BioLife Solutions, Inc. (BLFS) Q4 2020 Earnings Call Transcript

BioLife Solutions, Inc. (NASDAQ: BLFS) Q4 2020 earnings call dated Mar. 22, 2021

Corporate Participants:

Rod de Greef — Chief Financial Officer and Chief Operating Officer

Michael Rice — Chief Executive Officer

Dusty Tenney — Chief Executive Officer, Stirling Ultracold

Analysts:

Paul Knight — KeyBanc Capital Markets — Analyst

Chris Lin — Cowen — Analyst

Jacob Johnson — Stephens — Analyst

Suraj Kalia — Oppenheimer & Co. — Analyst

Michael Okunewitch — Maxim Group — Analyst

Thomas Flaten — Lake Street — Analyst

Marc Wiesenberger — B. Riley & Co. — Analyst

Carl Byrnes — Northland Securities — Analyst

Presentation:

Operator

Ladies and gentlemen, thank you for standing by and welcome to the BioLife Solutions Q4 and Full Year 2020 Earnings Call. [Operator Instructions]

I would now like to hand the conference over to your host, CFO, Roderick de Greef. Sir, please go ahead.

Rod de Greef — Chief Financial Officer and Chief Operating Officer

Thanks, Latif. Good afternoon everyone and thank you for joining this call. Earlier today we issued two press releases. The first was our announcement of the signing of a definitive merger agreement to acquire Global Cooling, Inc., better known as Stirling Ultracold, a leading US-based developer and manufacturer of ultra-low temperature freezers. The second press release detailed our Q4 and full year 2020 financial results and operational highlights.

As a reminder, during this call we may make certain projections and other forward-looking statements regarding future events or the future financial performance of the Company or its acquisitions. These statements are subject to risks and uncertainties that may cause actual results to differ materially from expectations. For a detailed discussion of the risks and uncertainties that affect the Company’s business and that qualify as forward-looking statements, I refer you to our periodic and other public filings filed with the SEC. Company projections and forward-looking statements are based on factors that are subject to change and therefore these statements speak only as of the date they are given. The Company assumes no obligation to update any projections or forward-looking statements except as required by law.

During this call, we will speak to non-GAAP or adjusted results. Reconciliations of GAAP to non-GAAP or adjusted financial metrics are included in the press release we issued this afternoon. These non-GAAP or adjusted financial metrics should not be viewed as an alternative to GAAP. However, in light of our M&A activity, we believe that the use of non-GAAP or adjusted metrics provides investors with a clearer view of our current financial results when compared to prior periods.

Now I’d like to turn the call over to Mike Rice, CEO of BioLife Solutions.

Michael Rice — Chief Executive Officer

Thanks, Rod and good afternoon everyone. Thank you for joining our call. We’re very pleased to present the background, strategic rationale and synergies as well as the potential financial impact of our just announced acquisition of Stirling Ultracold, a company that’s been in the news quite a bit these last few months due to their support of COVID-19 vaccine distribution and point of care storage. Before I get to Stirling, I’d like to give some color on how we finished last year. I’ll provide some quantitative data, but I’ll leave most of the detailed revenue presentation to Rod.

To set the context, it’s important to review how active the cell and gene therapy space is right now. In 2020 total funding for companies participating in the space was nearly $20 billion, a 50% increase over 2019. Industry-sponsored clinical trials increased by 154 over 2019 and several therapeutic candidates could get approved this year.

2020 was a banner year for BioLife with total revenue of $48 million, up 76% over 2019. 2020 media revenue grew 32% over the prior year. We gained over 200 new direct customers with new line [Phonetic] users across the portfolio, including media, thaw, evo cold chain, CBS freezers and SciSafe storage services. Additionally, our two largest distributors sold and shipped our preservation media products to nearly 3,500 different customers. This is truly remarkable and speaks to how well our direct sales team and distribution partners are planting seeds for future growth.

Further to our media franchise, since 2016 we processed nearly 300 cross-reference requests for our US FDA Master Files to support media use in human clinical trials. In 2020, we added 63 new media customers and we also added 75 new customer clinical trials using our media, including 30 in the fourth quarter alone. It’s not a perfect data match-up, but if we take the ARM data of 154 new clinical trials in 2020, it’s possible our market share is nearly 50% of these considering we added 75 new trials last year.

We continue to believe that our media franchise really sticky, marquee customers is the engine that we will continue to leverage to market our growing bioproduction tools and services portfolio tool. To-date our biopreservation media is used in four approved cell therapies, Yescarta and Tecartus from Kite, [Indecipherable] from Celgene and ZYNTEGLO from bluebird. CryoStor is also used in four new therapies that could get approved this year. These include Ide-cel from Celgene, omidubicel from Gamida Cell, cilta-cel from Janssen and Ide-cel from bluebird. So we could start to see the anticipated growth in customer approvals this year and continuing for several years considering our large installed base of media customers still in the clinic and marching towards filing for approvals in various geographies.

Turning to our ThawSTAR products. Although the pandemic significantly limited our ability to sell onsite in person at customer and prospect locations, we gained 11 new customers in Q4 last year and 29 for the full year 2020.

Turning to our evo cold chain management platform. We continued to gain traction and added 14 new customers in Q4 last year. The large pharma company we’ve been working with to secure some portion of the commercial shipments has confirmed that they have completed their regulatory update filings citing the evo platform in the US and Europe and we’re on schedule to commence a series of monthly deliveries of evo containers to our courier partners to support customer shipments using evo next quarter. We believe that over time this customer decision to derisk cold chain management by approving more than one container and logistics provider will become the norm and we’ll have a strong opportunity to compete across the landscape of cell and gene therapies.

In the last few months we also onboarded two new courier partners with Biocare [Phonetic] and Fisher BioServices joining World Courier and Quick as approved evo partners targeting the cell and gene therapy space. With our CBS freezer platform again the pandemic curtailed much of our on-site selling activities. However, we finished last year on a strong note and gained 19 new customers in Q4 2020.

Rounding out my recap, our biostorage services team had a very strong Q4 and full year 2020. We gained six new customers in Q4 and set the stage for significant growth this year with expansion underway in the US and Europe.

