2


 

PART I – FINANCIAL INFORMATION

 

ITEM 1. Financial Statements

 

REPLIGEN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, amounts in thousands, except share data)

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

780,617

 

 

$

751,323

 

Accounts receivable, net of reserves of $1,918 and $2,122 at
   March 31, 2024 and December 31, 2023, respectively

 

 

115,766

 

 

 

124,161

 

Inventories, net

 

 

198,033

 

 

 

202,321

 

Assets held for sale

 

 

1,016

 

 

 

 

Prepaid expenses and other current assets

 

 

37,586

 

 

 

33,238

 

Total current assets

 

 

1,133,018

 

 

 

1,111,043

 

Noncurrent assets:

 

 

 

 

 

 

Property, plant and equipment, net

 

 

205,716

 

 

 

207,440

 

Intangible assets, net

 

 

388,146

 

 

 

400,486

 

Goodwill

 

 

985,963

 

 

 

987,120

 

Deferred tax assets

 

 

866

 

 

 

1,530

 

Operating lease right of use assets

 

 

134,604

 

 

 

115,515

 

Other noncurrent assets

 

 

956

 

 

 

1,277

 

Total noncurrent assets

 

 

1,716,251

 

 

 

1,713,368

 

Total assets

 

$

2,849,269

 

 

$

2,824,411

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

18,731

 

 

$

19,563

 

Operating lease liability

 

 

9,781

 

 

 

5,631

 

Current contingent consideration

 

 

24,352

 

 

 

12,983

 

Accrued liabilities

 

 

55,971

 

 

 

50,533

 

Convertible Senior Notes due 2024, net

 

 

69,480

 

 

 

69,452

 

Total current liabilities

 

 

178,315

 

 

 

158,162

 

Noncurrent liabilities:

 

 

 

 

 

 

Convertible Senior Notes due 2028, net

 

 

513,918

 

 

 

510,143

 

Deferred tax liabilities

 

 

38,238

 

 

 

40,466

 

Noncurrent operating lease liability

 

 

144,551

 

 

 

126,578

 

Noncurrent contingent consideration

 

 

 

 

 

14,070

 

Other noncurrent liabilities

 

 

3,646

 

 

 

3,789

 

Total noncurrent liabilities

 

 

700,353

 

 

 

695,046

 

Total liabilities

 

 

878,668

 

 

 

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; 55,841,318
   shares at March 31, 2024 and
55,766,078 shares at December 31, 2023
   issued and outstanding

 

 

559

 

 

 

558

 

Additional paid-in capital

 

 

1,571,811

 

 

 

1,569,227

 

Accumulated other comprehensive loss

 

 

(42,712

)

 

 

(37,431

)

Accumulated earnings

 

 

440,943

 

 

 

438,849

 

Total stockholders’ equity

 

 

1,970,601

 

 

 

1,971,203

 

Total liabilities and stockholders’ equity

 

$

2,849,269

 

 

$

2,824,411

 

 

 

 

 

 

 

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

3


 

REPLIGEN CORPORATION

Condensed CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

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

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2024

 

 

2023

 

Revenue:

 

 

 

 

 

 

Products

 

$

151,310

 

 

$

182,621

 

Royalty and other revenue

 

 

36

 

 

 

39

 

Total revenue

 

 

151,346

 

 

 

182,660

 

Costs and operating expenses:

 

 

 

 

 

 

Cost of goods sold

 

 

76,391

 

 

 

81,845

 

Research and development

 

 

11,238

 

 

 

12,154

 

Selling, general and administrative

 

 

61,686

 

 

 

56,170

 

Contingent consideration

 

 

 

 

 

1,235

 

Total costs and operating expenses

 

 

149,315

 

 

 

151,404

 

Income from operations

 

 

2,031

 

 

 

31,256

 

Other income (expenses):

 

 

 

 

 

 

Investment income

 

 

8,993

 

 

 

5,486

 

Interest expense

 

 

(4,891

)

 

