Rachel Vatnsdal: Helpful. Thank you.
Operator: Our next question comes from Vijay Kumar with Evercore ISI.
Vijay Kumar: Good morning, Rainer. Thanks for taking my question. So I had my first question on bioprocessing here just about clarify some of these numbers here. I think a couple of months ago, Rainer, I think the expectation was for base bioprocessing, anywhere from high singles to teens. When you look at the high single, if it’s at the low end of the range, did anything change? And when I think about that cadence throughout the year, I think first half is somewhere in the mid-single digits imply second half and double-digit range. Is there any risk out there in the back half? What gives you the visibility in the back half activation bioprocessing?
Rainer Blair: Thanks, Vijay. So as early as the JPMorgan conference, we did talk about the bioprocessing growth range being from high single digits to mid-teens range. And as I mentioned then, and I’ll confirm now, we have spent the last several weeks talking to our customers to understand their planning assumptions for the year. And the clear message is the underlying demand remains robust and unchanged. So we continue to see monoclonal antibodies, cell therapy and gene therapy activity continue to be strong, and we’re even seeing more work on mRNA on the back of its success with COVID vaccine. So while the demand is remaining solid, customers are actually not anticipating a step-up in activity. So activity remains strong and as we’ve seen in prior quarters, but they’re not anticipating a step-up versus what we’ve seen here in the last couple of years.
And so as you look at the two, three, even four year stacks here, we’ve seen mid-teens growth CAGRs for bioprocessing non-COVID. So coming back then, if you take our high single-digit bioprocessing non-COVID full year guide on the back of an approximately 30% comp from 2022, it’s right in the mid-teens range, both on a two and a three-year basis. So we think that’s especially strong in light of the fact that in Q1, we do expect to burn off some inventory and will start low single digits. And in fact, if we had assumed the mid-teens to the higher part of the range for ’23, that actually would have implied an acceleration of demand to over 20% on a two-year stack. And frankly, that’s just not supported by our customer discussions. So as we think about burning off these inventories, you asked about the confidence in the later part of the year, and that confidence is based on our discussions with customers, the backlog that we have, the continued order activity that we see and that has improved over prior periods.
And so we feel very good about the high single digits non-COVID bioprocessing growth for 2023.
Matthew McGrew: And maybe, Vijay, just to give you a bit — sorry, yes. Just to give you kind of numbers to it because I know we’ve talked about this a lot recently, just so that we kind of repeated here. If you look at bioprocessing, ex-COVID growth, right, over the last four years, inclusive of our ’23 guide, you have 7%, 8% type growth in 2020 as we are sort of moving into and away from the core bioprocessing doing more COVID work. And then in 2021 and 2022, we grew, ex-COVID, 20% plus in each of those two years. And so now this year in ’23, the high single-digit guide, it’s sort of kind of an inverse barbell, if you will. But if you look at kind of high single digits to start in ’20, high single digits as we get through the last of COVID in ’23 with 20% and 25% growth in the middle in ’21 and ’22, that’s sort of the period that we’re looking back and over because I don’t think you can look at just any one period or quarter, given everything Rainer said that happened in ’21 and ’22 with the extended lead times and what was happening with COVID.
