CORPORATE PRESENTATION
June 2017
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DisclaimerCautionary StatementsThis presentation contains “forward‐looking statements” within the meaning of the federal securities laws. Except for historical information contained herein, the statements in this presentation are forward‐looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward‐looking statements made herein relate to, among other things, future sales, earnings, return on equity, cost savings, process improvements, free cash flow, share repurchases, capital expenditures, acquisitions, benefits of investments and partnerships, business strategies and other matters. Such statements can be identified by words such as: “expected,” “expects,” “expect,” “forecast,” “would,” “estimate,” “will,” or similar references to future periods.
Forward‐looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward‐looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Actual results could differ materially from those stated or implied in the forward‐looking statements. For a list of factors, risks and uncertainties which could make our actual results differ from expected results, please see our latest Annual Report on Form 10‐K. We undertake no obligation to publicly update any forward‐looking statement, whether written or oral, as a result of new information, future developments or otherwise.
This presentation also contains non‐GAAP financial information. Management uses this information in its internal analysis of results and believes this information may be informative to investors in gauging the quality of our financial performance, identifying trends in our results and providing meaningful period‐to‐period comparisons. For definitions of applicable non‐GAAP financial measures and reconciliations of non‐GAAP financial information to GAAP financial information, see the Reconciliations of GAAP to Non‐GAAP Financial Measures included in the Company’s financial reports on Forms 10‐Q and 10‐K and related press releases.
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Bio‐Techne Business OverviewAt a Glance:President and CEO: Chuck KummethHeadquarters: Minneapolis, MNNumber of Employees: 1,700FY2016 Revenues: $499 millionNASDAQ: TECHMarket Cap: $4.2B
Market Profile:Leader in:‐ Life Science Consumables Market‐ Automated Protein Analysis Solutions‐ Controls & Calibrators for IVD Assays‐ Molecular Anatomic PathologyAddressable Market Size: ~$5‐10 billion
Key Product Lines and Workstreams:Biological ContentAutomated Western BlotSingle and Multiplex ImmunoAssaysRNA‐ISH Molecular Diagnostics
36%
23%
25%
17%
Revenue by Customer Segmentation
Pharma/Biotech
Academia
OEM
Distributors
59%27%
14%
Revenue by Geography
Americas EMEA APAC
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Our Vision
• Expanding our product portfolio with New & Innovative research tools
• Delivering more complete solutions through a greater diversity of technologies
• Geographic expansion with continued focus on China
• Focusing on products that bring us closer to the “clinic” by leveraging diagnostic and bioprocess applications
• Extract maximal value from the “treasure trove” of reagents developed over the past 40 years
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Our Mission
80%
12%
8%
Headcount by Geography
North America
EMEA
APAC
1,700Employees
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In excess of 200 employees hold PhD degree
A Great Big Welcome and Hello
North America
Minneapolis
San Marcos
Devens
Cambridge
San Jose
Newark
Emeryville
Littleton
Oakville
Toronto
Ottawa
Wallingford
Europe
Abingdon
Langley
Bristol
Wiesbaden
Lille
Milan
Zug
Asia
Shanghai
Beijing
Hong Kong
Singapore
Tokyo
Total Geographic Sites – 24Total WW Employees ‐ 1700
Global Locations
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Subsidiary Model
Biotechnology
Diagnostics
Protein Platforms
Americas
EMEA
APAC
Collaboration Structure
‐ Commercial teams collaborations‐ Global prioritization‐ Global capital planning‐ M&A
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Divisions (Own Strategy)
Regions(Own Execution)
Current Reportable Segments & Brands
~64% of Sales~80% Gross Margin
Low 50s Op. Margin%
~15% of SalesHigh 60s GM%
High single‐digit OM%
~21% of SalesMid 40s Gross Margin%
~ 30% Op. Margin
Note: All margin percentages have been adjusted to exclude impact of acquisition costs
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Large Addressable Markets
Customers Servedo Pharmao Biotecho Academiao CROso Hospitalso Foundationso Government
$5B‐$10B Addressable
Market 4‐10% CAGR
Life Science Research Reagents$1.8B Tumor
Biology $0.8B
Stem Cells$0.9B
Research Immunoassay
$0.7B
Diagnostics $4.2B
ClinicalControls$0.4B
BioProcessMedia $1.6B
Single Cell Biology$0.9B
Western Blot$0.5B
Biologics Manufacturing
$0.6B
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Minneapolis Headquarters Offices and Labs
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Space: 950,000 ft2
Global Bio‐Techne Locations
Abingdon, UK Office
Langley, UKWarehouse
Newark, CA ACD Office Devens, MA, Offices
Bristol, UK Offices
Shanghai PG labs
Milan, Italy Office
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ProteinSimpleJapan Office
Pl
Collaboration Programs• Active collaboration with over 50 Key Opinion Leaders to better identify product needs
(Univ. of Minnesota, Mayo Clinic, Univ. of Pennsylvania, Stanford, etc.)
