Mark Sawicki: Yes, I am going to focus on your specific question around allogeneic therapy as it relates to the need for storage and fulfillment related capabilities. So, we have obviously, as part of the infrastructure build over the last year and a half, built out competencies for secondary labeling and packaging requirements, which are all a base need for allogeneic therapy distribution. Those are currently being used by both clinical and commercial clients, both in the U.S. as well as in Europe. So we’ve been very successful in transitioning that investment into direct support of the cell and gene space itself. Allo, obviously, there’s really – the only real allo product on the market right now is Atara, which is a low volume indication right now.
So there is not going to be a significant financial impact on that in the short term. But there is also a contribution into BioServices over time for autologous therapies where they’re supported – where we’re supporting backup doses, as well as other support elements, which also has the competencies over time to support additional revenues.
David Larsen: Okay.
Jerrell Shelton: Lastly, maybe just to add there, you were looking for a dollar amount. The BioServices revenue grew 9% year-over-year to $3.5 million in the first quarter.
David Larsen: Okay. And I think that there were two large facilities that are fairly new that came online recently, one in Texas, one in New Jersey. Are those profitable now?
Mark Sawicki : Look, we are still in the early stages of our BioServices initiatives and both of those were introduced. And so we are really working towards filling up and bringing up the revenue in BioStorage/BioServices. We’re in the early stages. When Mark is talking about utilizing them for the commercial therapies, for example, our statistics all just now commencing, so we’re obviously not fully utilized at this point in time.
Robert Stefanovich: Hey David, remember, once we open those facilities, and those facilities were opened in, I think, it was June a year ago. So it takes six to eighteen months for clients to come in. They have to do their audits, and they have to do their trial runs, and then they have to rearrange the traffic and you know what they’re doing. So it’s just now ramping up. It does – BioServices, we always anticipated an exponential development. So I think we are still down there right around that point of inflection, and I think you’ll see it picking up over time.
Mark Sawicki : Yes, we actually, Rob I just want to comment. Over the last 12 months in those facilities, we’ve actually onboarded 27 clients.
David Larsen: Okay. And then just one more quick one, I think on last quarter’s call, you talked about nine new therapies for 2024 and 17 filings in 2024. Does that mean nine new commercial therapies that you’re supporting coming online in 2024? Is that what that means? And how is that number as of today? Is it still 9 and 17?
Jerrell Shelton: We have had so far this year, three new therapies get approved, that’s CASGEVY, the CRISPR Vertex product, Amtagvi from Iovance, and most recently Anktiva from ImmunityBio. In our reporting today, we’re saying we can see five more new therapies approved this year. So that would give you eight. So it has one as I’ll call it pushed out. It hasn’t gone away. It’s probably going to be a 2025. And right now we’re seeing 16 more filings in 2024.
David Larsen: Okay, thanks very much. I’ll hop back in the queue.
Operator: Your next question comes from Paul Knight from KeyBanc. Your line is now open.
Paul Knight: Hi, Mark, I have a question for you for starters, and that is the Phase 3 trial, customer count was up the most in those that press release, meaning up 5.6%. Is this a significant indication that biotech is getting some money and getting back into the trial business early stage?
Robert Stefanovich: Well, we are seeing a lot of new money starting to come back into the space. We still see a lot of volatility and churn, as we had mentioned, we had a net add of 42 trials in the quarter, with a net removal of 42 trials. We always – our whole focus is around playing the portfolio, which means the collective average, so that we’ll have winners and losers as it relates to those. But as long as we’re supporting the vast majority of trials in the space, then we’re on the upside. And we remain confident in that. And with the funding position seeming to stabilize and improving in Q1, obviously we need to see if that’s sustainable, that’s a positive indicator.
Paul Knight: And then I think the conference [indiscernible] was 8000 employees. I mean, that’s obviously a record, and not employees, but attendees in, I think, it was the American Society of Gene & Cell Therapy. Right? Are you seeing an uptick in potential customer interest?
Robert Stefanovich: Yes, I mean, there’s a lot of new startups, and so a significant percentage of those 42 new programs came from new clients, which is a very good sign.
Paul Knight: And then I mean, we talk about a $7.7 million EBITDA loss. What do you really want to run the business at Jerry? And a few years out is this a 30% EBITDA margin business or is it 25%?
Jerrell Shelton: Paul, our goals have not changed. Our goals are 55% to 60% gross margin and 30% adjusted EBITDA. Our goals are not changed, and we do examine them often. So that’s the metrics that you should be looking for from us.
Paul Knight: Thank you.
Operator: Your next question comes from Yuan Zhi, from B. Riley. Your line is now open.
Yuan Zhi: Thank you for taking our questions. So, can you help us better understand the weakness in biologic services in 1Q, was it because of lower volume? And how about the visibility and confidence in 2Q and beyond? And I have follow-up.
Jerrell Shelton: Mark is going to answer your question, but this has to do with the report that you put out just recently, I assume.
Thomas Heinzen : No, he is talking about BioServices.
Mark Sawicki: Sorry, can you repeat the question, guys? Because we’re confused. I think it was a little garbled over here. I thought you said biologics, Jerry. I did too.
Jerrell Shelton: No, I thought you said biologics, you thought BioServices. What is it? Repeat the question.
Yuan Zhi: Yes. So can you help us better understand the weakness in biologistic services? Was it because of lower volume? And how about the visibility and confidence in 2Q and beyond?
Jerrell Shelton: Good. Okay, Mark…
