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Repligen Corp (NASDAQ:RGEN)
Q4 2020 Earnings Call
Feb 24, 2021, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to Repligen Corporation's fourth quarter and 2020 earnings conference call. My name is Sarah and I will be your coordinator. [Operator Instructions] I would now like to turn the call over to your host for today's call Sondra Newman, Head of Investor Relations for Repligen.

Sondra Newman -- Head of Investor Relations

Thank you, Sarah. Good morning, everyone. We appreciate you joining our call. This morning we'll cover financial results and business highlights for the three months and full-year periods ended December 31, 2020. We'll will also provide financial guidance for the current year 2021. President and CEO, Tony Hunt will cover business updates, and our CFO, Jon Snodgres will cover our financial results and guidance.

As a reminder, the forward-looking statements that we make during this call, including those regarding our business goals and expectations for the financial performance of the company are subject to risks and uncertainties that may cause actual or -- events or results to differ. Additional information concerning risks related to our business is included in our annual report on Form 10-K, our quarterly reports on Form 10-Q, the current report on Form 8-K which we filed today, and other filings that we make with the SEC. Today's comments reflect management's current views which could change as a result of new information, future events or otherwise. The company does not obligate or commit itself to update forward-looking statements except as required by law.

During this call we are providing non-GAAP results and guidance. Reconciliations of GAAP to non-GAAP financial measures are included in the press release that we issued this morning, which is posted to Repligen's website and also on sec.gov. Non-GAAP figures in today's report include the following. Revenue growth at constant currency, gross profit and gross margin, operating expenses including R&D and SG&A, operating income and operating margin, income tax expense, net income and earnings per share, as well as EBITDA and adjusted EBITDA. These adjusted financial measures should not be viewed as an alternative to GAAP measures, but are intended to better enable investors to benchmark Repligen's current results against historical performance and the performance of peers when evaluating investment opportunities. That's it for me. Now I'll call the -- turn the call to Tony Hunt.

Tony Hunt -- President and Chief Executive Officer

Great, thank you, Sondra and good morning everyone and welcome to our 2020 year end update. We're really delighted with the way we finished off the year with 47% organic growth in the fourth quarter, 25% organic growth for the full year and overall 2020 growth for the company coming in at 36%. As we all know, 2020 was a remarkable but challenging year where we observed accelerated demand for our products to support COVID-19 vaccine and therapeutic development. This came on top of very strong growth in non-COVID related revenue, which grew 18% overall for the year.

We were also able to complete a series of strategic acquisitions to advance our systems strategy. In addition, we launched innovative new products. We continue to gain traction across our industry including gene therapy accounts. I'm especially proud of how our team has risen to the challenges of 2020, showing a real drive to make a difference during the pandemic, making tremendous efforts to manufacture and deliver bioprocessing equipment and consumable products to our customers, and to scale our operations to keep pace with accelerating demand. Throughout the year, COVID related orders increased. And by Q4 COVID programs accounted for 22% of our overall revenue, which is up sequentially from 15% in Q3. For the full year, COVID customers accounted for 13% of our revenue and 17 points of our [Phonetic] 36% reported growth. Our order book also accelerated in the fourth quarter and finished the year up approximately 80%, with COVID programs contributing approximately half of this growth. Based on this order trend, we now expect COVID related revenues to double from $46 million in 2020 to a range of $90 million to $100 million this year, an increase from our previous projections of $50 million to $70 million.

Before jumping into our business highlights for Q4 and 2020, I want to spend a few minutes on the five strategic initiatives that we highlighted at the beginning of last year. Number one was around successful integration of C Technologies and expansion of their customer and application base. Second was around launching disruptive technologies from our R&D pipeline and expanding these technologies into new applications. The third one was around growing our gene therapy business by establishing our core technologies in viral vector manufacturing. Fourth was around expanding our manufacturing capacity to support our business unit growth on our longer-term vision of obtaining a $1 billion in revenue by 2025. And finally number five was around adding new technologies through M&A with primary focus on building out our systems and fluid management portfolio.

So let's start with C Technologies and our process analytics business. When we kicked off 2020, we set three goals for ourselves. We wanted to quickly onboard a team of 10 new salespeople to broaden our market presence across the regions including going direct into Europe. We wanted to build a pipeline of new accounts and expand applications beyond mAbs into gene therapy. And finally, we wanted to focus on Flow VPE. We wanted to demonstrate to customers the power of in line, real-time process monitoring and bring the next-gen Flow technology to market. It's been an amazing year for our process analytics team. We hired and completed the on-boarding of the commercial team in Q1. We focused on building the funnel with new accounts, which resulted in 50% of the systems sold in the second half of the year coming from these accounts. We expanded the applications for our process analytics products into gene therapy with laser focus on viral vector analysis. Finally, the Flow VPE team moved more than 20 customers into clinical evaluations. At the same time, our R&D team delivered on advancing its next-gen Flow VPE technology and we are now accepting orders for this instrument here in Q1.

The [Indecipherable] finished the year with pro forma growth of 30% and is on track for another strong year of growth in 2021 in the range of 20% to 25%. On the R&D front, our innovation engine continued to produce. We set a goal at the beginning of the year to launch five products and expand our technology adoption especially in gene therapy. In filtration, we launched our TangenX SIUS flat sheet cassettes into gene therapy. We ramped our marketing efforts for TangenX process scale TFDF systems to significantly improve and simplify harvest clarification [Phonetic] And we completed R&D work on our next-gen ATF controllers.

