BioLife Solutions Inc (BLFS) Q3 2022 Earnings Call Transcript

BioLife Solutions Inc (NASDAQ:BLFS) Q3 2022 Earnings Call dated Nov. 09, 2022.

Corporate Participants:

Troy Wichterman — Chief Financial Officer

Michael Rice — Chairman and Chief Executive Officer

Roderick de Greef — President and Chief Operating Officer

Analysts:

Paul Knight — KeyBanc — Analyst

Thomas Flaten — Lake Street — Analyst

Jacob Johnson — Stephens — Analyst

Max Masucci — Cowen — Analyst

Yuan Zhi — B. Riley Securities — Analyst

Suraj Kalia — Oppenheimer — Analyst

Presentation:

Operator

Good afternoon, ladies and gentlemen, and thank you for standing-by. Welcome to the BioLife Solutions shareholder and analyst conference call. [Operator Instructions] I will now turn the call over to Troy Wichterman, Chief Financial Officer of BioLife Solutions.

Troy Wichterman — Chief Financial Officer

Thank you, Dennis. Good afternoon, everyone, and thank you for joining us. With me on today’s call are Mike Rice, Chairman and Chief Executive Officer; and Rod de Greef, President and Chief Operating Officer.

Earlier today, we issued a press release announcing our financial results and operational highlights for the third-quarter and first-nine months of 2022, which is available at biolifesolutions.com.

As a reminder, during this call, we will 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 provide 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, Chairman and CEO of BioLife Solutions.

Michael Rice — Chairman and Chief Executive Officer

Thanks, Troy. And good afternoon, everyone. Thank you for joining our call. After my remarks, Troy will present our financials for Q3 and nine months of 2022, and Rod will provide an operations update. After that, we’ll be glad to take your questions.

Turning to Q3 revenue and customer highlights. Despite several macro headwinds, also cited by our peers in the life science tool space, our team delivered another strong performance in Q3. Total revenue was 40.7 million, up 21% from Q3 2021, with organic revenue growth of 18%. A key highlight of Q3 was the Biopreservation media revenue growth of 50%. Our growth catalyst and business fundamentals remain intact, and with improved business visibility and reduced COVID related revenue, we are once again tightening our full-year 2022 revenue guidance, which Troy will cover in a few minutes.

To make the point on our revenue differentiation with respect to some of our assumed competitors, in Q3, 44% of total revenue was high-margin consumables, and 13% was high-margin recurring services revenue. So about 60% is non-hardware related. With the recovery of our ULT freezer platform well underway with greatly improved quality and no lead times, we look to finish the year strong.

Relative to some of our competitors that are offering generic alternatives and mostly instruments, it’s critical to note that BioLife is a vastly different company with hyper-growth of our high-margin recurring consumables media revenue as the anchor from which we expect to drive growth in our entire portfolio. We believe our Biopreservation media franchise could easily reach 250 million in revenue within five years, reflecting 30 plus percent annual growth. BioLife remains one of the most highly correlated suppliers to the growth of the global CGT market.

In Q3, we sold and shipped products or provided services to 193 new unique customer sites across our three-product and services platforms. Most of our revenue comes from existing customers as we penetrate deeper and pitch our integrated solutions to take more share of their spend for manufacturing, storage and distribution, products and services.

In each of the first three quarters this year, we gained about 200 new customer sites, building a phenomenal pipeline of early-stage customers we will nurture and support to drive future growth. I’ll remind you now what our three platforms are.

First, cell processing, which includes the Biopreservation media and Sexton cell processing products. Second, is our Freezers and Thaw systems platform comprised of Cryogenic Liquid Nitrogen Freezers and Stirling ULT mechanical freezers and automated thawing devices. And finally, storage and storage services, which includes our SciSafe Storage Services and our evo Cold Chain management offering.

New Q3 customer sites by-product line included 14 more, now using Biopreservation media, 11 new ThawSTAR users, 12 new evo Cold Chain end-users, 14 new Cryogenic Freezers and Accessory Customers, 114 new Stirling ULT freezer and accessory customers,18 new biostorage customers and 10 new cell processing customers now using Sexton products.

For cell processing in Q3, we gained 24 new customers and received confirmation that our cell processing solutions will be used in at least 20 additional clinical trials for new cell or gene therapies. We estimate that our Biopreservation media products have been used in or are planned to be used in 570 customer clinical applications. For Biopreservation media, we also remain confident that each customer clinical application, if approved, could generate revenue in a range of 500,000 to 2 million annually.

To date, our Biopreservation media is used in 11 approved therapies and our Sexton cell processing media and vials are used in three approved therapies, including Breyanzi from BMS [Indecipherable] from JW Therapeutics. Note, all of these also use our CryoStor Biopreservation media. Our Biopreservation media products are also embedded in at least 10 additional anticipated approvals by the end of 2023.

