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Item 1. Business

2023-02-28 compared with 2022-03-01 · 174 added, 149 removed, 411 unchanged (44% of the section changed)

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Our customers include the top global biopharmaceutical companies ranked by research and development expenditures according to industry consultants, and many other emerging biopharmaceutical and life sciences research companies, as well as leading academic research institutions and in vitro diagnostics companies.

Our products address the key phases of biopharmaceutical development spanning research to commercialization and include complex nucleic acids for diagnostic and therapeutic applications, and antibody-based products to detect impurities during the production of biopharmaceutical products.

Our products address the key phases of biopharmaceutical development spanning research to commercialization and include complex nucleic acids for diagnostic, vaccine and therapeutic applications, and antibody-based products to detect impurities during the production of biopharmaceutical products.

Our businesses principally address high growth market segments in biopharmaceutical development.

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our CleanCap® technology is used to stabilize mRNA and streamlines mRNA manufacturing;

and our plasmid DNA products are used as templates for the production of our ribonucleic acid (“RNA“) products.

we were one of the first companies to provide the essential modified uridine, N1-methyl-pseudouridine triphosphate, for research applications;

our catalog mRNA products are frequently used by lipid developers to test and validate new mRNA delivery platforms;

and our plasmid DNA products are used as templates for the production of our ribonucleic acid mRNA products.

Our oligonucleotide and oligonucleotide supply products are included in the supply chain of several diagnostic platforms.

We also provide biologics safety testing technology used to ensure the safety of the biological drug manufacturing process and drug products.

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Among other capabilities, we are experts in RNA and mRNA products, which are challenging and often unstable molecules requiring significant chemical modifications to ensure their stability and efficacy in our customers’ applications.

Notably, according to research commissioned by us in November 2021 consisting of over 55 interviews with our current and former customers, our competitors and industry experts focused across our two ongoing business segments (the “Industry Analysis”), we believe CleanCap is viewed as a leading solution to incorporate the five prime (“5’”) cap into mRNA.

Notably, according to research commissioned by us in November 2021 consisting of over 55 interviews and in November 2022 consisting of 30 additional interviews with our current and former customers, our competitors and industry experts focused across our two ongoing business segments (the “Industry Analysis”), we believe CleanCap is viewed as a leading solution to incorporate the five prime (“5’”) cap into mRNA.

CleanCap is a novel chemical approach to produce the 5’ cap analog, which, in addition to making mRNA more stable, aids in protein production and helps prevent an unwanted immune response to the mRNA.

CleanCap had been incorporated into several mRNA programs targeting immunization against the novel strain of coronavirus, SARS-CoV-2 (“COVID-19”).

These programs included two commercial programs led by Pfizer in partnership with BioNTech and one led by BioNTech in partnership with Fosun Pharma, one phase I clinical program led by Chulalongkorn University, one phase I/II clinical programs led by Imperial College London, one phase I/II clinical program led by the University of Tokyo in partnership with Daiichi-Sankyo, one phase III program led by CureVac, and two pre-clinical programs by eTheRNA Immunotherapies and Greenlight Biosciences.

Given the early stage of these last two programs, there

can be no assurance they will continue to use CleanCap through commercialization.

We believe our CleanCap products have also been incorporated into vaccine development programs for other infectious diseases, including Influenza.

In addition to vaccines for infectious disease, we estimate our mRNA and CleanCap products have also been incorporated in at least 59 therapeutic programs in development as of December 31, 2021.

These therapeutic programs address a number of disease states, including ornithine transcarbamylase deficiency, glycogen storage disorders, Alpha-1 antitrypsin deficiency, acute lymphoblastic leukemia, Hurler syndrome, ovarian cancer and cardiovascular disease.

These therapeutic programs also use multiple therapeutic modalities, including CRISPR/Cas-9, transcription activator-like effector nuclease (TALENS), enzyme replacement therapies, allogeneic CAR-T cells and base editing.

Should one or more of these programs proceed to commercialization, we believe we will continue to supply our customers and our products will likely be incorporated in customer regulatory filings.

programs included two commercial programs led by Pfizer in partnership with BioNTech and one led by BioNTech in partnership with Fosun Pharma, as well as the bivalent booster vaccine developed by Pfizer in partnership with BioNTech to address the Omicron strain of the virus.

In addition to these commercialized programs, CleanCap has been incorporated into many earlier stage programs addressing COVID-19 that have not yet been commercialized.

Additionally, the U.S.

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We believe this guidance may streamline the future development and approval of mRNA vaccines utilizing our products and that they would likely be incorporated into customer regulatory filings as a result.

We believe our CleanCap products have also been incorporated into vaccine development programs from several of our licensed clients for infectious diseases, including Influenza, lyme disease, malaria, HIV, tuberculosis, shingles, rabies, yellow fever, respiratory syncytial virus (“RSV”) and Zika.

We estimate our mRNA and CleanCap products have also been incorporated in over 250 vaccine and therapeutic programs in development as of December 31, 2022, including at least 60 programs that our mRNA CDMO services group manufactured the mRNA APIs using CleanCap.

In addition to infectious diseases, these programs address a number of disease states, including ornithine transcarbamylase deficiency, glycogen storage disorders, Alpha-1 antitrypsin deficiency, acute lymphoblastic leukemia, Hurler syndrome, ovarian cancer and cardiovascular disease.

Should one or more of these programs proceed to commercialization, we believe we will continue to supply our customers and our products will likely be incorporated in customer regulatory filings.

mRNA is at the core of our capabilities.

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With the COVID-19 pandemic, mRNA has shown its potential for more rapid vaccine design and manufacture when compared to traditional techniques involving culturing inactivated virus to elicit an immune response.

According to the World Health Organization, there were nearly 350 COVID-19 vaccine development programs as of December 2021, with two candidates approved in the RNA class and 23 additional RNA lead candidates for approval with anticipated program data readouts, including results of preclinical studies and phase I/II and phase III clinical trials.