In proteins, we developed a ligand and resin for spike protein in under 10 months working with Navigo GmbH and Purolite Life Sciences. Finally, as mentioned earlier, in process analytics, we launched our gen Flow VPE technology in the first quarter of this year which will be used for highly accurate in line protein concentration measurement. In gene therapy, the challenge in 2020 was really around getting customer access and conducting evaluations during COVID. Our commercial and field applications teams were incredibly resourceful and by the end of the year we have firmly established OPUS pre-packed columns, TFDF flat sheet cassettes, ATF, and VPE technology and viral vector manufacturing applications. Our products match up well with the needs of this customer base, which has resulted in robust demand. We added on average 10 to 15 new gene therapy customers per quarter in 2020 and we now have approximately 75 significant accounts adopting and implementing our technology.

Even with some gene therapy customers shifting focus to COVID programs which we exclude from our gene therapy revenues, we achieved approximately 30% growth from our $41 million base in 2019. In 2019 and 2020, we talked about the importance of capacity expansion. And the work done over the last two years really helped us as we are in the middle of the surge in demand. Having spent just over $26 million in 2020, we accelerated our capital investments. We will accelerate our capital investments in 2021 and expect to deploy $55 to $60 million as we build out our capacity, major focus on our filtration and single-use products. By mid 2021, we expect to have our European center for pre-packed columns up and running and to have significant capacity in our hollow fiber business.

Finally, we plan to complete and build out an incremental 64,000 square-feet of manufacturing space in Marlborough to support our TFF systems, ATF and flat sheet cassette businesses. On the M&A front, we recognized back at the beginning of the year that our systems portfolio is gaining traction in the marketplace especially for hollow fiber applications. We also realized that we were missing opportunities especially in downstream maps, where we did not have the breadth and our systems offerings to address customer needs. The acquisitions of ARTeSYN, EMT and NMS directly address these gaps with gold standard systems and consumables that truly extend our system offering to chromatography and downstream filtration. We now have a complete portfolio of systems and fluid management consumables and our goal now is to invest in and expand our customer base as we roll these products out to our global commercial org [Phonetic]

As we move into 2021, we will continue to be opportunistic on M&A and we will focus on expanding our franchise footprint with differentiated technologies. So moving now to the fourth quarter on our business performance. As reported today, we had a record quarter with $108 million plus in sales. Each of our proteins analytics filtration and chromatography franchises performed well and together delivered almost 47% organic growth in the quarter, with our filtration business leading the way with approximately 60% organic growth. Our chromatography business was up over 20% for the quarter and finished the year up 14%. Within chromatography, our OPUS revenues for the full year 2020 were up approximately 20% and comp sales increased by 30%. With the investments we've made in 2019, our capacity increased significantly and we now have best-in-class lead times for pre-packed columns in the industry. We continue to migrate customers to drop ship resins which has improved our overall margins, and we are very excited to bring additional capacity online in Europe in mid 2021. We believe this will position us well for the next three to five years, not only on the capacity front but with respect to market opportunities. Finally, we're excited about the work we're doing with Navigo on the ligand development side as this has resulted in new opportunities for us to deliver resins in our pre-packed column format adding to the growth potential for our chromatography business. We expect chromatography will grow in the range of 30% to 40% in 2021.

Our proteins franchise had a very strong quarter in Q4, and finished year up 24%. This is the second year in a row where we've had 20% growth for this business. We started the year expecting the franchise to be down 15% given the transition to in-house manufacturing of Protein A ligand of Cytiva. With the onset of COVID, demand increased and we saw across the board strength from our three main proteins customers, including increased demand from Cytiva, Millipore, and continued market traction for NGL impact A ligand through the sales of Purolite's Jetted A50 resin. We expect 2021 to be another strong year for this franchise with growth in the range of 10% to 20%. Our filtration franchise with the big growth driver for Repligen in 2020 up greater than 60% in the quarter, and up 46% for the year. We benefited from continued traction at gene therapy accounts and COVID, where 60% of our total COVID revenues for the year came from our filtration portfolio. We are a key technology provider in many of the late stage and commercial vaccines and expect 2021 to be an exceptional year for filtration, given the strong order load and the overall global demand for our products. We expect the filtration franchise will grow in the range of 55% to 60% this year.

Overall, we expect the company to grow at 37% to 43% in 2021, with organic growth in the range of 26% to 33%. We expect the first half to be very strong as many of our customers ramp up COVID manufacturing. As we move through the year, our strategic priorities will center on the following: Number one, we want to support ongoing demand for our customers while continuing to prioritize the health and safety of our employees. Number two, we want to build out capacity to support accelerating growth in our business. Three, we want to integrate ARTeSYN, EMT and NMS. Four, is around new product launches including our spike protein resin, next generation Flow VPE, and next-gen TFF Systems. And finally, we want to focus on continued traction in gene therapy. We believe we are well positioned to gain further market share in bioprocessing, relying on our strategy of growth through acquisition, continuous innovation, and expansion of our customer base.

We believe that the M&As and highly differentiated new products developed and launched over the last 18 months will propel Repligen to above industry average organic growth over the next three to five years, and we have set our sights on achieving a $1 billion in revenue by 2025. Before concluding, I wish to recognize our 1100 plus employees around the globe, including our new colleagues at ARTeSYN, EMT and NMS for their commitment and leadership in 2020. I also want to thank our loyal shareholders and customers for their parts in Repligen's success as we look forward to delivering another strong year here in 2021. Now I'd like to turn the call over to Jon for a report on the financial performance.

