We are reaffirming our "buy" rating on Bio-Techne Corp. (TECH); we are encouraged by the company’s strong performance in fiscal 4Q21, notes David Toung, a healthcare sector analyst with Argus Research, a leading independent Wall Street research firm.

We see solid revenue and EPS growth — reflecting continued recovery from pandemic-related disruptions in the academic research market. We see robust customer demand and continued momentum for Bio-Techne in FY22.

Bio-Techne provides solutions to assist in the development of tests, therapeutics and vaccines to combat the coronavirus. It also remains well positioned to benefit from macro trends in the biotech industry, including increased spending on the development of new drugs and genomics-based diagnostics.

Through its Protein Sciences business segment, Bio-Techne is one of the world’s leading suppliers of proteins, such as cytokines and growth factors, immunoassays, antibodies, and reagents to the biotech and academic research communities.

Bio-Techne’s Diagnostics and Genomics segment provides blood chemistry and blood gas quality controls, hematology instrument controls, immunoassays, and other bulk and custom reagents for the in-vitro diagnostic market. Both segments saw robust growth in 4Q21.

In addition to the use of proteins by developers of COVID-19 vaccines, biotech companies and researchers are using these proteins to discover, refine, and manufacture biologic drugs in areas such as oncology, immunology, rare diseases, and gene therapy.

Bio-Techne delivered strong fiscal 4Q21 results on August 5. Adjusted EPS rose 87% to $1.87. GAAP net income was $15.0 million or $0.37 per share, compared to $58.8 million or $1.48 per share a year earlier. Revenue was $259.0 million (+47% reported; +39% organic). Growth was also strong relative to the pre-pandemic 4Q19. The CAGR for the two-year period was 13%.

While the COVID-19 response was a tailwind in the quarter, there was also robust demand for Bio-Techne’s products and services for non-COVID-related activities. The company is seeing strong demand from biopharma end markets and expects significant government research funding for academic labs.

In addition to supplying antibodies (both off-the-shelf and custom) and reagents, the Protein Sciences segment is providing customers with workflow solutions for work on cell and gene therapies.

Bio-Techne is expanding its manufacturing capacity in order to address demand for GMP (good manufacturing practice) cytokines and growth factors, and views the supply of products for mRNA research and production as an area of future growth.

For FY21, adjusted EPS rose to $6.75 from $4.55 a year earlier. GAAP net income was $140.4 million or $3.47 per share, compared to $229.3 million or $5.82 per share in FY20. Revenue was $931.0 million (+26% reported; +22% organic). Our price target is $540 per share.

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