I’ll conclude by saying that our Biopreservation media clinical customer-base includes most of the CAR-T cell developers with our proprietary products embedded in the majority of the autologous and allogeneic platforms currently in development. We expect to be able to continue to take share from homebrew preservation cocktails as awareness grows of the critical role our engineered media formulations play in reducing risk for CGT companies.

In addition to the initial approvals of new cell and gene therapies, we also see the recent and pending approvals of CGT products for first or second-line treatment, and approvals for additional indications, and the new geographies as four growth catalyst for our Biopreservation media and other solutions.

For the other part of our cell processing platform, our Sexton products, adoption and customer clinical applications includes 67 using HPL Media, 62 using CellSeal vials, and three using automated film machines. So, you can see we’re running our Biopreservation media playbook to drive adoption of Sexton products. We estimate that annual revenue for Sexton reagents and consumables used in approved customer therapies ranges from 500,000 to 1 million for both CellSeal vials and HPL media.

Turning to our freezers and thaw systems platform. To reiterate, we shipped first time orders to 139 new customer sites. Our hyper-focus on the acquired Sterling platform has resulted in greatly improved quality and reduced shipping lead times which Rod will speak to you on this call. Customers continue to see the value proposition of our ULT freezer offering, based on tight temperature regulation, reduced power consumption, reduced heat generation and less noise pollution, as these support their goals of reducing the negative environmental impact of their operations.

In our final of three revenue platforms, storage and storage services, which includes evo Cold Chain rentals and SciSafe Storage Services, we either shipped first-use products or engaged for initial services with 30 new customer sites in Q3, 18 for storage services and 12 for evo.

Our SciSafe Storage Services platform is growing rapidly. We are now considering multiple locations for our new bio repository plan to open in 2023. With our evo Cold Chain management platform, cell and gene therapy companies now have broad access to our class defining offering through our expanded specialty courier partner network that now includes World Courier, Quick International, Patheon, Thermo Fisher, Marken and Biocare.

We’re very excited about our market opportunity to drive our evo platform to become a meaningful revenue and profit contributor. Q3 evo shipments over 2000 were up 100% over the same quarter last year. Of these, we estimate at least 75% were for approved therapies and the rest were for clinical trials. We’re collecting a huge amount of shipment information that is shaping our continued evo OIS cloud innovation to give our courier partners and end CGT customers even more actionable data to reduce risk.

We continue to expect that by mid next year, the evo platform will be used for all of the currently approved CAR-T cell therapies. This adoption validates our belief that the evo platform will increasingly be selected as a class defining, temperature-controlled, shipping container and related cloud app by the leading CGT companies.

Now, I will turn the call over to Troy to present our financials for Q3. Troy?

Troy Wichterman — Chief Financial Officer

Thank you, Mike. Total revenue for the third-quarter of 2022 totaled a record $40.7 million, representing a 21% increase over Q3 of 2021. Organic revenue growth was 18%, driven by a 50% increase in Biopreservation media revenue of 16.6 million. COVID-19 related revenue accounted for approximately 9% of total revenue in the quarter. Cell processing platform revenue was 18.1 million, up 57% over the same-period in 2021, and organic growth was 50%.

Freezers and thaw systems platform revenue was 15.3 million, total and organic growth was down 13% over the same-period in 2021. COVID-19 related revenue accounted for approximately 4% of the freezer and thaw systems platform revenue versus 23% last year.

Storage and Storage services platform revenue was 7.3 million with both total and organic growth of 56% over the same-period in 2021. COVID-19 related revenue accounted for approximately 40% of the storage and storage services platform revenue. Total revenue for the nine months ended September 30, 2022 was 117.5 million, an increase of 44% over 2021, with organic growth of 44%. Adjusted gross margin for the third-quarter of 2022 was 34% compared with 26% for the third-quarter of 2021, and 36% for the second-quarter of 2022. For the first-nine months of 2022, adjusted gross margin was 34%, compared with 39% in the same-period last year. The quarterly sequential decline in Q3 gross margin was largely due to supplier quality issues impacting yield and customer mix, partially offset by lower warranty costs. We expect to see increases in gross margin in Q4.

GAAP operating expenses for Q3 2022 were 52.2 million versus 45 million in Q3 2021. And for the first-nine months of 2022, GAAP operating expenses were 212.8 million, which includes the noncash intangible impairment of 69.9 million related to the Global Cooling acquisition recorded in Q2, compared with 2021 nine-months ended GAAP operating expenses of 98.5 million.