Jon Snodgres -- Chief Financial Officer

Thank you, Tony, and good morning everyone. Today, we are reporting our financial results for the fourth quarter and full year 2020 as well as providing our financial guidance for the year 2021. Unless otherwise mentioned, all financial measures discussed reflect adjusted non-GAAP measures. As you've seen in our press release this morning, we delivered record revenue and strong earnings growth for both the fourth quarter and full year 2020, supported by strong overall biologics markets and the significant influence we are seeing from COVID vaccine and therapeutic programs. We've also continued to execute on our vision of driving technology leadership in bioprocessing during 2020 through new product launches that drive efficiencies for our customers, through the completion of three acquisitions that support our systems strategy, and through new applications for our products as we expand their use into a broader set of drug modalities. We also continued to deliver on our plans to expand our manufacturing footprint and capacity and to build out our IT systems to drive down lead times to enable delivery of increased volumes of our critical consumables, equipment, and systems to help our customer support growth we are seeing in the biologic drug development, and manufacturing around the world.

Now moving to our fourth quarter and full year 2020 Revenue commentary. On our top-line we realized record revenue of $108.6 million in the fourth quarter of 2020 representing 56% reported and 47% organic growth. Within these figures reported growth includes a 3% tailwind from foreign exchange and a six point tailwind from our 2020 acquisitions. For full year 2020, we reported revenue of $366.3 million with 36% reported growth and 29% organic growth. The reported revenue results include a 1% foreign exchange tailwind and a 6% contribution from acquisitions. The incremental revenue from acquisitions is comprised of partial year revenue from each of our 2020 acquisitions ARTeSYN, EMT, and NMS, plus C Technologies revenue for the first five months of 2020. In the fourth quarter, we achieved a consensus beat of $14.7 million or 13.5% on revenue with approximately 75% of the beat driven by COVID related projects, and approximately 25% related to the strength of our base business. Overall COVID programs represented 22% and 13% respectively of fourth quarter and full year of 2020 revenues. These same COVID programs represented 17 points of our reported 36% growth for the year.

As Tony highlighted, we continue to see strong full-year orders growth across each of our four product franchises, with overall order growth at approximately 80% in 2020 with about 40 points or half of this growth coming from COVID related projects. On a regional basis for the fourth quarter, Asia continues to be the lead with direct revenue growth of greater than 100% led by the strength of filtration and chromatography product lines in China. Europe and North America also delivered strong performances with direct revenue growth of approximately 70% and 40% respectively. On a full year basis, Asia was again our top performer with direct revenue growth of approximately 60%. On the same full-year basis, Europe and North America achieved direct revenue growth of greater than 50% and 25% respectively. For full year 2020, North America represented 52% of the company's direct product revenue, with Europe and Asia, accounting for 30% and 18% respectively.

Now moving down our income statement. Fourth quarter of 2020 adjusted gross profit increased to $61.1 million, a ramp of $21.4 million or 54% compared to the same 2019 period. Adjusted gross margin for the fourth quarter was 56.3% versus 57.2% reported in the fourth quarter of 2019. Our fourth quarter performance included the impact of planned depreciation from equipment and systems coming online, as well as increased human resource expenses as we continue to focus on capacity expansion to support current and long-term growth. Full year 2020 adjusted gross profit was $211 million, an increase of $57 million or 37% compared to the full year 2019. Full year adjusted gross margin was 57.6%, reflecting a 60 basis point expansion versus full year 2019.

Next we'll shift to adjusted operating expenses. Adjusted research and development expenses increased to $6.7 million in the fourth quarter of 2020 compared to $4.9 million for the 2019 period. Adjusted R&D expenses finished the full-year period at $19.7 million, 5.4% of revenue compared to $18.8 million spent in the full year 2019 with 2020 spend levels coming in lower than originally planned as we had limited R&D staff on site in Q2 and Q3. Adjusted SG&A expenses for the fourth quarter were $27.2 million compared to $22.2 million for the 2019 period. Adjusted SG&A for the year was $93.4 million compared to $71.8 million for full year 2019, an increase of $21.6 million. The full year spend increase reflects the timing impacts of our 2019 and 2020 acquisitions, investments in personnel to support capacity expansion, and commercial activities and systems and occupancy cost, all in support of realized and expected growth.

Now moving to adjusted earnings and EPS. Adjusted operating income for the fourth quarter was $27.3 million, an increase of $14.6 million or 115% compared to $12.7 million reported in the fourth quarter of 2019. Fourth quarter adjusted operating margin was 25.1%, an expansion of 680 basis points compared to 18.3% in the fourth quarter of 2019. Adjusted operating income for the full year 2020 period was $98.1 million, an increase of $34.5 million or 54% compared to the same 2019 period. Adjusted operating margin for the full year period was 26.8% representing a 330 basis point improvement over the 23.5% reported in the same period for 2019. Full year adjusted operating margin improvements versus the prior-year were driven by strong volume growth, favorable product mix, operating expense leverage and strong overall operational execution by the business. Fourth quarter adjusted net income was $28.7 million representing an increase of $17.8 million compared to the fourth quarter of 2019. Full year adjusted net income was $89.1 million compared to $52.5 million for the 2019 period, representing an increase of $36.6 million or 70%. In addition to our strong revenue growth and operational performance, adjusted net income also benefited from a low adjusted income tax rate of 8.6% for the year related to the combined impact of incentive stock transactions and one-time benefits from US tax reform changes related to our US owned foreign operations. Adjusted EPS increased to $0.52 per fully diluted share in the fourth quarter of 2020 compared to $0.20 in the fourth quarter of 2019, an increase of $0.32. For full year 2020, adjusted EPS was $1.65 per fully diluted share, an increase of 55% compared to $1.70 for the 2019 full year.

