But if we only have a 30 – whatever, 6% share, there is lots of share that they are going elsewhere. So I think it is important that we have decent competition regardless of their price points. And regardless of where they do the work. And I think it is important to engender large clients, particularly Big Pharma clients to outsource that they feel that they can outsource to folks that are capable. But I think from a pricing point of view, we have been and we will continue to hold our own. We will invest in price in safety in fiscal 2024. That is not just in fiscal 2023. I think that is a commentary and lots of things, commentary on the nature of your question, commentary on the overall economy commentary on the cautiousness of our clients as they put a little more emphasis on post-IND work and clinical work, maybe to the detriment of some of the earlier tax work and certainly on the discovery work.
But I think most of the time, we feel that we are being paid quite well for our work.
Operator: We will take our next question from Justin Bowers with Deutsche Bank.
Justin Bowers: So just a two-parter for me. Can you talk about the sort of like the pros and cons of owning farms and HP suppliers? I know we have done this in the past, and there has been – your strategy is evolving over the last 18 to 24-months. So could you just sort of give us some thoughts there on that? And then part two would just be around competition, just given the demand environment has slowed in general, there had been, I think, some competitors funded over the last few years. Just what are you seeing in the competitive environment competitive environment. Generally, what are you asking about specifically with regard to compensation? Sorry, within like within DSA, for example. Are we seeing exits from competitors or anything? Yes.
James Foster: The competition is pretty static. We are the largest player by 100%. Our next largest competitor is kind of LabCorp and that is a capable, relatively large, stable enterprise, very good in sort of general toxicology. Then you have another tier, which used to be sort of fourth or fifth tier, which kind of became third tier because we bought 3 of our competitors in the second tier and merged with one of them, and those are much smaller companies. When I say much smaller, maybe they do – I’m just trying to do this quickly in my head, maybe they do. 5% of what we do, maybe they do 8%, maybe they do 10%, but they are much, much smaller. I don’t know what their financial status is. One of our competitors market CapEx shrinking there is enough business to go around.
But I do think it has to do with quality and science and speed and technological rigor, particularly IT capabilities. I think it is incredibly unlikely that we will have new competitors. There are several decent competitors in China that I think will focus. They are probably doing some work now for Western companies, but the raise on [indiscernible] is to do toxicology work in China for Chinese drug companies. I think many of them are funded and/or supported by the Chinese government. So I would say the competitive dynamic is kind of – it is what it is and is unlikely to change. There seems to be enough scale to support the client base. So that is positive. To go back to the other part of your question. I don’t see cons in owning the suppliers.
So let’s just talk about the one that we just bought. We now own 90% of. It happens to be probably the highest quality and the one that we know the most about and the one that just exquisite job in terms of the quality of the NHPs themselves. But it just gives us control on the ground of everything, control of [indiscernible] tree, breathing veterinary oversight, nutrition, housing, ultimately shipping. We have a very, very close relationship with the government there, and we have already spoken to them about scaling up the project over the next number of years and have a workforce that we are confident in, and it is hard. So any sort of concern about, I don’t know, transportation or animals getting ill before they are put on transport or just the overall genetics or reading methodology.
Number one, it is on us because we own it. Number two, we have a high degree of confidence in our own ability to do it at the highest quality level. I don’t even know the number anymore, but dozens and dozens and dozens of genarians mice from primate binaries. So we own another one in China, a much smaller one. We are considering doing more of this just to have control of our supply sources. Some of these providers are newer. They are just sort of getting their sea legs under one and I think we are trying to teach them a lot about all the things I just said. Obviously easier to teach them and train them and ensure that they are doing the right things if we own them. So we have a very, very large revenue base in NHP toxicology and growing.
All large molecules have to be tested in the nonhuman primates. So the demand will continue to be significant and we need to continue to have access to large numbers of animals, but also the highest quality. So we don’t see cons. We see a lot of pros. We are delighted with the deal that we just did, both in terms of the supply source and the accretion on the top and the bottom line.
Operator: We will take our next question from Jacob Johnson with Stephens.