COVID-19 has helped highlight the potential advantage of mRNA as a treatment modality and directed significant resources to the growing base of knowledge about mRNA.

This knowledge is now being directed at future vaccine programs including for influenza, Lyme disease, malaria, HIV, tuberculosis, shingles, rabies, yellow fever, respiratory syncytial virus (“RSV”) and Zika, as well as for therapeutic agents for a host of human diseases.

This knowledge is now being directed at future vaccine programs addressing infectious diseases as well as for therapeutic agents for a host of human diseases.

We are positioned to serve our biopharmaceutical customers in the fast-growing field of mRNA across a range of clinical programs for a variety of diseases.

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As of December 31, 2022, approximately 18% of our workforce have earned advanced degrees and all receive rigorous training on our procedures.

We manufacture our nucleic acid products at our San Diego, California facility (“Wateridge facility”), one of our three facilities in the United States.

We manufacture our nucleic acid products at our San Diego, California facility (“Wateridge facility”).

The Wateridge facility was purpose-built to address our customers’ needs for critical raw materials manufactured under certain good manufacturing practices (“GMP”) conditions and APIs for investigational use.

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Our API products are manufactured following the voluntary quality standards of ISO 9001:2015, the International Council for Harmonisation’s GMP Guide, comparable GMP principles for the European Union and customer specific requirements.

We believe our products are exempt from compliance with the current GMP (“cGMP”) regulations of the FDA, as our products are further processed or incorporated into final drug products by our customers and we do not make claims related to their safety or effectiveness.

As of December 31, 2021, we had

invested $81.6 million in our Wateridge facility.

We believe our products are exempt from compliance with the current GMP (“cGMP”) regulations of the

FDA, as our products are further processed or incorporated into final drug products by our customers and we do not make claims related to their safety or effectiveness.

As of December 31, 2022, we had invested $90.9 million in our Wateridge facility.

Our other facilities are similarly designed for specific applications with quality systems to match our customers’ requirements.

All of our facilities meet applicable ISO standards.

All of our manufacturing facilities meet applicable ISO standards.

We built our business through a combination of acquisitions and subsequent investments in our acquired companies to grow their commercial capabilities, upgrade and expand their research and production facilities, deploy stringent quality systems, integrate their back-office functions, and develop the personnel and management to fuel continued growth.

Today, we offer an integrated portfolio that enables innovation across the biopharmaceutical and academic markets.

We completed our first acquisition in April 2016.

Mergers, acquisitions and strategic partnerships that complement our capabilities in cell and gene therapy and biopharmaceutical production remain core to our strategy.

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We have recognized expertise in complex chemistries and products provided under exacting quality standards.

Our core offerings include mRNA, long and short oligonucleotides, our proprietary CleanCap capping technology and oligonucleotide building blocks.

Our offerings address key customer needs for critical components, from research to GMP-grade materials.

Our core offerings include mRNA, long and short oligonucleotides, our proprietary CleanCap mRNA capping technology, mRNA building blocks and oligonucleotide building blocks.

Our offerings address key customer needs for critical components, from research to GMP-grade raw materials and API manufacturing.

We market our nucleic acid products under the TriLink BioTechnologies® and Glen Research brands.

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mRNA as a treatment modality has been an area of acute interest for many years.

The success of COVID-19 vaccines has helped highlight the potential advantage of mRNA as a treatment modality and significant investments have been made industry wide to developing future mRNA vaccines as well as for therapeutic agents for a host of human diseases.

a host of human diseases.

We are positioned to serve our biopharmaceutical customers in the fast-growing field of mRNA across a range of clinical programs for a variety of diseases.

We further serve cell and gene therapies with our RNA and mRNA products and expect to supplement with our newly launched plasmid DNA capability.

In addition to the vaccine programs above, our products have been incorporated in at least 59 therapeutic development programs including programs focused on CRISPR/Cas-9, CAR-T, base editing, and enzyme replacement therapies, among others, with over 50 utilizing CleanCap technology.

Our nucleic acid products fall into four main categories:

mRNA, RNA Capping (CleanCap), oligonucleotides and plasmid DNA.

We began offering our plasmid DNA products in the first quarter of 2021.

We offer the following nucleic acid products:

mRNA, RNA Capping (CleanCap), oligonucleotides, oligonucleotide inputs, nucleoside triphosphates, custom nucleic acid chemistry and plasmid DNA.

mRNA is an intermediary molecule that translates the genetic information stored in DNA into proteins.

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This enzymatic method has several drawbacks, including the high cost of the capping enzymes as well as the need to perform additional processing steps to the mRNA to remove enzymes and byproducts of the capping reaction.

While capping efficiency is usually high, the extra processing steps typically result degredation and mRNA of poorer quality.

While capping efficiency is usually high, the extra processing steps typically result degradation and mRNA of poorer quality.

The second method is to add a synthetic cap analog into the transcription reaction such that the mRNA is transcribed and capped in a single step.

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In addition, CleanCap’s higher mRNA yields compared to ARCA result in lower cost of goods.

When compared to enzymatic capping, CleanCap removes the additional downstream purification steps required.

When compared to enzymatic capping, CleanCap removes the

additional downstream purification steps required.

We have developed a suite of CleanCap analogs that are specifically designed for therapeutics and vaccines.

CleanCap is sold as a stand-alone reagent or bundled with other mRNA products.

mRNA products represented 90% of our nucleic acid production revenue for the year ended December 31, 2021 (including the revenue from CleanCap products).

We currently offer several variations of the CleanCap molecule, serving the needs of mRNA and self-amplifying RNA developers.

CleanCap is in two quality grades, research use only for discovery and development activities, and a GMP-grade for clinical and commercial applications.

CleanCap mRNA products represented 89% of our nucleic acid production revenue for the year ended December 31, 2022 (including the revenue from CleanCap products).

Oligonucleotides.