Our cash and cash equivalents, which are GAAP metrics totaled $717 million at December 31, 2020, an increase of $189 million compared to year-end 2019. Our year-end cash position includes the effects of closing our three second half 2020 acquisitions and an increase of nearly $298 million from our follow-on equity raised closed on December 10, 2020. For full year 2020, we generated free cash flow of $36.3 million inclusive of $62.6 million of operating cash flow, less $26.3 million of capital expenditures, most significantly related to our facility and capacity expansion projects and IT systems investments.

Now we'll transition to our 2021 full-year guidance. Our GAAP to non-GAAP reconciliations for our 2021 financial guidance are included in the reconciliation tables in today's earnings press release. As previously mentioned, unless otherwise noted, all 21 -- 2021 guidance, excuse me, discussed will be non-GAAP. Please also keep in mind that our 2021 guidance may be impacted by fluctuations in foreign exchange rates beyond our current projection of a nominal impact on full-year sales, and does not include the potential impact of any future acquisitions that the company may pursue. In recognition of the continued strength of the overall bioprocessing market including estimates of revenues from COVID vaccines and therapeutics that are in development and commercialization. We are setting our 2021 full year revenue guidance, a GAAP metric at $500 million to $525 million, reflecting growth in the range of 37% to 43% as reported and 26% to 33% on an organic basis.

Our adjusted gross margin guidance for 2021 is 57% to 58%. We expect adjusted operating income to be in the range of $134 million to $140 million with adjusted operating margins in the range of 26% to 27% of revenue for the year. Adjusted other income and expense is expected to be $1 million of expense relating to cash interest expense from our convertible notes. We are expecting our 2021 adjusted income tax expense to be approximately 20% of adjusted pre-tax income. We are expecting full year 2021 adjusted net income to be in the range of $106 million to $111 million, and adjusted EPS to be in the range of $1.86 to $1.94 per fully diluted share. Our adjusted EPS guidance reflects an estimated 57.1 million fully diluted shares outstanding for the full year, an increase of approximately 3.2 million shares.

Adjusted EBITDA is expected to be in the range of $153 million to $59 million for 2021, with depreciation and intangible amortization expenses expected to be approximately $19.3 million and $24 million respectively. The company expects to invest $55 to $60 million into capital expenditures in 2021, inclusive of key capacity expansion initiatives for our filtration, chromatography and proteins portfolios, as well as continued SAP system implementation investments. We expect year-end cash and cash equivalents, a GAAP metric, to be in the range of $740 million to $760 million, with our capex investments being fully funded by cash generation from our operations. This completes our financial report and our guidance update and I will now turn the call back to the operator to open the lines for questions.

Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Dan Arias with Stifel. Please go ahead.

Dan Arias -- Stifel -- Analyst

Good morning, guys, thanks for the questions. Tony, I wanted to start with the guide for the year. if I back out $95 million or so from COVID related revenues from the outlook, it kind of looks like you're more or less guiding to non-COVID growth that's on par with what you saw in 2020 and maybe a point higher but same ballpark. That seems like a pretty reasonable way to start things off, so can you just maybe talk to the puts and the takes that go into that view versus what you saw last year? Are there market or product areas where you think you see something a little bit different than in 2020 or is the idea that you kind of probably see a continuation of the trends in the things that drove the non-COVID growth last year.

Tony Hunt -- President and Chief Executive Officer

Yeah. So if you -- I think really it's almost like down, looking at it over the last couple of years, I think we've traditionally been in that 10% to 15% organic growth range. This is even before COVID. But we're clearly getting increased traction for our products in the marketplace. We've done a nice job on the gene therapy side and I think we are moving into that kind of the 15% to 20% organic growth for the company and for the foreseeable future. Just based on what we see right now. And then you layer on COVID on top of that and clearly -- I think having the right portfolio of products and the right relationships with many of the COVID vaccine developers put us in a good position in 2020 and that's kind of carried over here into 2021. So I think you're right, we're right in that 15% to 20% sweet spot. I do think that there is a bit of a trade-off that goes on that I'm sure every other bioprocessing company will tell you is that there is a huge demand for capacity at the CDMO level. So CDMOs that are doing COVID related work, there is always going to be a trade-off. Right? So other projects and programs will get delayed slightly. So for us right now, we think we're in that 15% to 20% organic growth for non-COVID, and then the COVID revenue in that $90 million to $100 million range. And obviously that's an incremental $55 million versus last year.

Dan Arias -- Stifel -- Analyst

Yeah. Okay and then just maybe on new products, because you do have a bunch of those that are in the next year. Do you have a view on the contributions to organic growth, the stuff that's been internally developed over the last, call it nine to 12 months. TFDF, ATF controller, Flow VPE, what are you kind of penciling in for this year, if you have a number? And then specifically for TFDF how is the launch of that product going now that we're a couple of quarters in. How are you feeling about taking share within the depth filtration market. And then if I can just also ask, what is the outlook there for Cell and Gene Therapy. I remember that Oxford biomedical paper last year, kind of making it seem like that could prime the pump for that product in that area. Thanks a bunch.

