Matti Masanovich: PCH margins sequentially will go up through the year in the natural seasonality to the business model that they run and the business they bring in. In addition, we do have some cost structure initiatives going into PCH. And we also noted this new gummy contract, it was won with — a very substantial contract that was won that will launch in the third quarter and be into our run rate in the fourth quarter. So we do believe that we’ve got the opportunity to generate those margins on a sequential improvement basis.
Derik De Bruin: Great. And then just one final one. So I’m looking at the consensus estimates for fiscal ’25. The Street roughly has you increasing EBITDA by 35%. So that’s, call it, a 16% margin at the midpoint of your current guide, that’s 21-ish percent for fiscal ’25. I mean, is that sort of 500 basis point gain in EBITDA margins realistic for next year, given where you see the business right now? And I ask this because I was certainly thinking the margin contribution on the Sarepta business was going to be a lot higher than it actually turns out to be. So just wondering any thoughts on how we should sort of think about EBITDA margin progression as we’re exiting 2024.
Matti Masanovich: We talked about our exit run rate being more in line — in our fourth quarter, more in line with our historic average. And so I think that’s the best guidepost I can give you. We’re not going to give a ’25 update today or kind of look beyond the full year here today, fiscal year ’24. But I think that’s a good guidepost to use. If we get to that exit run rate that we talked about, you can use that as a benchmark to jump off from.
Alessandro Maselli: And the one point I can reiterate once again, our margin reduction this year is not due to a portfolio shift, it’s due to an operational dislocation which we have shared multiple times. And as John said, we have shared in these remarks, we are making very good progresses in addressing that. And probably the progress is faster than our initial expectations. So when you combine these two factors, you can make your own assessment.
Derik De Bruin: Great. Thanks very much.
Operator: The next question today comes from Paul Knight of KeyBanc. Your line is open.
Paul Knight: Hi, yeah, thanks for the question. Regarding Sarepta on next year, your view — a lot is booked through your fiscal year ending June. What portion of — when does the second half of ’24 get booked? And — meaning, when do we get your FY ’25 Sarepta book? Is it starting now? What visibility do you have beyond June of 2024 on Sarepta?
Matti Masanovich: Yeah. I think we’ve discussed, at a high level, we’ve had customer conversations around it. But we discussed how we actually book production. So our production is booked on a rolling six-month basis. So that’s why we feel really confident about how ’24 is going to finish. And as we think about the Sarepta readout, and Alessandro made comments to his view on the Sarepta readout, where it’s not maybe as binary as some are thinking. So I do think — that’s the comment I can give you on it. But we — just fact-specific, we get the orders in on a rolling six-month basis. As we work through the year, this year — so as we work through this year, we’ll get firmer orders that roll into ’25.
Paul Knight: Okay. And then regarding Brussels, you commented that, that was improving. Is that due to the biotech demand? Is it GLP-1s? Is it cell therapy? What’s making Brussel improve?
Alessandro Maselli: So Brussel is a drug product facility, right? And yes, there is a GLP demand there, it’s no secret, it’s a public available information. Clearly, I believe that, in general, as we said before, the site is sitting on a very high level of demand because that has been posed in production for some time in the last fiscal year, right, was a big drain on our margin last year. And it’s going back, right? So it’s a fully utilized because we have backlog to recover on, it’s going to take significant time. And yes, there is a lot of GLP demand. And I would tell you that the site is performing really well in satisfying the demand.
Paul Knight: Okay, thank you.
Operator: The next question comes from Eric Coldwell of Baird. Please go-ahead.
Eric Coldwell: Thank you very much. Good morning. I wanted to hit on two topics. The first is coming back to the COVID revenue. Sorry if I missed this, but did you comment on how the $100 million of Q1 revenue compared to your prior expectations or what was originally embedded in Street guidance? And then what changed to drive that upside or — and/or the increase for the full year on the COVID side?
Matti Masanovich: I think when we guided for COVID, I think we took a fairly conservative assumption on COVID, not knowing where the season was going to go, number one. But we don’t provide, as you know, individual guidance from a quarter perspective. But I’d say that it’s come in stronger — or it will come in strong in the first half. As I mentioned, it’s just not as important to the back half of the year from a COVID perspective, from a COVID revenue perspective in what we’re seeing today. Now as the season plays out this year, that’s going to dictate demand at the end of our fiscal year, our fourth quarter, or second quarter calendar year next year. And we would be able to have more visibility as we work through the tail end of the COVID season here in our second quarter and calendar year fourth quarter. And I think it will dictate the season for next year.