Adjusted operating expenses for Q3 2022 were 20.5 million compared with 17.4 million in Q3 of 2021, and 20.0 million in Q2 2022. For the first-nine months of 2022, adjusted operating expenses were 60.3 million compared with 39.5 million in the first nine months of last year. Adjusted operating expenses increased due to the 2021 acquisitions of Global Cooling and Sexton. In addition, operating expenses increased due to higher accounting costs and increased headcount to support our growth. Adjusted operating expenses increased by. 420,000 over the previous quarter, primarily due to increased accounting fees. Adjusted operating loss for the third-quarter of 2022 was 6.7 million compared with adjusted operating loss of 8.1 million in the third-quarter of 2021. Our adjusted operating loss for the first nine months of 2022 totaled 20.2 million compared with adjusted operating loss of 7.5 million in 2021.

Adjusted EBITDA for the third-quarter of 2022 was positive 1.4 million compared with negative 2.1 million for the third-quarter of 2021, and positive 2.2 million for the second-quarter of 2022, For the first-nine months of 2022, adjusted EBITDA was positive 2.8 million compared with 4.4 million in the same-period in 2021. We expect higher adjusted EBITDA in the second-half of 2022 compared with the first-half of 2022. Our cash and marketable securities balance at September 30, 2022 was 61.7 million compared with 46. 6 million at June 30, 2022.

On September 20, we closed a $50 million secured loan agreement with Silicon Valley Bank and advanced $20 million on this facility. We have $30 million of additional facility to draw upon prior to June 30, 2023, which is comprised of 10 million upon the company’s discretion, $10 million upon achieving a revenue milestone, and an additional 10 million upon SEB’s discretion. The loan matures on June 1, 2026, although it may be extended to June 1, 2027 upon the occurrence of certain conditions.

The interest-rate is the greater of 5.75% or Wall Street Journal Prime plus 50bps, subject to an overall interest-rate ceiling of not more than 1% above the time of the advance. Our first 20 million advance as an interest-rate ceiling of 7% and has no financial covenants. On repayment in-full of the loans we will pay an additional 5.75% of the aggregate principal amount extended. Taking into consideration our loan advance and adjusted EBITDA, a positive 1.4 million cash use in Q3 2022 was related to capital expenditures of 3.9 million, primarily related to the build-outs of our bio repository facilities, and a debt repayment of 1.8 million, which was partially offset by cash provided by operations of 1.5 million.

Turning to 2022 revenue guidance, we have tightened full-year revenue guidance to be in the range of 160 million to 164 million versus prior guidance of 160 million to a 166 million. Our guidance reflects a year-over-year growth of 34% to 38% and organic growth of 37% to 40%. COVID-19 related revenue is expected to account for approximately 7% to 8% of total revenue. Total revenue expectations for 2022 include the following platform updates. For our cell processing platform, lowered the top range of our guidance by 1.5 million, reflecting the potential for a supply-chain challenge that could delay shipments. Full-year 2022 platform revenue is now expected to be between 67 million to 68 million, an increase of 49% to 51% over 2021, and organic growth of 42% to 43%. Any 2022 orders that are delayed are expected to ship in Q1 of 2023.

For our freezers and thaw systems platform, we decreased the bottom range by 4 million and decreased the top range by $3.5 million. Full-year 2022 platform revenue is now expected to be between 66 million and 68 million, reflecting supply-chain challenges on our cryogenic freezer product-line. This guidance represents growth of 17% to 20% over 2021, and organic growth of 8% to 13%.

COVID-19 related revenue is estimated to account for 3% of the freezer and thaw systems platform revenue. For our storage and storage services platform, we increased the bottom range by 4 million and increased the top range by 3 million, and is now expected to be between 27 million to 28 million, with total and organic growth of 54% to 59% over 2021.

COVID-19 related revenue is expected to account for an estimated 40% to 45% of the storage and storage services platform revenue. The COVID-19 related revenue is primarily based on contracts, and therefore, we did not expect to see variability on this number through the balance of the year. In addition, our COVID contract that extended into 2023 has been amended in November to start therapies instead of COVID vaccines. Therefore, we expect minimal COVID revenue in 2023. In terms of our new share count, as of today, we have 42.8 million shares issued an outstanding, and 45.4 million shares on a fully-diluted basis.

Lastly, as this is Rod’s last earning call, I’d like to thank him for all his contributions to BioLife and being a true team player. You’ve made a positive impact on this organization, and for me, on a personal level as well. I wish you the best and a well-deserved retirement, and I look-forward to working with you on the Board.

Now, I’ll turn the call to Rod.