Tony Hunt -- President and Chief Executive Officer

Yes. So I'll start with TFDF. Obviously this will be the second full year that we've got -- we've put TFDF in the market. We started off with the Cho strategy that continues to be probably the primary driver of growth right now. So we've got many evaluations that have gone on, very successful, like all products, though, and I think we've said this a year ago. We expect -- it's a business that we expect will double every year for the next few years. And we had set a target of a couple of million dollars for TFDF last year, we beat that. We are in that $2 million to $3 million in revenue. We expect it will double this year adding in the gene therapy piece of the Oxford paper that you referenced. Yeah, it has resulted in additional evaluations going on and we expect that that's going to be another catalyst and another application area for TFDF technology. So I think all of that is very positive. I think if you start to look at it purely from what are we factoring into our organic growth this year coming from new products, it's [Inaudible] down. It's not much more than that.

Operator

Our next question comes from Tycho Peterson with JP Morgan. Please go ahead.

Unidentified Participant

Hi, good morning, this is Julia on for Tycho. Thanks for taking our question. So starting with the vaccine tailwind that you guided to. Obviously, it's been up from a previous range of 50 to 70. I'm just wondering if you could elaborate on what kind of factors are driving the change. Is it just scale up with your existing customers? Is it perhaps the new COVID variant speeding up development of next-generation vaccines, or is it like incremental contribution from the new ligand or the NextGen Flow VPE that you [Indecipherable] earlier.

Tony Hunt -- President and Chief Executive Officer

Yeah, it's essentially just increased demand for those vaccines and therapeutics that we're involved in. And as we went through, Jon pointed out, when you look at our Q4 performance, the 75% of the beat came from COVID, that came from increased demand from the vaccine developers, from the therapeutic companies that we're working with. And that's what's really driving the increase again here in 2021. We have more visibility, Julia, now to what's required in 2021 versus three months ago or six months ago. And we will see as we go through the year, how that plays out. But I can say there is very little that is around next generation vaccines or therapeutics, it's really the processes and opportunities that we're in today.

Unidentified Participant

Got it. And then regarding your product level guidance for 2021, I'm just curious because obviously the filtration guidance is significantly stronger than for the other product segment. So just wondering what really is allowing filtration to benefit that much more significantly from COVID vaccine therapeutics. And then separately for the Protein outlook, obviously very strong outlook for 2021. But I also remember that the prior adaptation for the Cytiva contract was by the end of this year. So, has that been extended out or how should we think about that the [Indecipherable] expectation?

Jon Snodgres -- Chief Financial Officer

Sure. On the filtration front, if you think through some of the comments we made already this morning, 60% of our COVID revenue in 2020 came from filtration. So if you also look at what we have in our filtration portfolio, it's the biggest portfolio of products that we have. If you look at chromatography as a sort of an example, the main driver in chromatography is our pre-packed columns OPUS. If you look at filtration, we have hollow fiber technology, we have flat sheet technology, we have systems, we have the fluid management ProConnex product line, we've got new products coming in from ARTeSYN, and EMT, NMS. So it's just a bigger portfolio, Julia, and as I said, we've benefited on the COVID front from our filtration portfolio. We are obviously selling our OPUS pre-packed columns into those applications as well and we're selling our Solo and Flow VPE technology into those applications, but there is a lot more shots at goal because of the depth and breadth of our filtration portfolio and that's really the reason why it's growing faster than the other product lines.

On your proteins question, yeah, I know we've said that our goal is by the end of this year to work with Cytiva to extend our contracts. We continue to have those discussions and we'll update you guys us as we move through the year.

Unidentified Participant

Got it. Thank you.

Operator

Our next question comes from Paul Knight with KeyBanc. Please go ahead.

Paul Knight -- KeyBanc -- Analyst

Hi, Tony. On the hollow fiber filtration technology, is that an alternative to Protein A or is the technology there yet?

Tony Hunt -- President and Chief Executive Officer

Yes, on the hollow fiber side, Paul, it's really the main application is downstream. It would be after the protein-A step. So it's more like a diafiltration, ultrafiltration type application. So they are connected, but they're not replacements for each other.

Paul Knight -- KeyBanc -- Analyst

Right. And then what do you worry about this year, are you getting enough raw material supply, polymers, et cetera?

Tony Hunt -- President and Chief Executive Officer

Yeah, I would say if you speak to the bioprocessing industry, everybody is hiring as fast as we can, we're all trying to build out a excess extra capacity. Everybody has got pretty strong order books and it's really around execution.

Paul Knight -- KeyBanc -- Analyst

Right. And then lastly, do you think customers are building for the equivalent amount of vaccine production in 2022 or can you even tell?

Tony Hunt -- President and Chief Executive Officer

Based on what we see right now, I would say that what they're building is what's required and every company is trying to produce more. And I think that's part of the increase we saw in Q4, and obviously I think it's a big part of the guidance that we're putting out today is -- but I don't think it's 2022. I think it's all 2021.

Paul Knight -- KeyBanc -- Analyst

Right. Okay, thanks.

Tony Hunt -- President and Chief Executive Officer

Thanks, Paul.

