Charles Kummeth: Yeah Dan, thank you so much for your question. Our antibody business has done quite well. I think it’s been running at the low single digits even in this environment. So with the Headwins in Biopharma, we certainly have to make sure that some of our sales force focuses on academic markets and make sure they close deals over there and we get better in that space. Our quality of our antibodies is world renowned and we know that we can compete even at higher prices with other antibody companies and we are really confident that we will be able to continue to do so. Of course, we have had some head-wins in addition from de-stocking where people would have fewer or less antibodies on the shelf. However, we feel confident that that symptom is now towards the end of its face so that we feel that HAT win will abate.
Dan Arias: Okay, helpful. And then Jim, I hate to ask about 2025 since the second half of this year is tough to call, but if I go back to the analyst’s day and I think about the growth platforms that you guys highlighted, four or five of them had double digit market growth rates attached to them. So does it feel like six to 12 months from now your growth verticals are ramped up enough and the comps are favorable enough to where a two-digit growth number that’s more typical of what you’ve done in the past comes back into the picture?
James Hippel: Yeah, what I’d say is this, Dan, is that we have a high level of confidence given our relative performance of our growth pillars even in this environment that once the market gets back to its long-term four or six, let’s call it mid-single-digit growth trajectory, that we will be well into the double-digit growth once our core is back up there and then, of course, the growth pillar is on top of that. So, asking how long it takes to get there is also asking how long it takes for the market, overall market to normalize, and I don’t have a crystal ball on that, but assuming it does normalize as we get into the end of calendar year ’25 and, hopefully by then, then the answer would be yes.
Operator: Thank you. Our next question has come from the lawn of Patrick Donnelly with Citi. Please proceed with your questions.
Patrick Donnelly: Hey, guys, good morning. Thanks for taking the question and Chuck, a second. My congrats there. You know, maybe Jim, on the near-term, just to recue a piece, we’re getting a good amount of questions just in terms of how to think about it. You know, is it flat? Is that the right organic, kind of near over-near number to think about 3C? If you could just help us kind of frame up the near-term, it would be helpful on the organic roadside.
Charles Kummeth: Yeah, I mean, specifically, right now, our base case is that the growth rate we experience in Q3 will be similar to the growth rate we saw in Q2. So the deceleration of our growth rate that we’ve seen, the deceleration of our growth rate that we’ve seen in the past three or four quarters we think is behind us.
Patrick Donnelly: Yes, I understand. Okay. And then maybe in China, it sounds like, obviously, Jim, we chatted and you were over there. Maybe just talk about your expectations for the recovery in that region?
James Hippel: I know in the past, whether it was government or whatever it may be, you guys saw some real snapbacks quarter to quarter. Last time we chatted, it sounded like that was a little less likely, maybe a little more of a stability into a gradual recovery. But maybe just talk to us about what you saw over there and again, the expectations over the next few quarters relative to some of the past cycles that we’ve seen. Thank you, Patrick. I’m going to hand this over to Kim. I know we feel exactly the same way about this, but he was there actually more recently than I even was. So go ahead, Kim.
Kim Kelderman: Yeah, Patrick. Well, thanks for the question. What we feel is that, obviously, China is an important country to us, right? Ten percent of our revenues come from there. We have been able to outgrow most of our peers over the last half decade. But that also made it tough over the last couple of quarters where China truly came to a standstill. And we feel that the activity in China is stabilizing. We do not see a clear light at the end of the funnel. Our comparables are going to be a little bit better in the coming quarters, but not for instruments, right? So it’s not that we are over that hump. We do think, though, that China is going to be a fast growing market in the future. We do expect that China will have a kind of a bias towards China for China.
Therefore, we are building a local GMP facility to serve the local market. And then at the end of the day, we feel that our products with the high quality and the automation aspects will increase efficiency and will continue to find a real good spot in China. And I think that the current pull-through of our consumables shows that the instruments are getting used at a record pace at the moment. As I mentioned, we are long-term believers in China, and we believe that China will get back to normalized funding and use the funds to prioritize health care. So we are very optimistic over time. But if you ask when or what will trigger a V-shaped recovery that I won’t be able to answer, we think it will be a slower recovery than usually.
Operator: Thank you. Our next question has come from the line of Dan Leonard with UBS. Please proceed with your questions.
Dan Leonard: Hi, thank you. I just want to make sure I understand the decline in the protein sciences business. You commented on the antibody trends to Dan Arias, low single-digit growth. But can you speak to the growth rate of core reagents and aggregate, so your antibodies, proteins, ELISA? And how steep was the decline in instrument revenue?
Kim Kelderman: Yeah, I’ll jump on this one and then can comment further. Dan, thanks for the question. We’re not going to give specifics at that level of detail, but what I would say is that in general, our overall, our reagents were down year over year, even though antibodies were slightly up. And our instruments were down as well, given the capital constraints in particular from our customers. However, again, as I mentioned again, the cartridges and consumables that are used specifically on those instruments were up nearly 20%. Cell and gene therapy is a big user of our reagents and also a high concentration of our biotech customers. And so that also impacted, we think, temporarily our reagent sales within the quarter.
Dan Leonard: Understood. And Jim, possibly you could comment on the growth rate for the cell and gene therapy portfolio specifically, either just GMP proteins or more holistically as you measure all the touch points you have in that market?
James Hippel: Yeah. Well, it was down year over year. I’m not going to give specifics to how much it was down, but I think an encouraging point is that the actual number of orders, invoices, et cetera, that we sold was still at an all-time record level. So what that tells us is that the customers were being more conservative in their purchases in terms of quantities, but still very active in their research within cell and gene therapy.
Kim Kelderman: Okay. Thank you. I can add some information there. I think that, as Jim mentioned, the volume of orders was higher than usual, but we did have a couple of larger orders push out. The thing that we can do as a company is make sure that we have new product introductions and the team is set to add five new GMP proteins to be released in the coming quarters so that we have a broader portfolio that serves more customers, and we’ll also increase share of wallets.
Operator: Thank you. Our next questions come from the line of Matthew Larew with William Blair. Please proceed with your questions.
Matthew Larew: Hi. Good morning. I just wanted to go back to the biopharmic comments because obviously you referenced sort of a further deterioration in the quarter, which you had set up on the last call, but on the press release mentioned conservatism from a subset of biotech customers. So I guess if I just think about sources of the Edwin being funding-related versus being perhaps budget-related at biopharma companies that may have commercial assets, but again, we’re just going through the budget process. What do you view as more of the gain factor? Are you waiting for turnaround and funding, or is it more just budgets had to get put in place and now there might be more constructive conversations?
James Hippel: Yeah, I think for us, given our waiting of customer base, the biotech funding was the biggest driver. I think the conservatism from pharma was secondary and hopefully much more transitory. So I think that’s our view. Kim?
