Q1 2020 Earnings Call
Excuse me, ladies and gentlemen, this is your conference operator.
For Ensco scheduled to begin momentarily until that time your lunch I once again be placed kind of musical. Thank you for your patience and please do not disconnect.
[music].
20 operating results conference call.
At this time, all participants are any listen only mode. After the speakers presentation, there will be a question and answer session.
A question during recession, you wanting to press star one on your telephone.
Please be advised that today's conference is being recorded if you require any further assistance. Please press star zero I would now like to hand, the conference over to your speaker for today Mr., Doug feral VP of Investor Relations. Thank you Sir Please go ahead.
[laughter]. Thank you very much Catherine joining me on the call today, It's Brad Gray, our president and CEO and Tom Daley our CFO.
This afternoon release, our operating results for the first quarter fiscal year 2020.
[noise] during this call we may make statements that are forward looking including statements about financial projections.
Back to pick up 19 pandemic.
Shifting to future collaboration.
Get your business growth trends and related factors prospects for expanding in penetrating addressable markets, our strategic focus and objectives and the development status and anticipate success recent and planned product offerings.
Forward looking statements are subject to risks and uncertainties many of which are beyond our control, including the risks and uncertainties described from time to time in our FCC filings. Our results may differ materially from those projected and we undertake no obligation to update.
[laughter] later in the call today, Tom will be reviewing our financial results consistent with our most recent earnings release, we have preparedness supplemental to our results bridged the gap selected non-GAAP and adjusted measures, we believe make it easier to interpreting compare our financial results.
Afternoon's press release includes details regarding the definition calculation of these non-GAAP measures reconciliation of non-GAAP measures to the nearest comparable GAAP measure as well as a discussion of the limitations and rationale for using such non-GAAP measures throughout this call financial measures will be gap unless otherwise noted.
In addition to eight analysts and investors and building their models, we posted an exhibit under the financial information tab on our Investor Relations page and includes a presentation of non-GAAP adjusted measures like other financial data for each quarter and the full year 2019, as well as the first work 2020.
In addition, I'd like to remind everybody will be participating in the virtual healthcare conferences at bank of America, and you'd be s. over the next two weeks and look forward to speaking with many of you then so with that let me turn call over to Brad.
Thanks, Doug Good afternoon, and thank you for joining us today.
Everyone remains healthy and productive and these uncertain times I'm proud of how the Nanostring team has rallied to face the coping 19 crisis, we have maintained the momentum in our Geo mix launch despite the near term challenges faced by our encounter business well. The majority of our staff has been working from home effectively over the last few months.
We've been able to continue our onsite research and manufacturing activities and we have avoided implementing any restructuring measures furloughs.
Quickly adapt it to the current environment, using digital and online channels to deepen engagement with our customers they to work from home.
I will start the call today for by providing color under current challenges faced by our research customers and outlining how we were adapting to the current environment. I will then update you on recent progress towards our 2020 strategic objectives before turning the call over to Tom will cover the financials and our outlook.
During Q1, we delivered strong angiomax DSP bookings and revenue growth. Despite the disruptions caused by Cobot 19. In contrast, internal revenue fell short of expectations as customers across Europe, and North America slowed the pace of research beginning in mid March with the majority of our customers transit.
Turning into a temporary work from home mode.
Turning to an independent market research study up more than a thousand institutions by early April fewer than one in five research customers.
Despite themselves as fully operational <unk>.
The widening cobot 19 pandemic impacted both instrument and consumable sales through a slowdown in orders and reduced ability for customers to receive shipments.
Our revenue over the balance of 2020 will largely be determined by the pace at which researchers resumed their work.
Our team is tracking a dashboard of leading indicators that we believe will help us manage the business through this uncertainty metrics. We are tracking include longitudinal surveys of research or sentiment customer lab operational status the volume of calls coming into our own customer helpline uncomfortable request for consumable sales.
