Harvard Bioscience, a name synonymous with prestigious labs and groundbreaking research, might be flying under the radar of many investors. However, their recent Q1 2024 earnings call hints at a potential growth explosion. While initial figures suggest a "tough start" to the year, a deeper analysis reveals a deliberate strategy that could propel Harvard Bioscience to outperform the market.

The key to this potential surge? A laser focus on high-growth niche markets like bioproduction and organoids. These are not mere buzzwords but represent the vanguard of life science research with immense commercial potential. Harvard Bioscience, leveraging its established reputation in academic research and unique product portfolio, is strategically positioning itself as the "Intel Inside" of these burgeoning fields.

CEO Jim Green didn't hold back during the earnings call, emphasizing bioproduction and organoids as "exciting new opportunities for high growth, well above our base business." This isn't just corporate optimism. Harvard Bioscience has already assembled dedicated commercial and application science teams, focusing on these specific areas. They've even repurposed their clinical amino acid analyzer, a product already utilized in leading labs worldwide, for bioproduction quality control.

""Bioproduction and organoids provide exciting new opportunities for high growth, well above our base business. As such, we've established commercial and application science team dedicated to bioproduction and to advance cellular applications with emerging organoids." - Jim Green, CEO, Harvard Bioscience"

This strategic shift is a calculated gamble with the potential for significant returns. Let's examine the numbers. Currently, bioproduction and related products, together with electroporation, account for approximately 10% of Harvard Bioscience's revenue. Green anticipates this segment to grow by a "point or two" in the coming year, accelerating to 2-4 percentage points in subsequent years. While seemingly modest, these figures are substantial when considering the company's overall revenue target of remaining "roughly flat to 2023." If bioproduction meets its projected growth, it could become the primary engine of revenue expansion, counteracting the current challenges in China and other markets.

The organoid market presents an even more compelling case. With its historical leadership in advanced cellular applications, Harvard Bioscience aims to secure a significant market share with its recently launched Mesh MEA Organoid Platform. Green is confident in the platform's ability to "drive high volume growth" in both biopharma and CRO sectors, predicting a "dramatic" growth trajectory of "north of 30%."

Projected Revenue Growth from Bioproduction and Organoids

The following chart illustrates the potential revenue contribution from these high-growth segments over the next few years.

Production limitations currently restrict the widespread commercialization of the Mesh MEA Organoid Platform. However, Harvard Bioscience is carefully choosing key academic and commercial partners to advance specific applications. This measured approach allows them to refine the technology while simultaneously building a solid foundation of early adopters, who will, in turn, propel further growth and adoption.

This strategic emphasis on high-growth niches is bolstered by a commitment to strengthening the company's core "bread-and-butter base business," which constitutes approximately 85% of its total revenue. Green aims to achieve "better-than-market growth" in this segment by investing in new product introductions like the SoHo shared housing telemetry and the VivaMARS high-capacity behavioral testing system. By fortifying its core while simultaneously venturing into high-growth areas, Harvard Bioscience is effectively deploying a dual-engine growth strategy.

While analysts seem fixated on the company's slow start to the year and the persistent challenges in the Chinese market, the potential of bioproduction and organoids to drive substantial future growth appears largely overlooked. Harvard Bioscience is not simply riding the wave of emerging trends; it is actively shaping them, positioning itself as a key player in these high-value, rapidly expanding markets.

"Fun Fact: Established in 1901, Harvard Bioscience has witnessed and contributed to scientific innovation for over a century. The company has evolved from its humble beginnings as a supplier of frog muscle preparations for physiology experiments to a global frontrunner in life science tools. This enduring history of adaptation and innovation bodes well for its capacity to navigate current market dynamics and capitalize on emerging opportunities."