Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Repligen (NASDAQ: RGEN) and the best and worst performers in the drug development inputs & services industry.
Companies specializing in drug development inputs and services play a crucial role in the pharmaceutical and biotechnology value chain. Essential support for drug discovery, preclinical testing, and manufacturing means stable demand, as pharmaceutical companies often outsource non-core functions with medium to long-term contracts. However, the business model faces high capital requirements, customer concentration, and vulnerability to shifts in biopharma R&D budgets or regulatory frameworks. Looking ahead, the industry will likely enjoy tailwinds such as increasing investment in biologics, cell and gene therapies, and advancements in precision medicine, which drive demand for sophisticated tools and services. There is a growing trend of outsourcing in drug development for nimbleness and cost efficiency, which benefits the industry. On the flip side, potential headwinds include pricing pressures as efforts to contain healthcare costs are always top of mind. An evolving regulatory backdrop could also slow innovation or client activity.
The 8 drug development inputs & services stocks we track reported a very strong Q1. As a group, revenues beat analysts’ consensus estimates by 4%.
In light of this news, share prices of the companies have held steady as they are up 1.4% on average since the latest earnings results.
Repligen (NASDAQ: RGEN)
With over 13 strategic acquisitions since 2012 to build its comprehensive bioprocessing portfolio, Repligen (NASDAQ: RGEN) develops and manufactures specialized technologies that improve the efficiency and flexibility of biological drug manufacturing processes.
Repligen reported revenues of $169.2 million, up 10.4% year on year. This print exceeded analysts’ expectations by 3%. Overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ organic revenue estimates but a miss of analysts’ full-year EPS guidance estimates.
Olivier Loeillot, President and Chief Executive Officer of Repligen said, “We had a strong start to the year with $169 million of revenue, which represented 14% organic non-COVID growth and helped drive meaningful adjusted operating margin expansion. Total orders grew nearly 20%, with all four franchises growing double-digits, highlighting the momentum in our business. As a result, we are confident in our organic growth outlook for the full year. Strategically, we strengthened our Analytics franchise with the acquisition of 908’s bioprocessing portfolio. Finally, we are working to navigate through the current economic environment and at this point in time, we see minimal impact from tariffs on our EPS.”
The stock is down 13.4% since reporting and currently trades at $124.40.
Is now the time to buy Repligen? Access our full analysis of the earnings results here, it’s free.
Best Q1: UFP Technologies (NASDAQ: UFPT)
With expertise dating back to 1963 in specialized materials and precision manufacturing, UFP Technologies (NASDAQ: UFPT) designs and manufactures custom solutions for medical devices, sterile packaging, and other highly engineered products for healthcare and industrial applications.
UFP Technologies reported revenues of $148.1 million, up 41.1% year on year, outperforming analysts’ expectations by 5.9%. The business had an incredible quarter with a solid beat of analysts’ EPS estimates.
UFP Technologies achieved the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 21.2% since reporting. It currently trades at $238.88.
Is now the time to buy UFP Technologies? Access our full analysis of the earnings results here, it’s free.
Slowest Q1: Azenta (NASDAQ: AZTA)
Serving as the guardian of some of medicine's most valuable materials, Azenta (NASDAQ: AZTA) provides biological sample management, storage, and genomic services that help pharmaceutical and biotechnology companies preserve and analyze critical research materials.
Azenta reported revenues of $143.4 million, up 5.2% year on year, exceeding analysts’ expectations by 2%. Still, it was a slower quarter as it posted a significant miss of analysts’ EPS estimates.
Interestingly, the stock is up 11.6% since the results and currently trades at $28.36.
Read our full analysis of Azenta’s results here.
West Pharmaceutical Services (NYSE: WST)
Founded in 1923 and serving as a critical link in the pharmaceutical supply chain, West Pharmaceutical Services (NYSE: WST) manufactures specialized packaging, containment systems, and delivery devices for injectable drugs and healthcare products.
West Pharmaceutical Services reported revenues of $698 million, flat year on year. This result surpassed analysts’ expectations by 2%. Overall, it was a very strong quarter as it also recorded a solid beat of analysts’ EPS estimates and full-year revenue guidance beating analysts’ expectations.
The stock is down 3.1% since reporting and currently trades at $211.
Read our full, actionable report on West Pharmaceutical Services here, it’s free.
Charles River Laboratories (NYSE: CRL)
Named after the Massachusetts river where it was founded in 1947, Charles River Laboratories (NYSE: CRL) provides non-clinical drug development services, research models, and manufacturing support to pharmaceutical and biotechnology companies.
Charles River Laboratories reported revenues of $984.2 million, down 2.7% year on year. This print topped analysts’ expectations by 4.6%. It was an exceptional quarter as it also produced an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ full-year EPS guidance estimates.
Charles River Laboratories had the slowest revenue growth among its peers. The stock is up 20.1% since reporting and currently trades at $138.49.
Read our full, actionable report on Charles River Laboratories here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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