Operator

Our next question comes from Jacob Johnson with Stephens. Please go ahead.

Jacob Johnson -- Stephens -- Analyst

Hey, thanks. In terms of the COVID orders you're receiving right now, how much visibility do you have today for full year 2021 demand? It sounds like guidance assumes these revenues are maybe heavier in the first half of the year. If we see customers continue to manufacture in the second half of the year, would that be additive to your outlook and I guess how should we think about the cadence of COVID related revenues in 2021?

Tony Hunt -- President and Chief Executive Officer

Yeah it's definitely some accounts we have visibility for the full year. But orders placed for the first half of the year, others we have visibility through the first half of the year. Our guidance is based on where we see 2021 playing out, especially on the COVID side, but we don't have full visibility, Jacob, to what's going to be required by various companies that we're working with. We have a good sense. We have definitely got orders from some of the companies that go out through Q4. Others we have orders that are in the first and second quarter.

Jacob Johnson -- Stephens -- Analyst

Got it. That's helpful. and then it looks like the Defense Production Act worked to secure a variety of inputs for vaccines. That actually included tangential flow filtration products. Can you just talk about demand for those products relative to your capacity right now, and if you're having to prioritize these products for vaccine customers?

Tony Hunt -- President and Chief Executive Officer

Yeah. Look, I don't think we're any different than anyone else in the industry. We're all trying to prioritize COVID vaccines and therapeutics, and at the same time trying to balance getting product to all the other customers that we have. So that's really the challenge that everybody is facing in the industry. So it's a balancing act. The demand for COVID is based -- vaccines and therapeutics and whether it's TFF or its chromatography resins or it's pre-packed columns, or whatever the product line is, there is a real strong demand right now. And everybody is trying to prioritize the COVID customers as high as we can. But at the same time still trying to provide to all the other customers that we have in our portfolio and Company.

Jacob Johnson -- Stephens -- Analyst

Got it. Thanks for taking the questions, Tony.

Operator

Our next question comes from Matt Hewitt with Craig-Hallum Capital Group. Please go ahead.

Matt Hewitt -- Craig Hallum -- Analyst

Good morning, congratulations on fantastic year. Just a couple from me. First off, once you finish integrating the ARTeSYN system, we should start to see some pull-through for chromatography and some of the other products in the portfolio. Has that been baked into guidance or would that represent upside? The pull-through.

Tony Hunt -- President and Chief Executive Officer

Yeah, yeah, the pull-through, probably not baked into any of the guidance. But when we look at our -- we, just like every deal we've done over the last six, seven years, year one, which is really this year is all around building out the infrastructure. So we need to build out the commercial team for systems. The good news is that because we sell hollow fiber systems, we do have a very strong team of folks that are out in the field that are specialists on system. So we just need to expand that group and build it out. At the end of the day, we're -- we have set some targets for ourselves. The revenue synergies pull through really won't start to kick in until 2022. So this year is around getting all the foundational pieces right, making sure we have the right funnel of opportunities, make sure everybody is trained, make sure the customers that ARTeSYN has spent many years nurturing and developing that they're taken care of, and we just expand that overall customer base. So that's the goal. And yeah, I think it will be 2022 before we start to see kind of pull-through opportunities.

Matt Hewitt -- Craig Hallum -- Analyst

Okay, great. And then regarding Flow VPE, I think you mentioned in your prepared remarks, you're up to 20 clinical evaluations now. How -- maybe walk through the ramp there. What did that look like maybe in Q3, and then what does that -- I don't know if it's -- not necessary order book, but how are the discussions ramping up, I mean are you adding 10 to 20 a quarter, or just maybe help us directionally think about that business. Thank you.

Tony Hunt -- President and Chief Executive Officer

Yeah so Flow VPE is something that I'm a huge fan of. And I just think that -- and this goes back to even my own role in the 1990s that companies like Perseptive Biosystems, there is a real need for in-line process monitoring, and Flow VPE solves a major problem that's out in the marketplace, which is can you measure antibodies proteins nucleic acid at very high concentrations without having to do any dilutions. And that's what Flow brings to the table and you get those results in seconds. So I think as we've increased our team, right, in terms of commercial and applications people, we've got a dedicated team focused on Flow. They continue to have technical discussions with big players in our industry about implementing a technology like this and I think where we were 12 months ago versus where we are today is night and day. Right. I think there is a lot more customers who absolutely see the value. They will go through evaluations at the process development level and eventually they start to move into the clinical sort of manufacturing arena. So we expect that the business will ramp this year, but I would say 2022, 2023, 2024 is where we are going to start to see a lot more Flow VPE especially the next-gen version of the technology being put into the manufacturing and going all the way through to commercial manufacturing of drugs.

Matt Hewitt -- Craig Hallum -- Analyst

Got it. All right, thank you very much.

Operator

Our next question comes from Puneet Souda with SVB Leerink. Please go ahead.

Puneet Souda -- SVB Leerink -- Analyst

Hey, thanks, Tony. So my first question is on -- and I don't know if this was covered before, but in terms of gene therapy, what are you seeing, obviously a strong growth there. And wondering what you're baking in for the full year here in the guidance.