 

(270

)

Amortization of debt issuance costs

 

 

(483

)

 

 

(457

)

Other (expenses) income

 

 

(3,536

)

 

 

77

 

Other income, net

 

 

83

 

 

 

4,836

 

Income before income taxes

 

 

2,114

 

 

 

36,092

 

Income tax provision

 

 

20

 

 

 

7,263

 

Net income

 

$

2,094

 

 

$

28,829

 

Earnings per share:

 

 

 

 

 

 

Basic

 

$

0.04

 

 

$

0.52

 

Diluted

 

$

0.04

 

 

$

0.51

 

Weighted average common shares outstanding:

 

 

 

 

 

 

Basic

 

 

55,791

 

 

 

55,590

 

Diluted

 

 

56,531

 

 

 

57,049

 

 

 

 

 

 

 

 

Net income

 

$

2,094

 

 

$

28,829

 

Other comprehensive income (loss):

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(5,281

)

 

 

3,273

 

Comprehensive (loss) income

 

$

(3,187

)

 

$

32,102

 

 

 

 

 

 

 

 

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

4


 

REPLIGEN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, amounts in thousands, except share data)

 

 

 

Three Months Ended March 31, 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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,094

 

 

 

2,094

 

Exercise of stock options and vesting of stock
   units

 

 

111,921

 

 

 

1

 

 

 

944

 

 

 

 

 

 

 

 

 

945

 

Tax withholding on vesting of restricted stock units

 

 

(39,451

)

 

 

0

 

 

 

(7,622

)

 

 

 

 

 

 

 

 

(7,622

)

Issuance of common stock pursuant to contingent
   consideration earnout payment

 

 

2,770

 

 

 

0

 

 

 

541

 

 

 

 

 

 

 

 

 

541

 

Conversion of debt

 

 

 

 

 

 

 

 

(55

)

 

 

 

 

 

 

 

 

(55

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

8,776

 

 

 

 

 

 

 

 

 

8,776

 

Translation adjustment

 

 

 

 

 

 

 

 

 

 

 

(5,281

)

 

 

 

 

 

(5,281

)

Balance at March 31, 2024

 

 

55,841,318

 

 

$

559

 

 

$

1,571,811

 

 

$

(42,712

)

 

$

440,943

 

 

$

1,970,601

 

 

 

 

Three Months Ended March 31, 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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

28,829

 

 

 

28,829

 

Exercise of stock options and vesting of stock
   units

 

 

140,210

 

 

 

1

 

 

 

28

 

 

 

 

 

 

 

 

 

29

 

Tax withholding on vesting of restricted stock units

 

 

(53,607

)

 

 

(1

)

 

 

(9,592

)

 

 

 

 

 

 

 

 

(9,593

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

7,254

 

 

 

 

 

 

 

 

 

7,254

 

Translation adjustment

 

 

 

 

 

 

 

 

 

 

 

3,273

 

 

 

 

 

 

3,273

 

Balance at March 31, 2023

 

 

55,644,301

 

 

$

556

 

 

$

1,544,956

 

 

$

(31,121

)

 

$

426,101

 

 

$

1,940,492

 

 

 

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

5


 

REPLIGEN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, amounts in thousands)

 

 

 

Three Months Ended
March 31,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

2,094

 

 

$

28,829

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

16,791

 

 

 

15,252

 

Amortization of debt discount and issuance costs

 

 

3,809

 

 

 

457

 

Stock-based compensation

 

 

8,776

 

 

 

7,254

 

Deferred income taxes, net

 

 

(833

)

 

 

(1,124

)

Contingent consideration

 

 

 

 

 

1,235

 

Other

 

 

(105

)

 

 

(857

)

Changes in operating assets and liabilities, excluding impact of acquisitions:

 

 

 

 

 

 

Accounts receivable

 

 

6,653

 

 

 

(16,832

)

Inventories

 

 

3,167

 

 

 

(5,845

)

Prepaid expenses and other assets

 

 

