BIO-TECHNE Corp

Bio-Techne Corporation develops, manufactures and sells life science reagents, instruments and services for the research, diagnostics and bioprocessing markets worldwide. The company manages its business in two operating segments: the Protein Sciences segment and the Diagnostics and Spatial Biology segment. The Protein Sciences segment is a leading developer and manufacturer of high-quality biological reagents used in all aspects of life science research, diagnostics and cell and gene therapy, and also includes proteomic analytical tools. The Diagnostics and Spatial Biology segment develops and manufactures diagnostic products, including controls, calibrators, and diagnostic assays for the regulated diagnostics market, exosome-based molecular diagnostic assays, advanced tissue-based in-situ hybridization assays and instrumentation for spatial genomic and tissue biopsy analysis, and genetic and oncology kits for research and clinical applications. The company operates globally, with offices in many locations throughout North America, Europe and Asia, and its product lines include hundreds of thousands of diverse products, most of which it manufactures itself in multiple locations in North America, as well as locations in the U.K., Canada, Switzerland and China.

The company faces intense competition across most of its product lines, encountering a wide variety of competitors including large global companies with substantial capabilities and resources, as well as smaller niche competitors with specialized product offerings. Key competitive factors include price, quality and safety, performance, delivery speed, application expertise, service and support, technology and innovation, distribution network, breadth of product offerings, and brand name recognition. Management believes the company's competitive position is strong due to the unique aspects of many of its products and its product quality. The company sells its products directly to customers primarily located in North America, Europe and China, as well as through a distribution agreement with Thermo Fisher Scientific and through third party distributors in China, Japan, certain eastern European countries and the rest of the world. No single end-user customer accounted for more than 10% of the Protein Sciences segment's net sales during fiscal 2025, 2024, or 2023, and no customer accounted for 10% or more of the Diagnostics and Spatial Biology segment's consolidated net sales during those same periods.

The company generates revenue through the sale of life science reagents, instruments and services. Revenue is categorized into consumables, instruments, services, and royalty revenues. Consumables revenues consist of specialized proteins, immunoassays, antibodies, reagents, blood chemistry and blood gas quality controls, and hematology instrument controls that are typically single-use products recognized at a point in time following the transfer of control to the customer, which generally occurs upon shipment. Instruments revenues consist of longer lived assets that, for the substantial majority of sales, are recognized at a point in time in a manner similar to consumables. Service revenues consist of extended warranty contracts, post contract support, and custom development projects that are recognized over time, as well as laboratory services recognized at point in time. Royalty revenues are recognized in the period the sales occur using third party evidence. For fiscal 2025, consumables revenue was $972.286 million ¹, instruments revenue was $112.086 million ², services revenue was $111.570 million ³, and royalty revenues were $23.693 million ⁴, for total net revenues of $1.219635 billion ⁵.

The Protein Sciences segment is the larger of the two segments, representing approximately 72% of net sales in fiscal 2025 ⁶. It is comprised of two divisions: the Reagent Solutions division and the Analytical Solutions division. The Reagent Solutions division consists of specialized proteins such as cytokines and growth factors, antibodies, small molecules, tissue culture sera and cell selection technologies. Key product brands include R&D Systems, Tocris Biosciences and Novus Biologicals. The Analytical Solutions division includes manual and automated protein analysis instruments and immunoassays used in quantifying proteins in a variety of biological fluids, with key product brands including R&D Systems and ProteinSimple. The segment also includes a 19.9% investment in, and eventual acquisition of, Wilson Wolf, a leading provider of cell culture devices for cell-based therapies. For fiscal 2025, the Protein Sciences segment reported net sales of $870.245 million ⁷ and a segment gross margin of 75.6% ⁸.

The Diagnostics and Spatial Biology segment, representing approximately 28% of net revenues in fiscal 2025 ⁹, includes three divisions: the Spatial Biology division, the Molecular Diagnostics division, and the Diagnostic Reagents division. The Spatial Biology division products, sold under the Advanced Cell Diagnostics (ACD) brand, are novel in-situ hybridization (ISH) assays for transcriptome, DNA copy, and structural variation analysis within intact cells. In the first quarter of fiscal 2024, the company closed on the acquisition of Lunaphore, a leading developer of fully automated spatial biology solutions using precision microfluidic technology. The Molecular Diagnostics division markets products under the Exosome Diagnostics and Asuragen brands, including the ExoDx Prostate test, a urine-based assay for early detection of high-grade prostate cancer. The Diagnostic Reagents division consists of regulated products used as calibrators and controls in the clinical setting, often manufactured on a custom OEM basis. For fiscal 2025, the Diagnostics and Spatial Biology segment reported net sales of $346.263 million ¹⁰ and a segment gross margin of 57.3% ¹¹.