Roderick de Greef — President and Chief Operating Officer

Thanks, Troy. It’s been a year since I moved into my current role. As I reflect on the last 12 months, I’m pleased to say that significant operational progress has been made, not just at Stirling, where we have some very acute issues, but across other product platforms as well. The efforts of our operations, quality and customer service teams throughout the company have positioned us for continued strong execution in 2023. The operational metrics at Stirling continued to improve, positively impacting gross margin through lower warranty utilization this quarter compared to historical levels. Our previously-announced plans to move the manufacturer of two of the three ULT products from an existing CMO to our Michigan facility are well underway and units are expected to be built in-house by the end of Q1 of next year. Our Athens facility will continue to focus on increasing production efficiencies on the 780XLE freezer and prepare for the launch of the next-generation large capacity freezer.

In Q3, as we continue to focus on overall gross margin and operational improvements, we also made the decision to relocate all of our evo production, quality and logistics activities to our Michigan facility, keeping customer service and engineering activities in a smaller Albuquerque facility. We expect PV10 production to begin in Michigan in Q1 of next year.

In addition to bringing the evo and two ULT production lines into our LN2 freezer facility, we have been finalizing the validation of a second source for a key component used in our LN2 freezer line, and expect to begin shipping products using this new supplier before the end-of-the year. This new supplier relationship mitigates consistent supply constraints, which have had an ongoing negative impact on revenue in recent quarters, and it also yields cost-savings which positively impacts gross margins on these products in 2023.

Moving on to our Biopreservation media products, we continue to make progress working through existing supply-chain constraints, and based on continued higher-than-expected demand, we are focused on increasing capacity in the near and mid term. To that end, in Q3, we finished the validation process involved in moving from 100 to 200 liter immediate batches and are currently producing our lead product CryoStor at that volume. Increased production in the coming quarters should allow us to meet continued growing demand and replenish our safety stock which has been depleted in the last year.

In addition, we are now executing on our plan to establish a small but scalable Biopreservation media production suite at our facility in Indianapolis and expect that facility to begin producing our smaller volume product runs by mid-2023, which will enable us to dedicate our bottle production slots to the larger volume runs.

Finally, with respect to the two other key operational initiatives, establishing a high-margin service revenue program and our NetSuite ERP implementation, I’m pleased to report that our pilot service revenue program is expected to exceed $700,000 in revenue this year. We expect service revenue and related gross margin to have a larger impact on our financial performance in 2023. While the majority of our accounting functions are now running on NetSuite, the balance of the implementation has encountered some delays based on bandwidth constraints, and we now expect to have the full accounting and manufacturing applications up and running by the middle of next year. And middleware connectivity to numerous other applications, entity-wide by the end of 2023.

As I move from my operational role to a seat on the Board early next year, I’m very confident that the company’s operations will continue to progress under the new leadership team I’ve worked so closely with over the last year.

Now, I’d like to turn the call-back over to Mike.

Michael Rice — Chairman and Chief Executive Officer

Thanks, Rod. Now, I’ll summarize our key takeaways from Q3 and for the rest of 2022. First, BioLife Solutions is a critical, highly trusted tools and services provider to the cell and gene therapy industry. We’ve built a valuable portfolio of risk mitigating solutions that help CGT developers increase their likelihood of success.

Second, demand for our portfolio of class-defining, bioproduction tools and services remained strong. We expect full-year 2022 revenue to fall within the guidance update we just issued. Our high-margin proprietary media business is booming and let’s all remember that we’re still in the early innings of CGT approvals and we have hundreds of shots on goal. This is really sticky recurring consumables revenue with the traditional homebrew alternatives becoming much less often considered and selected.

Number three, our Stirling product-line is notably differentiated and we expect to drive demand and capture share in the high-growth CGT and global pharma segments.

And lastly. We remain very confident that we will achieve our Q4 2024 run-rate aspirational financial goals of 250 million in revenue, 50 points of adjusted gross margin and 30 points of adjusted EBITDA. Fast forwarding to today, I’m pleased to say that overall, product and services demand so-far in Q4 is strong and we’re looking-forward to sharing our full-year 2022 results.

Before I turn the call-back over to the operator to manage the Q&A portion, I need to take a minute to recognize Rod’s contributions to BioLife during his long association with the company. With his retirement coming at the end-of-the year, this is Rod’s last earnings call as he transitions to joining our Board of Directors. We’re so fortunate to leverage his experience and guidance to help us take BioLife to our next level of growth and overall solid financial performance. Thank you, Rod, from the entire team. We wish you the best in your much deserved retirement, and this time, we mean it.

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

Questions and Answers:

Michael Rice — Chairman and Chief Executive Officer

[Operator Instructions] Your first question is from the line of Paul Knight with KeyBanc. Please go ahead.

Paul Knight — KeyBanc — Analyst

Yes, thanks a lot. Rod, thanks. I think our years together approaches almost double-digits as well. So hope you enjoy this next round of retirement. And the questions I have Mike are; how many CGT approvals do you expect again next year? Secondly, Troy, regarding the storage and COVID contract, is that being replaced by other modalities? Or do you think that that COVID number has to come down? And then, lastly, Mike, on the per revenue per approved therapy, why do you think it’s stickier than ever? You kind of expressed this comment in your finishing comments about homebrew kind of a less and less of a alternative, why is that? Thanks for those three questions.

