Prahlad Singh: Yeah. I mean, Jack, as you know, and as we have reported, we quickly got an injunction — received an injunction, which essentially maintains the previous status quo as the litigation plays out. Any — to your point, any initial customer inquiries and questions have died down significantly. And at the end of the day, we still have an agreement in place into the next decades with renewals beyond that.
Jack Meehan: Excellent. Okay. Thank you.
Operator: Our next question comes from Catherine Schulte from Baird.
Catherine Schulte: Hey, guys. Thanks for the questions. Maybe just one more on pharma. Last week, Roche mentioned that it had removed about 20% of the molecules in its pipeline over the last three quarters and that doesn’t seem like a dynamic that’s been unique to them. So I guess, where do you think we are in this pipeline reprioritization across large pharma? And when do you think the dust settles there?
Prahlad Singh: Yeah. Good morning, Catherine. I think the pipeline realignment is happening, and it will continue to happen. I mean, from our perspective, just as we look at preclinical research and discovery, both on the small molecules and on the biomolecule side, and as I’ve pointed out, the funnel has to be broad enough at the beginning for it to narrow down. I think as they realign their portfolio, they will continue to optimize cost measures, as they go further into development from preclinical research and into clinical. But in order to get into development and clinical, they have to have a broad enough funnel. So I think mid to longer term, we don’t see that having much of an impact on our business. I think the key will be how do we continue to help our pharma/biotech customers continue to optimize and make it more efficient for them to bring candidates from discovery into development.
Catherine Schulte: Okay. And then could you just talk through your expectations for pharma and biotech for the second quarter? And when do you think we could see a return to growth in that end market?
Max Krakowiak: Yeah. Hey, Catherine, as a reminder, too, we don’t necessarily give outlooks on an end market basis. And so, look, I think as you can hear from our senses that assuming a general change in the overall end market for pharma biotech, as we go throughout the course of this year. So that’s probably the best insight I can give you on that question.
Catherine Schulte: Great. Thanks.
Operator: Our next question comes from Dan Brennan from TD Cowen.
Daniel Brennan: Great. Thank you. Thanks for the questions. Maybe just on immunodiagnostics, solid first quarter, again. Comps do get more difficult as we go through the year. Can you just walk us through maybe the Q2 expectation and the outlook for the second half? And anything we should be considering, anything notable whether new products or pricing that support the outlook?
Max Krakowiak: Yeah. I think as you — as we look at the outlook for IDX, to your point, it was another strong first quarter here. We continue to expect the business to continue to perform well, even both in China for the rest of the year, as well as outside of China. And so, our expectation is that for the business for the full year, it’s still going to grow in the high-single-digits. It’s multiyear stack. They’re still in line with our LRP. And it’s really a combination of both the geographic expansion of our immunodiagnostics portfolio, but then also the wave of innovation and menu expansion that we’ve been driving for the past couple of years.
Prahlad Singh: And just to add to what Max said, US continues to also be a very good growth driver for us for the immunodiagnostics business. I know we tend to talk about China, but US for us is probably the fastest grower for our immunodiagnostics business.
Daniel Brennan: Got it. And then maybe just one on costs. You had a lot of comments in the prepared remarks on new programs, it sounded like, or maybe some emerging programs to take costs out, talked about stranded costs. Can you just elaborate a little bit, like, it sounds like maybe those impacts are going to come after ’24? Maybe we’ll learn more at the Investor Day, but just kind of any impact in ’24 baked in from some of these additional focus on costs? And if not, kind of how do we think about the magnitude of upside beyond? Thanks.
Max Krakowiak: Yes. It’s a great question. So I would say from a cost perspective and really our operating margin initiatives, there is the short-term and the long-term bucket. I think when we’ve talked about short-term really for 2024, it’s the structural actions we’ve been taking to remove the stranded costs really in relation to our SG&A functions, and so that has worked, has already mostly been done in the fourth quarter and first quarter here. It’s baked into our assumption for the full year. I think then when you look at it long term, it’s a lot of the topics that we had mentioned in our prepared remarks this morning, really around in-sourcing, freight lane optimization, vendor consolidation, rooftop consolidation. And so those will continue to be areas that we’re focused on executing over the next couple of years.
It’s part of our playbook for our LRP operating margin expansion. And so that’s really probably the way I would think about those two different cost actions.
Daniel Brennan: Got it. Thank you.
Operator: And our final question comes from Luke Sergott from Barclays.
Luke Sergott: Great. Thanks for the question. I just want to follow-up, Prahlad, on what you just talked about from the US and IDX being the fastest grower. I mean, this has kind of been the long-term thesis here on EUROIMMUN in general. And so, can you just talk about what’s driving the accelerated growth here? How big the US is now as a part — as a region for EUROIMMUN? And do you guys think that you are close to the critical mass when thinking about the menu or the menu expansion needs to really start to drive share gain here?
Prahlad Singh: Hey, good morning, Luke. I think if you look at our immunodiagnostics business in the US, it has grown at a 20% CAGR since the acquisition. And I don’t think we have really gone to where we would say that we have reached close to critical mass, so that it would plateau out. It’s gone from being 5% to nearly 15% of our overall immunodiagnostics business. But there is still a lot of growth that we have to cover in the US. And I would say that we are still in the early phases of growth that this business is going to see over the next several years in the US. And it is all a direct correlation of how many products that we can get onto the panel and get through the FDA approval process into the US, and the team is working very hard and diligently on that.
Luke Sergott: All right. Great. Thanks. And then just another follow-up here on the diagnostics side from — you guys came out with the automated tuberculosis testing. Can you talk about any recent tenders that you’ve won, any that are coming up throughout the rest of this year? And then, I guess, how does the new automated system compare to the QuantiFERON and the LIAISON?
Prahlad Singh: No, it’s a great question, Luke. Again, we don’t talk on specific tenders, but I’m happy to talk about the launch that we just did and announced at any — it was even at a such — at a such show at a current show that’s going on. It’s a complete workflow that has a specialized liquid handler added to it. It builds on the T-SPOT Select, which has added now chemagic extraction and cell counting ability. So I think the workflow that this product uses, the benefit is that it uses all our other offerings, too, including Cellaca cell counting, the EUROIMMUN reader, which will eventually connected also the EuroLabs software in the future. It essentially reduces our hands-on time by 50% versus the current existing T-SPOT Select, and it has a reduction of approximately 80% in technician touch points.
So this was one of the major hurdles that T-SPOT Select was facing in the market in terms of hands-on and technician time and the intent really is to significantly eliminate that. And now if you combine for day one and day two, it essentially has lesser total hands-on time versus the competitor’s product offering that you talked about.
Luke Sergott: Great. Thank you.
Operator: We currently have no further questions. I will hand back to Steve Willoughby for final remarks.
Steve Willoughby: Thank you, Carla. Thanks, everyone, for your time this morning. We look forward to touch in base with everyone over the coming weeks. Have a good day.
Operator: This concludes today’s call. Thank you for joining. You may now disconnect your lines.