• Committed to educating life science researchers on BioTechne’s products and their role in enabling life science research activities
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Pl
Our Business Today
Develop and manufactures biological reagents used in all aspects of life science research (Research Tools such as: proteins, antibodies, & immunoassays) and molecular probes for the Molecular Pathology market
Automated solutions that improve the efficiency of process work streams, such as: automated western blot instruments, bioprocess purity analyzers, microfluidic imaging instruments, multiplex‐ELISA instruments, etc.
Provide controls, calibrators and diagnostic assays for the regulated diagnostic market, such as: hematology controls, blood gas and chemistry controls, diagnostic assays reagents
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Proteins
Small MoleculesStem Cell
Products
StemXVivo®
ELISAs AntibodiesProteome Profiler Arrays
LuminexRNA‐ISH
Biotechnology Division
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Separation
Imaging
Analysis
Microfluidics
Immunoassay
Measurement
Proteins are complex!
Protein Platforms Division
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Diagnostics Division
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Key Technologies with Diagnostic Applicability
• ACD’s RNAscope (RNA in‐situ Hybridization)
• PPD’s Ella Multiplex Instrument
Ella
• Acquired in August 2016
• Newark, CA based company with ~150 employees
• Developed technology to improve detection of genes and gene transcripts using probes (in‐situ hybridization) with initial focus on RNA transcript detection (RNAScope)
• Key technology improvements:• Binding specificity to target RNA• Better signal amplification (b‐DNA)• Retention of morphological context
• Could be an aid to pathology practices where IHC reagents are deficient or lacking
• 13,000 current products, first commercialized in 2011, sold to both research and clinical customers
Advanced Cell Diagnostics
18RNAscope VENTANA LEICA
Probe: a synthetic short nucleic acid sequence complementary to the gene sequence of interest
Comparison of RNAscope® to other Dx Platforms for HPV Testing
RNAscope IHC DNA ISHPCR
(Roche Cobas)
Hybrid Capture
(Qiagen HC2)
RT PCR (HologicAptima)
Target HPV E6/E7mRNA P16 HPV DNA HPV DNA HPV DNA HPV E6/E7
mRNA
Evidence of Viral Activity √ ‐ ‐ ‐ ‐ √
Morphologic Context +++ +++ +++ ‐ ‐ ‐
Sensitivity +++ +++ + +++ ++ ++
Specificity +++ + +++ +++ +++ +++
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Fullfillment of an Unmet Need – In Situ RNA Analysis
• IHC and FISH are the leading tools for research & tissue diagnostics• No sensitive and robust technology for in situ RNA detection prior to RNAscope• RNAscope provides complementary information to FISH and IHC
DNA RNA Protein
FISH 1990s
IHC 1970s
RNAscope®
2012
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Ella Features Suitable for Diagnostic Applications
Ella
• Addresses low‐plex multi analyte immunoassay analysis: (16 samples/4 analytes)
• Parallel immunoassay operation, thus avoiding “cross‐talk” between assays
• Hands off operation (removes operator bias)
• Quick turn around time (1 hr to results)
• Excellent performance (precision and dynamic range‐4 log S/N)
• Embedded standard curve (removes need to run standard curve)
• Closed platform: (controls performance and biological sample handling)
• Small sample volume requirements (~25 L)
• Small Footprint (WxDxH=37x54x26 cm)21
Targets withROIC > WACC
Targets that fill perceived gaps
Sound prioritization strategy
Healthy hopper of targets
Disciplined M&A and Investment Strategy
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Bio‐Techne Summary
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