Jacob Johnson: Maybe a two-parter on manufacturing, the manufacturing segment. Can you just discuss probably it sounds like a lot of that is going to be driven versus – from the CDMO versus biologics, microbial, but maybe if you could talk about the breakdown of that. You would like to quantify the benefit from the CRISPR Vertex relationship, that would be great. And then just on margins in that segment on the path to 30%. As we think about that margin expansion opportunity, how much of that really driven by the top-line or are there cost savings opportunities that could get you there quicker?
James Foster: So the CDMO business has been a huge headwind for us. For the past couple of years, right? Losing money growing okay. The back half of last year, grew very nicely, but had been slower than we thought it would be. And as you know, we have literally had to recapitulate, redesign, re-staff all three of these businesses, and I’m talking about general management all the way down to the technicians in the study rooms. And I think we have done a really good job as evidenced by the fact that we have had multiple regulatory audits culminating in with Vertex’s new sickle cell drug, which we are going to be producing a large amount of that. So a couple of things with that. That is obviously our key clients. That is obviously sort of wonderful almost marketing to be out there when other clients are thinking about who they are going to use, they are going to call Vertex and they are going to ask them about our relationship.
And we have other clients who we are talking to right now who are about to file BLAs or finishing Phase IIIs. And I do think sort of success begets for the business. That business, while it won’t end fiscal 2024, where it should have been given our valuation models will have significantly better margins and significantly higher revenue not growing quite – we don’t have – our operating plan doesn’t have it growing quite at the rate that we thought it would when we bought them. But I still think that is transitory. And I think particularly as we get commercial clients that is going to crank up nicely. So we are liking this business a lot now. It has great connectivity with our biologics business and also with our Safety Assessment business.
And so the portfolio effect is alive and well. The other two businesses in the manufacturing segment, first being the Microbial Business had its first year. I think it had one year where it grew at 9% and we have owned it for 28-years. Linear grew at 9%. Every other year, it grew double digit. Last year was the only year it grew slowly. And that is so we have explained that 50 times what happened there with that business. The top-line will expand because the clients have worked through a lot of the backlog because they loaded up on supplies during COVID. And the margins are stunning in that business. So that should continue to bolster the operating mines. And then Biologics, which is a business that in 2022 and 2021 had dynamic top-line growth teams and escalating operating margins had a very slow year last year, all because the economy, less numbers of drugs to test.
It had a bunch of their capacity show Covid stuff we are still working through anyway. That business, as we said in the prepared remarks, proposal levels were up in the fourth quarter, which is a good sign that work comes back very, very quickly typically. And so we should see that whole segment, not our largest business, but to be significant not only in fiscal 2024, but if you look at the kind of three-year guidance that we gave, the CDMO business will be instrumental in driving operating margin and revenue growth for sure. It will be accretive to the manufacturing segment that will also be accretive to the business as a whole, and just reorganized that business with new general management and a different and tighter way of selling with single leadership and more commonality across those businesses.
Because a couple of them are GMP businesses, which is the same sort of regulatory oversight and that sort of mindset is beneficial across the clients so important segment has some margin opportunity. Last thing just to specifically answer your question, that segment before we got in the CDMO business was around mid-30s operating margin. We had a few years where it was higher, maybe a few years where it was lower. It will continue to grow back towards that. It is a little bit difficult to say if and when it will get higher than mid-30s. But what we did say when we bought the company was that we believe that when we had a substantial bolus of commercial work at higher price points, with greater efficiency and greater predictability and just larger volumes definitely would be accretive to our operating margins.
So that is going to take a while since we have only really signed our first one. But there will be more to follow. And as we get more of those and they get locked in for long periods of time. It will definitely benefit the operating margin of that segment. So we feel very optimistic, particularly optimistic about the CDMO business, in particular, but I’m quite optimistic about the home Manufacturing segment in terms of its importance to our client base in terms of the commonality of a lot of the work and in terms of the potential for better financial performance.
Operator: We will take our next question from Max Smock with William Blair.
Maxwell Smock: Just a quick one for me here on DSA. Can you just confirm that net bookings were down sequentially in the quarter and then discuss how you are thinking about net bookings moving forward in cancellations obviously elevated again here in the quarter. Can you just give us some detail around how gross bookings trended quarter-over-quarter? I think you called out still above one, but maybe just sequentially, any color there would be helpful.