Michael Rice — Chairman and Chief Executive Officer

Yes. Hi, Paul. Thanks. Really good questions. Next year perhaps 10 additional approvals that our media has baked-in, okay? And that’s a combination of US and outside the US, predominantly Europe. I’m going to answer your last one, then we’ll go back to Troy to take the middle part. So what gives us confidence that the estimated range of annual revenue of an approved therapy of 500,000 to 2 million per year can hold. Lot of anecdotal data, and looking at revenue from our customers who have approved therapies. Now, some of them are doing clinical trials as well but it’s patently clear to us, Paul, that the revenue range that we’re talking about here is fully supportable.

And look, I’ll go out on a limb a little bit to say that with a little more time, my sense is we’re going to be increasing the high-end of that range. Too early to do that today on this call but at least looking at the revenue track from our approved customers, they are rocking. I mean, they’re buying lots of media. And we know that most of that’s going to be approved therapies for production, the remainder going to the clinical trial candidates that are also using our media.

Troy, why don’t you speak to our confidence about replacing that COVID storage contract with non-COVID revenue for storage, okay?

Troy Wichterman — Chief Financial Officer

Exactly. So thanks for the question, Paul. As mentioned before, we have built-out that infrastructure, a lot of that infrastructure was using the Stirling freezers. As a reminder, that goes from negative 20C to negative 80C, which is the perfect temperature range to start other therapies. So really it’s about replacing that COVID contracts with other therapies and modalities.

And as I mentioned in my remarks, the big contract we have in the Netherlands that extended into 2023 has already been replaced by a different modality that we’re currently starting there, and we expect to expand that capacity too with that current modality. We’re storing now.

Paul Knight — KeyBanc — Analyst

Thanks very much. Congrats on the quarter.

Michael Rice — Chairman and Chief Executive Officer

Thanks, Paul.

Operator

Your next question comes from the line of Thomas Flaten with Lake Street. Please go ahead.

Thomas Flaten — Lake Street — Analyst

Hey, guys, congrats on the quarter. Mike, just a — with respect to the supply-chain constraints, I’m guessing that they’re rather different across bioprocessing versus the freezers. I was wondering if you could maybe enumerate those a little bit more for us?

Michael Rice — Chairman and Chief Executive Officer

I’ll turn it to Rod to do that. He is much closer. I mean, obviously I know what they are, but he’s closer to the details. Go ahead, Rod.

Roderick de Greef — President and Chief Operating Officer

Hey, Thomas. So on the media side, cell processing side, really it’s about packaging. And that would be bottles and bags from a particular supplier where they’ve had some capacity constraints that they’ve been working, opening a new plant. Anecdotally, it feels like things are loosening up a little bit, may still have a few constraints here as we go through Q4 in this regard, but I think 2023 will really loosen up based on their increased capacity.

On the cryogenic freezer side of things, which I mentioned, there is a very specific constraint as it relates to one vendor who provides us with the critical component for those freezers. And as I mentioned, we have a second source where we’ve got three products or three components, if you will, that need to be validated. One is completed and we’re shipping products in Q4. We’re working hard to validate the second one to see if we can get some units out still this quarter. And the third one will be done in Q1, which is obviously the smaller volume one as well.

Then, in addition, we’ve got some electronic component constraints, those are probably more global in nature and more generic. And that also has eased up a bit but that has created some issues with respect to Boards for our ULT freezers, in particular, the Board replacement customer service program that we embarked on a couple of quarters back, has slowed a little bit just based on the lack of flow, and are directing the flow to new products versus customer service.

Thomas Flaten — Lake Street — Analyst

Great. If I could switch-over to the storage services, I was curious if we could get an update on the facility that was due to open here anytime? And then, also, as you’re thinking about new sites, how do you think about the location of those relative — if you’re thinking about manufacturer versus site of service, I saw Allogene, for example, just opened a new Shanghai facility. So is it — how does that factor into the calculus you do to pick sites?

Michael Rice — Chairman and Chief Executive Officer

Thanks, Thomas. Another really good question. The plan of opening another biorepository this calendar year has now been delayed for good reason. We have more inputs now to help us make the best decision and we’re looking at several locations, both here in the US and outside the US. And to your point, correlating those to anchor customer sites where they have production facilities, where the transport time from their place to our storage facility would be reduced.

