August 17, 2020
Storytelling and vision are great. But execution is key.
Emerging technologies are inherently prone to hype and storytelling. That’s not necessarily the fault of cutting-edge science. After all, companies pursuing the market opportunities of tomorrow often have to rely on fuzzy details when persuading investors to take a leap of faith into the future. Although there are always factors out of a management team’s control, one ingredient is absolutely required for success: execution.
In the early 2010s, Repligen (NASDAQ:RGEN) began to pivot away from drug development to focus on bioprocess tools — the filters, purification columns, and other equipment used to manufacture biologic drugs. Management saw a long-term opportunity to avoid the risks of drug development while still capturing the emerging growth potential of the biopharma market. Why make bets on a handful of drug candidates when you can sell the equipment needed to manufacture drug assets for the entire industry?
Although the growth potential of the biopharmaceutical industry is easy to take for granted today, that wasn’t as much of a slam dunk a decade ago. What’s more, bioprocessing was a relatively overlooked part of the industry and certainly not one as sexy as drug development in the minds’ of investors or Wall Street analysts. Repligen’s management team kept its head down and executed.
By understanding the pain points of customers engaged in biomanufacturing, Repligen’s leadership could stay a few steps ahead of the field. That foresight allowed the company to build a market-leading portfolio of bioprocessing tools through a series of strategic acquisitions — often at amazing prices. Let’s be honest, there aren’t many bidding wars for tangential flow filters, although they are critical tools for separating cell debris from drug products during manufacturing. The team at Repligen understood that.
Executing on that vision has paid off handsomely for shareholders. Repligen grew product revenue from roughly $15 million in 2011 to $270 million in 2019 and expects revenue of about $336 million in 2020. The company is profitable, generating cash from operations, and ended June with a record amount of cash.
Meanwhile, the five (mostly overlooked) acquisitions made from 2014 to 2019 comprised roughly 40% of cumulative revenue in that span and spawned 12 new products through in-house research and development.
Repligen serves as a great reminder that execution is more valuable than storytelling, and that authentic success is often quiet, not blasted across social media or hyped on stage at conferences.
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