During fiscal 2025, the company invested $15.0 million ¹² into Spear Bio at the beginning of the fiscal year. The company repurchased 4,550,195 ¹³ shares of common stock for $275.7 million ¹⁴ during fiscal 2025. The Board of Directors approved a new share repurchase plan on April 30, 2025, authorizing the company to purchase up to $500 million ¹⁵ of the company's stock. The company paid annual cash dividends totaling $50.4 million ¹⁶ in fiscal 2025. In August 2024, 791,204 ¹⁷ shares of outstanding vested stock options related to former employees expired, of which 779,084 ¹⁸ shares belonged to the company's former CEO; the dispute with the former CEO was resolved through a binding arbitration award during the quarter ended March 31, 2025 for which the company paid $37.2 million ¹⁹ inclusive of interest and legal fees. The company also completed restructuring actions, including a plan to recover operating margins and a plan to optimize global manufacturing, incurring total restructuring and restructuring-related costs of $28.231 million ²⁰ for fiscal 2025. On August 5, 2025, the company announced the execution of a definitive agreement to sell the Exosome Diagnostics business for $15 million ²¹ including $5 million ²² of stock of the acquiring company at closing with the remainder received over the following four years.

For fiscal 2025, consolidated net sales increased 5% to $1.219635 billion ²³ as compared to $1.159060 billion ²⁴ in fiscal 2024. Organic growth was 5% ²⁵, and foreign currency translation and a business held-for-sale did not have a material impact. Consolidated net earnings for fiscal 2025 decreased 56% ²⁶ compared to fiscal 2024, impacted by a non-recurring loss on an arbitration award, impairment of assets held-for-sale, and restructuring and restructuring-related charges. GAAP net earnings attributable to Bio-Techne were $73.400 million ²⁷ for fiscal 2025, compared to $168.105 million ²⁸ in fiscal 2024. GAAP diluted earnings per share were $0.46 ²⁹ for fiscal 2025, compared to $1.05 ³⁰ in fiscal 2024. Adjusted net earnings attributable to Bio-Techne increased 8% ³¹ to $306.457 million ³² in fiscal 2025, compared to $284.749 million ³³ in fiscal 2024. Adjusted diluted earnings per share were $1.92 ³⁴ for fiscal 2025, compared to $1.77 ³⁵ in fiscal 2024.

A key growth vector is the expansion into the cell and gene therapy market. The company has made several acquisitions and investments to expand its product offerings for this market, including a significant investment in state-of-the art facilities for production of both proteins and small molecules in large quantities manufactured in accordance with cGMP, as well as a 19.9% investment in, and eventual acquisition of, Wilson Wolf, a leading provider of cell culture devices for cell-based therapies. Through a collaborative marketing venture with Wilson Wolf and another company, the company has leveraged its products to provide a more complete offering for the cell and gene therapy market. The second part of the forward contract to acquire the remaining 80.1% of Wilson Wolf will automatically trigger and requires the company to acquire the remaining equity interest on December 31, 2027, based on a revenue multiple of approximately 4.4 times trailing twelve month revenue ³⁶, with the second option payment of approximately $1 billion ³⁷ plus potential contingent consideration forecasted to occur between fiscal 2026 and fiscal 2028.

Another growth vector is the expansion in spatial biology, driven by the acquisition of Lunaphore at the beginning of fiscal 2024 for $169.7 million ³⁸ in a cash-free, debt-free acquisition. Lunaphore's COMET instrument automates ACD's RNAscope assays and utilizes antibodies to enable simultaneous hyperplex detection of protein and RNA biomarkers on the same slide at single-cell resolution. The Diagnostics and Spatial Biology segment's growth in fiscal 2025 was driven by broad based molecular diagnostics performance and Lunaphore's organic growth. The company also continues to expand its global presence, with approximately 44% of sales revenue in fiscal 2025 ³⁹ coming from outside the U.S., and a strategy to expand geographically, particularly in China, India and in developing countries, both through distribution and through direct operations.

Consolidated gross margins were 64.8% ⁴⁰ in fiscal 2025, compared to 66.4% ⁴¹ in fiscal 2024 and 67.7% ⁴² in fiscal 2023. Consolidated gross margin in fiscal 2025 was impacted by the reinstatement of incentive accruals and product mix. Excluding the impact of acquired inventory sold, amortization of intangibles, stock compensation expense, restructuring and restructuring-related costs, impact of business held-for-sale, and the impact of partially-owned consolidated subsidiaries, adjusted gross margins were 70.4% ⁴³ in fiscal 2025, compared to 71.0% ⁴⁴ in fiscal 2024 and 71.7% ⁴⁵ in fiscal 2023. The company expects that in the future, gross margins will continue to be impacted by the mix of the portfolio growing at different rates as well as future acquisitions.

Capital additions planned for fiscal 2026 are approximately $42 million ⁴⁶ and are expected to be financed through currently available cash and cash generated from operations. The company's manufacturing operations use a wide variety of raw materials and components, and it utilizes a number of techniques to address potential disruption in its supply chain, including the use of safety stock, alternative materials, and qualification of multiple supply sources. The majority of products are shipped within one day of receipt of customers' orders, other than instruments and related cartridges, which are typically shipped within one to two weeks of receipt of an order.