Tony Hunt -- President and Chief Executive Officer

Yeah. So probably a similar year again, I think there's a little -- when we look at the gene therapy customer base for us in 2020, there was a significant number of companies that are actually working on COVID based viral vector drugs. So we excluded those in terms of our calculation. So we're around that 30% mark. We expect we will be in that 25% to 30% growth. Again, there will be some trade-offs. But we really, really like the portfolio of products that we have. Our customers really see the value and we're going to continue to focus in this area like many players in bioprocessing. We see this as one of the growth drivers for the foreseeable future. So yes, it will be in that 25% to 30% range is our guess right now.

Puneet Souda -- SVB Leerink -- Analyst

Okay, that's great. And then if I could ask on capital deployment. I mean, you obviously have been very active here ARTeSYN, EMT, other acquisitions that you've made. As you look at the current landscape, Tony, valuations wise and overall the demand in the market, what are you seeing out there and just help us understand if anything has changed in your strategy in terms of acquisitions and inorganic growth as well as if you -- if John could talk about the capital deployment broadly, that would be great too.

Tony Hunt -- President and Chief Executive Officer

Yeah, so on the M&A front, nothing has really changed in the sense that the strategy we deployed over the last four or five years is the strategy we're going to deploy over the next four or five years. It's highly competitive as you know. Everybody is looking for technology assets. So it's maybe a little different than three, four, five years ago when you might be competing with one other company when you look at potential targets. But there is a lot of banker activity out there, there are a lot of technologies that are available. We'll continue to select the targets that we think make the most sense for Repligen. So I don't think the pace is going to be any different, Puneet, I don't think -- I think we've got a good strategy. We have a strategy for each of our divisions. And so each of those divisional strategies have an M&A element to it. And as we see targets or opportunities to execute, we'll go ahead and execute. And obviously being able to do capital raise back in December puts us in a pretty good position from a cash perspective. John?

Jon Snodgres -- Chief Financial Officer

I can talk to capital deployment. So Puneet, we finished the year with about $717 million in cash, puts us in a really nice position. Obviously, we're going to continue to look at M&A opportunities, and opportunistically continue to work on those things. The other things that we're doing this year with capital, obviously we're reinvesting quite a bit in the business to build out capacity. And across all of our filtration franchises, systems, even in proteins, we're looking at opportunities to expand capacity both from a footprint and equipment perspective, but also from headcount perspective and we're adding headcount pretty quickly. And then I think the third thing that we're putting an emphasis on is, obviously we want to make sure our part of the supply chain is not being disruptive to our customers. So we are making investments in working capital, in areas like that, like inventory as well. So you should continue to see that -- those strategies be active throughout 2021, and obviously we'll continue to relook at things as we get into '20 -- through the year 2021 and into 2022 about what we need for the future, just to support obviously the current growth we're seeing but also the future growth that we expect.

Puneet Souda -- SVB Leerink -- Analyst

That's very helpful. And last one if I could just, Tony, ask on the Navigo protein that you launched, the affinity resin that was launched recently. What's the expectation there. Obviously these vaccines productions have already started. So could you just give a sense of how they get plugged into the current productions and what's your expectation for that product this year?

Tony Hunt -- President and Chief Executive Officer

Yeah. So we have not built a lot of revenue in for the spike resin and it's not like we're not excited about being able to develop and bring that to market. But you're right, I mean, anyone who is in a commercial process, it's going to be challenging for them to go ahead and swap out. So I think it's really going to be around next generation vaccines. And just for everybody on the call, this particular resin does not work with mRNA based vaccines or viral vector based vaccines, so based on protein, protein based vaccines such as spike protein. So it binds the spike protein. So that's the target, so the subset of vaccine manufacturers is smaller than the total set that's out there.

Puneet Souda -- SVB Leerink -- Analyst

Okay, that's great. And great to see what you're doing here for the vaccines. I appreciate it. Thanks guys.

Tony Hunt -- President and Chief Executive Officer

Yeah, thanks, Puneet.

Operator

Our next question comes from Brandon Couillard with Jefferies. Please go ahead.

Brandon Couillard -- Jefferies -- Analyst

Good morning. Tony, in terms of the gene therapy customer base and the recent unexpected growth from the other market. I'm curious if you're able to characterize the contribution from new accounts, as opposed to existing customers to whom you're selling more products into and maybe taking a greater percentage of wallet share. And really of that, call it 75 kind of core customers. If we look at maybe like the top 10 or 15, are they buying a fraction of the portfolio or they kind of buying sort of the full suite of products.

Tony Hunt -- President and Chief Executive Officer

Yeah. A great question. I would say that it's definitely a subset of the portfolio. So we've a -- I would say that our ATF technology, pre-packed columns, hollow fiber technology system. So it's probably at least half our portfolio is definitely selling into these accounts. And especially the bigger accounts, they're buying and utilizing multiple products in our portfolio. I don't have the exact breakdown on new account contribution, but my just recollection is you're going to have every year accounts that were let's say in that top 75 significant accounts in let's say 2021, probably some of those will move out and they may be slower in our let's say last year 2020. In 2021 they may slow down, some of them might slow down, but you'll see others coming in. I think what's really encouraging Brandon is the fact that we were adding that 10 to 15 new accounts per quarter last year. The contribution from those accounts is going to be pretty small in terms of revenue in 2020, but they will start to pick up here in 2021. Those accounts -- some of those will definitely move into our top 75 or top 100 as we go through the year. And I think, to me it's a little bit like just build the funnel because I think if we build the funnel then we have more shots at Gold and we'll continue to see the growth in this part of the market for Repligen. So, really encouraged. I think, a year ago we had probably 50 significant accounts. Now we have 75. So I think we're headed in the right direction.

