Andy Last: I may only add we’re still focused on keeping our operating cost structure as tight as possible. So, the volume and mix will have a decent flow-through in the fourth quarter operating margin.
Patrick Donnelly: Okay. And then maybe on China, if you could just talk about that market, a little bit surprising to see the diagnostics piece softer as well. Can you just talk about what you’re seeing? Is it various policies over there that’s impacting things? It would be helpful just to get a little more discussion there.
Andy Last: Okay. So, the policies, I mean, are clearly impacting both Life Science and the Diagnostics side of the business. And they have — they’re made in China for China. There’s the anticorruption, there’s volume-based pricing, and then you layer on top of that recession. And the government, I think, that is generally struggling to find the right way to stimulate the market. You can add in an extra effect of capital markets soft for biopharma, which was a focus for us for expansion and growth of our — those pieces of our portfolio. They all have varying impacts to both sides of the business. And it’s just been a really tough ride through China, and there’s just no current clear reason to think that it’s going to improve in Q4.
And on the Clinical side, it just created a softer pull for our products in China in the quarter. And we still have had a little bit of backlog on our Clinical business as we called out, which by the end of this year, we should be roughly where we expect to be, we may finish with a very slightly elevated backlog on clinical products at the end of the year, but we’re pretty much on track relatively speaking for that.
Patrick Donnelly: Okay. On the diagnostics side, is it more the instrumentation? Obviously, the VBP stuff comes up quite often with all diagnostic players. Are you guys seeing anything on that front yet?
Dara Wright: What was the question?
Andy Last: The volume-based pricing. Sorry, we were just having difficulty here. Dara, do you want to comment on VBP?
Dara Wright: Sure. It’s starting to impact how we navigate tender requirements. So I think how that’s translating to reality is things are a little bit slower as we’re navigating how best to position for new deal considerations. But value-based pricing, it has historically been applied to other sectors, but in a couple of provinces we’re starting to see it reach into IBD. [Ph] So I think right now, it’s just sort of impacting sort of forward-looking risk. And then as Andy said, we’re still working through some supply chain fulfillment challenges in backlog, which we’re weighted a bit towards that region as well. And we’re working through that and have line of sight for a really solid Q4 landing.
Patrick Donnelly: Okay. And maybe last one, just on the PCR side. You guys called out, I think, qPCR weakness, it seemed like ddPCR step down as well. Can you just talk about what you’re seeing in that market? Is it just a broader slowdown? Is it specific pockets there would be helpful.
Simon May: I think again, it’s a compounding issues that we’ve already touched on here. So we’ve obviously got a fairly significant qPCR, Digital PCR footprint in biopharma. And again, the slowdown in early biotechs. We’ve seen a continuation of layoffs and project deferrals. That’s impacted the business. We’ve got the COVID compare. We’ve got all the challenges in China that we’ve already talked about. And I think on top of everything else, there’s kind of a club of systems out there in the market that were placed in the pandemic, and there’s a bit of free capacity out there. So, you roll all of these things together. Again, we refreshed our qPCR platform over the last couple of years. And again, the feedback that we get from out in the field is really positive in terms of how these products are being received in the market, but this compounding of market conditions right now is what’s adding up to a tough environment.
Andy Last: May I just add one extra comment. You look for the silver lining on occasion. And the customer demand in that — in small biotech biopharma, the desire to take in Digital PCR, in particular, remain very strong. What we’re actually experiencing is just the deferral of when they’re going to make the purchase because they’re constrained on kind of cash expenditure and some other changes going on structurally on the program focus. So the demand side remains very encouraging.
Operator: Your next question comes from the line of Jack Meehan from Nephron.
Jack Meehan: So just wanted to talk about how the quarter played out here. So revenue was about 8% below the Street. Can you just talk about kind of the pacing of the quarter. Was most of the pressure you saw in September? And is it possible, are there any orders that slipped into 4Q for any reason?
Ilan Daskal: I think, Jack — this is Ilan Daskal. The way to think about it, I think we saw it throughout the quarter, but it accelerated towards the end of the quarter. So, the pace was kind of decline was stronger towards the end of the quarter. But throughout the quarter, it started to get weaker and weaker, but definitely, it accelerated towards the end.
Jack Meehan: Okay. And Norman, I know you mentioned in your comments, there’s potential for maybe a couple more bumps in the road along the way. I think there’s a debate amongst tools investors around further through the cutting cycle, or could there be kind of new risks ahead because of some of the changes in the funding environment for customers? Just curious like — maybe like what you’re seeing through October? Do you — I guess, like kind of what was the thinking that went behind the fourth quarter guide that you’ve built here?
Norman Schwartz: Well, I think certainly, in terms of the fourth quarter guide, we look very carefully at kind of the order book and the funnel, the sales funnel, kind of accumulating as much data as we can to get the best assessment of where we think we’ll land for the year. When I think about bumps in the road, I think about the — I think there were a lot of people that kind of thought the pandemic is over and everything will be back to normal next week. And I think we’re seeing a continuation of that with some of this kind of biopharma meltdown and the readjustments that are being made in some of these programs. It just — I think we just have to be careful about calling the end and saying, it’s always possible that there’s something else that might bubble up.
