Shares of Repligen (RGEN -4.48%) rose nearly 34% in the first half of 2020, according to data provided by S&P Global Market Intelligence. That easily bested the 4% decline of the S&P 500 in what has been a volatile six months for investors.
The bioprocess leader designs and manufactures equipment and tools required to produce biological drugs including monoclonal antibodies, gene therapies, and cell therapies. While the coronavirus pandemic has forced uncertainty onto many businesses, the company's unique niche has allowed it to buck broader trends and continue on its impressive growth trajectory. Although it trades at a relative premium, the growth stock should be able to grow into its frothy valuation and continue setting new highs.
In the first quarter of 2020, Repligen generated $76 million in revenue -- a record -- at a healthy 58% gross margin. The business reported $11.9 million in operating income and just shy of $10 million in net income for the period.
More impressive is the fact that the bioprocess leader maintained initial full-year 2020 guidance even after the coronavirus pandemic emerged as a global headwind for economic growth. Repligen acknowledged the uncertainty of the current environment but doesn't expect it to have a significant negative impact on operations.
That came as a relief to investors wondering if clinical trials delayed by the pandemic would exert downward pressure on the business. In 2019, Repligen generated 65% of total revenue from clinical trials. But the industrywide delays are expected to be more than offset by the increased use of Repligen's products as companies across the globe sprint to develop potential treatments and vaccines for COVID-19.
If the coronavirus pandemic doesn't significantly alter the company's growth trajectory, individual investors can expect that resilience to be rewarded with a premium valuation as the health crisis and economic turmoil drag on. Those with a long-term mindset can find additional relief in that resilience, as Repligen expects to generate at least $500 million in total revenue by 2023. Considering the business generated full-year 2019 revenue of $270 million, management obviously sees a clear path to growth.