Starting with this call and onward, based on the guidance and requests we have directly received from several government agencies, we’re not going to discuss SciSafe customers and involvement with COVID vaccines. So just a heads up for when we get to the Q&A portion of this call.

In summary, we’re really pleased with what we accomplished last year and are confident about our organic growth potential and how the acquisition of Stirling will take BioLife to the next level.

Now turning to the transaction. Joining Rod and me on the call today is Dusty Tenney, the current CEO of Stirling Ultracold, who will be joining BioLife Solutions after we close the transaction as our new President and Chief Operating Officer. Dusty has a proven track record of scaling high-growth businesses at Brooks Automation and before that at PerkinElmer and I’m really looking forward to his contributions in scaling the business. We’re thrilled to welcome Dusty and the entire Stirling team to the BioLife family.

With our acquisition of Stirling we’re now guiding 2021 total revenue in a range of $101 million to $110 million and have set our next revenue goal at $250 million within the next three to four years.

I’ll start off with a recap of our M&A strategy and then comment on why Stirling is such a great fit for BioLife. Recall that in August 2018, we embarked on a strategy to identify and acquire or invest in novel and potentially disruptive technologies that would broaden our tools portfolio and enable us to help our cell and gene therapy customers to decrease the potential of delivering a nonviable dose. With reimbursement being predicated on an initial and sustained response from the patient and our understanding of the many ways manufacturers’ cell and gene therapies can be damaged during storage, shipping and fine [Phonetic], we looked at the fragmented tool supplier base and got to work. The merger with Stirling is our fifth deal in the last two years following our acquisitions of Astero Bio and the ThawSTAR product family, SAVSU Technologies and evo cold chain management platform, Custom Biogenic Systems, liquid nitrogen freezers and most recently last October SciSafe and their biologic storage services offering.

We focused on the mechanical freezer landscape since we currently don’t offer that temperature range in our freezer portfolio which is limited to minus 196 C. Mechanical freezers operate in a range from minus 20 C to minus 80 C. A key requirement of our strategy to enter the mechanical freezer market was to identify technologies that are not prone to the typical compressor failures and maintenance requirements of the current market offerings. The Stirling freezer platform is novel, utilizing a very efficient Stirling engine and no compressors providing much higher reliability and uptime than standard compressor-based technologies. There are just two moving parts and the energy consumption is a fraction of compressor based freezers creating significant operational benefits. These are the typical reasons that customers buy from Stirling. But the most compelling reason is that all Stirling freezer systems, the portable ULT25, the undercounter SU105 and the upright 780XLE all have programmable ultra low temperature ranges between minus 20 C and minus 86 C which provides customers universal applications for their biologic materials and vaccines that no other system in the world can provide. So, with this acquisition, we now have complete cold chain freezer line from minus 20 C to minus 196 C that fulfills 100% of the needs of cell and gene therapy developers and the broader biopharma market. The strategic fit is excellent.

In addition to welcoming the 18-person strong Stirling global direct sales team to BioLife who will now also present our CBS liquidation freezers to customers, we have an operational and cost synergy to leverage in that SciSafe is a major customer of Stirling. So we’ll be supplying one operations team from another. Lastly, we will pick up 80 patents in the acquisition related to Stirling’s current and future products that will enable strong, sustained product differentiation.

Now I’d like to turn the call over to Dusty to give you a background on Stirling and then Rod can take us through our 2020 financials and the impact of the Stirling acquisition. Dusty?

Dusty Tenney — Chief Executive Officer, Stirling Ultracold

Thanks, Mike. This is a great day for Stirling’s team members, customers and shareholders. From my time at Brooks Automation and more recently at Stirling Ultracold, I followed the progress that Mike and the BioLife team have executed to broaden their tools portfolio and provide more value to customers and shareholders. Each of the assets BioLife acquired were targets of my own M&A list. When Mike reached out to me last fall to start a conversation about putting Stirling and BioLife together, I immediately saw the strategic fit and I’m really looking forward to joining BioLife as its President and COO and doing my part to further the growth of the Company and build it into an even bigger and more trusted supplier of critical bioproduction products and services.

Let me give you a little background on Stirling. The company was spun out of SunPower Incorporated in 1996 to capitalize on an IP estate related to the use of Stirling engines in various industrial applications. Since that time the company developed mechanical freezers and to date has shipped more than 10,000 systems worldwide.

I joined Stirling in March 2020 after a very successful time at Brooks Automation, where I was President of its Life Science division and oversaw rapid growth and the completion of several acquisitions. We grew Life Science’s revenue from $65 million to over $300 million over five years. At Stirling, we operate a 50,000 square foot manufacturing facility, southeast of Columbus in Athens, Ohio and have an inside sales and marketing team that works in downtown Columbus. We currently employ 160 team members and have been flat out running with the pedal down hard since last August when our upright, undercounter and portable Stirling freezers were recognized as key enabling technologies for the distribution and point of care storage of COVID-19 vaccines.

In 2020, our revenue break-outs were along these lines. By market segment pharma and biotech were 71%; academic, 26%; and government was 3%. By freezer model large freezers were about 80%, portable 15% and undercounter freezers 5%. And by geography, North America was about 90%; EMEA, 8%; and Asia-Pacific, 2%. We sell through distributors mainly VWR and via our direct sales team who also provides support for our sales partner at VWR.

Preliminary revenues for 2020 was $39 million and 2020 revenue is estimated at $60 million. We are a key supplier to operation work speed and a partner with UPS, Walgreens and other participants in the fight against COVID. We also serve the cell and gene therapy space and count Allogene, Moderna, Orchard [Phonetic] and Sangamo as key customers.

I’ll close with some comments on why our Stirling engine freezers are highly valued in the cell and gene therapy and broader biopharma markets. Just as with BioLife’s entire portfolio, it’s all about helping customers reduce risk. Stirling has engaged with multiple cell, gene and regenerative medicine customers, provide a flexible solution and maintain the cold chain of custody, critical to maintaining the efficacy and viability of these therapies. Use cases include localized high-density upright freezers at manufacturing locations, clinical applications that leverage the undercounter system given the limited space to store therapies and a fully mobile solution that allows couriers to transport this high biological material to its point of use while maintaining full traceability at ultra low temperatures.

