What changed in this filing

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Item 1. Business

2023-08-23 compared with 2022-08-24 · 66 added, 62 removed, 251 unchanged (34% of the section changed)

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Our Protein Sciences segment is a leading developer and manufacturer of high-quality biological reagents used in all aspects of life science research, diagnostics and cell and gene therapy.

This segment also includes proteomic analytical tools, both manual and automated, that offer researchers and pharmaceutical manufacturers efficient and streamlined options for protein size and purity analysis, automated western blot and multiplexed ELISA workflow.

This segment also includes proteomic analytical tools, both manual and automated, that offer researchers and pharmaceutical manufacturers efficient and streamlined options for automated western blot and multiplexed ELISA workflow.

Our Diagnostics and Genomics segment develops and manufactures diagnostic products, including controls, calibrators, and diagnostic assays for the regulated diagnostics market, exosome-based molecular diagnostic assays, advanced tissue-based in-situ hybridization assays for spatial genomic and tissue biopsy analysis, and genetic and oncology kits for research and clinical applications.

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Our historical focus was on providing high quality proteins, antibodies and immunoassays to the life science research market and hematology controls to the diagnostics market.

Over the last ten years, we have been implementing a disciplined strategy to accelerate growth and expand our addressable markets in part by acquiring businesses and product portfolios that leveraged and diversified our existing product lines, filled portfolio gaps with differentiated high growth businesses, and expanded our geographic scope.

From fiscal years 2013 through 2022 we have acquired sixteen companies that have expanded the product offerings and geographic footprint of both operating segments.

Since 2013, we have been implementing a disciplined strategy to accelerate growth in part by acquiring businesses and product portfolios that leveraged and diversified our existing product lines, filled portfolio gaps with differentiated high growth businesses, and expanded our geographic scope.

From fiscal years 2013 through 2023 we have acquired, agreed to acquire, or made investments in nineteen companies that have expanded the product offerings and geographic footprint of both operating segments, including the acquisition of Namocell, Inc.

at the beginning of fiscal year 2023, and entering into an agreement to acquire Lunaphore SA.

at the end of the year.

We also completed a 19.9% investment in Wilson Wolf Corporation (“Wilson Wolf”) this year, and will acquire the remaining ownership in Wilson Wolf by the end of calendar year 2027, if not earlier due to its achievement of revenue or earnings before interest, taxes, depreciation, and amortization (“EBITDA”) targets.

Recognizing the importance of an integrated, global approach to meeting our mission and accomplishing our strategies, we have maintained many of the brands of the companies we have acquired, but unified under a single global brand -- Bio-Techne.

We are committed to providing the life sciences community with innovative, high-quality scientific tools that allow our customers to make extraordinary discoveries and diagnose diseases.

We are committed to providing the life sciences community with innovative, high-quality scientific tools that allow our customers to make extraordinary discoveries and treat and diagnose diseases.

We intend to build on Bio-Techne’s past accomplishments, high product quality reputation and sound financial position by executing strategies that position us to serve as the standard for biological content in the research market, and to leverage that leadership position to enter the diagnostics and other adjacent markets.

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In recent years, we have made several acquisitions and investments that have expanded our product offerings for the cell and gene therapy market.

These include a significant investment in state-of-the art facilities for production of both proteins and small molecules in large quantities manufactured in accordance with cGMP, as well as an agreement entered into in fiscal 2022 to invest in and potentially acquire Wilson Wolf Manufacturing Company, which is a leading provider of cell culture devices for cell therapy.

Through a collaborative marketing venture with Wilson Wolf and another company, we have leveraged products we have or are developing to provide a more complete offering for the cell and gene therapy market.

These include a significant investment in state-of-the art facilities for production of both proteins and small molecules in large quantities manufactured in accordance with cGMP, as well as a 19.9% investment in – and eventual acquisition of – Wilson Wolf, which is a leading provider of cell culture devices for cell therapy.

Through a collaborative marketing venture with Wilson Wolf and another company, we have leveraged the products we have or are developing to provide a more complete offering for the cell and gene therapy market.

The Analytical Solutions division includes manual and automated protein analysis instruments and immunoassays that are used in quantifying proteins in a variety of biological fluids.

Products in this division include traditional manual plate-based immunoassays, fully automated multiplex immunoassays on various instrument platforms, automated western blotting and isoelectric focusing analysis of complex protein samples.

