Release Date: May 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Harvard Bioscience Inc (HBIO, Financial) has introduced new products, including the SoHo family of implanted telemetry devices and the VivaMARS system, which are expected to drive future growth.
- The company reported improved cash flow from operations, increasing to $3 million in Q1 2025 from $1.4 million in Q1 2024, driven by better working capital management.
- Harvard Bioscience Inc (HBIO) is making progress in refinancing its debt facility, with multiple providers showing interest.
- The company is seeing strong interest in its MeshMEA organoid platform, particularly from academic and industrial customers, driven by new policy changes encouraging alternative methods in drug development.
- Harvard Bioscience Inc (HBIO) has achieved approximately $1 million in consumable revenue from its first large bioproduction customer, indicating traction in this segment.
Negative Points
- Revenue for Q1 2025 was $21.8 million, down from $24.5 million in Q1 2024, reflecting a decline in sales across several regions.
- The company recorded a significant non-cash goodwill impairment charge of $48 million, impacting its operating expenses and financial results.
- Gross margin decreased to 56% in Q1 2025 from 60.3% in Q1 2024, affected by lower absorption of fixed manufacturing overhead and changes in accounting methods.
- Harvard Bioscience Inc (HBIO) faces uncertainty in NIH and academic research funding, which could impact future revenue and growth.
- The company anticipates a challenging Q2 2025, with expected revenue in the range of $18 million to $20 million, partly due to the impact of China tariffs and softening revenue in the region.
Q & A Highlights
Q: Can you tell us a little bit more about the impairment charge?
A: This is Mark Frost, Interim CFO. The impairment charge was due to a drop in our market cap, which required us to reassess our goodwill valuation. We used a discounted cash flow (DCF) approach, which led to a $48 million non-cash charge recorded this quarter.
Q: Can you provide more details about the bioproduction business and the Car-T therapy?
A: James Green, CEO, explained that the BTX system, particularly the Agile Pulse, is widely used in creating new therapies, including Car-T. A domestic biotech customer is using our system for bioproduction of a Car-T related therapy, which is currently in early-stage clinical testing.
Q: Regarding the [SNEA] product line, how do you see the impact of NIH funding and HHS announcements on the product's interest?
A: James Green noted strong interest in the product, especially from academic researchers and biopharma companies. Although NIH funding has been unpredictable, the recent government push for NAMs and organoids is driving increased interest, particularly from industrial customers.
Q: When will the BTX technology be able to compete with MaxCyte in the sector?
A: James Green stated that while MaxCyte focuses on high-volume applications with a licensing structure, Harvard Bioscience targets early adopters with a razor blade model. The company is well-positioned for initial bioproduction, especially in Car-T therapy, but high-volume competition would require further development.
Q: What are your thoughts on the future of animal testing in light of the MeshMEA product line and NIH focus?
A: James Green believes that while organoids may reduce the need for large-scale animal testing, full safety and tox testing with implant telemetry will remain essential for most new drugs. The MeshMEA product line will likely complement rather than replace animal testing.
Q: Can you provide details on the refinancing of your debt facility?
A: Mark Frost mentioned that the refinancing will be more expensive than commercial debt, with a term likely spanning four to five years. The company is still negotiating the specifics and will provide more details once finalized.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