Stirling has partnered with several gene and cell therapy customers and co-branded the portable bench-top ULT25 as their point of view storage. This makes it easy for their customers to maintain the biologic materials that they supply to clinics and proper temperatures ranging from minus 20 to minus 86 C while bringing prominent brand recognition for repetitive purchases.

Further, Stirling has demonstrated that it’s engines can also support cryo temperatures less than minus 135 C without further intervention, which creates tremendous pathways for further growth as a natural combination with the existing assets within BioLife to address the full range of ultra low temperatures required for viable cell and gene therapy storage and distribution. This truly highlights the tremendous growth synergies that exist by combining Stirling’s assets with BioLife’s strong cell and gene therapy portfolio.

Now I’ll turn the call back over to Rod.

Rod de Greef — Chief Financial Officer and Chief Operating Officer

Thanks, Dusty. I’ll start off with a review of our 2020 financial performance. Revenue for the fourth quarter totaled $14.7 million, representing a 78% increase over 2019’s fourth quarter revenue of $8.3 million. Media revenue for the fourth quarter of 2020 was $8.2 million, a 58% increase over the fourth quarter of 2019. This quarter’s revenue also included $662,000 of sales related to the automated thaw product line, $469,000 of evo cold chain related revenue and $3.6 million in freezers and accessories at CBS.

We also reported $1.8 million in biostorage revenue related to our acquisition of SciSafe which closed on October 1st last year. Revenue for the full year ended December 31st, 2020 totaled $48.1 million, an increase of 76% over 2019. Media revenue for the full year of 2020 increased 32% to $31 million compared to 2019. We believe that the full-year comparison is the best reflection of how media revenue is currently growing as it smooths out the quarterly lumpiness we witnessed throughout 2019 and 2020 and which we expect to continue to see in 2021.

Our adjusted gross margin for the fourth quarter was 54% compared with 65% last year. For the full year of 2020 adjusted gross margin was 58% compared to 69% in the same period in 2019. The decrease in adjusted gross margin for both periods reflects the gross margin profile of the product lines we acquired in 2019 and 2020. In addition, based on expected growth in these product lines in 2021, we increased our fixed manufacturing overhead at our evo and freezer operations.

Adjusted operating expenses for Q4 of 2020 totaled $8.2 million compared with $4.9 million in Q4 of 2019. For the full year of 2020 adjusted operating expenses totaled $27.6 million compared with $16.8 million in 2019. The increase in both periods was primarily driven by additional operating expenses related to the acquisitions made in 2019 and 2020 as well as increased headcount and stock-based compensation expense necessary to support our overall growth objectives. The adjusted operating loss for the fourth quarter of 2020 was $255,000 compared with operating profit of $437,000 in 2019. Our adjusted operating income for the full year of 2020 totaled $293,000 compared to $2.1 million in 2019.

Our adjusted net loss for the fourth quarter of 2020 was $256,000 or negative $0.01 per diluted share compared with adjusted net income of $527,000 or $0.02 per diluted share in 2019. For the full year of 2020 adjusted net income was $351,000 or $0.01 per diluted share compared with adjusted net income of $2.6 million or $0.13 per diluted share in 2019.

Adjusted EBITDA for the fourth quarter of 2020 increased 47% to $2.5 million compared with $1.7 million in the fourth quarter of 2019. For the full year of 2020, adjusted EBITDA increased 41% to $8.3 million compared with $5.9 million in 2019. And our cash balance at December 31st was $90 million.

Now I’d like to make a few comments on our just announced acquisition of Stirling. This is an all-stock deal whereby BioLife will issue 6.6 million shares of common stock in exchange for 100% of the outstanding shares of Stirling. Based on Friday’s closing share price of approximately $39, the transaction has an imputed value of approximately $258 million including the assumption of $8.7 million of debt.

When you combine fourth quarter 2020 revenue for BioLife and Stirling, the annualized revenue run rate is approximately $115 million. Stirling’s margin profile is not dissimilar to our CBS freezer business with gross margins currently in the low 30%s and a modest adjusted EBITDA expectation this year. However, during diligence Dusty and his team did a good job of articulating a clear and what we believe to be an achievable plan for significant margin improvement over the next 12 to 36 months. We expect the gross margin expansion to result from the introduction of new and higher ASP products and increased plant automation, which we expect will move gross margins into the mid to high 40%s. So while we will see some near-term margin erosion, particularly at the gross margin level, we believe that the combined entity can achieve our adjusted EBITDA margin target of 30% in the next 24 to 36 months and with materially higher absolute numbers. In addition, we expect the transaction to be accretive to adjusted net income per share next year and beyond.

In summary, we are issuing 19.9% of our outstanding shares which is 16.5% on a pro forma basis to acquire a business which is a great strategic fit and which we expect will contribute in excess of 30% of projected pro forma revenue and EBITDA this year and in the following years.

I’ll conclude my remarks with our revenue guidance for 2021. So for ’21, we expect to report revenue in three product categories. First is media, then freezer and thaw systems, which includes our CBS and Stirling freezer systems and ThawSTAR product lines and then third services, which includes our evo cold chain and biostorage services. Our 2021 revenue guidance is based on current expectations for our existing business and includes the anticipated contribution from our acquisition of Stirling, which is expected to close on or before May 1st.

Total revenue for 2021 is expected to be in the range of $101 million to $110 million, reflecting year-over-year revenue growth of 110% to 129%. Our total revenue expectation for 2021 is comprised of the following items. The expected 2021 revenue contribution of $35 million to $37 million from the Stirling product line given that we expect to close on or before May 1st. Media revenue is expected to be between $38 million and $40 million, reflecting growth of 23% to 29% over 2020 and accounting for approximately 37% of total revenue. Freezer and thaw systems revenue, including the contribution from Stirling, is expected to be between $50 million and $54 million, accounting for approximately 50% of total revenue.