Brandon Couillard -- Jefferies -- Analyst

That's very helpful. And then just one more on the COVID side. In terms of the revenue contribution, could you talk about the breakdown between the COVID vaccines as opposed to lab [Phonetic] based therapeutics and if that makes us any difference between last year and '21.

Tony Hunt -- President and Chief Executive Officer

No, I think it's about. I don't think there's any real difference in 2021 versus 2020 on a percentage basis. The vast majority of our COVID revenue is coming from vaccines.

Brandon Couillard -- Jefferies -- Analyst

Got you. Thank you.

Operator

[Operator Instructions] Our next question comes from Raghuram Selvaraju with H.C. Wainwright. Please go ahead.

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

Thanks so much for taking my questions. And really impressed with all the solid performance over the course of 2020 during a really challenging and disruptive time for most people, which doesn't seem to have broken your stride at all. Wanted to ask two things. Firstly, regarding the vaccines. Can you give us a sense of which types of vaccines in particular you're most likely to have your technology be applicable to. If you can maybe cite specific products that would be very helpful, but I understand if you're not in a position to do that. And if you can also talk through a little bit about the sustainability of these revenues given all the discussion around how COVID-9 is going to be an endemic problem, the emergence of these new coronavirus variants which appear to indicate that vaccines for COVID-19 are going to be part of the landscape for a very, very long time. And then I had a follow-up on the gene therapy side of the business. Thanks.

Tony Hunt -- President and Chief Executive Officer

Yeah. On the COVID front, we haven't come out and said, oh, we're in vaccine X and Y, but I think when you go back and look at what I said in my prepared remarks, we're in the majority of the late stage in commercial processes. So we are definitely working with viral vectors and mRNA and protein based vaccine manufacturers. And our -- all our products if you think about it, anyone who is working on viral vectors, all the work we've done in the gene therapy space that those technologies work just as well if it's viral vector that's in gene therapy or viral vector that's going into the vaccine. On mRNA, we've been working on the mRNA front for a number of years. Again, majority of what we're doing there is probably filtration-based and pre-packed columns. And then on the protein side, we're working on -- with companies on that as well. And again, it goes across the Board in terms of products, whether it's our products in our filtration portfolio, in our pre-packed columns, and down the road hopefully the spike resin will be something that will be used for next generation vaccines.

In terms of where -- though the frequency of vaccination, it feels like a bit of a roller coaster over the last nine months. I think six, nine months ago, everybody was like going, well, maybe it's a shot every two to three years. Some people were thinking every five years. Now everybody is thinking it's every year. I just don't think we know. And what we're doing right now is just focused on 2021 on the execution that needs to happen to support the customers that have asked us to work with them, who have basically adopted our technologies. At the same time trying to also to get the products out to all our other customers in our -- on our list. So that's really our focus where it plays out Ram on the frequency of vaccinations and whether we'll will have additional vaccines for variants and whether that will be an annual shot or every 2 years. I just don't know right now, I don't think anyone really knows and we'll see how that plays out as we go through 2021.

Jon Snodgres -- Chief Financial Officer

Ram, I'd just add on that, on the capacity side. We're taking a longer-term view of that, but certainly we don't know how that's going to evolve in terms of the recurrences of vaccines coming through.

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

Okay and then just very quickly on the gene therapy side of the business. I was wondering if you could give us a little bit more color on your sales and marketing process as you reach out to potential new gene therapy customers, and what is the principal thrust of the sales argument for potential gene therapy entrants, gene therapy companies to utilize Repligen systems, Repligen suite of applicable products? Thanks.

Tony Hunt -- President and Chief Executive Officer

Yeah, and the world has changed in the last 12 months. So a lot of what we're doing now is virtual, right? So a lot of the marketing is digital marketing. So we are focused on technology seminars to get initial interest in place and then that's followed up a lot with applications based work by our field applications team. And once all that's done then that results in a decision at the customer level, whether a technology that Repligen has outperforms the technology that comes from one of the other bioprocessing players or we solve a problem that hasn't been addressed before. I think for us, we're focused on improving the overall efficiency of a process and improving overall yield. So if we can -- if we stay focused on those two things, then it allows us to have really good conversations with customers, but 90% of what goes on in our industry comes up -- comes down to a bake-off. In other words, a technical evaluation and the decision based on data. So that's really how we play. That's how we win. And I think we're happy with the portfolio of products that we have.

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

Thank you so much.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Tony Hunt for any closing remarks.

Tony Hunt -- President and Chief Executive Officer

I just want to thank everybody for joining us today. Obviously 2020 was an outstanding year for the company. Clearly, we have set some high expectations for ourselves for 2021, and look forward to jumping back on a call in May and bringing you guys up to speed on where we're at. So thanks for joining.

Operator

[Operator Closing Remarks]

Duration: 62 minutes

Call participants:

Sondra Newman -- Head of Investor Relations

Tony Hunt -- President and Chief Executive Officer

Jon Snodgres -- Chief Financial Officer

Dan Arias -- Stifel -- Analyst

Unidentified Participant

Paul Knight -- KeyBanc -- Analyst

Jacob Johnson -- Stephens -- Analyst

Matt Hewitt -- Craig Hallum -- Analyst

Puneet Souda -- SVB Leerink -- Analyst

Brandon Couillard -- Jefferies -- Analyst

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

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