Hardly a week passes where we don't learn of some cutting-edge research that helps us better understand our bodies and how to harness them to combat disease. The revolutionary vaccines for COVID-19 have primed society to appreciate those breakthroughs -- and they keep coming.

One unsung hero in the effort is a small company helping facilitate the production of cell and gene therapies called BioLife Solutions (NASDAQ:BLFS). The company is growing quickly and could be a diversified way to profit from amazing discoveries happening in the world of scientific research. That's because it isn't developing its own drugs -- it's helping others do it.

A lab worker retrieves a sample from an ultra-low temperature storage unit.

Image source: Getty Images.

Handling living material used in drug making is a growing business

Biotechnology is the use of molecular biology and living organisms to create products -- mostly therapies. That material must be kept alive not only during research, but also as it's manufactured, stored, and shipped. That's where BioLife Solutions comes in.

It creates, builds, and sells tools for bioproduction to the cell and gene therapy (CGT) industry. The company provides cell-processing equipment, freezers, thawers, and solutions for managing the storage and shipping of perishable material.

Business has been good. During the first half of 2021, revenue grew to $48 million. Management is calling for up to $117 million for the full year. That would be 375% more than the year before the pandemic and 118% above 2020.

Its customers include some high-profile gene-editing names like Editas Medicine and Intellia Therapeutics, as well as Moderna's manufacturing partner Lonza, and biopharma giant Novartis.

It's pieced together an end-to-end solution through acquisitions

BioLife Solutions has capitalized on a fragmented industry by acquiring bioproduction tools and service companies. The strategy has turned it into a trusted supplier to CGT customers. In making acquisitions, it targets companies that will be accretive to earnings within two years and have management teams that are willing to stay in place after the deal.

In March, it bought ultra-low-temperature freezer manufacturer Stirling Ultracold. It was an all-stock deal that cost the company about $235 million in equity.

This was the fifth such acquisition in the last few years. Others include a small maker of thawing equipment, a maker of cloud-connected shipping containers, and makers of storage equipment like liquid nitrogen freezers. It's a specialized industry where a large catalogue should be an advantage.

Lots of growth on the horizon for supplying the biotech industry

Offering products across the entire value chain should help increase BioLife's competitiveness. After all, companies like finding suppliers that can meet many of their needs in one transaction. Beyond market share, there's plenty of room for growth as it integrates those acquisitions.

BioLife believes the addressable market for its offerings will add up to roughly $14 billion by 2025. By then, management is aiming for more than $250 million in revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins of at least 30%. That doesn't factor in any acquisitions or the approval of its customers' drug candidates.

To deliver value for shareholders, the company will have to start demonstrating that the larger portfolio allows it to better control expenses and produce higher margins. It's still unclear if it can achieve that. Acquisition expenses and accounting adjustments have clouded the view of what the business' steady-state profitability truly is.

That said, it's a high-demand industry with technical products and a clear path for a lot of growth. If BioLife Solutions can get it right, it could easily be many times larger than it is right now in only a few years. It's mostly about execution, as industry tailwinds are strongly at its back.

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