(4,571

)

 

 

(2,799

)

Operating lease right of use assets

 

 

(19,465

)

 

 

3,349

 

Other assets

 

 

320

 

 

 

(434

)

Accounts payable

 

 

(645

)

 

 

(1,194

)

Accrued expenses

 

 

6,381

 

 

(13,326

)

Operating lease liabilities

 

 

22,484

 

 

 

(2,870

)

Long-term liabilities

 

 

(148

)

 

 

59

 

Total cash provided by operating activities

 

 

44,708

 

 

 

11,154

 

Cash flows from investing activities:

 

 

 

 

 

 

Additions to capitalized software costs

 

 

(27

)

 

 

(924

)

Purchases of property, plant and equipment

 

 

(8,346

)

 

 

(8,509

)

Other investing activities

 

 

11

 

 

 

 

Total cash used in investing activities

 

 

(8,362

)

 

 

(9,433

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

945

 

 

 

29

 

Payment of tax withholding obligation on vesting of restricted stock

 

 

(7,622

)

 

 

(9,592

)

Payment of earnout consideration

 

 

(2,160

)

 

 

 

Other financing activities

 

 

(137

)

 

 

 

Total cash used in financing activities

 

 

(8,974

)

 

 

(9,563

)

Effect of exchange rate changes on cash and cash equivalents

 

 

1,922

 

 

 

993

 

Net increase (decrease) in cash and cash equivalents

 

 

29,294

 

 

 

(6,849

)

Cash, cash equivalents and restricted cash, beginning of period

 

 

751,323

 

 

 

523,458

 

Cash and cash equivalents, end of period

 

$

780,617

 

 

$

516,609

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

Assets acquired under operating leases

 

$

23,093

 

 

$

179

 

Fair value of shares of common stock issued for contingent consideration earnouts

 

$

541

 

 

$

 

 

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

6


 

REPLIGEN CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

1.
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 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 high inflation 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 March 31, 2024, its results of operations for the three months ended March 31, 2024 and 2023 and cash flows for the three months ended March 31, 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 Standards Updates

The Company considers the applicability and impact of all Accounting Standards Updates (“ASU” or “ASUs”) 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 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 will be effective for large accelerated filers for annual periods beginning in calendar 2025 (fiscal 2026). The Company is assessing the effect of 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

7


 

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.

2.
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

8


 

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 March 31, 2024 and December 31, 2023 (amounts in thousands):

 

 

 

As of March 31, 2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Money market accounts

 

$

694,501

 

 

$

 

 

$

 

 

$

694,501

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Short-term contingent consideration

 

$

 

 

$

 

 

$

24,352

 

 

$

24,352

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Money market accounts

 

$

658,574

 

 

$

 

 

$

 

 

$

658,574

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Short-term contingent consideration

 

$

 

 

$

 

 

$

12,983

 

 

$

12,983

 

Long-term contingent consideration

 

$

 

 

$

 

 

$

14,070

 

 

$

14,070

 

Cash and cash equivalents

As of March 31, 2024 and December 31, 2023, cash and cash equivalents on the Company's condensed consolidated balance sheets included $694.5 million and $658.6 million, respectively, in money market account. These funds are valued on a recurring basis using Level 1 inputs.

Contingent Consideration – Earnouts

As of March 31, 2024, the maximum amount of future contingent consideration (undiscounted) that we could be required to pay in connection with the completed acquisitions is; $125.0 million over a three-year earnout period for Avitide, Inc. (“Avitide”), which was acquired in September 2021 and for which the earnout periods run from January 1, 2022 through December 31, 2024; $42.0 million over a two-year earnout period for FlexBiosys, Inc. (“FlexBiosys”), which was acquired in April 2023 and for which the earnout periods run from January 1, 2023 through December 31, 2024; and approximately $10 million over a one-year earnout period for Metenova Holding AB (“Metenova”), which was acquired in October 2023 and for which the earnout period runs from January 1, 2024 through December 31, 2024. See Note 3, “Acquisitions” to this report for additional information on the contingent consideration earnouts.

