Jerrell Shelton: They’re in clinical trials mostly, but we do see a lot of promise there. Obviously, it’s an area where the market’s looking a lot at — is how CAR Ts are expanding beyond oncology. A lot of promise there. We’re seeing some of the results of the early trials, Phase 1, Phase 2, come out with promise. So there’s upside there, absolutely looking at it, and it is part of our clinical trial pipeline.
Yuan Zhi: Got it. Another question is related to your recent acquisitions. Can you share any update from the integration of Bluebird Express as well as patent format since the acquisitions?
Jerrell Shelton: Well, the Bluebird fit like a hand in glove because we’ve known Bluebird for a long time. So it’s in process. There’s nothing more to say about that, that it’s in process and that the integration of the operations are moving along very, very well.
Todd Fromer: And then TEC4MED.
Jerrell Shelton: You mentioned TEC4MED as well. Yeah. What was your question about?
Yuan Zhi: Yeah.
Jerrell Shelton: Okay. So TEC4MED is quite interesting. TEC4MED is a German company that we acquired. It offers communication and temperature monitoring systems that are quite advanced. And that too is in process. It’s being, we’re looking at the impact that TEC4MED has on our SmartPak, I mean on our SkyTrax condition monitoring system project. And most likely those two will be moving, intersecting and moving together because there’s some software advantages there. And also I think that TEC4MED has, it stands independently as well, so it’s got independent orders coming in. And then I think thirdly, I think it will serve as an integrating tool as I mentioned in my comments earlier throughout the company over time. So it’ll take some time to do all these things, but we’re really excited about TEC4MED.
Yuan Zhi: Got it. Thanks for the additional…
Mark Sawicki: Yeah, the industry feedback on TEC4MED has been resoundingly positive as well.
Yuan Zhi: Got it. Thanks for the additional color there and that’s all my question.
Jerrell Shelton: Thank you.
Operator: Your next question comes from Paul Knight of KeyBanc. Your line is already open.
Paul Knight: Hi, Jerry. You had mentioned the 70% market share. I mean what’s the alternative? I guess if they do it themselves or another commercial vendor? What’s the biggest piece of that 30 %? Is it themselves or [indiscernible] or what?
Jerrell Shelton: No, that’s a global basis, Paul. So you have one large lower-end manufacturer in China. You have a large lower-end manufacturer in India. And then you have a number of, then you have one smaller operation in Germany. And then you have a number of small operations that kind of are like job shops.
Thomas Heinzen: I think he was talking about clinical trial percentage, not MVEs.
Jerrell Shelton: I thought you were talking about MVE.
Paul Knight: Yeah.
Jerrell Shelton: Okay. On clinical trials, I’m going to turn that to Tom because he’s the expert on clinical trials.
Thomas Heinzen: Thanks, Jerry. There are alternatives. We’re not a monopoly out there. There is competition. It’s the same competition that’s been around for years. It’s some of our partners that we go to work with every day, especially couriers that are using either MVEs product or somebody else’s to compete with us. But we stand on our merits. We stand on the quality of our product, our market leading position, all of our commercial customers, our chain of compliance and everything else we do, that’s what separates us.
Mark Sawicki: Yeah and that 70% is in reality higher than that because we do have a lot of the specialties that subcontract equipment through us for programs that they’re supporting that we don’t have visibility on. So the effective number is going to be higher than 70%. We just don’t know that exact number.
Paul Knight: Okay. And then on — animal health was down year-over-year. Could you comment on that? And then MVE is down year-over-year, but you’re saying what, that’s stabilizing at its juncture?
Mark Sawicki: Yeah, animal health and MVE are directly correlated. So you look at the product size of the markets, the reduction in revenue or the drop in revenue is really driven by the drop in MVE revenue. So animal health and biopharma both have been impacted by MVE and what we’ve seen in Q2 throughout the remainder of the year.
Paul Knight: Okay, thank you.
Operator: Thank you. There are no further questions at this time. I would hand over the call to Jerry Shelton, the CEO. Please go ahead.
Jerrell Shelton: Thank you for your questions and our discussions. In closing, our 2023 results were within our guidance range and our expectations. While product revenue was lower than historical levels, MVE revenue began to stabilize in the latter part of the year and that has continued into early 2024. Services revenue continued to become a larger part of our business led by growth in BioStorage/BioServices and Commercial Cell and Gene Therapy. We think 2024 will be a year of progressive advancement as more therapies move toward commercialization. In addition to our operating results in 2023, we continue to make strategic investments and establish important relationships to drive our long-term growth. We signed a number of new clients and bought new products and services to market.
All of these actions continued to expand our ability to serve the cell and gene therapy industry globally and open up new revenue streams. Barring any geopolitical breakdown, we think our outlook of a progressively improving market in 2024 is well founded. As an established industry leader that leads the way in providing vital supply chain support to the life sciences industry, we intend to continue to grow in importance and to benefit from the growth of the cell and gene therapy industry as it becomes an even greater proportion of our business. Thank you for joining us today. We appreciate your continuing support and interest in our company. We look forward to updating you on our progress again next quarter. We hope you have a good evening.
Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation and you may now disconnect.
