We are projecting the potential of nine new therapies in 2024, plus potentially another two already commercialized products getting earlier line approval, which will substantially increase the addressable patient population and five label expansions. And so there’s a ton of activity, and we already see the potential for another 11 possible filings in 2025. So that’s the huge driver. And I think if you look at it overall, the growth rate there is going to be consistent with where the market has been and with our numbers, some of the numbers that Robert had presented for the foreseeable future.
John Sourbeer: Thanks for those details. And I believe a portion of the convertible debt is due next year. The company has a strong cash position on the balance sheet. Just any color, maybe for Robert just on the company’s financing plans going forward?
Robert Stefanovich: Yeah, absolutely. So we’re in a strong position that we have a strong balance sheet with strong cash as of the December end. The convertible debt, really the substantial portion of the convertible debt is due December of 2026. So we still have some time. As you recall, in Q3, we did buy back some of the convert, it’s about $25 million, there was about $31 million, we paid about $25 million in cash for that. So we had about $5.7 million gain just because of the transaction. And we’ll continue to look at some of the convert buyback. We’re looking at the longer term strategy that we’re still mapping out, but at this point in time, we’re in a good position, as you recall, to convert at 0.75% interest. And like I said, it’s due in December of ‘26. So we still have some time to evaluate the best options for that.
John Sourbeer: Thanks. And then last question I had was on IntegriCell and the [apheresis] (ph) collection. I just wanted clarification. Is that currently live and then just outlook for that segment for the year?
Jerrell Shelton: No, it will become live in the last half of the year.
John Sourbeer: Got it. Thanks for taking the question.
Jerrell Shelton: Thank you.
Operator: Your next question comes from Brandon Couillard of Jefferies. Your line is already open.
Unidentified Analyst: Thanks. This is Matt on for Brandon. Appreciate all the color already on ’24. I guess, maybe for Jerry or Robert. Just talk a little bit about your guidance philosophy and visibility in ‘24. I think historically you’ve had the most visibility in Cryoport Systems, but from where we sit today, just the level of visibility you have across Systems, MVE, PDP, and CRYOGENE, then can you also just remind us how much of the MVE business goes through distributors today? Thanks.
Robert Stefanovich: Yeah, no, absolutely. Like we said, we did take a conservative view at creating the estimates for the year. We do have forecasts from our clients, especially for Cryoport Systems, in terms of what their expectations are. We did try to do a bottoms-up, for our services and our product revenue to determine the revenue guidance for the year. Clearly, as Jerry already mentioned, for MVE, we have to take a very conservative look at growth. Over the last three quarters, it’s been pretty much the same level after that drop from Q1 to Q2. So we are taking a very conservative approach in terms of the ramp on the product revenue side. Clearly, like we mentioned, there’s some upside opportunity on the services side driven by the cell and gene therapy market in particular, both on the commercial revenue side as well as on the BioStorage/BioServices side.
But that’s really how we approached it. And we’re hoping, obviously, that we’ll be able to exceed the estimates.
Jerrell Shelton: And, Brandon, your last part of your question was how much of the MVE businesses through distributors, and that’s about 70%, 75%.
Unidentified Analyst: Thanks. And then you guys spiked out in the deck of the 950 or so industry clinical trials, Cryoport is supporting 675 or 70% of those. Is there scope for that to go higher over time or is there kind of a theoretical limit we should think about in terms of market share for those industry clinical trials? Thanks.
Jerrell Shelton: Mark, I’m going to turn that to you.
Mark Sawicki: Sure. Yeah, I mean, we’re obviously always trying to capture more share. The biggest driver for share capture for us over the next 12 to 18 months in this space is going to be around the negative 80 space. We launched the Elite UltraCold product the middle of last year. We’re already seeing substantial pickup with that product line and historically without a negative 80 offering, our penetration in gene therapy distribution that was managed via negative 80 was minimal. And so there’s some nice opportunity for upside in that space. On the cryo side, obviously, moving from a 70% market share much higher is more of a challenge. So most of that growth will come out of the market dynamics in our continued drive to capture as much of that portfolio as we can. The bigger thing to think about is obviously the drive into maintaining that 70-plus-percent market share into commercial, which we’ve had a very, very good track record of doing.