Since the date of acquisition, expected results and changes in market inputs used to calculate the discount rate related to Avitide, FlexBiosys and Metenova, have resulted in changes in amounts reported as the Company’s contingent consideration obligation. As of March 31, 2024, no changes in fair value were required. A reconciliation of the change in the fair value of contingent consideration – earnouts is included in the following table (amounts in thousands):

 

Balance at December 31, 2023

 

$

27,053

 

Payment of contingent consideration earnouts

 

 

(2,701

)

Balance at March 31, 2024

 

$

24,352

 

 

9


 

The recurring Level 3 fair value measurement of our contingent consideration earnout that we expect to be required to settle our 2023, 2024 and 2025 contingent consideration obligations for Avitide, FlexBiosys and Metenova include the following significant unobservable inputs (amounts in thousands, except percent data):

 

Contingent Consideration Earnout

 

Fair Value as of
 March 31, 2024

 

 

Valuation Technique

 

Unobservable Input

 

Range

 

Weighted Average(1)

 

 

 

 

 

 

 

 

Probability of

 

 

 

 

 

 

 

 

 

 

 

 

Success

 

100%

 

100%

Commercialization-based payments

 

$

 

20,094

 

 

Monte Carlo
Simulation

 

Earnout Discount Rate

 

5.8%-5.9%

 

5.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Volatility

 

12.5%-24.6%

 

13.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue and Volume-
based payments

 

$

 

361

 

 

Monte Carlo
Simulation

 

Revenue & Volume
Discount Rate

 

2.5%-9.3%

 

5.1%

 

 

 

 

 

 

 

 

Earnout Discount Rate

 

5.8%-7.2%

 

5.8%

 

 

 

 

 

 

 

 

Probability of
 Success

 

100%

 

100%

Manufacturing line expansions

 

$

 

3,897

 

 

Probability-weighted present value

 

Earnout Discount Rate

 

6.1%-6.4%

 

6.3%

 

(1)
Unobservable inputs were weighted by the relative fair value of the contingent consideration liability.

Fair Value Measured on a Nonrecurring Basis

During the three months ended March 31, 2024, there were no re-measurements to the fair value of financial assets and liabilities that are measured at fair value on a nonrecurring basis.

Convertible Senior Notes

In July 2019, the Company issued $287.5 million aggregate principal amount of 0.375% Convertible Senior Notes due 2024 (the “2019 Notes”). Interest is payable semi-annually in arrears on January 15 and July 15 of each year. The 2019 Notes will mature on July 15, 2024, unless earlier converted or repurchased in accordance with their terms. At March 31, 2024 and December 31, 2023, respectively, the carrying value of the 2019 Notes was $69.5 million, net of unamortized debt issuance costs and the fair value of the 2019 Notes was $119.0 million and $109.8 million, respectively.

On December 14, 2023, the Company issued $600.0 million aggregate principal amount of its 1.00% Convertible Senior Notes due 2028 (the “2023 Notes”) in a private placement pursuant to separate, privately negotiated exchange and subscription agreements (the “Exchange and Subscription Agreements”) with a limited number of holders of its outstanding 2019 Notes and certain other qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (“Securities Act”). Pursuant to the Exchange and Subscription Agreements, the Company exchanged $217.7 million of its 2019 Notes for $309.9 million aggregate principal amount of the 2023 Notes (the “Exchange Transaction”) and issued $290.1 million aggregate principal amount of the 2023 Notes (the “Subscription Transactions”) for $290.1 million in cash. At March 31, 2024 and December 31, 2023, the carrying value of the 2023 Notes was $513.9 million and $510.1 million, respectively, net of unamortized debt discount and debt issuance cost and the fair value of the 2023 Notes was $587.0 million and $596.0 million, respectively.