So we’ve got a lot of factors that we’re thinking about but for sure. I mean, our plan is to pick the site and get at least one new buyer positive turned up in the next calendar year in 2023. That’s not reflective of any diminishment of demand to the contrary, we just want to slow-down a little bit and be a lot more thoughtful in the inputs of that decision to make sure that we’ve got just a great pack with plenty of scale capacity.

Thomas Flaten — Lake Street — Analyst

And then one final one. Any updates for us on the Coriell agreement that you guys struck? I think it was three or four months ago.

Michael Rice — Chairman and Chief Executive Officer

No, nothing noteworthy.

Thomas Flaten — Lake Street — Analyst

Got it. Appreciate it. Thanks, guys.

Michael Rice — Chairman and Chief Executive Officer

Thanks, Thomas.

Operator

Your next question is from the line of Jacob Johnson with Stephens. Please go ahead.

Jacob Johnson — Stephens — Analyst

Hey, good afternoon, everybody. And Rod, I’ll echo my congrats on the retirement, as long as Mike said, it sticks this time. Maybe first —

Roderick de Greef — President and Chief Operating Officer

Thanks.

Jacob Johnson — Stephens — Analyst

Yes. Yes. Just first on the freezer business. I think, as you guys alluded to, there is some talk that maybe the macro backdrop is impacting demand for freezers in the near-term. It seems where you moderated expectations is more around your own internal supply in the supply-chain. So can you just talk about what you’re hearing from customers on the freezer side in terms of demand? And maybe, how should we think about this asset growing longer-term?

Michael Rice — Chairman and Chief Executive Officer

Yes. Hey, Jacob, Mike here. Good question. The demand-side, I guess, from our perspective is, things are going fine. We have the supply-chain constraints that we’re talking about. But I will say that because of the COVID sugar high and all the need to build-up COVID infrastructure over the last couple of years, I would not be surprised if we face, to some degree, a new competitor that would be in the form of resale of used freezers. And that’s going to affect everybody who has been selling freezers in that space, but we’ll see. No real detriment from that yet but we’re keeping our eye on that. But as far as our book of business on cryo and Stirling across those temperature ranges, we’re not seeing some huge erosion to the contrary, it’s really more of our ability to produce.

Jacob Johnson — Stephens — Analyst

Okay, that’s helpful, Mike. And then just — sorry to belabor the point, but going back to storage services, there’s a good amount of COVID in that business. It sounds like you’ve already transitioned one of the contracts for kind of non COVID applications. But I think investors are concerned. Do we see that business maybe shrink next year if COVID is rolling-off? So maybe, can you talk about the dynamic of how we should think about those COVID revenues rolling-off in the near-term and then your ability to transition that capacity for non-COVID purposes, maybe particularly, as we think about 2023?

Michael Rice — Chairman and Chief Executive Officer

Yes. We think we can give some color. And of course, when we issue guidance for the full-year 2023, we’ll have some more granularity on that platform and some support of narrative that can help you understand how we got there. But as Troy just mentioned, a big COVID contract is already at least been contractually committed to be replaced and that’s great. So we’re going to be reducing our reliance on COVID revenue across the entire portfolio as we get out to the next year and years beyond. Right now, it’s down significantly from last year. And next year, it will be even less.

So it was all fine. We and other companies who enjoyed that, that bolus when it was there. But at least for us, we’re not going to be anticipating any reduction in the storage services for next year. We’re not going to tell you where we’re going with it yet but it’s certainly going to have a healthy growth rate applied to it based on just organic growth but also the replacement of that big chunky COVID contract.

Jacob Johnson — Stephens — Analyst

Thanks for that. That’s super helpful. Just one quick clarification there. The contract that was amended, the COVID contract that was amended for non-COVID purposes, is there any change in like the revenue? Like, is it still the same? Are they still paying the same amount, I guess, is the question?

Michael Rice — Chairman and Chief Executive Officer

Yes. I appreciate you asking, but too much detail. We wouldn’t speak to that detail.

Jacob Johnson — Stephens — Analyst

Okay, fair enough. I had to try. Thank you, Mike. And congrats again, Rod.

Roderick de Greef — President and Chief Operating Officer

Thank you.

Operator

Your next question is from the line of Max Masucci with Cowen. Please go ahead.

Max Masucci — Cowen — Analyst

Hi, this is Stephanie on for Max. Thanks for taking my questions. And congrats, Rod, on the retirement. So, a quick one on-cell processing. Are there any specific demand trends by customer end-market that you can call-out within the platform segment? Are you seeing any evidence of slowdown among earlier-stage biotech pr biopharma customers, given recessionary fears?