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Most of our TriLink BioTechnologies oligonucleotide products are custom manufactured DNA or RNA sequences, often highly modified and produced as research grade or under GMP conditions for use in development, clinical and commercial applications.

We also provide nucleoside triphosphates (“NTPs”).

NTPs are the precursors to DNA and RNA.

Oligonucleotide Synthesis Inputs.

Our product offerings through Glen Research include reagents and support supplies for DNA and RNA oligonucleotide synthesis, labeling, modification and purification.

We are a reputable and trusted vendor with a large portfolio, quality brand, knowledgeable technical support, and responsive customer service.

In addition to oligonucleotide synthesis service providers, our customer base includes life science, biopharma, and diagnostic companies as well as academic institutions and government organizations, all of which internally manufacture their own oligonucleotide products.

Nucleoside triphosphates.

Nucleoside triphosphates (“NTPs”) are the precursors to DNA and RNA.

They are composed of a nitrogen base bound to either ribose or deoxyribose with three phosphate groups added to the sugar.

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TriLink BioTechnologies NTPs are used by customers in both research and clinical trial applications.

Our product offerings also include reagents that form the building blocks of oligonucleotides with our Glen Research products, including high quality specialty chemicals and amidites.

In December of 2020, we completed the manufacturing verification of plasmid DNA within our newly released manufacturing suite inside our San Diego facility.

The manufacturing of beta customer plasmids began in the first quarter of 2021.

Our manufacturing capabilities for NTPs now includes both research use and GMP-grade.

Custom Nucleic Acid Chemistry .

Through our acquisition of MyChem LLC in the first quarter of 2022, TriLink BioTechnologies expanded its synthetic chemistry expertise and added proprietary manufacturing processes allowing for the highest purity NTP, amidite and custom nucleotide services.

We serve a diverse market of diagnostics and therapeutic developers that require novel molecules that are otherwise unavailable on the market.

Typically, these molecules are initially manufactured in small quantities, and then scaled to meet the need of larger diagnostic platform or therapeutic applications once positive candidates have been identified by the customer.

Unlike genomic DNA, which constitutes the chromosome, plasmid DNA exists outside the chromosome and represents small circular double-stranded constructs.

Plasmid DNA is frequently used as a vector for replicating nucleic acid products.

Plasmid DNA is integral to the production of mRNA and our production of plasmid DNA will assist in ensuring the quality and timeliness of the mRNA we produce.

Plasmid DNA is integral to the production of mRNA, serving as the nucleic acid template for the DNA-dependant RNA polymases that frequently are used in the manufacturing of mRNA.

Our plasmid DNA offering allows us to ensure the quality and timeliness of the mRNA API manufacturing campaigns that we service for our customers.

Biologics Safety Testing (8% of Revenue for the Year Ended December 31, 2022)

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Viral vector manufacturing processes require rigorous analytics, including testing for process-related impurities such as HCPs, host cell DNA, purification leachates, growth media additives and enzymes used in viral vector purification processes.

Of all process-related impurities, HCPs present the most complex impurity.

Per regulatory requirements, viral vectors used as a component of CAR-T cell therapies or as gene therapies must be produced in certain cell lines, purified and tested for the presence of host cell proteins.

All of the 15 existing FDA-and EMA-approved CAR-T Cell and Gene Therapies use Cygnus Host Cell Protein ELISA kits for HCP testing for commercial product lot release.

Five of these 15 therapies were approved in 2022.

ELISA is the benchmark method for monitoring levels of process-related impurities during the purification process and in product release testing.

The advantages of well-developed ELISA kits include the ability to measure very low levels of impurities in the presence of high amounts of drug product, without requiring a high level of expertise to run, and are readily transferable across an organization from process development to manufacturing and quality control bioanalytical groups.

The advantages of well-developed ELISA kits include the ability to measure very low levels of

impurities in the presence of high amounts of drug product, without requiring a high level of expertise to execute and interpret, and are readily transferable across an organization from process development to manufacturing and quality control bioanalytical groups.

Though relatively simple to run, these ELISA kits require a high level of expertise to design, develop and qualify.

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ELISA kits for measuring additives in growth media, such as bovine serum albumin;

ELISA kits for measuring host cell DNA;

and ELISA kits to detect and quantify residual endonuclease impurities in recombinant viral vector and vaccine preparations.

kits for measuring host cell DNA;

ELISA kits to detect and quantify residual endonuclease impurities in recombinant viral vector and vaccine preparations:

and ELISA kits to quantify residual AAV2, AAV8, AAV9 ligands resulting from affinity purification method used for adeno associated virus (AAV)-based gene therapies.

Viral Clearance Prediction kits .

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The kit enables manufacturers to conduct viral clearance assessments easily and economically and to predict outcomes in-house ahead of costly and logistically challenging live viral clearance studies.

In 2022, Cygnus Technologies introduced MockV® RVLP Kit.

This kit enables bioprocess scientists to quantify the removal of Retrovirus-like Particles

(RVLPs) produced endogenously by Chinese Hamster Ovary (CHO) cell lines during biopharmaceutical manufacturing.

The kit includes a highly purified and concentrated stock solution of RVLP, an actual non-infectious retrovirus-like contaminant generated during CHO production.

In the early 1990s, global regulatory agencies such as the FDA realized the prevalence of this particle and became concerned about the retroviral safety of CHO-derived biopharmaceuticals.

Since then, the biopharmaceutical industry has relied on CROs to propagate Xenotropic Murine Leukemia Virus (XMuLV) as a model retrovirus to demonstrate effective clearance.

With the availability of the MockV® RVLP Kit, biopharmaceutical companies can now independently assess the removal of the original retroviral particle of regulatory concern, derived directly from CHO cells.

Ancillary reagents .

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In addition, we have pioneered advanced orthogonal methods including antibody affinity extraction (AAE™) and mass spectrometry for HCP antibodies coverage analysis and HCP identification, which we provide as custom services.