The fair value of the 2023 Notes and the 2019 Notes is a Level 1 valuation and was determined based on the most recent trade activity of the 2023 Notes and 2019 Notes as of March 31, 2024 and December 31, 2023. The 2023 Notes and 2019 Notes are discussed in more detail in Note 8, “Convertible Senior Notes,” to these condensed consolidated financial statements.

3.
Acquisitions

Metenova Holding AB

On October 2, 2023, the Company's subsidiary, Repligen Sweden AB, acquired Metenova from the former shareholders of Metenova (the “Metenova Seller”) pursuant to a Share Sale and Purchase Agreement (the “Share Purchase Agreement”), dated as

10


 

of September 23, 2023 (such acquisition, the “Metenova Acquisition”), by and among Repligen Sweden AB, the Metenova Seller, and the Company, in its capacity as guarantor of the obligations of Repligen Sweden AB under the Share Purchase Agreement.

Metenova, which is headquartered in Molndal, Sweden, offers magnetic mixing and drive train technologies that are widely used by global biopharmaceutical companies and contract development and manufacturing organizations. The Metenova Acquisition further strengthens our fluid management portfolio with these products.

Consideration Transferred

The Company accounted for the Metenova Acquisition as a purchase of business under Accounting Standards Codification No. (“ASC”) 805, “Business Combinations,” and the Company engaged a third-party valuation firm to assist with the valuation of Metenova. Under the Share Purchase Agreement, all outstanding equity interests of Metenova were acquired for consideration with a value totaling $172.6 million. The Metenova Acquisition was funded through payment of $164.5 million in cash, the issuance of 52,299 unregistered shares of the Company's common stock totaling $8.1 million and contingent consideration with an immaterial fair value.

Under the acquisition method of accounting, the assets acquired and liabilities assumed of Metenova were recorded as of the acquisition date, at their respective fair values, and consolidated with those of the Company. The fair value of the net liabilities acquired is estimated to be $1.9 million, the fair value of the intangible assets acquired is estimated to be $58.8 million and the residual goodwill is estimated to be $115.7 million. The estimated consideration and preliminary purchase price information has been prepared using a preliminary valuation. Acquisition-related costs are not included as a component of consideration transferred but are expensed in the periods in which costs are incurred. The Company has incurred $5.1 million of transaction and integration costs associated with the Metenova Acquisition from the date of acquisition to March 31, 2024, with $1.6 million of transaction and integration costs incurred during the three months ended March 31, 2024. The transaction costs are included in operating expenses in the condensed consolidated statements of comprehensive (loss) income for the period ended March 31, 2024.

Fair Value of Net Assets Acquired

The preliminary allocation of purchase price is based on the fair value of assets acquired and liabilities assumed as of the acquisition date. As of March 31, 2024, the purchase accounting for this acquisition had not been finalized. As additional information becomes available, the Company may further revise its preliminary purchase price allocation during the remainder of the measurement period. During 2024, the Company recorded a net working capital adjustment of $0.1 million related to an inventory adjustment, offset in goodwill, to align the Metenova opening balance sheet. Besides tax implications of the purchase price allocation, the final allocation may result in additional changes to other assets and liabilities.

The components and estimated allocation of the purchase price consist of the following (amounts in thousands):

Cash and cash equivalents

 

$

5,768

 

Accounts receivable

 

 

3,730

 

Inventory

 

 

4,477

 

Prepaid expenses and other current assets

 

 

470

 

Property and equipment

 

 

433

 

Operating lease right of use asset

 

 

615

 

Customer relationships

 

 

12,659

 

Developed technology

 

 

44,377

 

Trademark and tradename

 

 

939

 

Non-competition agreements

 

 

787

 

Goodwill

 

 

115,722

 

Accounts payable

 

 

(1,432

)

Accrued liabilities

 

 

(2,934

)

Operating lease liability

 

 

(275

)

Deferred tax liability, long-term

 

 

(12,481

)

Operating lease liability, long-term

 

 

(255

)

Fair value of net assets acquired

 

$

172,600

 

 

 

 

 

Acquired Goodwill

11


 

The goodwill of $115.7 million represents future economic benefits expected to arise from anticipated synergies from the integration of Metenova into the Company. These synergies include operating efficiencies and strategic benefits projected to be achieved as a result of the Metenova Acquisition. Substantially all of the goodwill recorded is expected to be nondeductible for income tax purposes.

