What happened
Shares of Cryoport (CYRX 2.18%) were down more than 24% by 11 a.m. on Thursday after the company announced preliminary second-quarter earnings. The stock is down more than 16% so far this year.
So what
Cryoport supplies temperature-controlled supply chain solutions for life sciences companies. The healthcare company released preliminary second-quarter results after the markets closed on Wednesday, saying it expected a drop in quarterly revenue and annual revenue, thanks to a slowdown in orders from cell- and gene-therapy companies.
Cryoport said it expected quarterly revenue to be between $56.5 million and $57.5 million, meaning a drop of 11% year over year at the midpoint. The company also said it expected 2023 revenue to be between $233 million and $243 million, compared to $237.3 million in 2022, and well down from earlier guidance of between $270 million and $290 million.
Now what
The company isn't profitable. In the first quarter, it reported that it lost $5.6 million and had $522.6 million in cash. However, the long-term outlook for the company is solid considering the growing need for its services to support global clinical trials, an increasing number of commercial cell and gene therapy products, the expansion of cell and gene manufacturing capacity to meet patient demand, and the demand for biostorage and cryogenic freezer systems.
"Based on our conversations with clients and third-party sources, we expect life sciences fundamentals to remain strong for the longer term," said CEO Jerrell Shelton. "Unfortunately, there has been a global slowdown in capital equipment investment. The impact of this unexpected slowdown was further exacerbated by a number of clinical trial start delays and several key customers falling short of their forecasts for the revenue ramp of certain cell and gene therapies. We expect some of these challenging conditions to persist into the third and fourth quarters of 2023."