Protein Detection (2% of Revenue for the Year Ended December 31, 2021)

The remaining 2% of revenue generated in the year ended December 31, 2021, was from the sale of products to detect the expression of proteins in tissues of various species by our Protein Detection segment.

In September 2021, we completed the divestiture of Vector Laboratories, our Protein Detection segment which is not considered to be a significant part of our portfolio or capabilities.

Our Competitive Strengths

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Our oligonucleotides address complex chemistry challenges, which we believe few competitors can address.

The results of the Industry Analysis indicate that our HCP ELISAs have defined the market for impurity detection and we believe they have become a de facto standard in biologics safety testing.

Similarly, our protein detection assays have been recognized for their performance for over 40 years.

The results of the Industry Analysis indicate that our HCP ELISA kits have defined the market for impurity detection and we believe they have become a de facto standard in biologics safety testing.

Trusted Brands

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As of December 31, 2022, we had invested approximately $90.9 million into our flagship Wateridge facility and its five dedicated manufacturing suites to produce materials under GMP conditions, along with the required quality systems to meet requirements specified by our customers.

Additionally, this investment in our Wateridge facility allows us to meet our customers demand for our nucleic acid products, including CleanCap.

Additionally, this investment in our Wateridge facility allows us to meet our customers demand for our nucleic acid products, including

We similarly invest in our other sites to ensure we meet our customers’ expectations.

Throughout 2022 we invested in additional facilities that we expect to bring online operationally in 2023, including 1) an additional facility in San Diego, California to further support GMP-grade manufacturing and to support customers into Phase II clinical trials and beyond, and 2) a new state of the art facility in Leland, North Carolina to further support the Biologics Safety Testing business.

We believe that the capacity to manufacture to stringent biopharmaceutical standards is constrained within the industry and our ability to meet this demand sets us apart from our competition.

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We participate in two distinct market segments:

nucleic acid production and biologics safety testing, which, according to industry consultants, together represented approximately $15.3 billion in annual spending in 2021 and which are expected to

grow at a 8% compound annual growth rate (“CAGR”) through 2024.

nucleic acid production and biologics safety testing, which, according to industry consultants, together represented approximately $15.2 billion in annual spending in 2022.

Of that combined market, we estimate our addressable portion represents approximately $3.7 billion.

Our addressable segments as a whole, adjusted for the mix of products we offer, are expected to grow at a weighted average blended rate of 7% per annum through 2024, according to industry consultants and management estimates.

We benefit from favorable industry dynamics in our broader market segments and specific growth drivers in our addressable market segments.

Biopharmaceutical customers are increasingly relying on outside parties to provide important inputs and services for their clinical research and manufacturing, a development driving growth for suppliers with unique capabilities and the ability to manufacture at an appropriate scale to support customer programs.

We believe that suppliers like ourselves, with this rare combination of capabilities, proprietary products and the required investment in manufacturing and quality systems, are benefiting from rapid growth as biopharmaceutical customers seek to partner with a small number of trusted suppliers.

In addition to the continued trend toward outsourcing, several market developments are driving increased growth, above the broader market growth rates, in our addressable market segments, including:

• Pivot toward mRNA vaccines driven in part by COVID-19 .

The first two vaccines to be approved for use in combating the COVID-19 pandemic were mRNA vaccines, including the vaccine developed by Pfizer and BioNTech which uses our CleanCap product.

According to the World Health Organization, there are 23 mRNA COVID-19 vaccines in the clinic and an additional 24 mRNA based COVID-19 vaccines in pre-clinical development.

vaccine technology is gaining prominence as a result of its fast development time, lower relative manufacturing costs and improved safety because of the lower risk of unwanted immune responses.

In addition to the COVID-19 vaccines, mRNA technology is being used for other infectious disease vaccines.

There are four influenza vaccines in clinical trials and an additional 50 non-flu vaccines in the clinic and another 84 pre-clinical vaccine programs that have been disclosed.

RNA expertise is highly specialized and customers seek partners to provide these complex products.

A small number of providers, like ourselves, can provide this RNA capability.

Our businesses principally address high growth market segments in biopharmaceutical development.

In particular, the field of cell and gene therapy has emerged as one of the fastest growing treatment modalities to address a host of human conditions.

There are more than 2,000 cell and gene therapies in development or launched and sales in this category are expected to grow more than five times by 2027, according to industry consultants and management estimates.

While we expect near-term declines in overall market demand for COVID-related products, we expect to benefit from favorable industry dynamics in our broader market segments and specific growth drivers in our addressable market segments.

Biopharmaceutical customers are increasingly relying on outside parties to provide important raw material inputs and services for their clinical research and manufacturing, a development driving growth for suppliers with unique capabilities, high quality and the ability to manufacture at a relevant scale to support customer programs.

In addition to the continued trend toward outsourcing, several market developments should contribute to long-term growth in our addressable market segments, including:

• Pivot toward mRNA vaccines and therapeutics for non-COVID indications has been accelerated in part by COVID-19 .

The first two vaccines approved for use in combating the COVID-19 pandemic were mRNA vaccines,

including the vaccine developed by Pfizer and BioNTech which uses our CleanCap product.

Our CleanCap product is also incorporated into the bivalent booster vaccine developed by Pfizer and BioNTech.

The mRNA platforms are gaining prominence as a result of their fast development time, lower relative manufacturing costs and proven safety profile.

Pfizer and BioNTech are now developing a combined COVID-19 and Influenza vaccine that has been placed into a designation that can “fast-track” a regulatory decision by the FDA.

In addition to the COVID-19 vaccines, mRNA technology is being investigated for a spectrum of other infectious diseases as well as cancer vaccines, including personalized medicine vaccines.

We expect research in other mRNA vaccines to experience increased growth as research conducted for COVID-19 diffuses more broadly into other vaccines and therapies.

RNA expertise is highly specialized, and customers seek partners with our expertise to provide these complex products.

A small number of providers, like ourselves, with a successful track record for COVID-19, can provide this level of RNA capability.