And finally services revenue is expected to be between $13 million and $16 million accounting for approximately 13% of total revenue. Now going to our share count, in terms of our new share count, taking into consideration the 6.6 million shares, which will be issued in connection with the Stirling transaction, we will have 40 million shares issued and outstanding and 42.5 million shares on a fully diluted basis.

Now I’ll turn the call back over to Mike.

Michael Rice — Chief Executive Officer

Thanks, Rob. I’d like to summarize with three key points of our investment thesis. One, we have very sticky relationships with hundreds of cell and gene therapy companies and our media is baked into hundreds of clinical trials with each customer therapeutic candidate estimated to generate $500,000 to $2 million annual revenue, if approved. Two, these customers trust BioLife and want to buy more from us. So we have a tremendous cross-selling leverage opportunity with the rest of our offering. And three, the Stirling acquisition brings us proprietary products, revenue scale and a seasoned team and leader in DUSTY Tenney.

Now I’ll turn the call back over to the operator, Latif?

Questions and Answers:

Operator

Thank you. [Operator Instructions] Our first question comes from the line of Paul Knight of KeyBanc. Your line is open.

Paul Knight — KeyBanc Capital Markets — Analyst

Hey, guys. Hi, Dusty. Nice to see you again.

Dusty Tenney — Chief Executive Officer, Stirling Ultracold

Yes. Likewise, Paul.

Michael Rice — Chief Executive Officer

Hi, Paul.

Paul Knight — KeyBanc Capital Markets — Analyst

Hey, Mike, first question on the core business pre-Stirling and that is with your talk about a 50% share, what does the rest of the market do? Is it homebrew? Could you talk to that share estimate?

Michael Rice — Chief Executive Officer

Right on, Paul. Yeah, we believe it remains homebrew. We are yet to see really any entrants of either pre-formulated preservation media products from any suppliers, distributors or anybody else that’s out there. So it really is a — it’s a BioLife versus homebrew battle and we’re doing great taking share, we believe, every quarter.

Paul Knight — KeyBanc Capital Markets — Analyst

And then regarding Stirling with existing ops, what do you have in terms of distribution, meaning your move in the direct sales? Do you have direct sales? What’s the head count there? What’s the plan there? And who are your key distributors?

Michael Rice — Chief Executive Officer

Sure, Paul. Yeah, we have in the current pre-Stirling organization about 10 folks who are involved in sales and that’s a mix of inside folks and field folks. So call it about 10 with a couple of openings. The current distributors look like this. On the media side, again it’s the big four as always, it’s Fisher, VWR, Millipore/Sigma and STEMCELL Technologies and there are perhaps 30 or so other regional in-country distributors that do a decent job on media.

With CBS freezers we did inherit a fairly well-known and diverse distribution team around the world with good presence. So we’ll have a great time just rationalizing this and from our perspective it’s just more feet on the street. So it’s all about a force multiplier to leverage the story.

Paul Knight — KeyBanc Capital Markets — Analyst

Okay. And what’s the overlap and perceived synergy with CBS? What temperature was CBS operating in for customers and what do you see as the positives of those two together?

Michael Rice — Chief Executive Officer

Yeah. Great question, Paul. So with CBS, the products are, pardon me, limited to liquid nitrogen operating temperature range which is minus, call it, 196, right. It’s the coldest extreme for the complete gestation [Phonetic] of metabolism of biologic material.

Now this combined sales team has in their bag and their arsenal the ability to offer any freezer that meets whatever the customers’ temperature range might be from minus 20 all the way to minus 196.

Paul Knight — KeyBanc Capital Markets — Analyst

Okay. And then lastly, regarding the COVID benefit at Stirling, Dusty, what’s your thought there? Does that dissipate as we move into the year? Do we have it visible into ’22? What’s your thought on the duration of COVID?

Dusty Tenney — Chief Executive Officer, Stirling Ultracold

Yeah, Paul, I think, first of all, a great reconnect and thanks for the question. I think Mike provided some context there that we’re not really at liberty at this point in time just given some of the nature of the placements that we’ve had with COVID to really get into the mechanics associated with that question. So we’re going to have to defer on that one.

Paul Knight — KeyBanc Capital Markets — Analyst

Yeah. Thank you.

Operator

Thank you. Our next question comes from the line of Chris Lin of Cowen. Your line is open.

Chris Lin — Cowen — Analyst

Hi. Thanks for taking my questions.

Michael Rice — Chief Executive Officer

Hi, Chris.

Chris Lin — Cowen — Analyst

Mike, just to start — hey, Mike. Just to start, so investors have been attracted to BioLife Solutions because of the favorable mix of highly sticky consumable revenue and just the strong margin profile. Stirling Ultracold appears to be a largely instrument-heavy business that is also dilutive to overall margins. So with this in mind, could you just elaborate why you believe BioLife Solutions is the right owner of Stirling Ultracold?

Michael Rice — Chief Executive Officer

Definitely. I’ll start and I’ll ask Rod to reiterate some of the points in our remarks. So, Chris, for us this is about the novelty and the disruptive potential of the Stirling portfolio and then our ability to leverage the sticky media customers to expose them to this really cool new equipment offering to solve more of their problems. And we believe, obviously with Dusty and Rod on the ops and the margin side, that we will definitely get that back to something a lot more attractive.

It’s really hard to find bolt-on acquisitions. Chris, as you know that we’d enjoy the margins from the media program that we’ve had for the last several years. But nevertheless, we believe that we’re on the right track here and customers want to buy from us. So, Rod, you might want to expand a little bit on that if you care.

Rod de Greef — Chief Financial Officer and Chief Operating Officer

Yeah, sure, I can. Chris, as I mentioned on the call in my prepared remarks, the gross margin profile of Global is not much different than CBS. So, currently in the low 30%s. But again as I stated, there is a pretty clear plan that we’ve wedded as well as we could to take those margins into the 47%, right. And once we’ve done that then I think you’re going to be looking at blended margins overall for the Company a few years out of mid 50%s at a gross level. And based on the modeling that we’ve done, and we’ve done quite a bit both internal and using an independent source, we believe that the EBITDA margin target, adjusted EBITDA margin target that we’ve set for 30% is absolutely achievable with the combined entity. And in fact, as I mentioned, it’s going to be at a much higher absolute number of adjusted EBITDA.