Unidentified Analyst: Thanks and one last quick one for Jerry. Would just love to get your updated thoughts on how you’re thinking about profitability? Clearly you’ve laid out a lot of growth areas that you’re investing in but as we look out into ‘25 and beyond, how do you think about balancing some of those growth investments and looking to turn profitable on an adjusted EBITDA basis? Thanks.
Jerrell Shelton: Well, the way I think about them, Brandon, is all the projects that we undertake, all the initiatives that we have going on, are — they withstand financial scrutiny and they are accretive. And so, as I said earlier, we constantly are re-prioritizing those initiatives and they will start to roll out just as the Elite UltraCold just rolled out. You’ll see the HV3 rolling out soon. You’ll see IntegriCell at the last half of this year, and you’ll see more progress on the Fusion product and so forth. So I think very positively about them, they’re going to have a revenue impact. They’re going to have profitability impact.
Unidentified Analyst: Super. Thank you.
Jerrell Shelton: Thank you, Brandon.
Operator: Your next question comes from David Larsen of BTIG. Your line is already open.
David Larsen: Hi. I think I heard you say in your prepared remarks that you were generating some revenue from allogeneic services. I think you said a client was storing some product in anticipation of allogeneics, and I thought I heard you also say that they were using IntegriCell. Did I hear that correctly? And just any thoughts there on the progress that allogeneics are making in the market would be very helpful. Thank you.
Mark Sawicki: Yeah, so we’re already supporting a fairly large portfolio of allogeneic therapies. They constitute nearly 30% of our overall portfolio, so it’s a substantial number of products. And that product — those activities go from, like you said, storage through distribution as it stands today. IntegriCell, as Jerry had mentioned, is not, the doors are not open there on those facilities. They’ll open the second half of this year. However, we’re already very heavily engaged with our clients. We already have clients going in and auditing the facilities even before the doors are open. And we have the relationship that Jerry also mentioned in the prepared remarks with the NMDP or National Marrow Donor Program, which we’re teaming up with them where they’re going to be managing all the donor recruitment, and we’ll be doing all the cryopreservation through our facility in Houston for the United States on behalf of NMDP.
And that’s all focused around allogeneic contribution.
David Larsen: Okay, great. And then what should we expect for commercial revenue growth going forward? Is 30% to 40% per year reasonable? And how would you expect these new therapies that are now commercially available to ramp in terms of revenue contribution? Any thoughts there would be great. Thank you.
Mark Sawicki: Yeah, I guess I can comment. Yeah, so from my perspective, the easiest way for you guys to look at the ramp associated with any given therapy is to go through the analyst reports for those therapies and for those companies, right? They do a lot of diligence on the space and come back and provide their guidance as it relates to projected ramp. We do get forecasts from all of our clients as it relates to commercial but it’s not something that we can disclose publicly. However, with the portfolio that’s in place today and all of the filing activity that we see ongoing through late ‘23 and through ‘24, I think the rates that you guys have been seeing historically and that we saw in Q4, 33% year-over-year, that 30 plus range is probably in a reasonable expectation for commercial revenue for the next couple of years.
David Larsen: And then just one last quick one, demand for large freezers within MVE, just any more color there would just be very helpful. Thanks again.
Jerrell Shelton: Our demand at MVE is normalized. It’s no different than historical patterns with the mix, David.
David Larsen: Okay, thanks a lot. I’ll hop back in the queue.
Jerrell Shelton: Thank you.
David Larsen: Thanks.
Operator: Your next question comes from Yuan Zhi of B. Riley Securities. Your line is already open.
Yuan Zhi: Thank you for taking our questions. And, Jerry, probably there are 10 biotech companies pivoting cell therapy from cancer treatment to autoimmune disease. I’m curious if these applications or clinical trials in autoimmune disease have meaningfully helped the Cryoport System business so far?