• Rapid growth in development of cell and gene therapies .

Sales of cell and gene therapy drugs are expected to exceed $30 billion in sales by 2024.

A record number of recent approvals (Abecma, Brevanzi, Imlygic, Rethymic and Stratagraph) were all granted FDA approval in 2021 and have added clinical credibility to cell and gene therapies.

We support the development of cell and gene therapies with products used in gene editing and cell therapy research.

Five new cell and gene therapy approvals (Carvykti, Roctavian, Upstanza, Hemgenix, Adstiladrin) were all granted FDA or EMA approval in 2022 and have added clinical credibility to cell and gene therapies.

Our internal analysis, supported by third-party research, projects that by 2027, 40-50% of the mRNA pipeline assets will be for in vivo gene editing and ex vivo gene-edited cell therapies.

We support the development of cell and gene therapies by providing products used in gene editing and cell therapy research.

For example, our host cell protein assays are used during the manufacturing of viral vectors and plasmid DNA.

Further, we participate by providing RNA guide strands or mRNA that encodes for gene-editing enzymes, such as Cas9.

Further, we participate by providing the critical high quality synthetic guide RNA and mRNA that encodes for gene-editing enzymes, such as Cas9 that are used in vivo gene editing and ex vivo gene-edited cell therapies.

• Large and growing pipeline of protein-based therapeutics .

In addition to cell and gene therapies, an increase in protein-based therapies is driving the need for impurity testing during process development and manufacturing.

• Rise in molecular diagnostics driven by COVID-19 .

The market for molecular diagnostics is growing dramatically because of demand for new tests related to COVID-19.

This growth is driving demand for our products, particularly oligonucleotides and related inputs.

• COVID-19 providing both short-term and expected long-term growth .

Several of our product categories have experienced accelerated growth in 2021, notably our CleanCap and oligonucleotide products.

We expect the impact of COVID-19 on our growth to sustain in the longer-term as the entire mRNA category benefits from lessons learned during the COVID-19 pandemic.

We expect research in other mRNA vaccines and therapeutic categories to experience increased growth as research conducted for COVID-19 diffuses more broadly into other vaccines and therapies.

The following table shows the impact COVID-19 has had on our business from 2020 through 2021 and its ongoing longer term impact.

In addition to cell and gene therapies, an increase in protein-based therapies is driving the need for impurity testing during process development and manufacturing from our Biologics Safety Testing business.

Classical biologics are evolving to be expressed in vivo via mRNA.

Our analysis suggests that therapeutic proteins and protein replacement may represent as much as 25% of the mRNA pipeline by 2027.

We are well positioned to leverage our service capabilities and deep understanding of mRNA biology to serve our customers’ needs to express these large, complex, peptide-based molecules.

Nucleic Acid Production Market

The nucleic acid production market includes the production and synthesis of reagents for research and manufacturing of DNA and RNA-based biologics.

Nucleic acid production is a $11.0 billion market expected to grow at 7% annually through 2024.

Growth has generally accelerated in recent years with continued innovation in cell and gene therapy, including mRNA therapeutics and synthetic biology approaches.

Our addressable portion of the market is $3.8 billion with expected growth of 6% annually through 2024.

This growth rate is driven by our exposure to high growth sub-markets including RNA cap analog production and mRNA.

Capping and mRNA growth is fueled by the continued growth of nucleic acid vaccines and therapies, which we expect will accelerate because of research into COVID-19.

That research has highlighted the benefits of mRNA vaccines and therapies more broadly.

Nucleic acid production was an $11.0 billion market in 2022.

Market growth generally accelerated in recent years until the middle of 2022 due to continued innovation in cell and gene therapy, including mRNA therapeutics and synthetic biology approaches, and particularly as a result of mRNA manufacturing of COVID-19 vaccines.

The field of mRNA-based drugs and vaccines has advanced dramatically within a few short years.

Capacity to manufacture these products when approved, however, remains in short supply.

Providers of technical expertise and manufacturing

capabilities, like ourselves, with the facilities and quality systems demanded by biopharmaceutical customers, benefit from the demand created in the mRNA category.

COVID-19 is further accelerating growth in custom oligonucleotides and related inputs, which are used to manufacture diagnostic tests.

New participants have entered the diagnostics market.

Reference labs and hospitals have rapidly expanded their capacity.

And demand for testing is increasing rapidly.

These developments in turn lead to increased demand for our oligonucleotide products.

Providers of technical expertise and manufacturing capabilities, like ourselves, with the facilities and quality systems demanded by biopharmaceutical customers, benefit from the demand created in the mRNA category.

Biologics Safety Testing Market

The biologics safety testing market includes the detection and clearance of downstream bioprocessing product and process impurities.

Biologics safety testing is a $4.3 billion market expected to grow at 12% annually through 2024.

The biologics safety testing market includes the detection and clearance of downstream bioprocessing product-related and process-related impurities.

Biologics safety testing is a $4.2 billion market in 2022.

We participate in the HCP and other process related impurities and viral contamination segments of this market for biopharmaceutical vaccine and therapeutics manufacturing.

These addressable segments account for $0.9 billion of the market and are expected to grow at 12% annually through 2024.

The growth in this market is driven by continued growth of biologics and biosimilars and increased outsourcing of process development.

The growth in this market is driven by continued growth of biologics and biosimilars, viral vector manufacturing for rapidly-growing CAR-T and gene therapy modalities, and increased outsourcing of process development.

Our customers strive to improve human health.

Our goal is to provide them with products and services to accelerate their development efforts, from basic research through clinical trials and ultimately to commercialization for drugs, therapeutics, diagnostics and vaccines.

Supporting Biopharmaceutical Customers from Product Development Through to Commercialization

Supporting Biopharmaceutical Customers from Discovery Through to Commercialization

Our customers include both emerging and established biopharmaceutical leaders developing novel drugs, therapeutics, diagnostics and vaccines.