Products in this division include traditional manual plate-based immunoassays, fully automated multiplex immunoassays on various instrument platforms, and automated western blotting and isoelectric focusing analysis of complex protein samples.

Key product brands include R&D Systems and ProteinSimple.

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In fact, we have received Food and Drug Administration (FDA) marketing clearance for a few of our immunoassays for use as in vitro diagnostic devices.

In addition, subsequent to fiscal 2022, we closed on the acquisition of Namocell, Inc., a leading provider of single cell sorting and dispensing platforms that are gentle to cells and therefore preserve cell viability and integrity.

In addition, in the first quarter of fiscal 2023, we closed on the acquisition of Namocell, Inc., leading provider of simple single cell sorting and dispensing platforms that are gentle to cells and therefore preserve cell viability and integrity.

Protein Sciences Segment Customers and Distribution Methods

Our customers for this segment include researchers in academia, government and industry (chiefly pharmaceutical and biotech companies as well as contract research organizations).

This segment also sells to diagnostic/companion diagnostic and therapeutic customers, including customers engaged in the development of cell- and gene-based therapies.

Our biologics line of products in the Analytical Solutions division is used chiefly by production and quality control departments at biotech and pharmaceutical companies.

We sell our products directly to customers who are primarily located in North America, Europe and China, as well as through a distribution agreement with Fisher Scientific.

Our customers for this segment include researchers in academia and industry (chiefly pharmaceutical and biotech companies as well as contract research organizations).

This segment also sells to diagnostic/companion diagnostic and therapeutic customers, especially customers engaged in the development of cell- and gene-based therapies.

Our biologics line of products in the Analytical Solutions division is used chiefly by production and quality control departments at

biotech and pharmaceutical companies.

We sell our products directly to customers who are primarily located in North America, Europe and China, as well as through a distribution agreement with Thermo Fisher Scientific.

We also sell through third party distributors in China, Japan, certain eastern European countries and the rest of the world.

Our sales are widely

distributed, and no single end-user customer accounted for more than 10% of the Protein Sciences segment’s net sales during fiscal 2022, 2021 and 2020.

Our sales are widely distributed, and no single end-user customer accounted for more than 10% of the Protein Sciences segment’s net sales during fiscal 2023, 2022, or 2021.

DIAGNOSTICS AND GENOMICS SEGMENT

The Diagnostics and Genomics segment, representing about 25% of our net revenues in fiscal 2022, is comprised of three divisions and is focused primarily on the diagnostics market and includes spatial biology, liquid biopsy, molecular diagnostics kits and products, and diagnostics reagents.

The Diagnostics and Genomics segment, representing about 26% of our net revenues in fiscal 2023, includes three divisions and is focused primarily on the diagnostics market and includes spatial biology, liquid biopsy, molecular diagnostics kits and products, and diagnostics reagents.

Diagnostics and Genomics Segment Products

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Our manufacturing operations use a wide variety of raw materials and components, including electronic components, chemicals and biological materials.

No single supplier is material, although for some components that require particular

specifications or regulatory or other qualifications there may be a single supplier or a limited number of suppliers that can readily provide such components.

No single supplier is material, although for some components that require particular specifications or regulatory or other qualifications there may be a single supplier or a limited number of suppliers that can readily provide such components.

We utilize a number of techniques to address potential disruption in and other risks relating to our supply chain, which in certain cases includes the use of safety stock, alternative materials, and qualification of multiple supply sources.

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In fiscal 2023, we introduced over 1,600 new products.

While this is an area of focus for the Company, there is no assurance that any of the products in the research and development phases can be successfully completed or, if completed, can be successfully introduced into the marketplace.

While this is an area of focus for the Company, there is

no assurance that any of the products in the research and development phases can be successfully completed or, if completed, can be successfully introduced into the marketplace.

HUMAN CAPITAL

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Each employee is measured against the behaviors and attributes that support those values.

To further amplify our desired behaviors, we have an annual employee recognition program in which we ask for nominations and recognize winning individuals and teams form across our business who have best demonstrated our EPIC values.

To further amplify our desired behaviors, we have an annual employee recognition program in which we ask for nominations and recognize winning individuals and teams across our business who have best demonstrated our EPIC values.

Bio-Techne’s Board of Directors reviews management succession planning at least annually, and its Compensation Committee reviews the Company’s talent management strategy periodically in connection with significant initiatives and acquisitions, as well as part of its oversight of our executive and equity compensation programs.

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We believe that strong employee engagement helps enable higher retention and better business performance.