Well its walkover 19 disrupted our business in the near term, we expect to full recovery over the long term.
Our instrument sales funnel and other demand indicators for encounter remain healthy interest and Geo mix remains higher than ever.
We're navigating the current challenges with an eye on emerging from the situation and a strong position and poised for growth.
I had in mind I want to provide an update on the fourth strategic objectives that we laid out at the beginning of the year.
Our first strategic objective is to accelerate the a job adoption of genomics DSP and translational research where demand for spatial analysis is being driven by the study of human disease and the search for Biomarkers. During Q1 translational research generated the vast majority agilemax revenue included.
Which included $6.5 million from the shipment of 27 instruments and about $600000 and consumables.
We generated more than 15, new Geo mix system orders in Q1, bringing cumulative orders to more than 105 systems, but she'll much ordering patterns that we saw in Q1 were largely consistent with what we experienced in 2019 with oncology translational research remaining the primary application.
We are closely tracking several important leading indicators of market demand that suggested this momentum will continue.
The first indicator interest in our technology access program or tap, which allows customers to send samples for processing and our Seattle lab, providing a mechanism for customers to test drive genomics and experienced the powerful insights of spatial biology for purchasing an instrument.
Of our cumulative Jianming system sold today, roughly one third of instrument orders have been preceded by a top project, making task order volume a nice leading indicator of she'll mixed demand.
We booked more than 50, new tap projects during the first quarter approximately double the orders of Q1 2019 to date, we've completed need nearly 240 type projects for about 140 unique customers.
Second indicator just a steady stream of peer reviewed publications illustrate the power and productivity of the GM system.
That's the body in publications grows we expect customers to gain confidence to order Geo mix systems without the need to run their own samples through.
So Dave there have been 17 peer reviewed geometry publications with new papers, appearing at a rate that is about double the pays achieved during the launch of the encounter system and similar to the explosion of single cell genomics publications seen as that field developed beginning about five years ago.
In recent weeks there've been several new peer reviewed publications on genomics, including two papers from the laboratory of Dr., David rim, and Gail, but I'd like to highlight.
It's worth noting that these are the second and third Geo mix publications from Dr. rim and his colleagues at Yale and just the last nine months, indicating the tremendous productivity of the Geo mix system.
And is in a study in the nature Journal Laboratory investigation Dr. Rins team demonstrated the potential for Geo mix to quantitatively measure PDL one.
Dr rooms team compared measurements by Geo mix DSP to each FDA approved PDL, one assay and one laboratory developed test. The authors concluded that DS Peters DSP appears to have quantitative potential comparable to these immunohistochemistry assays and then as possible for this technology.
Great to be used as a PDL one protein measurement system for companion diagnostic testing in the future.
In a separate paper published in the journal clinical cancer Research Dr. Rems team identified 12 protein helpers associated with the benefit from single agent PD, one PD one checkpoint blockade confirmation of these findings and additional studies would suggest that future companion diagnostic test to predict.
The outcomes may require measuring markers, especially focusing on more first located in particular tissue compartments or specific cell types.
Other noted that by utilizing an S&P tumor samples with a relatively simple workflow, Jim Geo mix DSP as well suited for this translational diagnostic use.
Many more pump demonstrations of genomics productivity and translational research have not yet been published in peer review literature.
I want to exercise. An example, the cellular therapy pioneer call junes use of Geo mix DSP to study the efficacy of car T in solid tumors.
Dr. June's research will be featured in advancing science or virtual cancer conference sponsored by Nanostring and scheduled for May 19th in Twentyth.
Free for all two two and we encourage you to join.
We already have 2000 registered participants and plan to use the event to further promote genomics use within oncology.
Well all of this commercial and scientific momentum, we feel confident that the leadership of genomics and translational research remained secure.
Our second strategic objective is to expand Geo mix adoption into discovery research with the mid year launch of a next generation sequencing readout capability.
Discovery researchers represent an exciting new community of customers for us and we estimate that by opening up geometry, Ngs read out.