Michael Rice — Chairman and Chief Executive Officer

Super question, Stephanie, to the contrary. You might recall in my remarks a few minutes ago, the four catalysts that we see driving demand for cell processing are really all about new approvals, additional indications for existing approved therapies, new geographies, and I think, most importantly, for the benefit of cancer patients, who should be getting these therapies moved up in the treatment regimen so you don’t have to be really on your last breath, having failed systemic chemo two or three times to get a CAR-T. It’s a second-line. And I believe clearly within our lifetime, if not in the next couple of years, we’re going to see first-line therapies. The clinical results are stellar, the pharmacoeconomics work to support that kind of spend. So, yes, no slowdown whatsoever.

Max Masucci — Cowen — Analyst

That’s great to hear. And another one on Storage and Cold Chain services. So for your partnership with CSafe indicated in that press release that you expected to support 10,000, 12,000 evo shipments for key CGT [Phonetic] starting materials and manufacturing doses over the next 12 months. How should we think about that pacing of the increase in shipments over the coming quarters? And is there any seasonality factors that we should keep in mind?

Michael Rice — Chairman and Chief Executive Officer

I would say no to seasonality, Stephanie. It’s really about how fast we can on-board and get the CSafe team trained up and how fast they can do their thing with their own sales and marketing engine. As far as the run-rate, right now, it’s spread [Phonetic] pretty much every quarter, the number of your shipments are doubled from the quarter the same-period last year or the previous year.

So I mean with growth of the currently approved therapies and all the catalysts I just mentioned a minute ago, those would be the modulators that time-out in terms of how fast we get there.

Max Masucci — Cowen — Analyst

Great. That’s helpful. And one last one from me. So some of your top manufacturing peers have indicated that customers are working through excess inventory and the normalization — and are seeing a normalization in ordering versus book annual orders have you seen any similar behaviors to ordering trends with your customer-base. And if so, can you specify on the specific product?

Michael Rice — Chairman and Chief Executive Officer

Yes. Just one to the contrary. So in our most recent quarter, we reported [Phonetic] Q3, one of our largest distributor ordered quite a bit more than the previous quarter. And they have a healthy discount. So that customer mix obviously has a bit of a gross margin impact. But no, to the contrary, not anything about reduced orders or burning through safety stocks or anything like that. If anything, on the media side, I mean this is the business that’s going to keep on giving. We’re embedded in so many customers, and particularly, these large global pharma companies who have CGT operations either de novo or acquired. And yes, this thing is going to rock for quite a while here. You might have heard me say in the prepared remarks that just using a modest kind of low 30% annual growth rate. Media alone, we think can get to 250 million in revenue over five years, just as that one part of the business, not total revenue, but just preservation media.

Max Masucci — Cowen — Analyst

Got it. That’s helpful. Thanks again for taking my questions and congrats.

Michael Rice — Chairman and Chief Executive Officer

You’re welcome. Thank you.

Operator

Your next question is from the line of Yuan Zhi with B. Riley Securities. Please go ahead.

Yuan Zhi — B. Riley Securities — Analyst

Mike, thank you for taking our questions and congratulations on a strong quarter in this tough macro environment. And Rod, surely, we will miss you there. So here I have a couple of questions. First, glad to see the new partnership with CSafe, maybe follow — a few follow-ups there. Can you remind us how does CSafe fit in your offering right now? In the context of that you already have other two rare partnership in place. And now, with CSafe, within cryogenic logistics, what can you together offer to cell and gene therapy companies?

Michael Rice — Chairman and Chief Executive Officer

Yes. Good place to start, Yuan. Thanks. So CSafe is a really well-managed company. They’ve got some great relationships in CGT. This is really, at its base, just the extension of the evo partner network. So customers obviously have a lot of optionality. They can access the evo platform through a number of carriers, all the major carriers. CSafe has obviously really strong aspirations to be a much a more dominant supplier of these critical services to the CGT space and we’re glad to have them in the network for sure.

So I think we’re going to certainly see some productivity from that team once they’re trained up and they’ll be competing against particular shipment opportunities against the other carriers. But really good for them, and obviously good for customers to have broad access, and ultimately really good for BioLife. So we’ve got just a force multiplier in the form of our partnership with CSafe.

Yuan Zhi — B. Riley Securities — Analyst

Got it. And maybe a follow-up there. So what can CSafe bring in to your table to kind of strengthen your current position in terms of offerings to customers?

Michael Rice — Chairman and Chief Executive Officer

I think, Yuan, we’re going to have to watch and see how they do with the current regime of single shipment of autologous therapies. Clearly, because they are in the big Shipper container game as well, they’re going to be able to offer the allogeneic space, lots of flexibility and really tight temperature-regulated storage of pallet size containers and both active and passively controlled containers.

So my sense is we’re going to start out with them, see how they do, give them great stellar support, and ultimately their end-customers as well, many of whom we already know, and many of which are already using our media or other parts of our solutions. So really this is, to use my term of a minute ago, this is another force multiplier here so we can have even more expanded exposure to the CGT space through one other highly-regarded, highly trusted service provider.

