Repligen Continues To Gain Share In The Fast-Growing Bioproduction Market

Repligen (RGEN) is about as close as I'll get to "forget the valuation and just buy", as although these shares do carry a high multiple, Repligen is a share-gainer in the fast-growing bioproduction market. Between expanding the line-up of products on offer, gaining share within its existing portfolio, and leveraging growth in antibodies and gene therapies, I see Repligen as fully capable of generating more than 20% annualized growth for some time to come, provided the company doesn't accept a buyout offer before then.

These shares have risen more than 50% since my last update, outperforming more diversified large rivals like Danaher (DHR) and Thermo Fisher (TMO) and more or less keeping pace with Sartorius (OTC:SARTF). The development of therapeutics and vaccines for COVID-19 should provide a multiyear boost to revenue, but the main opportunity here is in growing the business to address more opportunities in areas like flow control/fluid management, analytics, and possibly fermentation and cell culture media. The valuation is not low, and I'd much prefer to pick up shares on a pullback, but I don't believe high multiples are necessarily an impediment to further appreciation from here.

 

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Repligen Continues To Gain Share In The Fast-Growing Bioproduction Market

Repligen Gives Investors A Pure Play On Bioproduction

Seven of the top 10 best-selling drugs in the world are antibodies, biosimilars are starting to disrupt the pharmaceutical industry, and Big Pharma is investing billions in gene therapy. On top of that, roughly half of the drugs in biopharma pipelines today are biologics (antibodies, cell therapies, gene therapies, etc.). All of that means an exceptionally attractive market opportunity for companies like Repligen (RGEN) that sell what amounts to the picks and shovels of the biologics industry.

I believe Repligen’s strong position in purification and filtration, as well as emerging opportunities in areas like analytics, give the company a good shot at a prolonged streak of 20%-plus revenue growth and 20%+ FCF margins. While the shares do trade at around 15 times forward revenue, I’m not sure they’re as expensive as that snapshot approach to valuation may suggest, particularly with the company gaining share in a large market set to grow at a high-single digit rate for many years to come.

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Repligen Gives Investors A Pure Play On Bioproduction