We will expand our addressable markets by approximately 20 fold.
We remain on track to begin enabling ngs readout mid year.
Shipments of the first Ngs enable genomics instruments, along with our 1800 plus gene cancer Transcriptome Atlas expected during the third quarter.
We are aggressively focused on developing this market and our hard work is beginning to pay off.
Since the day GBC meeting in February and for while the Cobot 19 pandemic, we've been educating discovery researchers while they work from home leveraging digital content such as present presentations for more spatial genomic summit.
These online events are generating an enormous customer interest that is driving new sales leads we've had more than 3000, researchers participate and webinars and other events held in March and April indicating that coping 19 has endo way dampened the interest and spatial genomics.
As a result of these successful events ngs related opportunities now account for about one third of the opportunities on our genomics instruments sales model as well as one third of the task orders that we received during the first quarter.
Well the hallmarks of the gentleman its value proposition to discovery researchers is its flexibility to measure any target and any region of any sample.
In the past discovery researchers have been limited to the use of fresh ore fresh frozen samples.
With Geo mix DSP enormous opportunities for great Science opened up an archived S&P samples collected from human patients can be used for discovery research.
A sudden explosion and cobot 19 research presents a compelling illustration of the value across.
The value of flexibility to discovery researchers in order to reduce the risk of working with an infectious pathogens like the virus discovery and translational work on these tissues must be performed on formalin fixed samples.
While other spatial profiling methodologies are significantly challenged by fixed tissues.
As you samples they are what Geo mix was built for.
Over the past weeks, we've been approached by it doesn't research institutions interested in applied genomics Cobot 19 research. Most are affiliated with medical centers and have implemented rapid autopsy programs. So the days. They can secure tissue samples that may be used to gain insight into the entire biology of cobot 19.
From early infection to morbidity.
Summer processing samples via tab, while others plan to use genomic instruments at their sites. These studies include long hard brain colon and kidney tissue from multiple patients who succumbed to covert 19.
These data are generating ultra rapid discovery of key biological insights there are been being written up as case studies for publication.
The Cobot 19 discovery research paradigm require speed precision and the ability to work on SFP samples all nicely matched to the flexibility of Geo mix. We look forward to many more examples of discovery research enabled by Geo mix DSP in the future.
Our third strategic objective is to maintain the momentum our encounter business. This objective is primarily driven by growing our installed base of encounter systems and expanding our portfolio of consumable products. In Q1, we grew our encounter installed base to approximately 880 systems and income.
Piece of 16% compared to a year ago.
While consumable sales fell short of our Q1 target, we're continuing to expand our menu encounter panels to feed increased utilization when researchers resume their work.
For example in recent months, we introduced our tumor signaling Dthree hundred 60 panel that focuses on pathways targeted by oncology therapeutics that are currently in development and the glial panel for studying the complex role that immune cells play in neuro degeneration and neuro inflammatory disorders.
Recently multiple publications have demonstrated the value of encounter for understanding the host response to viral infection and cobot 19 research.
We are rapidly developing a cobot 19 specific gene expression spike in assay that can be used with most of our panel products and custom code sets.
We are providing the beta assay at no charge to scientist doing cope and research and in the first month of availability almost 50 customers a border enough kids to process more than 2000 samples.
Our fourth strategic objective is to identify the key applications for our high potency platform and to pursue partnerships that can support our emerging commercial strategy.
We remain engaged an ongoing discussions with potential partners for infectious disease applications for high potency.
In addition, our researchers continue to explore other potential applications for the unique sequencing chemistry, we have developed which at this time remain confidential, but that we may provide new opportunities for heitman seek based on future products.
I look forward to updating you on these developments in the future.
I'll now turn the call over to Tom to review the details of our operating results for the first quarter.
Thanks, Brett and thanks, all for joining us today.
