Back to top

Image: Bigstock

Will Repligen's (RGEN) COVID Woes Be Offset by Product Demand?

Read MoreHide Full Article

Repligen Corporation (RGEN - Free Report) had a strong first quarter wherein earnings rose 35.3% year over year on the back of 45% growth in revenues.

The company is one of the leading providers of advanced bioprocessing technologies and solutions that are used by large biopharmaceutical companies to manufacture their biologic drugs or gene therapies. Repligen’s focus on the development of biologics and gene therapies for rare as well as common diseases in the past few years has driven the demand for advanced bioprocessing technologies and solutions. Repligen is riding this demand wave well and has helped its investors to create wealth over the past few years as its share price moved north.

However, Repligen’s share price has declined 43.2% so far this year as slow COVID-19 vaccination rates during the first quarter led the company to lower its revenue guidance by 4%. Moreover, the decline in the broader S&P 500 Index amid the Russia-Ukraine war, rising capital costs and supply bottlenecks might have resulted in the recent decline in the company’s stock price. The Zacks Medical - Biomedical and Genetics industry has declined 24.7% year to date.

Zacks Investment Research
Image Source: Zacks Investment Research

Repligen earns revenues from the sale of several products, which can be categorized mainly under three segments, namely Filtration,  Chromatography and Protein products. The chromatography products include OPUS and OPUS PD chromatography columns, chromatography resins and ELISA test kits. Filtration products consist of XCell Alternating Tangential Flow Systems and consumables, KrosFlo filtration products and SIUS filtration products. Protein products comprise the Protein A ligands and cell culture growth factors.

The company’s product franchises have witnessed robust demand in the past few quarters. Its products have exhibited strong organic growth momentum in the past two years. The trend is expected to continue in the rest of 2022. Based on the encouraging trends, Repligen expects its revenues to grow 17%-21% at constant currency, and expects organic growth of 14%-18% in 2022. The company expects to reach a billion dollars in revenues in 2025.

Repligen has a history of adding new technologies and products through acquisitions to diversify its business and support accelerated growth. The company made four acquisitions in the last two years, adding capacities or technologies that complement its existing infrastructure.

Repligen acquired C Technologies in 2019 that added its current process analytics franchise to its portfolio.

Although Repligen’s shares are in a downtrend so far this year, the strong organic growth and promising acquisitions done in the last two years are likely to support its growth going forward.

However, there is stiff competition in the bioprocessing products market. With a large portion of Repligen’s revenues being concentrated among a few customers, any shift of customers to its competitors may significantly hamper the company’s top-line growth.

Zacks Rank & Stocks to Consider

Currently, Repligen has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include Alkermes (ALKS - Free Report) , Sesen Bio (SESN - Free Report) and Angion Biomedica (ANGN - Free Report) . While Alkermes and Sesen Bio sport a Zacks Rank #1 (Strong Buy), Angion Biomedica carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Alkermes’ 2022 loss per share has narrowed from 13 cents to 3 cents in the past 30 days. ALKS has risen 15.6% in the year-to-date period.

Earnings of Alkermes beat estimates in all the last four quarters, the average surprise being 350.48%.

The Zacks Consensus Estimate for Sesen Bio’s 2022 loss per share has improved from 33 cents to 32 cents in the past 30 days. SESN has declined 46.9% in the year so far.

Earnings of Sesen Bio beat estimates in three of the last four quarters and missed the mark once, the average being 69.94%.

The consensus estimate for Angion Biomedica’s 2022 loss has narrowed from $1.92 to $1.79 in the past 30 days. ANGN has declined 55.2% so far this year.

Earnings of Angion Biomedica beat estimates in three of the last four quarters and missed the mark once, the average surprise being 47.51%.