Emerging biopharmaceutical customers frequently seek the support we can offer in our state-of-the-art facilities under our stringent quality standards, with the capabilities that result from the capital and process investments we have made over the last several years.

We are capable of manufacturing reagents from research-grade to GMP-grade, which often exceeds the in-house capabilities of our pre-commercial customers.

We are capable of manufacturing reagents from research-grade to GMP-grade, which

often exceeds the in-house capabilities of our pre-commercial customers.

The results of the Industry Analysis indicate that our emerging and established customers also seek us out for our leading capabilities in nucleic acid chemistries and process control assays.

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By investing in technologies at the forefront of biopharmaceutical and in vitro diagnostics, we aim to remain focused on the highest-growth applications.

Opportunistically Acquiring Leading Life Sciences Businesses and Supporting Their Continued Development

Acquiring Leading Life Sciences Businesses and Supporting Their Continued Development

We built our business by acquiring established and emerging companies with strong scientific foundations in our target markets and investing in their systems, processes and people to accelerate their growth and expand their technologies.

Going forward, we may opportunistically pursue strategic acquisitions that we believe meet, or could meet after being acquired and expanded, the following criteria:

Going forward, we may pursue strategic acquisitions that we believe meet, or could meet after being acquired and expanded, the following criteria:

• address our core target markets;

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Our acquisition strategy is to invest significantly in our acquired businesses.

We strive to rapidly integrate their information and financial systems.

We strive to rapidly integrate their quality, human resources, information and financial systems into our shared services.

All of our companies share a common enterprise resource planning system, and we implement our financial controls and reporting systems soon after acquisition.

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We also augment their commercial capabilities through a combination of sales and marketing resources dedicated to each business, supported by our global marketing infrastructure.

We will continue to seek a balance between driving growth organically and inorganically through opportunistic acquisitions.

We will continue to seek a balance between driving growth organically and inorganically through acquisitions.

We have relationships with the following categories of customers:

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Our commercial function includes direct sales, marketing, customer service, technical support and distributor management.

We serve customers through direct sales in each business segment, with a primary focus on our larger biopharmaceutical and other industry customers.

We serve our academic customers via web, email and phone ordering.

We serve customers through direct sales in each business segment, with a primary focus on our biopharmaceutical and large diagnostics and commercial customers.

We serve our academic customers via web, email and phone ordering as well as through key partnerships where our reagent products are included in their mRNA kits.

We support all customers with live technical support and customer service.

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However, it is important to note that CDMOs seldom offer proprietary products.

For mRNA capping analogs, we compete principally with Thermo Fisher and Hongene Biotech Corporation, who offer alternatives to CleanCap.

For mRNA capping analogs, we compete principally with Thermo Fisher Scientific, Aldevron (a subsidiary of Danaher), and New England BioLabs, who offer alternatives to CleanCap with enzymatic capping solutions.

Many biopharmaceutical companies produce capping solutions in-house using enzymatic or ARCA processes.

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Deep scientific expertise, intellectual property protection and specialty equipment serve as barriers to entry in this space.

For our mRNA offerings, we compete with Aldevron (a subsidiary of Danaher) and System Biosciences, among others.

For our mRNA offerings, we compete with Aldevron Patheon, eTheRNA, Lonza, Catalent, and Samsung Biologics, among others.

Based on the Industry Analysis, we believe we have a reputation for our expertise in the RNA space with talented scientists who are constantly pushing the frontier of RNA science.

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In the custom oligonucleotide space, complexity is based on the length of the sequence and level of modification to the phosphate backbone.

Large manufacturers like Integrated DNA Technologies, Thermo Fisher and EMD Millipore Corporation (“Millipore Sigma”) serve less complex customer needs while we, LGC Biosearch Technologies and GenScript Biotech Corporation serve more complex customer needs.

Large manufacturers like Integrated DNA Technologies, Thermo Fisher Scientific and EMD Millipore Corporation (“Millipore Sigma”) serve less complex customer needs while we, LGC Biosearch Technologies and GenScript Biotech Corporation serve more complex customer needs.

In the custom oligonucleotide market, we have a reputation for accepting complex orders and delivering high purity products that reduce researcher re-work and save money.

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For drugs in early development, we compete against other bioprocess impurity kit providers such as BioGenes (“BioGenes”) or Enzo Life Sciences (“Enzo”).

Competitors generally offer fewer expression platforms (generally between one and three) compared to our offering of 23 expression platforms and a total of 78 different ELISA impurity detection kits.

Competitors generally offer fewer expression platforms (generally between one and three)

compared to our offering of 23 expression platforms and over 75 different impurity detection kits.

As a drug successfully moves forward to validation and approval stages, a customer may either continue with an off-the-shelf kit or they may begin the process to develop a custom assay that is tailored to meet their specific host cell and manufacturing process needs.

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We occupy facilities in San Diego, California, Southport, North Carolina and Sterling, Virginia.

Except for our Sterling facility, all our facilities are engaged in the manufacture of reagents.

Our Wateridge facility in San Diego, in particular, was designed and built by us in conjunction with the building owner to contain fully functional chemical and biological manufacturing operations from material receiving to product distribution and has its own loading dock, manufacturing gas delivery system, solvent delivery and waste system, ISO 8 and ISO 7 designated customer manufacturing suites and integrated building management systems for required site control.

We continue to invest in our San Diego facility with recent expansions allowing for the manufacture of plasmid DNA and creation of ISO Class 8 and ISO Class 7 clean rooms providing for an expansion of the scale at which we can manufacture CleanCap and NTPs, supported by a pilot plant for development of large-scale manufacturing processes.

This investment has allowed us to substantially increase our capacity for nucleic acid production and specifically CleanCap meeting the growing demand from our customers without interruption or constraints.

Our Southport operations are engaged in the manufacture and processing of antibody and ELISA kits.

The facilities incorporate laboratory, manufacturing, bottling, shipping and waste handling capabilities.