For the first quarter of 2020 product and service revenue was 24.5 billion representing year over year growth of 15% recall in December 2019, we completed our transaction with Verisign. We now recognize about one third of the previous Prosigna revenue over the same unit sold on a pro forma basis for the effectiveness study.
And year over year product and service revenue growth was 23%.
Our revenue growth was driven by Geo mix total Geo mix revenue was just over 7 million with about 6.5 billion of that total derived from June which instrument shipments and 600000 from consumables service revenue growth was also strong at 23% and driven by our Geo mix top service.
In contrast, our legacy encoder business was more significantly impacted by cobot.
And tenor instrument revenue was just over 3 million, 23% lower as compared to Q1 19 and encounter consumables revenue was 10.9 million lower by 25% on an actual basis and 16% on a pro forma basis compared to Q1 night she'd recall reported consumables revenue is now inclusive of Prosigna.
Turning now to margins and expenses I'll be providing numbers on non-GAAP or adjusted basis, which removed the impact of stock based compensation depreciation and certain onetime items. Please refer to our press release and the exhibit we posted to our Investor Relations Web page for descriptions of how our adjusted measures, including adjusted EBIT da are prepared.
Adjusted gross margin on product and service revenue was 56% approximately 400 basis points lower than last year pro forma for the Verisign transaction. Adjusted gross margin was about 100 paid 100 basis points lower primarily due to lower encounter consumable sales.
Adjusted R&D expense was 15.8 billion, an increase of 5% over the prior year. The increase was driven primarily by investment the development of Ngs readout for Geo mix DSP and spending for research firm supplies, which are expected to be heavier in the first quarter.
Adjusted EPS Gionee expense was 22.6 billion, an increase of 4% over the prior year, but modest Q1 asked you to expense growth was primarily due to higher audit fees, which were driven by sarbanes Oxley compliance and related activities.
Adjusted EBITDA loss was 23.4 million approximately flat as compared to the prior year, reflecting are lower than anticipated encounter revenue.
We ended the quarter with about 270 million of cash cash equivalents and short term investments, which is the strongest balance sheet position in the company's history.
On March.
We completed a convertible notes offering and raised 230 million.
The dose carry a 2.6% coupon and the conversion premium of 40% reflects an effective underlying share price of about $48.
Approximately 90 million of the proceeds rates were used to repay our senior term loan facility, which carried an interest rate of 10.5% and transaction fees and expenses. The balance of the proceeds will be used to support the launch of Geo mix and other growth initiatives.
Transitioning now to guidance as a reminder, we announced on April six the suspension of our 2020 financial guidance, when we will not be providing guidance today I'd like to share some color on how we're thinking about Q2.
First our instrument funnels are healthy and indicate that Q2 instrument orders for Geo mix encounter should be about flat as compared to Q1.
Instrument revenue recognition in Q2 could be negatively impacted in the event that customers are unable to receive shipments due to site closures Geo mix revenue recognized might also be negatively impacted in the event, we slow shipments of new instruments to allow our teams to get back out to customer sites and install and train customers that are eager to put the.
Our new jailing systems to work at this time, we expect service revenues remain approximately flat as compared to Q1.
Turning to consumables like other companies in our space, we expect the cobot impact will be greater in Q2 that in Q1, while it's still relatively early we have not yet seen a return to usual levels of customer activity during April and counter consumable orders were down approximately 50% as compared to the same period a year ago.
And as of this date, we're planning for that trend to hold through the balance of future.
Regarding gross margins lower encounter consumables revenue will reduce our gross margins as compared to Q1 for operating expenses, we've prepared a range of expense and cash flow scenarios and have already taken steps to manage our expenses. During this period of uncertainty. We expect Q2 total expenses will decline as compared to Q1 with.
That said, we do at this time intend to maintain our investments at the most critical parts of our business, including commercial and product development activities related to Geo mix. So we could be well positioned as research activity recovers our balance sheet is stronger than any point, the nanostrings history, and while we may use more cash to sustain our business in 2020 and originally plan.