We assess our engagement performance through regular consultation with our managers.

We also engage more formally via an annual engagement survey that assesses our employees’ overall experience.

In 2021, 73% of our global workforce participated, and 87% of those who responded provided positive feedback.

While these responses were positive, our management used the responses to inform and shape our future employee-focused initiatives.

These initiatives in the past have resulted in changes in programs and policies, including expansion of our management and leadership development programs, addition of a parental leave program, expansion of our incentive programs to include annual cash bonuses to all employees, introduction of flexible working and expanding the breadth of our Employee Resource Groups (ERGs).

We believe a diverse workforce and culture of belonging are both essential to drive innovation, fuel growth and help ensure our technologies and products effectively serve a global customer base.

In 2023, 62% of our global workforce participated, and 77% of those who responded provided favorable feedback.

While these responses were quite positive, our management used the responses to inform and shape our future employee-focused initiatives.

These initiatives in the past have resulted in changes in programs and policies, including expansion of our management and leadership development programs, addition of a parental leave program, expansion of our incentive programs to include annual cash bonuses to all employees, introduction of flexible working, addition of an internal communications function, leadership engagement focused on transparency and stronger feedback follow-up, and expansion of the breadth and resources of our Employee Resource Groups (ERGs).

In fiscal year 2023, we empowered work/life integration through hybrid work models wherever feasible, continued to cultivate belonging and inclusion through deepened investment of resources to our ERGs, and paved the path for career growth through the personalized development and implementation of individual action plans.

We believe a diverse workforce and culture of belonging is central to drive innovation, fuel growth and help ensure our technologies and products effectively serve a global customer base.

The Company’s executive-sponsored Belonging initiative is focused on providing a welcoming working environment for all employees, continued education, broadening our candidate pools, and implementing and sustaining programs.

One of the centerpieces of our talent development strategy is our ERGs.

One of the centerpieces of our talent development strategy is our ERGs, coordinated under the guidance of our executive-sponsored Employee Resource Group Council;

they offer mentorship, support and engagement to help our employees, including those from underrepresented groups, succeed and thrive.

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Recruitment and Retention

We believe that sustaining our profitable growth will require a continued focus on recruiting and retaining top, diverse talent.

We engage in a variety of recruiting strategies intended to locate and identify qualified candidates, and to maintain a talent pipeline.

Bio-Techne believes that sustaining its profitable growth will require a continued focus on recruiting and retaining top, diverse talent.

We engage in a variety of recruiting strategies intended to locate and identify qualified candidates and create a talent pipeline.

The Company offers competitive pay and benefits, from flexible work to financial planning resources to an employee stock purchase plan.

In fiscal 2022, we bolstered our recruitment and retention efforts by expanding eligibility to receive stock options and annual cash bonuses.

In addition to pay and benefits, we believe one key to retention is to maintain an environment in which employees can work productively and enjoy opportunities to develop and advance.

The Company seeks to cultivate a culture of empowerment and collaboration, allowing employees to understand the impact of their efforts and see opportunities for career growth.

We believe that our focus and investment in recruitment and retention contributed to our inclusion on the Forbes list as one of America’s Best Midsize Employers as well as one of the Best Employers for Diversity.

The last fiscal year saw considerable employee turnover in all industries, including the biotechnology industry, and we were able to adapt and respond to turnover pressures in our industry to deliver strong growth and profitability.

We believe our sustained efforts to enhance recruitment and retention will allow us to remain resilient and productive in the face of increased employee mobility and economic challenge.

Last year, we bolstered our recruitment and retention efforts by expanding eligibility to receive stock options deeper into the organization.

In FY23, we further expanded these efforts by expanding our Long-Term Incentive program strategy to include a combination of stock options and restricted stock units, instead of exclusively stock options.

Bio-Techne continues to offer a referral bonus with the understanding that this is one of our most successful sourcing methods.

In addition to pay and benefits, Bio-Techne believes that the ability to retain employees requires an environment where they can work productively and where there are opportunities to grow and advance.

The Company therefore seeks to cultivate a culture of empowerment and collaboration, where employees can observe the impact of their efforts, and where they see opportunities both laterally and vertically.

We believe that our focus and investment in recruitment and retention contributed to our inclusion on the Forbes list in fiscal 2022 as one of America’s Best Midsize Employers as well as one of the Best Employers for Diversity.