Our Sterling facility was designed to perform quality control, aliquoting, packaging and shipping and houses the appropriate space and systems.

Our Wateridge facility in San Diego is engaged in the manufacture of reagents.

The facility was designed and built by us in conjunction with the building owner to contain fully functional chemical and biological manufacturing operations from material receiving to product distribution and has its own loading dock, manufacturing gas delivery system, solvent delivery and waste system, ISO 8 and ISO 7 designated customer manufacturing suites and integrated building management systems for required site control.

We continue to invest in our Wateridge facility with recent expansions allowing for the manufacture of plasmid DNA and creation of ISO Class 8 and ISO Class 7 clean rooms providing for an expansion of the scale at which we can manufacture CleanCap and NTPs, supported by a pilot plant for development of large-scale manufacturing processes.

This investment has allowed us to substantially increase our capacity for nucleic acid production and specifically CleanCap meeting the demand from our customers without interruption or constraints.

In addition to the Wateridge facility, throughout 2022 we invested in an additional facility in San Diego.

California (the “Flanders San Diego Facility”) that we expect to occupy in 2023.

The new Flanders San Diego Facility will provide us with additional GMP manufacturing capacity and provide us the optionality downstream to manufacture materials beyond current quality requirements for mRNA raw materials, including CleanCap.

The Flanders San Diego Facility will include the introduction of integrated manufacturing systems, quality of water improvements from Reverse Osmosis De-ionized grade water to WFI (“Water For Injection”), which is pharmaceutical grade water, and other facility infrastructure investments to support potential customer needs related to quality.

These investments will also support an additional increase to batch run sizes and overall throughput.

In 2022, we secured additional office, warehouse and light lab space in San Diego for the primary purpose to relocate our sales, general and administrative employees.

We also assumed a lease from our MyChem acquisition and have repurposed the facility as a small R&D lab.

Our Southport, North Carolina operations are engaged in the manufacture and processing of antibody and HCP ELISA kits.

The operations include laboratory, manufacturing, bottling, shipping and waste handling capabilities.

In 2023, our Southport operations will relocate to a new state-of-the-art facility in Leland, North Carolina.

This new facility more than doubles our operational square footage to support current and future growth.

The fully customized design will provide room for a Mass Spectrometry Center of Excellence and specialized cell culture facilities.

It will significantly increase our cold storage capacity while providing other R&D, laboratory and automation upgrades.

Extensive process flow analysis has been incorporated into the facility design to optimize and enhance both our manufacturing and kit packaging operations.

Our Sterling, Virginia facility was designed to perform quality control, aliquoting, packaging and shipping and houses the appropriate space and systems.

Our supply chain relies on a network of specialized suppliers and transportation companies.

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We do not make claims related to safety or effectiveness and they are not intended for diagnostic or clinical use.

However, the quality of our products is critical to meeting customer needs, and we therefore voluntarily follow the quality standards outlined by the International Organization for Standardization for quality management systems (ISO 9001:2015) for the design, development, manufacture, and distribution of our products.

development, manufacture, and distribution of our products.

Some biopharmaceutical customers desire extra requirements including quality parameters and product specifications, which are outlined in customer-specific quality agreements.

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We believe that our operations comply in all material respects with applicable laws and regulations concerning environmental protection.

There have been no material effects upon our earnings or competitive position resulting from compliance with applicable laws or regulations enacted or adopted relating to the protection of the environment.

Our capital and operating expenditures for pollution control in 2020 and 2021 were not material and are not expected to be material in 2022.

To date, there have been no material effects upon our earnings or competitive position resulting from our compliance with applicable laws or regulations enacted or adopted relating to the protection of the environment.

Our capital and operating expenditures for pollution control in 2022 and 2021 were not material.

Intellectual Property

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Our patent portfolio generally includes patents and patent applications relating to compositions and methods for the production of oligonucleotides, nucleic acids, immunofluorescence assays, and mock viral particles.

We may own provisional patent applications, and provisional patent applications are not eligible to become issued patents until, among other things, we

file national stage patent applications either directly or via the PCT within 12 or 30 to 32 months, respectively.

We may own provisional patent applications, and provisional patent applications are not eligible to become issued patents until, among other things, we file national stage patent applications either directly or via the PCT within 12 or 30 to 32 months, respectively.

If we do not timely file any national stage patent applications, we may lose our priority date with respect to our provisional patent applications and any patent protection on the inventions disclosed in such provisional patent applications.

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Compositions and methods for synthesizing 5′-Capped RNAs

United States 10913768C1

Compositions and methods for synthesizing 5′-Capped RNAs

United States 11414453

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Compositions and methods for synthesizing 5′-Capped RNAs

The following patent relates to our oligonucleotide synthesis support technology.

Jurisdiction Patent Number Title Expiration

United States 7491817

Universal Supports for Oligonucleotide Synthesis

Japan 7082174

Compositions and methods for synthesizing 5′-Capped RNAs

The following patents relate to our MockV related products and technology.

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China 105899684

Method and kit for quantifying pseudoviral particles removed from purified solution

Methods and kits for quantifying pseudoviral particles removed from purified solution

Japan 6549126

Methods and kits for removal of mock virus particles from a purified solution

Our trademark portfolio is designed to protect the brands of our current and future products and includes U.S.

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We intend to pursue additional intellectual property protection to the extent we believe it would advance our business objectives.

Notwithstanding these efforts, there can be no assurance that we will adequately protect our intellectual property or

provide any competitive advantage.

Notwithstanding these efforts, there can be no assurance that we will adequately protect our intellectual property or provide any competitive advantage.

We cannot provide any assurance that any patents will be issued from our pending or any future patent applications or that any issued patents will adequately protect our products or technology.

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Furthermore, it may be difficult to protect our trade secrets.

While we have confidence in the measures we take to protect and preserve our trade secrets, they may be inadequate and can be breached, and we may not have adequate remedies for violations of such measures.

