Kim Kelderman: No, I would agree. Okay, fair enough. And then obviously you referenced M&A continuing to be a high priority and looks like some deals are starting to get done.
Matthew Larew: Just curious, obviously you had the Lunaphore acquisition here recently, either from a size portfolio perspective. What are you seeing out there that’s interesting and are you starting to see evaluations move more in line with public markets?
Kim Kelderman: Yeah, thanks for the question. To quickly jump on to the Lunaphore acquisition, it’s obviously, we are very, very happy with the acquisition itself. The assets, the team is amazing. Integration is going well. And of course, it will give us a fantastic position in the lucrative and fast-growing spatial biology market. As this instrument, the Comet, will give us fully automated capabilities and multi-alcoholic aspects where we can look at proteins and RNA in the same slide and then combining that with the ACD portfolio and our antibodies here in our systems. It’s an unbelievable value proposition. We would love to do more of those. So we are always on the lookout. We have interest in looking at filling out our sub-engine therapy portfolios.
We would like, if there’s opportunities, to strengthen our core. We’ve talked about the four growth verticals and if we can bolt something on to make those even stronger and get our positions more differentiated, that’d be fantastic. And any opportunity that pulls through our core reagents is really on our list. And as we always maintain the long list, but we will be disciplined in picking opportunities that would meet or exceed our financial expectations over time, which is basically contributing to the financial expectations that we’ve all set to by technique overall. And whether this would be a small or large or public or private company, we really don’t select between that. We are open to any target that fits the mold that I just described.
Operator: Thank you. Our next questions come from the line of Catherine Schulte with Baird. Please proceed with your questions.
Catherine Schulte: Hey guys, thanks for the questions and congrats Chuck on the retirement. Maybe first in pharma and biotech, I think you said down low single digits outside of China. You just talk a little about what you’re seeing from emerging biotech versus kind of mid-sized and large customers and how you see those two groups playing out going forward?
James Hippel: Yeah. Hi Catherine. Thanks for the question. It’s difficult to ascertain exactly small, sometimes smaller and larger biotechs, as many of these are private companies and hopefully they are, isn’t always easy to determine. But I would just say, in generally speaking, the smaller the biotech, usually the more difficult the funding situation is. That being said, we haven’t been at the JPMorgan conference, called another green shoot perhaps, but the level of activity that we saw around VC firms, private equity firms in general, out sniffing around for all kinds of investment opportunities, whether it was in tools or whether it was in biotech, et cetera, was some of the highest levels that I’ve seen in many years there.
So, again, encouraging that perhaps the drought and funding has hit its low point and might come back this calendar year and that will obviously benefit our smaller biotech customers. Yeah, I never can add to that. I think that the smaller and newer biopharmac companies obviously are in a different life cycle. So they typically still have to build out their labs and define their processes and validate the way they measure things. So that’s where we see, our automation platforms, of course, being placed. And then the midsize ones are often running and they might have repositioned a number of projects to run in parallel, but certainly they typically already have our instrumentation. They’re a little bit more consumable-oriented because they are pulling through these consumables.
And then large pharma has gone through a phase where they repositioned the portfolios just as well. And there we see a mix, right? So there’s a capacity expansion by buying more instruments and there’s, of course, the pull-through and consumable. So that’s how I look at the influence versus size.
Catherine Schulte: Okay, got it. And then you talked about these decelerating trends, hopefully being behind you here and three-q organic growth, both looking similar to the second quarter. Do you think we could see a return to positive organic growth in 4Q, or is that more likely going to be a fiscal 25 event?
James Hippel: Anything’s possible, Catherine. Sure. I mean, is that within the wiggle room of possibilities? Yes, in fact, the tide is turning some momentum and China truly stabilizes. I think there’s a potential for it. I’m not, I would say, I’d mute it by saying it would be flight growth probably, but I think there’s a potential for it. We’re seeing sequential improvement in our businesses, so that’s encouraging.
Operator: Thank you. Our next question has come from the line of Alex Nowak with Craig Hallam. Please proceed with your questions.
Alex Nowak: All right. Good morning, everyone. How is Wilson Wolf progressing since you made that investment there? Just curious where they deployed the cash, the cash infusion, and just how they’re handling the biotech funding environment?
James Hippel: Yeah, thank you for the question. So Wilson Wolf has tremendous progress behind them now in this last year. Overall, the year was hard because the, some of the early stage activities and clinical projects have been canceled. So overall, they’re down mid-single digits, but the last quarter and last has been much, much better back in the black, and we do see a progress in the pipeline. We see that there are various clinical studies rolling into next phases, and we even see an approval upcoming where the G-REX is packed in. So overall, we believe that Wilson Wolf will be doing great again, and we know that John Wilson has invested in activities that bolster the adoption of our G-REX and the Wilson Wolf franchise. As we have a very genius deal structure around the Wilson Wolf, and at the latest, it’s the end of calendar year 2027 that Wilson Wolf will be fully part of the biotech new family.
I’ll just add too, with regards to their financial performance, they had a tough calendar year ’23 like we all have, but they actually did see significant sequential improvement in their December quarter and are expecting continued sequential improvement from there. So that’s encouraging also. Given their, they have even much wider visibility into the cell and gene therapy market than we do.
Operator: Thank you. We have reached the end of our question and answer session. I would now like to turn the floor back over to Kim Kellehrman for any closing remarks.
Kim Kelderman: Yeah, thank you, and thanks everyone for joining the call. Of course, one last time, thank you Chuck for your leadership over the last decade plus. As you can hear, I’m excited about the long-term position and our prospects as a company. We have a great strategy in place. I’m also very proud of the biotech need team for executing so well in this constrained environment. And I’m absolutely looking forward to navigating these constraints and I’m looking forward to speaking again at our next earnings release.
Operator: Thank you. That does include today’s telecom. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day. Thank you.