The last fiscal year continued to see considerable employee mobility across all industries, including the biotechnology industry, but we nonetheless significantly reduced our attrition rate to maintain durable stability across our enterprise.

We believe that Bio-Techne’s sustained efforts on recruitment and retention will fortify our resilience and ability to remain productive in the face of increased employee mobility and economic challenges.

Talent Development and Learning and Development

Bio-Techne invests in people development with the belief that growing and promoting employees from within the Company creates a more sustainable organization.

High potential and promotable employees are identified through our annual talent review strategy.

These employees are elevated to the attention of senior management and may be considered for additional development and career advancement opportunities.

Bio-Techne invests in people development in the belief that growing and promoting employees from within the Company creates a more sustainable organization.

High potential employees are identified through our annual talent review strategy, as well as through leadership development programs designed to cultivate future leaders.

Employees identified as high potential are elevated to the attention of senior management for consideration for additional development, growth opportunities, and career advancement.

Our global Learning and Development program delivers a wide range of initiatives including a validated suite of compliance training, and soft, technical, business, interpersonal and career skills.

Many of these programs are assigned to individuals specifically.

In addition, there are some programs available to employees in order to accelerate their own development.

Bio-Techne also encourages and supports employees who wish to supplement their growth through external training and education.

As a company that regularly acquires other businesses, we believe it is important for employees to be trained in the skills and mindsets that enable them to respond positively to change.

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The Company is committed to protecting the physical health and psychological well-being of our employees by providing a safe work environment.

We train all employees on foundational safety principles and require more rigorous safety and hazard awareness training where appropriate based on function, role, or team.

All employees are empowered and encouraged to maintain and create a safe workplace.

In addition, we offer internal and external resources to provide for the psychological and emotional security of employees, including employee resource programs and mental health benefit coverage.

The COVID-19 pandemic imposed new and unusual challenges in maintaining a safe workplace.

As an essential business providing key research and diagnostics products needed to confront the pandemic, Bio-Techne maintained operations while providing a safe work environment through staggered shifts, work from home protocols where possible, masking and vaccine requirements, and other significant safety measures.

We actively monitor and adjust our crisis management plan and response protocol to protect our employees.

Bio-Techne trains all employees on foundational safety principles and requires more rigorous safety and hazard awareness training where appropriate based on function, role, or team.

At Bio-Techne, all employees are empowered and

encouraged to maintain and create a safe workplace.

In addition, we provide internal and external resources to provide for the psychological and emotional security of employees, including employee resource programs, mental health benefit coverage, and flexible work for many roles.

As fiscal year 2023 finally saw the end of the COVID-19 pandemic, the Company carefully managed all employees’ return to their worksites, permitting hybrid work schedules wherever feasible, and prioritizing a safe workplace.

The Company believes in giving back and in supporting the local communities in which we live and work.

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Most sites or departments engage in local charitable causes and activities.

In some of our sites, employees are encouraged to give through regular payroll deductions

and through the annual campaign week where employee contributions are matched by the Company.

In some of our sites, employees are encouraged to give through regular payroll deductions and through the annual campaign week where employee contributions are matched by the Company.

Some charitable causes are identified and promoted by our ERGs.

In addition, United States employees receive eight hours of voluntary paid time off to participate in local opportunities to give back to the community.

In addition, United States employees receive a paid day off to participate in local opportunities to give back to the community as part of our volunteer time off benefit.

INTELLECTUAL PROPERTY

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As of June 30, 2023, we had rights to approximately 490 granted patents and approximately 290 pending patent applications.

Products in the Analytical Solutions and Genomics divisions are protected primarily through pending patent applications and issued patents.

Products in the Analytical Solutions and the Spatial Biology divisions are protected primarily through pending patent applications and issued patents.

In addition, certain of our products are covered by licenses from third parties to supplement our own patent portfolio.

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Any medical devices we manufacture and distribute are subject to pervasive and continuing regulation by the FDA and certain state and non-U.S.

As a medical device manufacturer, our manufacturing facilities are subject to

inspection on a routine basis by the FDA.

As a medical device manufacturer, our manufacturing facilities are subject to inspection on a routine basis by the FDA.

We are required to adhere to the Current Good Manufacturing Practices (“cGMP”) requirements, as set forth in the Quality Systems Regulation (“QSR”), which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all phases of the design and manufacturing process.

We must also comply with post-market surveillance regulations, including medical device reporting (“MDR”), requirements which require that we review and report to the FDA any incident in which our products may have caused or contributed to a death or serious injury.

