What happened

Shares of Repligen (NASDAQ:RGEN) gained nearly 63% in the first six months of 2019, according to data provided by S&P Global Market Intelligence. The surging stock price was driven by continued business momentum, as witnessed in solid full-year 2018 and first-quarter 2019 operating results. A recent acquisition has also added to the excitement.

The solid first-half performance builds upon the 45.4% gain shares delivered in 2018. Repligen stock has now gained 208% in the last three years. Considering revenue and operating income are growing at double-digit clips, investors can have reasonable confidence that the stock, although trading at a premium, might be able to keep trekking higher.

A hand picking up the last column on a chart to make it rise above the rest.

Image source: Getty Images.

So what

Repligen specializes in bioprocess products used to safely and efficiently manufacture biologic drugs, such as monoclonal antibodies and gene therapies, whether they're in clinical trials or have been approved by regulators. The business has been humming along for the last five years or so thanks to a slew of acquisitions and increasing demand for its products. That trend not only continued in the first half of 2019 but actually accelerated.

The company reported revenue of $60.6 million and gross profit of $33.8 million in Q1 2019, which both marked a 35% increase from the year-ago period. Operating income surged 87% year over year, and net income soared 128% on the same basis. That strong showing prompted management to increase its full-year 2019 financial guidance for revenue, operating income, net income, and adjusted earnings per share (EPS).

Now what

There are no signs Repligen's growth will come to a halt anytime soon. Consider that there are currently 13 monoclonal antibody drugs approved for use in the United States, but 40% of those have launched since 2016. Moreover, there are more than 400 such drug candidates in development today. That doesn't even consider the company's recent acquisitions positioning it to one day provide bioprocess solutions for gene therapies and immunotherapies, which add several hundred more clinical programs to the company's pipeline. That likely explains why the stock trades at a hefty premium, but at least so far, operations have always made up the difference in valuation in time.

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