Intangible Assets

The following table sets forth the components of the identified intangible assets associated with the Metenova Acquisition and their estimated useful lives:

 

 

Useful life

 

Fair Value

 

 

 

 

 

(Amounts in thousands)

 

 

 

 

 

 

Customer relationships

 

15 years

 

$

12,659

 

Developed technology

 

15 years

 

 

44,377

 

Trademark and tradename

 

15 years

 

 

939

 

Non-competition agreements

 

2 years

 

 

787

 

 

 

 

$

58,762

 

FlexBiosys, Inc.

On April 17, 2023, the Company completed its acquisition of all of the outstanding equity interests in FlexBiosys, pursuant to an Equity Purchase Agreement (“EPA”) with FlexBiosys, TSAP Holdings Inc. (“NJ Seller”), Gayle Tarry and Stanley Tarry, as individuals (collectively with NJ Seller, the "Sellers"), and Stanley Tarry, in his capacity as the representative of the Sellers (the “FlexBiosys Acquisition”).

FlexBiosys, which is headquartered in Branchburg, New Jersey, offers expert design and custom manufacturing of single-use bioprocessing products and a comprehensive range of products that include bioprocessing bags, bottles, and tubing assemblies. These products will complement and expand our fluid management portfolio of offerings.

Consideration transferred

The FlexBiosys Acquisition was accounted for as a purchase of a business under ASC 805, “Business Combinations,” and the Company engaged a third-party valuation firm to assist with the valuation of FlexBiosys. Under the terms of the EPA, all outstanding equity interests of FlexBiosys were acquired for consideration with a value totaling $41.0 million. The FlexBiosys Acquisition was funded through payment of $29.0 million in cash, which includes $6.3 million deposited in escrow for future payments, the issuance of 31,415 unregistered shares of the Company's common stock totaling $5.4 million and contingent consideration with fair value of approximately $6.6 million.

Under the acquisition method of accounting, the assets acquired and liabilities assumed of FlexBiosys were recorded as of the acquisition date, at their respective fair values, and consolidated with those of the Company. The fair value of the net assets acquired is $14.1 million, the fair value of the intangible assets acquired is $12.6 million and the residual goodwill is $14.3 million. Acquisition-related costs are not included as a component of consideration transferred but are expensed in the periods in which costs are incurred. The Company has incurred $1.1 million of transaction and integration costs associated with the FlexBiosys Acquisition from the date of acquisition to March 31, 2024. There were no transaction and integration costs incurred for the FlexBiosys Acquisition during the three months ended March 31, 2024.

Fair Value of Net Assets Acquired

The allocation of purchase price is based on the fair value of assets acquired and liabilities assumed as of the acquisition date, based on the final valuation of FlexBiosys. The Company has made appropriate adjustments to purchase price allocation during the measurement period, which ended on April 17, 2024. The purchase price allocation is now complete as of March 31, 2024.

The components and final allocation of the purchase price consist of the following (amounts in thousands):

12


 

Cash and cash equivalents

 

$

1,090

 

Accounts receivable

 

 

683

 

Inventory

 

 

667

 

Prepaid expenses and other current assets

 

 

35

 

Property and equipment

 

 

12,034

 

Operating lease right of use asset

 

 

3,537

 

Customer relationships

 

 

2,530

 

Developed technology

 

 

9,860

 

Trademark and tradename

 

 

30

 

Non-competition agreements

 

 

220

 

Goodwill

 

 

14,321

 

Other long-term assets

 

 

10

 

Accounts payable

 

 

(136

)

Accrued liabilities

 

 

(314

)

Operating lease liability

 

 

(39

)

Operating lease liability, long-term

 

 

(3,498

)

Fair value of net assets acquired

 

$

41,030

 

 

 

 

 

Acquired Goodwill

The goodwill of $14.3 million represents future economic benefits expected to arise from anticipated synergies from the integration of FlexBiosys into the Company. These synergies include operating efficiencies and strategic benefits projected to be achieved as a result of the FlexBiosys Acquisition. Substantially all of the goodwill recorded is expected to be deductible for income tax purposes.