Chris Lin — Cowen — Analyst

Got it. Just another question on Stirling Ultracold. Could you say what Stirling Ultracold revenue was in 2019, so pre-COVID times? And then in terms of the revenue guidance $35 million to $37 million, could you clarify if that’s a gross or net revenue figure that needs to be adjusted for potential intercompany eliminations if SciSafe purchases Stirling freezers?

Michael Rice — Chief Executive Officer

Yeah, that’s a good question, Chris. So $39 million is a preliminary unaudited number four Global last year in 2020. The base number this year is $60 million. There might be $1 million or $2 million here of rack revenue that’s sold by CBS to Global. And the balance of it is going to come in the form of capex, reduced capex on the SciSafe side when they have the — move those freezers into the SciSafe operations.

Chris Lin — Cowen — Analyst

Okay. Last question for me. Mike, you referenced in your prepared remarks that there are potential therapies — well, therapies that could potentially receive FDA approval this year. Now as we think about your 2021 media revenue guidance, does explicitly include contributions from these new product approvals and commercial-scale manufacturing volumes associated with those launches or would that be largely upside or a 2022 dynamic?

Michael Rice — Chief Executive Officer

Farther out, Chris, yeah, good question. We would expect from those customers just the sort of pre-approval clinical trial phase revenue where we’ve been seeing and continuing on to that. And then the big step changes will come, obviously, 12 to 24 months post approval once they’ve done what we’ve been articulating now for many of these calls, which is to establish a reimbursement strategy that’s going to be palatable to the payers to get their manufacturing operations fully scaled up. And probably equally importantly is to get the clinical centers trained up to administer their particular dose because they all have their own nuances. So, think about it on a 12 to 24-month ramp post approval for us to see the large step-up changes in revenue from those, hopefully, soon to be approved therapies.

Rod de Greef — Chief Financial Officer and Chief Operating Officer

And, Chris, it’s Rod here. I want to try to provide a little additional clarity because I’m not sure I fully answered your question. So you asked 2019 revenue — sorry, 2020 revenue, $39 million. Expected Global revenue for the full year of 2021 is $60 million. We have it in terms of contributing to the BioLife fiscal 2021 revenue, $35 million to $37 million based on the fact that we’re not closing the transaction until April 30th, May 1st.

Chris Lin — Cowen — Analyst

Okay. Could you just share what 2019 revenue was for Stirling?

Rod de Greef — Chief Financial Officer and Chief Operating Officer

2019 revenue —

Michael Rice — Chief Executive Officer

Dusty, if you’ve got it, go for it.

Rod de Greef — Chief Financial Officer and Chief Operating Officer

Dusty, if you have that handy?

Dusty Tenney — Chief Executive Officer, Stirling Ultracold

Yeah, it’s $35 million, Chris.

Chris Lin — Cowen — Analyst

Okay. Great. Thanks for taking my questions.

Michael Rice — Chief Executive Officer

Yeah.

Dusty Tenney — Chief Executive Officer, Stirling Ultracold

Sure.

Operator

Thank you. Our next question comes from Jacob Johnson of Stephens. Please go ahead.

Jacob Johnson — Stephens — Analyst

Hey. Good afternoon everybody and congratulations on all the news.

Michael Rice — Chief Executive Officer

Thanks, Jacob. Hi.

Jacob Johnson — Stephens — Analyst

Yeah. Hey, Mike. Mayb starting on the eva side and congratulation on the customer news there. Is there any way to give any color on the revenue potential for eva shipping, a commercial therapy? I know it’s a little bit different business model, but is there any way to frame up the impact in that relationship?

Michael Rice — Chief Executive Officer

Not yet, Jacob. Once we get a few more of these commercial therapies allocating or splitting their shipments then we would hope to be in a position to do that, but this is — one, the first one. So too soon to try to prognosticate on that.

Jacob Johnson — Stephens — Analyst

Got it. That makes sense, Mike. And maybe just trying to ask it a little bit differently. On the guidance given in 2021 for the services revenue stream $13 million, $16 million I guess, kind of a wide range given the size of those revenues, maybe if Rod wants to just talk about what are the, kind of, key swing factors for the low end and the high end of that guidance of evo versus SciSafe.

Rod de Greef — Chief Financial Officer and Chief Operating Officer

Sure. It’s two things. One on the evo side, it’s how quickly the large commercial customer that Mike identified earlier, how quickly they ramp up through the year, because remember that the business model is a monthly rental program. So the number of doers [Phonetic] that go out in a particular month if it’s delayed by 90 days, it does make an impact.

And the other is that what we’ve seen in SciSafe for the last six months is that the orders that Gary over there is wrestling with are very significant orders. And so whether you get one or whether you get half of one or how much of it gets into this year versus next year based on the timing of close, there’s a lot of variability in that, which is the other reason we have such a relatively large range.

Jacob Johnson — Stephens — Analyst

Got it. Thanks for that, Rod. And maybe last one for me and maybe sticking with you, Rod. Just on gross margins, you talked about 50% longer term, but obviously a few moving pieces in the near term. Can you give us any kind of color on your thoughts about gross margins as we think about modeling 2021?

Rod de Greef — Chief Financial Officer and Chief Operating Officer

Yeah. I think you’re going to see something in the neighborhood of low 50%s.

Jacob Johnson — Stephens — Analyst

Okay. Got it. Thanks for taking the questions.

Rod de Greef — Chief Financial Officer and Chief Operating Officer

You bet.

Michael Rice — Chief Executive Officer

Thanks, Jacob.

Operator

Thank you. The next question comes from Suraj Kalia of Oppenheimer & Company. Your question please.

Suraj Kalia — Oppenheimer & Co. — Analyst

Good afternoon, everyone. Mike, can you hear me all right?

Michael Rice — Chief Executive Officer

Hi, Suraj. Yeah. Hi, Suraj.

Suraj Kalia — Oppenheimer & Co. — Analyst

Hey. Congrats on the deal, Dusty, Mike and Rod.

