And as that is starting to normalize and we talk to our customers about specific expectations for next year for activity level, I think the sentiment is just given the pipelines that they’re working on, the areas of focus that they have, the anticipation is that activity levels will be higher next year. And as these inventories are normalized will not only benefit from a higher level of activity, but certainly, we’ll also be able to capture the underlying demand that’s been satisfied here over the last year or two with inventory. So our customers continue to be quite encouraged, I would say, by what they’re working on. And the end market demands and themes continue to be quite strong. And I like our positioning. I like the amount of activity, the commercial intensity we’ve applied to keep ourselves relevant in front of our customers.
Our innovation engines are hitting on all cylinders and giving us the right products to solve our customers’ challenges. So I couldn’t be more excited about our positioning. And I think we’re doing all the right things to control costs and the other things that are within our control here that will only strengthen us as these end markets will ultimately turn.
Luke Sergott: Great. Thank you.
Operator: The next question comes from Dan Leonard with UBS. Please go ahead. Dan, your line is now open.
Daniel Leonard: Thank you for the time. Michael, I have a question on cell and gene therapy. Can you help me reconcile your commentary there with the market trends? That market spend hit especially hard by biotech funding constraints. Other suppliers have recently lowered their long-range plans in the past two months, and you sound very bullish. So I’d love to learn more about your thinking.
Michael Stubblefield: Yeah. So when I talked about the optimism around cell and gene therapy and the impact that had on our third quarter results, really talking about the commercialized platforms that are in the market that are being produced today. There is, I would say, incremental traction in that area. There’s been a number of approvals this year. And given our offering and the work that we’ve ceded over the last number of years, we are incredibly well positioned notwithstanding some of the manufacturing challenges and inefficiencies associated with launching these new modalities, we continue to be very well positioned there with an extremely relevant offering and the specifications that we won as we’ve run our model here and collaborate with our customers is resulting in strong double-digit growth of that platform.
When I look at the pipeline, which is driving our R&D activities, the pipeline has never been stronger either. Are there customers that are optimizing and programs falling out, certainly as is usual as programs progress through that funnel. But as I indicated in my prepared remarks, the number of promising programs there that are advanced to stage 2, I mean their way through the pipeline here, the curve is accelerating meaningfully. And we have a relevant offering and this is going to be an important growth driver for us over the long term. mAbs from a revenue standpoint is still driving the bulk of our revenues. But it is nice to be able to already start to see the next waves of growth and where they ultimately come from for our industry and certainly, cell and gene therapy and particularly gene therapy is going to be one of those areas for us.
Daniel Leonard: That’s helpful color. And a follow-up on bioproduction more broadly. Are you seeing any differential trends across your product offering in that space, whether it be formulation products versus single-use versus pumps? And is there any forward insight to be gleaned from those trends, whether one is more reflective of end customer demand versus another?
Michael Stubblefield: Yeah. I think we’re seeing similar trends across our offering there. You’re right to touch on our process ingredients and excipients and chromatography resins and such. And we’re seeing headwinds in those categories, not really related to inventory because we don’t think there’s been a stocking issue on those categories, but more just related to our customers managing their end product revenues and resulting in just campaign pushouts and delays and maybe cutting batches in their campaign schedules. And then on the single-use side, not only do you see the activity headwinds that are hitting our process ingredients business, but you also then have the double whammy there with the inventory stocking that we’ve talked about that those continue to be improving.
So I wouldn’t call out anything specific in terms of differences between the different components of our portfolio. But under the — again, under the heading of anecdotally good evidence, good sentiment, the engineering activity that front runs our single-use order book continues to be quite strong. And when I look into forecasting things we’re getting from our customers for 2024, overall, this is a space that’s growing. Some of my team has been in talking in the region in Asia here recently. And if you look at some of the growth that some of those customers are reporting, it’s impressive. We just finished another great quarter in Asia on bioprocessing, excluding China, which is modest for us in any event. So there are a number of bright spots in this space that give us reason to believe that brighter days are ahead here.
Daniel Leonard: Appreciate all that color. Thank you.
Operator: Our next question comes from Catherine Schulte with Baird. Please go ahead, Catherine. Your line is now open.
Catherine Schulte: Hey, guys. Thanks for the questions. Michael, you mentioned that the percentage of customers that are holding out those inventories has declined significantly. Can you just give the numbers around where that is today based on your survey’s or conversations with customers and how that metric has trended throughout the year?
Michael Stubblefield: Yeah. Happy to do so. When we first started to look at inventory health and trying to really get insights to try to help us triangulate just the trends, there were a number of customers, both in the lab with our lab consumables as well as in bioprocessing, particularly within single-use that we’re reporting excess of a year’s worth of inventory. It wasn’t everyone, but certainly a meaningful number of customers that we’re signaling. They have more than a year’s worth of inventory. Certainly, our Ritter platform has suffered under that pressure of excess inventory as an example. And as I look at the work that we’ve done on both the lab side of our business as well as bioprocessing, we have no customers that are reporting those levels of inventory.