Yuan Zhi — B. Riley Securities — Analyst

Yes, that’s good to hear. And then, maybe, one last question on the CSafe partnership. So, as you know, it requires regulatory inspections or filings to have this two platform integrated together. So maybe can you comment on how long does this process will take and when will customers have these options available to them?

Michael Rice — Chairman and Chief Executive Officer

Yes, sure. Well, as far as a customer and their own regulatory updates, naming a courier in an IND or BLA, I’m not so sure that’s really how it goes, Yuan. I think that it’s more of a generic description that the final manufactured dose, Shelby transported in the vapor-phase of liquid nitrogen to the final destination. My sense is not that their naming Cryoport or their naming World Courier or any third-parties like that with that degree of specificity. So I don’t really think that’s going to be a necessity, unless you know something that I don’t. But that’s not our sense of how that particular documentation would go.

And with regard to your last question about when we might be able to speak to how productive the CSafe relationship is, well, they need to get going. They need to obviously finish the training, and we need to do a lot of support with them. But my sense is, over the next couple of quarters or so, we’ll start to see them kick in, and I’m glad to have them in the party with us, in the boat.

Yuan Zhi — B. Riley Securities — Analyst

Yes. Got it. And then, maybe, one last quick one for Troy. Can you clarify what’s the percentage of your revenue coming from ex-US versus domestically?

Troy Wichterman — Chief Financial Officer

Yes, Yuan, that’s in the 10-Q. And I believe it’s 80% is US and 20% ex-US.

Yuan Zhi — B. Riley Securities — Analyst

Yes, got it. That’s all from us. Thank you for taking our questions.

Troy Wichterman — Chief Financial Officer

You’re welcome.

Operator

Your next question is from the line of Suraj Kalia with Oppenheimer. Please go ahead.

Suraj Kalia — Oppenheimer — Analyst

Good afternoon. Thank you for taking my questions. And Rod, let me echo the sentiment that it has been a pleasure dealing with you over the last, what, almost 15 years. So wish you a healthy and safe retirement.

Hey, Mike, a lot of my questions have been asked. So I’ll just stick to two. Like your comments about everything is rocking and rolling and the 30% CAGAR, maybe if you could just provide us one additional layer i.e., all the new customers that are being added. Mike, how much time from the point that they are added to when these customers start having somewhat of a material impact in the respective line items? That would be one of my questions.

And Mike, to your other point on 250 million by 2024, maybe if you could just help us understand, is it organic? Or is it — are there any implicit acquisitions also baked-in? Gentlemen, thank you for taking my questions, and Rod, congrats again.

Roderick de Greef — President and Chief Operating Officer

Thanks, Suraj.

Michael Rice — Chairman and Chief Executive Officer

Hey, Suraj, Mike here. Yes, good questions. I’ll just take the second one first. No, no other anticipated or additional M&A required to get us to that ending Q4 2024 run-rate of total revenue. Now, with respect to the customer revenue journey, I can say the longest ramp would be on the preservation media just based on their own timeline to get something from a preclinical state through the various phases of clinical trials to a regulatory approval. And that can take, as you know, anywhere from just three to five years or so. Now, that’s probably going to get compressed over-time as the regulators become more familiar with these constructs, right? And the clinical data hopefully is sustained in the stellar results and all that kind of stuff.

So, it really, it does vary by the product or by the service platform, but that’s probably a reasonable sort of estimate. I guess, the point I’d like to just close on that is to wrap it is that most of the preservation media revenue comes from existing customers that have approved therapies. And overtime, you could just see that as additional therapies make it over the goal line. And the other three catalysts that I described earlier in the call; new indications for existing therapies, new geographies for existing and approved therapies; and then, finally, getting the stuff moved up in the treatment regimen.

This is just going to cascade. There will be several of these catalysts that stack-up on each other every quarter and then year-over-year here. All of which, we believe, is easily going to support my comment a minute ago of just media alone growing modestly. And I say modestly, relative to a lot of other tools and services, but modestly at 30 plus percent annually, getting to 250 million in revenue of super-high margin recurring, very sticky, written into BLA kind of revenue. So that’s just one part of the business, but really encouraging.

Suraj Kalia — Oppenheimer — Analyst

Thank you.

Operator

At this time, there are no further questions. I will now turn the call over to Mr. Rice for any closing remarks.

Michael Rice — Chairman and Chief Executive Officer

Thanks, Dennis. Thanks again, everyone, for your interest in BioLife. Have a great evening and rest of the week. We’d like to wish you and your families a safe and joyful holiday season that’s coming up here. And we look-forward to seeing many of you at the JP Morgan Conference in January. Good night.

Operator

[Operator Closing Remarks]