Michael Rice — Chief Executive Officer

Thank you.

Suraj Kalia — Oppenheimer & Co. — Analyst

So a lot of information provided, Mike. And maybe if I could just parse it a little more. Rod, you were kind and Dusty you were kind enough to give the numbers from from 2019, ’20 and ’21 for ULT. How much — if I see from 2020 through ’21, there is a significant jump. How much of that is COVID related? And I guess to the extent that you can, what was the expected growth trajectory of ULT versus, if I may, consider organic BioLife, everything that is non-ULT as you looked at the Company? I guess what I’m just trying to understand is is ULT faster growing than what BioLife was originally?

Michael Rice — Chief Executive Officer

I think in the near term, Suraj, the answer to that is yes. I think that the organic growth that we would look at is, again, in that sort of 25% to 30% range excluding Stirling. And so there is going to be a bump in the Stirling revenue this year, in part related to COVID, but also in part related to just an increase in demand. And we do expect that increase in demand, irrespective of any future COVID activity to continue. And so therefore there’ll be a significant a contributor and we expect them to grow at that — at the lower end of that range.

Suraj Kalia — Oppenheimer & Co. — Analyst

Got it. And, Rod, for ULT this would be a point of sale model, not a recurring revenue base, correct, for ULT?

Rod de Greef — Chief Financial Officer and Chief Operating Officer

That’s correct.

Suraj Kalia — Oppenheimer & Co. — Analyst

And you guys are not comfortable at this stage sharing the incremental contribution from COVID-related revenues, right?

Rod de Greef — Chief Financial Officer and Chief Operating Officer

Correct.

Suraj Kalia — Oppenheimer & Co. — Analyst

Okay. Fair enough. Hey, Rod, I know this has been beaten to death. Maybe I’ll just belabor it a little more. Since 2019, you all have made a determined strategy to acquire a bunch of companies. And gross margins of the different businesses, when we look at the composite gross margins, they have taken a hit. When you will integrate ULT, this thing needs to reverse pretty significantly from 30% to 55%. Maybe you can give us some additional color, I’m just going to piggyback on the prior person’s question, give us some color what gives you the confidence level in the mid term you can turn the tide around to get to an adjusted 30% EBITDA margin?

Rod de Greef — Chief Financial Officer and Chief Operating Officer

So, again, it’s driven by two things. One is that the current Stirling gross margins are in the low 30%s, right. And those are expected to expand to the mid to high 40%s which would then, at that point, give an overall blended — again, we’re looking in the crystal ball a bit. So it depends on how much of the revenue is comprised of media, thaw etc. But the point being that if they get into the mid to high 40%s, then the blended gross margin for the company would be somewhere in the mid 50%s. Okay. It could be a little bit better, but that’s what we’re thinking now.

And so when you then adjust out all the things that we adjust out, we feel very strongly that we can attain the 30%. And if you recall, Suraj, the narrative for the last 18 months for BioLife has been that, yes, we recognize that the trade-off was to remain a one-product pony that had a great margin profile, but had serious risk with respect to customer order patterns and perhaps ultimate customer growth, right. And so we wanted to mitigate that by embarking on the acquisition strategy we did fully understanding that in the near term, and that’s defined as 12 to 24 months from the time we started that strategy, we would have declining margins until the point where the revenue scale and now my stated goal of $250 million. At that point in time, we’re very comfortable talking about a 30% adjusted EBITDA margin that has a mid 50%s gross margin associated with it.

Suraj Kalia — Oppenheimer & Co. — Analyst

Got it. Hey, Mike. One last question for you. The evo commercial win, would love to get additional color on that. Should we — would we be too far off in thinking about the two commercial — key commercial players that you all have bagged, at least one of them, maybe on a different product line?

Michael Rice — Chief Executive Officer

Yeah. Good question, Suraj. I think — rather than answer that directly, I think I’ll just refer to our previous response, which is this Company understands how material and important this is — and significant this would be for us to be able to disclose the relationship. We’re not quite there yet working through their multi-layer approval process, but I’m confident perhaps at some point we will get that approval. But before that and out of respect for relationship, we’re just not going to disclose the name.

Suraj Kalia — Oppenheimer & Co. — Analyst

Got it. Gentlemen, thank you for taking my questions.

Michael Rice — Chief Executive Officer

Thanks, Suraj.

Operator

Thank you. Our next question comes from Jason McCarthy of Maxim Group. Your question please.

Michael Okunewitch — Maxim Group — Analyst

Hey. This is, Michael Okunewitch on the line for Jason. Thanks for taking the question.

Michael Rice — Chief Executive Officer

Hey, Michael.

Michael Okunewitch — Maxim Group — Analyst

And congratulations on the announcement. Seems like a pretty big add to your overall business. But I’d like to add a — ask a bit generally. You invested pretty heavily into the ultracold freezing and the cold chain logistics. So I’d like to touch on what you anticipate to be the key drivers for growth in this business area. Obviously, COVID-19 kind of thrusts ultracold chain into the public consciousness, but it’s really — it’s just first mRNA vaccine, a lot more in the pipeline. So what are the areas where you expect to really drive growth in this respect?

Michael Rice — Chief Executive Officer

Yeah, Michael. Good question. I think in a nutshell, sticking to our knitting within the cell and gene therapy, it’s going to be about the pace of approvals, right. So we all know the ARM data. We know how many clinical trials are out there. We’ve not been really clear about our estimates of how many clinical trials our media is used in. I articulated in the call in my remarks a little earlier today that we believe that the decision by this large pharma company to split off their commercial shipments and to award parts of the business to more than one logistics partner and to use more than one container so they’ve got some risk mitigation we believe will be the norm over the next few years. So it won’t be a winner-take-all scenario. And we’re really, I think, strongly configured to compete and to take a decent amount of share of those shipments. So in a nutshell, it’s really going to be about the pace of approvals and then our ability to see the adoption increase based on this key win and also through the great work that our courier partners are doing.

Michael Okunewitch — Maxim Group — Analyst

All right. Thank you. And then I have one more on the actual Stirling freezers themselves. So how does the energy requirement compare for Stirling versus a more traditional compressor-based freezer? And how does that kind of translate into operational cost saving?

