What changed in this filing

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Item 1. Business

2024-08-22 compared with 2023-08-23 · 51 added, 52 removed, 265 unchanged (28% 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 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 protein analysis, automated western blot, and multiplexed ELISA workflows.

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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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.

From fiscal years 2013 through 2024 we have acquired, agreed to acquire, or made investments in twenty companies that have expanded the product offerings and geographic footprint of both operating segments, including the acquisition of Lunaphore SA (“Lunaphore”) at the beginning of fiscal year 2024.

We also completed a 19.9% investment in Wilson Wolf Corporation (“Wilson Wolf”) in fiscal year 2023, 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.

Additionally, subsequent to fiscal 2024, we made an investment in Spear Bio, which is a leader in the development and manufacturing of ultra-sensitive immunoassays capable of measuring protein biomarkers at attomolar level from sub-microliter sample volume.

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.

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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.

Our strategies, which have been consistent for at least the last several years, include:

Continued innovation in core products.

Our strategic pillars include:

Grow & Leverage the Core.

Through collaborations with key opinion leaders, participation in scientific discussions and societies, and leveraging our internal talent we expect to be able to convert our continued significant investment in our research and development activities to be first-to-market with quality products that are at the leading edge of life science researchers’ needs.

Market and geographic expansion.

Capitalize on High Potential Markets.

We will continue to leverage our strong balance sheet to gain access to new and differentiated technologies and products that improve our competitiveness in the current market, meet customers’ expanding workflow needs and allow us to enter adjacent markets.

Market Expansion Through Innovation & Acquisition.

We will leverage our existing portfolio to expand our product offerings into novel research fields and further penetrate diagnostics and therapeutics markets.

Acquisitions have, and will likely continue to play, an important role in our efforts to expand our portfolio of innovative tools and bioactive reagents, and support our initiatives to enter adjacent markets.

Deliver Best-in-Class Customer Experience.

We will continue to expand our sales staff and distribution channels globally in order to increase our global presence and make it easier for customers to transact with us.

We will also leverage our existing portfolio to expand our product offerings into novel research fields and further into diagnostics and therapeutics markets.

Culture development and talent recruitment and retention.

We strive for every interaction to be seamless, personalized, and exceeding expectations.

We aim to deeply understand customers wants and needs while simultaneously offering high-quality service at every touchpoint.

Develop People Through a Transofrmative Culture.

As we continue to grow both organically and through acquisition, we are intentionally fostering an “EPIC” culture based on the ideals of Empowerment, Passion, Innovation and Collaboration.

We strive to recruit, train and retain the most talented staff, who share these EPIC ideals to effectively implement our global strategies.

Targeted acquisitions and investments.

PROTEIN SCIENCES SEGMENT

Protein Sciences Segment Products and Markets

The Protein Sciences segment is the larger of our two segments, representing about 74% of our net sales in fiscal 2023.

The Protein Sciences segment is the larger of our two segments, representing approximately 72% of our net sales in fiscal 2024.

It is comprised of two divisions with complementary product offerings serving many of the same customers – the Reagent Solutions division and the Analytical Solutions division.

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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 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.

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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, 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

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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.

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.

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DIAGNOSTICS AND GENOMICS SEGMENT

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.

The Diagnostics and Genomics segment, representing approximately 28% of our net revenues in fiscal 2024, includes three divisions and is focused primarily on the diagnostic and research markets and includes spatial biology, liquid biopsy, molecular diagnostics kits and products, and diagnostics reagents.

Diagnostics and Genomics Segment Products

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Since these products preserve spatial context, they are particularly useful for complex tissue profiling.

In the first quarter of fiscal year 2024, we closed on the acquisition of Lunaphore, a leading developer of fully automated spatial biology solutions using precision microfluidic technology capable of revealing hyperplex proteomic and transcriptomic biomarkers in tumors and other tissues at single-cell and subcellular resolution.

Lunaphore’s COMET instrument automates ACD’s RNAscope assays and utilizies antibodies to enable simultaneous hyperplex detection of protein and RNA biomarkers on the same slide at single-cell resolution.

The Molecular Diagnostics division markets and sells products and services under the Exosome Diagnostics and Asuragen brands.

The Exosome Diagnostics brand is based on exosome-based liquid biopsy techniques that analyze genes or their transcripts.

It includes the ExoDx Prostate test, which is a urine-based assay for early detection of high-grade prostate cancer used as an aid in deciding the need for biopsy and offered by Exosome Diagnostics as a lab-developed test, as well as the ExoTRU kidney transplant rejection test, which we have licensed exclusively to Thermo Fisher Scientific.

It includes the ExoDx Prostate test, which is a urine-based assay for early detection of high-grade prostate cancer used as an aid in deciding the need for biopsy in men with grey-zone prostate specific antigen (PSA) scores.

