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Bio-Techne Fiscal Q3 Revenues Rise 5 Percent Despite Coronavirus Challenges

NEW YORK – Bio-Techne said Thursday that its 2020 fiscal third quarter revenues rose 5 percent year over year, despite a negative impact on its growth from the coronavirus pandemic.

For the three months ended March 31, the Minneapolis, Minnesota-based firm said revenues rose to $194.7 million year over year from $184.9 million, beating analysts' average estimate of $185.4 million.

The firm reported Q3 Diagnostics and Genomics segment revenues of $49.4 million, up 5 percent year over year from $47.1 million, and Protein Sciences segment revenues of $145.5 million, up 6 percent from $137.9 million in the prior-year quarter.

Bio-Techne CEO and President Chuck Kummeth said in a statement that the firm faced "unprecedented challenges" with the COVID-19 pandemic during the second half of the quarter. But as a protein, antibody, assay and diagnostics producer, the firm is well placed to provide reagents for "all aspects of COVID-19 research and diagnostics," he said.

Due to the pandemic, numerous customer site shutdowns occurred in Bio-Techne's academic and biopharma end markets, particularly in the last several weeks of the quarter, negatively impacting its fiscal Q3 sales by about 3 percent, the firm said.

The company noted that it anticipates customer site shutdowns will continue to have a negative impact on sales while they remain in effect, though the company is currently unable to quantify the impact. However, it anticipates a positive long-term outlook for future sales growth resulting from expected future funding increases within life-science research in response to the pandemic.

The company added it has responded to COVID-19 by developing resources for SARS-CoV-2 detection, cytokine monitoring, and drug discovery, all which provide critical support in understanding the mechanisms of infection and developing effective treatments. Bio-Techne said its Ella automated immunoassay platform is providing front-line support through real-time monitoring of an individual's immune responses to COVID-19, and that the firm is deploying other technologies to provide critical support for researchers, further advancing the development of potential therapeutics and vaccinations worldwide.

Kummeth said on a conference call to discuss the firm's financial results that the company is "experiencing significant demand and ramping production" of proteins and antibodies used in coronavirus research, including reagents that are part of serological assays. He added that the company is working with several healthcare providers that are developing ELISA assays for detecting individuals' exposure to SARS-CoV-2.  

The firm noted that it continues to execute on a long-term strategy associated with its Exosome Diagnostics business. The General Services Administration (GSA) recently awarded a 10-year reimbursement contract to its Exosome Diagnostics laboratory for the ExoDx Prostate (EPI) test in March, the firm noted. The contract provides 9 million additional men access to the urine-based genomic EPI test for early detection of prostate cancer.

Additionally, Bio-Techne made product enhancements associated with the development of an ExoDx at-home specimen collection kit and obtained certification of its ExoDx CLIA lab for virology testing, the firm said.

Kummeth said on the conference call that Bio-Techne "still has much to do" to ensure its ExoDx prostate cancer test becomes available to more patients with heightened prostate specific antigen levels, who are contemplating a tissue biopsy.

Last October, the Medicare Administrative Contractor (MAC) National Government Services issued a final Local Coverage Decision (LCD) for its ExoDx test for men being considered for an initial prostate biopsy. The firm is receiving steady reimbursements for the test, but it is seeking a closer alignment of the Medicare Local Coverage Decision with National Comprehensive Cancer Network (NCCN) guidelines, "which will expand the potential market size for the test," Kummeth said.

Many private payors want to see a published clinical utility study prior to issuing a favorable coverage decision. The company has conducted a study, he noted, adding, "We expect such a publication in a leading peer-reviewed urology journal within the next couple of months."

In the study, he said, physicians detected 30 percent additional clinically significant, high-grade prostate cancers compared to those detected in a standard-of-care control arm, due to increased testing compliance stemming from use of the ExoDx test.

In Q3, Bio-Techne's posted a net income of $36.4 million, or $.92 per share, compared to $44.7 million, or $1.15 per share, in the prior year. The firm reported adjusted EPS of $1.39 per share, beating Wall Street analysts' average estimate of $1.15 per share.

COVID-19 had a negative impact on its adjusted EPS by an estimated $.07 to $.09 in Q3, the firm said, adding that it anticipates the short- and long-term impacts of COVID-19 on adjusted EPS to be similar to the impact on its sales growth.

Bio-Techne's R&D expenses rose 3 percent to $16.0 million from $15.6 million in Q3 2019, and its SG&A expenses rose 2 percent to $66.3 million from $65.0 million in the prior-year quarter. 

At the end of Q3, the firm had $156.2 million in cash and cash equivalents and $104.9 million in short-term available-for-sale investments. 

Bio-Techne announced a dividend of $0.32 per share for the quarter ended March 31, payable May 22 to common shareholders of record on May 11.