Michael Rice — Chief Executive Officer

Yeah, Great question. Dusty, why don’t you take that one?

Dusty Tenney — Chief Executive Officer, Stirling Ultracold

Yeah. I think to frame it out, Michael, the basis of our savings which is an Energy Star rating, an important element in terms of the strategy that the business was born roughly about 10 years ago and what that does, it provides a material benefit as it compares to our compressor systems anywhere between 10% and 50% less energy being used. So when you start to think about the application of our freezers versus a traditional compressor-based freezer, the infrastructure that many of our partners have realized is the fact that they can eliminate a lot of HVAC, i.e. more cooling to offset some of the heat but also they’re getting a material benefit associated with the less energy use. And when you start to multiply that especially with multiple different systems, there is a significant benefit that many of our customers are experiencing by virtue of using the Stirling freezer system.

Michael Okunewitch — Maxim Group — Analyst

All right. Thank you. And I just want to ask one more, if you don’t mind, how does the target use case vary for the Stirling Ultracold that that 80 — that 20 to 86 C range compared to the CBS nitrogen-based?

Michael Rice — Chief Executive Officer

Okay. Go ahead, Dusty.

Dusty Tenney — Chief Executive Officer, Stirling Ultracold

Well, I think there is two applications that basically cover the entire cold chain here, Michael. So when you start to think about minus 20 to minus 86, our system, unlike any compressor-based system, can be tuned to any temperature between those respective temperature ranges. So we basically cover every single temperature point between minus 20 and minus 86.

And traditionally when you take a look at the work flows, especially in the end markets that Mike and Rod talked about, there are a lot of biologic materials that basically are mandated to support that in addition to the vaccines that are more prominent with regards to the temperatures that we’ve — that we just highlighted.

When you start to think about even colder temperatures, so the deep temperatures, a key temperature point, of course, is minus 135 C. At minus 135 C that’s the glass transition temperature. Mike noted this in terms of the fact that biological activity is stopped. And typically, this is the temperature range in which cell and gene therapies are most noted to ensure that that biologic co-activity, especially when it gets to researchers in the cell and gene therapies that are being developed, ultimately meet the efficacy requirements that are being driven from the manufacturers.

So those two temperature ranges basically are all focused on biological material, but each of those respective temperatures provides a biological benefit that customers use in the markets today, whether that be clinical trial, cell and gene therapy, bio banking etc. And the fortunate aspect that we have here is combining those two now we, as Mike said, cover the entire cold chain temperature range that’s ever so critical for every single biologic material in the world today.

Michael Okunewitch — Maxim Group — Analyst

All right. Thank you very much.

Michael Rice — Chief Executive Officer

Thanks, Michael.

Operator

Thank you. Our next question comes from Thomas Flaten of Lake Street Capital. Your line is open.

Thomas Flaten — Lake Street — Analyst

Hey. Good afternoon, guys. Thanks for taking the questions.

Michael Rice — Chief Executive Officer

Hey, Thomas.

Thomas Flaten — Lake Street — Analyst

Just a quick one on SciSafe. During the last quarterly call, there was — there was a suggestion there was some upside to that $2.7 million COVID deal and you’ve obviously raised your guidance from $9 million to $12 million. Is that all COVID deal or is there other business expansion that’s nestled in that increase in guidance?

Michael Rice — Chief Executive Officer

Yeah. Good question. And probably just best to stick to our line that we’re just not going to talk about COVID revenues just based on the guidance we received from a bunch of travel agencies. So would like to answer and give that kind of detail, but it’s a little early for us to do that.

Thomas Flaten — Lake Street — Analyst

Sure. And if you can’t quantify but if at least we could do a kind of a qualitative answer, if you look — if you think about the Venn diagram of customer overlap, I know there’s some names that were thrown out during the prepared remarks, but could you help us understand what the overlap is in customers between Stirling and the legacy BioLife businesses?

Michael Rice — Chief Executive Officer

Sure. Somewhat qualitatively, I can say that there are some customers that do use our media and also contract with SciSafe for storage. But I don’t want to get into how many or who they might be.

Thomas Flaten — Lake Street — Analyst

Okay. Fair enough. And then, Rod, I was wondering if you could help us a little bit with how to think through the middle of the P&L this year. Obviously, there is going to be — there’s going to be a big change to the middle for the second quarter. But could you help us think about — because you’re not going to be EBITDA accrete or sorry accretive until next year, could you just help us think through what that looks like from a spending perspective?

Rod de Greef — Chief Financial Officer and Chief Operating Officer

Well, I think that, here’s what I can say, because we purposely chose not to give guidance below the revenue and a little bit of gross margin, got a lot of moving parts. And so what I will say is that if you looked at the operating expenses for Q4 that while we may have somewhat of — some growth in 2021 based on both activity and just gearing up to become a larger entity, it’s probably not going to be the same growth that you saw from 2020 to 2019.

Thomas Flaten — Lake Street — Analyst

Okay.

Rod de Greef — Chief Financial Officer and Chief Operating Officer

And that’s ex Stirling, right. That’s just the BioLife at the end of the year kind of thing.

Thomas Flaten — Lake Street — Analyst

Understood, understood. All right, guys. Thanks so much for taking the questions.

Rod de Greef — Chief Financial Officer and Chief Operating Officer

Thank you.

Michael Rice — Chief Executive Officer

Thanks, Tom.

Operator

Thank you. Our next question comes from Marc Wiesenberger of B. Riley Securities. Please go ahead.

Marc Wiesenberger — B. Riley & Co. — Analyst

Thank you. Good afternoon. Thanks for taking the questions and congrats on the deal.

Michael Rice — Chief Executive Officer

Thank you. Thank you.

Marc Wiesenberger — B. Riley & Co. — Analyst

I’m wondering if you could talk about the demand from non-vaccine related players in terms of biostorage and has there been maybe a rush to secure space with the increase in demand from vaccines?

Michael Rice — Chief Executive Officer

Yeah. I don’t think we want to go there, Marc. I think we’re going to just kind of stick right to it and say we’re just not going to give any granularity on SciSafe other than how Rod has articulated how we’re going to report that in one of the three buckets going forward this year.