While we have confidence in the measures we take to protect and preserve our trade secrets, they may be inadequate and can be breached, and we may not have adequate

remedies for violations of such measures.

In addition, our trade secrets may otherwise become known or be independently discovered by competitors.

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“Risk Factors—Risks Related to our Intellectual Property.”

Human Capital Resources

Human Capital Management

Operating a sustainable business begins with our people.

As of December 31, 2022, we had over 610 full-time employees.

Among our employees, 43% identified as female and 57% identified as male.

Approximately 19% of our employees had advanced degrees.

Among our employees, 46% identified as female, 54% identified as male and 55% identified as ethnically or racially diverse.

Approximately 18% of our employees have earned advanced degrees and all employees receive rigorous on the job training.

None of our employees is represented by a labor union, and none of our employees has entered into a collective bargaining agreement with us.

We offer a highly competitive compensation and benefits program to attract and retain top talent, and all employees receive equity awards under our 2020 Omnibus Incentive Plan.

Our talented employees drive our mission and share core values that both stem from and define our culture, which plays an invaluable role in our execution at all levels in our organization.

Our culture is based on these shared core values which we believe contribute to our success and the continued growth of the organization.

Our core values are used in candidate screening and in employee evaluations to help reinforce their importance in our organization:

• Adaptability .

We stay agile, ready to shift or change our approach when challenges arise and open to new ideas and responsibilities.

• Open Communication .

We focus on open door sharing with our focus on constant improvement as individuals and as an organization.

• Quality Mindset .

We strive to eliminate errors with accurate work as a priority and seek opportunities to improve products/services.

• Work Together .

We are accountable to our team and work to meet established deliverables with respect and appreciation of others’ views.

• Workplace Awareness .

We promote a safe and healthy work environment.

We celebrate and recognize accomplishments, both individual and collectively.

We offer a highly competitive compensation and benefits program to attract and retain top talent.

We believe it is important for our employees to have an ownership stake in our company, so all eligible employees receive equity awards under our 2020 Omnibus Incentive Plan and have the opportunity to purchase stock at a discount under our 2020 Employee Stock Purchase Plan.

At Maravai, our success hinges on our ability to attract, engage, develop and retain a talented and diverse team who share our core values and mission to enable the miracles of science.

Our talented employees drive our mission and help shape our culture, which plays an invaluable role in our execution at all levels in our organization.

Our culture reflects our shared core values which we believe contribute to our success and the continued growth of our organization.

We use our core values in candidate screening and performance management to help reinforce their importance in our organization.

Our mission and core values are coded into our culture and help guide our path forward.

We define our company culture and guiding principles with a simple acronym for how we conduct ourselves and service our clients:

• C onnected — believing in people, trust and collaboration.

• O pen — embracing ideas and perspectives for better outcomes.

• D riven — finding a better way, always.

• E mpowered - valuing integrity and accountability in everything we do.

Our human capital management strategy oversees culture, talent acquisition, compensation and benefits, employee engagement, training and development, health and wellness and diversity, equity and inclusion.

In 2022, we made strategic advancements in each of these areas to help ensure our workforce is aligned with our mission and values.

For example, we implemented a new global applicant tracking system that enables us to better organize, track and engage with candidates throughout the recruitment and hiring process.

We also launched a comprehensive, five-day orientation program for new employees called “Foundations,” which includes informational sessions with leadership and more than twenty hours of self-directed training.

As part of our efforts to enhance our company culture, we have dedicated personnel focused on our diversity, equity and inclusion strategy and launched our first employee resource group, Women in Leadership, and proud to have an executive leadership team that is 50% women.

To improve the quality of our colleagues’ experience at Maravai, we measured various levels of engagement through a company-wide survey and received an average participation rate of 91%.

We use the results from our survey to develop action plans that we can incorporate into our human capital management strategy.

As a leading life sciences company.

we are committed to the health, safety and well-being of our employees.

All employees exposed to potential hazards are required to complete annual health and safety training, including laboratory chemical safety, hazard communication and hazardous waste management.

To better track, report and improve upon occupational health and safety, we have implemented a health and safety management system that includes an online incident reporting platform across all sites.

To mitigate the impact of COVID-19 on our employees, we instituted new processes, guidelines and preparedness measures within the context of each of our offices’ unique culture and geographies.

For example, employees in our San Diego facilities received free weekly mandatory COVID-19 testing, and each employee wore contract tracing devices to assist with contact tracing in the event of exposure.

We also implemented outreach efforts focusing on the mental health of our employees on topics such as anxiety, depression, sleep, stress and substance abuse.

Through our employee assistance program, employees are offered up to three sessions with licensed counseling professionals at no cost to the employee, as well as additional online resources.

In 2022, we continued to strengthen our comprehensive environmental, health and safety management system, which includes an online incident reporting platform across all company sites.

Additionally, we have implemented incident intervention services which include telemedicine for some of our locations.

Through our employee assistance program, employees and their families are offered up to three sessions with licensed counseling professionals at no cost to the employee and have on-demand access to additional online resources.

Available Information

Our website is located at www.maravai.com, and our investor relations website is located at investors.maravai.com.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and our Proxy Statements, and any amendments to these reports, are available through our investor relations website, free of charge, after we file them with the SEC.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and our Proxy Statements, and any

amendments to these reports, are available through our investor relations website, free of charge, after we file them with the SEC.

Our filings with the SEC are also available, free of charge, on the SEC's website at www.sec.gov.

We webcast via our investor relations website our earnings calls and certain events we participate in or host with members of the investment community.

Our investor relations website also provides notifications of news or announcements regarding our financial

performance and other items that may be material or of interest to our investors, including SEC filings, investor events, press and earnings releases, and blogs.

Our investor relations website also provides notifications of news or announcements regarding our financial performance and other items that may be material or of interest to our investors, including SEC filings, investor events, press and earnings releases, and blogs.

The contents of our website are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our website are intended to be inactive textual references only.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business