We must also report any incident in which our product has malfunctioned if that malfunction would likely cause or contribute to a death or serious injury if it were to recur.

We must also report any incident in which our product has malfunctioned if that malfunction would likely cause or contribute to a death or serious injury it if were to recur.

Labeling and promotional activities are subject to scrutiny by the FDA and, in certain circumstances, by the Federal Trade Commission.

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agencies responsible for reimbursement and regulation of healthcare goods and services, including laws and regulations related to kickbacks, false claims, self-referrals and healthcare fraud.

Federal Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration (including any kickback or bribe), directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing or arranging for a good or service, for which payment may be made in whole or in part under a federal health care program, such as Medicare or Medicaid.

or to induce either the referral of an individual, or the furnishing or arranging for a good or service, for which payment may be made in whole or in part under a federal health care program, such as Medicare or Medicaid.

● Comparable laws and regulations similar to, and in some cases more stringent than, the U.S.

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● The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which prohibits knowingly and willfully (1) executing, or attempting to execute, a scheme to defraud any health care benefit program, including private payors, or (2) falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for health care benefits, items or services.

In addition, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, also restricts the use and disclosure of patient identifiable health information,

mandates the adoption of standards relating to the privacy and security of patient identifiable health information and requires the reporting of certain security breaches with respect to such information.

In addition, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, also restricts the use and disclosure of patient identifiable health information, mandates the adoption of standards relating to the privacy and security of patient identifiable health information and requires the reporting of certain security breaches with respect to such information.

● The False Claims Act, which imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment by a federal health care program, knowingly makes, uses or causes to be made or used, a false record or statement material to a false or fraudulent claim, or knowingly makes a false statement to avoid, decrease or conceal an obligation to pay money to the U.S.

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We are subject to the U.S.

Foreign Corrupt Practices Act and various other similar anti-corruption and anti-bribery acts, which are particularly relevant to our operations in countries where the customers are government entities or are controlled by government officials.

by government officials.

Both directly and indirectly through our distributors, we must comply with such laws when interacting with those entities.

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companies and their subsidiaries and affiliates outside the United States are prohibited from participating or agreeing to participate in unsanctioned foreign boycotts in connection with certain business activities, including the sale, purchase, transfer, shipping or financing of goods or services within the United States or between the United States and countries outside of the United States.

If we, or certain third parties through which

we sell or provide goods or services, violate anti-boycott laws and regulations, we may be subject to civil or criminal enforcement action and varying degrees of liability.

If we, or certain third parties through which we sell or provide goods or services, violate anti-boycott laws and regulations, we may be subject to civil or criminal enforcement action and varying degrees of liability.

We are subject to laws and regulations governing government contracts, and failure to address these laws and regulations or comply with government contracts could harm our business by a reduction in revenue associated with these customers.

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Executive Vice President and Chief Financial Officer

Brenda Furlow

Executive Vice President, General Counsel and Corporate Secretary

Kim Kelderman

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President, Protein Sciences

Senior Vice President, General Counsel & Corp.

Set forth below is information regarding the business experience of each executive officer.

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Prior to joining the Company, Mr.

Hippel served as Senior Vice President and Chief Financial Officer for Mirion Technologies, Inc and as Vice President, Finance at Thermo Fisher Scientific, and in financial roles at Honeywell International.

Hippel served as Senior Vice President and Chief Financial Officer for Mirion Technologies, Inc and as Vice

President, Finance at Thermo Fisher Scientific, and in financial roles at Honeywell International.

Hippel started his career with KPMG LLP.

Brenda Furlow joined the Company as General Counsel and Corporate Secretary on August 4, 2014.

Prior to joining Bio-Techne, Ms.

Furlow served as general counsel for TomoTherapy, Inc.

and Promega Corporation.

Kim Kelderman joined Bio-Techne on April 30, 2018 as President, Diagnostics and Genomics.

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Geist most recently served as Chief Operating Officer for Quanterix, and before that in senior management roles at Thermo Fisher Scientific and QuantaBiosciences, a QIAGEN company.

Shane Bohnen was promoted to General Counsel and Corporate Secretary on March 3, 2023, and has been an attorney on the Company’s legal team since July 2019.

Prior to joining Bio-Techne, Mr.

Bohnen spent 10 years in private practice as a life sciences litigator, followed by seven years as in-house corporate counsel with an expansive breadth of responsibility and global scope.

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