Marc Wiesenberger — B. Riley & Co. — Analyst

Got it. Understood. In the prepared remarks, you did talk about expansion in the US and Europe related to biostorage.

Michael Rice — Chief Executive Officer

Yeah.

Marc Wiesenberger — B. Riley & Co. — Analyst

Could you talk about maybe some color on the location and level and investment we can expect?

Michael Rice — Chief Executive Officer

Definitely not. Based on the guidance from the federal agencies, there’s one thing we’re definitely not going to talk about and that is where we’re going to be and what might be stored in those facilities. We’d like to, but that’s the guidance. So we’re going to respect that.

Marc Wiesenberger — B. Riley & Co. — Analyst

Okay. You made an interesting investment in December in PanTHERA CryoSolutions.

Michael Rice — Chief Executive Officer

Yes.

Marc Wiesenberger — B. Riley & Co. — Analyst

Can you talk about what attracted you to that opportunity, how they’re preservation media compares to your current formulation and with kind of worldwide marketing and distribution rights what’s the strategic opportunity there going forward?

Michael Rice — Chief Executive Officer

Yeah. Good one. Thanks for asking. So PanTHERA has a particular synthetic molecule that can inhibit the formation of ice inside of cells during the freezing process, which is really damaging. That whole ice formation and then water flowing out, water flowing back in can cause the membranes to go crazy and rupture and then you have no cells left because they are dead. So this particular molecule that the PanTHERA folks have identified and gained access to could be seen as a potential additive to our CryoStor family of freeze media, although we have to be clear that if CryoStor works really, really well. So there could be some upside with certain cell types. But nevertheless, it could be something we would spike CryoStor with to make it work even better.

But I think, Marc, think about this as an offenses/defensive play. While we have the opportunity to help them finish the work and then to commercially exploit it, we also have the opportunity to make sure that it’s not in anybody else’s hands where they could simply spike a homebrew with this particular molecule and come up with something that might ultimately, based on the performance, disrupt this large CryoStor’s hold in the cell and gene therapy space. So we think we have total optionality based on how it goes and we’re looking forward to seeing how the rest of the experiments go.

Marc Wiesenberger — B. Riley & Co. — Analyst

Awesome. Great color. And then just one more for me. Can you talk about the expectations for the preservation media growth in the first quarter given that there was some pull-forward last year at the onset of the pandemic and maybe just more broadly the cadence throughout the year for the respective business lines? Thank you.

Michael Rice — Chief Executive Officer

Yeah. We don’t — as you know, we don’t give any quarterly color but Rod, you can chime if you like.

Rod de Greef — Chief Financial Officer and Chief Operating Officer

Yeah. I mean the only thing I was going to say, Marc, really is that the Q1 is going to be a tough comp on the media side because we probably pulled in $1.5 million to $2 million in Q1 of ’20 from the COVID, which was then kind of trailed off throughout the rest of the year. So we did conclude that it was demand pull-forward as opposed to some permanent safety stock on the part of our customers. So I think Q1 will be what it is, but certainly on the media side, it’s a tough comp.

Marc Wiesenberger — B. Riley & Co. — Analyst

Got it. Thank you very much.

Michael Rice — Chief Executive Officer

Thanks, Marc.

Operator

Thank you. Our next question comes from Paul Knight of KeyBanc. Your line is open.

Paul Knight — KeyBanc Capital Markets — Analyst

Rod, thanks for the redo. Dusty, who are your competitors in your business?

Dusty Tenney — Chief Executive Officer, Stirling Ultracold

Paul, we’ve got probably two primary competitors that I’ll denote I think Thermo is probably one and Panasonic is the second.

Paul Knight — KeyBanc Capital Markets — Analyst

Okay. Where do you rank in share do you know?

Dusty Tenney — Chief Executive Officer, Stirling Ultracold

I think share by geography is a little bit mixed. I would say that we’re hovering around the number two position in the market.

Paul Knight — KeyBanc Capital Markets — Analyst

Okay. And then, Rod, I missed the breakout on the number on Astero for 4Q.

Rod de Greef — Chief Financial Officer and Chief Operating Officer

Sorry. We [Speech Overlap] yeah, yeah. You broke up. Can you repeat?

Paul Knight — KeyBanc Capital Markets — Analyst

What was the Astero number and the CBS revenue for Q4?

Rod de Greef — Chief Financial Officer and Chief Operating Officer

Okay. Astero was — let me find my commentary, Astero was $662,000 and freezer business was $3.6 million.

Paul Knight — KeyBanc Capital Markets — Analyst

Okay. Thank you very much.

Rod de Greef — Chief Financial Officer and Chief Operating Officer

You bet.

Operator

Thank you. Our next question comes from Carl Byrnes of Northland Capital Markets. Your line is open.

Carl Byrnes — Northland Securities — Analyst

Thanks for the question. Congratulations.

Michael Rice — Chief Executive Officer

Thanks, Carl. How are you doing?

Carl Byrnes — Northland Securities — Analyst

Good. Thanks. With respect to Stirling, in addition to the obvious COVID opportunity and considering that Stirling has been growing, do you see any material opportunity from stockpiling related to contracts from DoD or other government entities like BARDA? Thanks.

Michael Rice — Chief Executive Officer

Yeah. Well, Carl, if you’re asking specifically related to COVID, we wouldn’t answer that. If you mean just generally, then definitely, sure.

Carl Byrnes — Northland Securities — Analyst

Fair enough. Thanks.

Operator

Thank you. At this time, I’d like to turn the call back over to CEO, Mike Rice, for closing remarks. Sir?

Michael Rice — Chief Executive Officer

Thanks, Latif and thanks again everyone for your interest in BioLife. We’re all really inspired to share this good news and BioLife is now even better configured for even more continued growth. We have a very strong team here that executes everyday to satisfy our customers and the performance of this team is simply amazing. We wish all of you and your families good health and safety and we look forward to speaking with you when we report our first quarter results. Good night.

Operator

[Operator Closing Remarks]