Intangible Assets

The following table sets forth the components of the identified intangible assets associated with the FlexBiosys Acquisition and their estimated useful lives:

 

 

 

Useful life

 

Fair Value

 

 

 

 

 

(Amounts in thousands)

 

 

 

 

 

 

Customer relationships

 

12 years

 

$

2,530

 

Developed technology

 

16 years

 

 

9,860

 

Trademark and tradename

 

4 years

 

 

30

 

Non-competition agreements

 

5 years

 

 

220

 

 

 

 

$

12,640

 

 

4.
Restructuring Plan

In July 2023, the Board of Directors authorized the Company's management team to undertake restructuring activities to simplify and streamline our organization and strengthen the overall effectiveness of our operations. Since the initial streamlining and re-balancing efforts contemplated in July, the Company has undertook and continues to undertake further restructuring activities (collectively, the “Restructuring Plan”) which included consolidating a portion of our manufacturing operations between certain U.S. locations, discontinuing the sale of certain product SKUs, and evaluating the fair value of finished goods and raw materials, mostly secured during the 2020-2022 COVID-19 pandemic period (the “COVID-19 Period”) to meet increasing demand during a challenging supply chain environment in the industry.

The Company recorded pre-tax restructuring activity of $1.4 million for the three months ended March 31, 2024, related to the Restructuring Plan and expects the Restructuring Plan to be completed by the end of the third quarter of 2024.

The following table summarizes the charges related to restructuring activities by type of cost:

 

13


 

 

 

For the Three Months Ended March 31, 2024

 

 

 

Severance & Employee-Related Costs

 

 

Accelerated Depreciation

 

 

Facility and Other Exit Costs

 

 

Total

 

 

 

(Amounts in thousands)

 

Cost of goods sold

 

$

482

 

 

$

19

 

 

$

58

 

 

$

559

 

Research and development

 

 

165

 

 

 

 

 

 

 

 

 

165

 

Selling, general and administrative

 

 

699

 

 

 

 

 

 

 

 

 

699

 

 

 

$

1,346

 

 

$

19

 

 

$

58

 

 

$

1,423

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance and employee-related costs under the Restructuring Plan are primarily associated with actual headcount reductions. Costs incurred include cash severance and non-cash severance, including other termination benefits. Severance and other termination benefit packages are based on established benefit arrangements or local statutory requirements and we recognized the contractual component of these benefits when payment was probable and could be reasonably estimated.

Non-cash charges for accelerated depreciation were recognized on long-lived assets that were taken out of service before the end of their normal service due to the shutdown of manufacturing facilities and production lines, in which case depreciation estimates were revised to reflect the use of the assets over their shortened useful life.

The restructuring accrual is included in accrued liabilities in the condensed consolidated balance sheet as of March 31, 2024 and the balance is expected to be paid by the third quarter of 2024. Activity related to the Restructuring Plan for the three months ended March 31, 2024 was as follows (amounts in thousands):

 

 

 

Restructuring Costs

 

 

Amounts Paid in 2024

 

 

Non-Cash Restructuring Items

 

 

Restructuring Liability

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance & employee-related costs

 

$

1,346

 

 

$

(471

)

 

$

(108

)

 

$

767

 

Accelerated depreciation

 

 

19

 

 

 

 

 

 

(19

)

 

 

 

Facility and other exit costs

 

 

58

 

 

 

(48

)

 

 

(10

)

 

 

 

Total

 

$

1,423

 

 

$

(519

)

 

$

(137