ExoDX Prostate is offered by Exosome Diagnostics as a lab-developed test.

We have also licensed exclusively the ExoTRU kidney transplant rejection test to Thermo Fisher Scientific.

We also sell products for genetic carrier screening, oncology diagnostics, molecular controls, and research under the Asuragen brand.

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This test is also available in Europe as a CE-marked product.

The Asuragen-branded products are sold primarily to laboratories for use in lab-developed tests or in kit form as regulated diagnostic tests.

The Asuragen-

branded products are sold primarily to laboratories for use in lab-developed tests or in kit form as regulated diagnostic tests.

The majority of Diagnostic Reagents Division’s sales are through OEM agreements, but we sell some of our diagnostic reagent products directly to customers and, in Europe and Asia, also through distributors.

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The majority of our products are shipped within one day of receipt of the customers’ orders, other than our instruments and related cartridges, which are typically shipped within one to two weeks of receipt of an order.

There was no significant backlog of orders for our products as of the date of this Annual Report on Form 10-K or as of a comparable date for fiscal 2023.

There was no significant backlog of orders for our products as of the date of this Annual Report on Form 10-K or as of a comparable date.

For additional discussion of risks relating to supply chain and manufacturing, refer to “Item 1A.

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Although the Company transacts business with various government entities, no government contract is of such magnitude that renegotiation of profits or termination of the contract at the election of the government entity would have a material adverse effect on the Company’s financial results.

As a party to these contracts, Bio-Techne does have to comply with certain regulations that apply to companies doing business with governments.

As a party to these contracts, Bio-Techne does have to comply with

certain regulations that apply to companies doing business with governments.

For a discussion of risks related to government contracting requirements, see “Item 1A.

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In fiscal 2024, we introduced over 800 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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Our EPIC values are embedded in our culture and practices.

For example, our performance management system and annual review processes incorporate our EPIC values.

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 across our business who have best demonstrated our EPIC values.

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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).

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 2024, 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.

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As of June 30, 2024, 49% of our total employee population was female, and 43% of our managerial employees were female.

In the United States, 38% of our total employee population identified as nonwhite and 26% of our managerial employees identified as nonwhite.

39% of our total employee population identified as nonwhite and 26% of our managerial employees identified as nonwhite.

Recruitment and Retention

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

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.

In recent years, we bolstered our recruitment and retention efforts by expanding eligibility to receive stock options deeper into the organization and expanded 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.

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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.

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

Talent Development and Learning and Development

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Well-Being and Safety

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

The Company is committed to protecting the physical health, safety, and psychological well-being of our employees by providing a safe work environment and permitting hybrid work schedules wherever feasible.

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.

At Bio-Techne, 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, mental health benefit coverage, and flexible work for many roles.

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

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The following sections describe certain significant regulations pertinent to the Company.

These are not the only laws and regulations applicable to the Company’s business.

These are not the only laws and regulations applicable

to the Company’s business.

For a description of risks related to laws and regulations to which we are subject, refer to “Item 1A.

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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.

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.

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.

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

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

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EXECUTIVE OFFICERS OF THE REGISTRANT

Currently, the names, ages, positions and periods of service of each executive officer of the Company are as follows:

As of the date of this Annual Report, the names, ages, positions and periods of service of each executive officer of the Company are as follows:

Officer Since

Charles Kummeth

Kim Kelderman

President, Chief Executive Officer and Director

Executive Vice President and Chief Financial Officer

Kim Kelderman

President, Diagnostics and Genomics

William Geist

President, Protein Sciences

Matthew McManus

President, Diagnostics and Genomics

Senior Vice President, General Counsel & Corp.

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There are no family relationships among any of the officers named, nor is there any arrangement or understanding pursuant to which any person was selected as an officer.

Charles Kummeth has been President and Chief Executive Officer of the Company since April 1, 2013.

Prior to joining the Company, he served as an executive at Thermo Fisher Scientific and in various roles at 3M Corporation.

Kim Kelderman was promoted to President and Chief Executive Officer of the Company on February 1, 2024 and has been an executive officer of the company since joining the company in 2018.

Prior to joining the Company, he served as an executive at Thermo Fisher Scientific and as a Senior Segment Leader at Becton Dickinson.

James Hippel has been Chief Financial Officer of the Company since April 1, 2014.

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.

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

Matthew McManus joined Bio-Techne on January 8, 2024 as President, Diagnostics and Genomics.

Prior to Bio-Techne, Mr.

Kelderman was an executive at Thermo Fisher Scientific and a Senior Segment Leader at Becton Dickinson.

McManus most recently served as Chief Operating Officer for Azenta Life Sciences and served as Chief Executive Officer of Asuragen prior to the Bio-Techne acquisition.

William Geist has been President of the Protein Sciences segment since January 3, 2022.

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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