Here’s Why This Hot Healthcare Stock Is Soaring This Week

The bioprocessing market is well on its way to recovery. This is the conclusion Replication‘S (RGEN -1.00%) second-quarter earnings report released earlier this week and the reason for the stock’s 17.7% gain in the week through Friday morning.

Repligen and Danaher see first signs of recovery

The positive opinion about the regeneration of Repligen is confirmed by research Danaherlatest results, released a week earlier. Danaher is a much larger company that sells platforms and consumables for life sciences and diagnostics; but its bioprocessing business drew the most attention on the earnings call.

Danaher’s bioprocessing revenue fell by high single digits in the quarter, and management continues to expect a low single digit decline for the full year. However, management also said its core bioprocessing revenue will end the year with a high single digit growth rate.

Danaher’s bioprocessing consumables orders are “back to normal,” CEO Rainer Blair said. Additionally, the increase in bioprocessing orders was positive for both equipment and consumables.

What about Repligen?

Repligen’s results and comments followed suit. While China remains weak, CEO Tony Hunt said orders outpaced revenue in both the second quarter and the first half of the year. Hunt noted that, in line with Danaher’s market outlook, “Sales and consumables order momentum continued, and we saw a rebound in hardware orders, both sequentially and year over year.”

Image source: Getty Images.

The reduction in inventory among customers appears to have paid off, with the bioprocessing industry poised to return to its long-term growth pace, driven by rising demand for biologics, which includes the rapidly expanding areas of monoclonal antibodies, vaccines (research budgets have been boosted by COVID-19 vaccine research), and gene therapies.

Repligen, which trades at 115 times expected 2024 earnings, is not a cheap investment on its face, but the company operates in high-growth markets that will begin to recover in 2024.