The company's capital allocation strategy includes R&D spending, capital expenditures, share repurchases, and dividends. Research and development expenses were $99.496 million ⁴⁷ in fiscal 2025, compared to $96.664 million ⁴⁸ in fiscal 2024 and $92.493 million ⁴⁹ in fiscal 2023. Capital additions were $31.0 million ⁵⁰ in fiscal 2025. The company repurchased $275.7 million ⁵¹ in shares during fiscal 2025 under its repurchase plan, and the Board approved a new share repurchase plan on April 30, 2025 authorizing up to $500 million ⁵² in stock purchases. The company paid annual cash dividends of $50.4 million ⁵³ in fiscal 2025, and the Board of Directors periodically considers the payment of cash dividends.

The company faces structural headwinds from global economic conditions, including slower economic growth, inflation, recession, volatility in currency markets, and labor availability constraints. International political and compliance factors, including the military conflict in Ukraine, Israel's conflict in Gaza, and trade tensions between the U.S. and China, can negatively impact operations. The company has experienced and may in the future experience adverse impacts on customer orders, supply chain disruptions, price increases in raw materials, and increasing price competition. The healthcare and life sciences industries face constant pressures to reduce healthcare costs, and research and development spending by customers and the availability of government research funding can fluctuate. The company also faces headwinds from tariffs, with the U.S. implementing tariffs on imports from a wide range of countries beginning in early April 2025, which has prompted retaliatory tariffs and has increased the cost of supplies and components the company imports, as well as its cost to serve certain markets.

Management has identified several execution risks to the growth plan. The company's ability to grow revenues, earnings and cash flow depends in part upon its ability to identify and successfully acquire and integrate businesses at appropriate prices and realize anticipated synergies. Acquisitions, investments, joint ventures and strategic relationships involve risks including underperformance relative to expectations, difficulty in integrating cultures and personnel, and the assumption of unknown liabilities. The company may be required to record a significant charge to earnings if goodwill and other amortizable intangible assets become impaired; goodwill was $980.935 million ⁵⁴ as of June 30, 2025, representing 38% of total assets. The company's success also depends on recruiting and retaining highly qualified personnel, and the market for highly skilled workers is extremely competitive. The company faces intense competition and must keep pace with changing technologies and market needs, and if it does not develop innovative new products on a timely basis, its offerings will become obsolete.

The company faces material risks from its significant international operations, with approximately 44% of sales revenue in fiscal 2025 ⁵⁵ coming from outside the U.S., exposing it to foreign currency fluctuations, geopolitical tensions, and compliance with complex international laws such as the Foreign Corrupt Practices Act. The company's growth strategy relies heavily on acquisitions, and the inability to complete acquisitions at appropriate prices or integrate them successfully could negatively impact growth; the company has a forward contract to acquire the remaining 80.1% of Wilson Wolf with a second option payment of approximately $1 billion ⁵⁶ plus potential contingent consideration forecasted between fiscal 2026 and fiscal 2028. Goodwill impairment risk is significant, with goodwill of $980.935 million ⁵⁷ representing 38% of total assets as of June 30, 2025, and the company recorded impairment charges of $80.503 million ⁵⁸ for assets held-for-sale and $83.1 million ⁵⁹ total impairment charge including allocated goodwill during fiscal 2025. The company is subject to extensive regulation by the FDA and comparable agencies, and failure to comply could result in warning letters, product recalls, seizures, or civil and criminal sanctions; the EU has adopted the In Vitro Diagnostic Regulation (EU IVDR) which imposes stricter requirements and may require material modifications to quality management systems. The company faces intense competition and rapid technological change, and if it fails to develop innovative new products on a timely basis, its offerings could become obsolete, with research and development expenses of $99.496 million ⁶⁰ in fiscal 2025.

Management's message in the filing emphasizes a disciplined strategy to accelerate growth in part by acquiring businesses and product portfolios that leverage and diversify existing product lines, fill portfolio gaps with differentiated high growth businesses, and expand geographic scope. The strategic pillars outlined include: Grow & Leverage the Core through continued significant investment in research and development activities to be first-to-market with quality products; Capitalize on High Potential Markets by leveraging the strong balance sheet to gain access to new and differentiated technologies; Market Expansion Through Innovation & Acquisition by expanding product offerings into novel research fields and further penetrating diagnostics and therapeutics markets; Deliver Best-in-Class Customer Experience by expanding sales staff and distribution channels globally; and Develop People Through a Transformative Culture by fostering an EPIC culture based on Empowerment, Passion, Innovation and Collaboration. Management states that the company intends to build on past accomplishments, high product quality reputation and sound financial position by executing strategies that position it to serve as the standard for biological content in the research market and leverage that leadership position to enter diagnostics and other adjacent markets.