And we're confident we have the resources to drive growth and eventually reach profitability through the course of the Geo mix launch now I'll turn the call back over to Brad for closing comments.
Thanks, Tom and conclusion Nanostring remains focused on capturing the compelling market opportunities before us the Geo mix DFT has strong momentum and translational research with a leadership position that grows each quarter.
The entry of geometries and to the dumped discovery research market is off to a great start with the launch timelines intact and substantial customer interest are healthy balance sheet allows us to whether the current cobot 19 store the captured the explosion in demand for spatial profiling that as expected as researchers returned to their loan.
Average worries with that I'd like to open the lineup for your questions.
Ladies and gentlemen, just as a reminder.
Question. Please press star.
On your telephone keypad.
Your first question comes from the line as Casey Woodring with Jpmorgan.
The answer Tyco. My first question is regarding academic versus Biopharma revenue you could give us some color on what you saw in the quarter, there and trends moving forward in terms of.
Lads being shut down.
Okay sure Okay.
Thanks Casey so.
Both academic and bio pharma customers were impacted during the first quarter with respect to encounter instruments.
We we saw strong biopharma demand and relatively weaker academic demand with respect to consumables, which was largely just disrupted as people's last couple of weeks of research activity slowed down we saw approximately equal.
Impact from both academic and Biopharma customers.
During April we are seeing.
A slowdown, especially across the academic laboratories.
Multiple market research efforts that and surveys that have been ongoing over the month of April indicates that.
The academic research customers are being impacted more than industrial research customers and Thats really what we expect for Q2.
Okay and then maybe can you talk about just mentioned in terms of that.
Let me take steps to reduce costs can you maybe going through what steps, you're taking and specifically will that affect the R&D line.
Yes, I can address that there were taking some steps that are similar to what you've seen from other companies. Obviously there are significant reductions of travel expenses and in addition to that we've slowed our pace of hiring for both the full time in temporary workers, we haven't entirely frozen.
Orders and service.
Yeah. She said instruments can be negatively impacted was there any color on that and I guess the question would be.
Ever shortfall and placements that occurred in Q. to do you think there's an ability to make goes up in the back after the.
<unk>.
Yeah, I think no we.
Oh, you back to Tom's prepared remarks with respect to waters I think we said orders are expected to be about sort of flat revenue could be laughter downside rest a revenue yeah. In the event that customers are disrupted due to their ability to receive an instrument ship <unk> or due to a need to slow things down on the.
<unk> side as we install and train so yeah, we we're not providing formal guidance, but that's kind of.
<unk> seven what the outlook looks like yeah with respect to the back half the year I mean, I think many of US believe that the second quarter is going to be the toughest of the year as we start back porno work from home scenario, where you know many if not most academic labs are are <unk>.
Are are partially or completely closed that's something that's likely to improve the third Porter and the fourth quarter. So I do expect to see demand and prove of those periods, but it's just too early to be quantitative about what the full year expectation can be at this time.
Right right I guess do you think you'd have the capacity, let's say you know you're <unk> <unk> <unk> customers. There would you expect you'd have to capacities I know you've been focus on delighting customers and having the appropriate salesforce, we'd be able to you know ideally make up printing shortfalls and.
Placements and key to throw out the back end from there.
Yeah, if if you're if you're referring to our ability to install and train yeah. We have been thinking very carefully about how to expand our capacity and prepare for a catch up phase. If you will on a installation and training, we will definitely be installing and training.
At a faster clip once the lab's reopened but it's just too early to say you know whether we can take up the full difference at this stage because we really don't know when exactly people are gonna be back in the lab and what kind of social distancing restrictions. These labs may impose on visitors to the lab et cetera, It's just too early to speak to some of those things.
But <unk>, we would not expect our own capacity to be the primary constraint, we would expect our customers sort of capacity to receive training and receive instruments to be a more important constrained.
Got it and then and then obviously refer to like the record funnel brand new gave a lot of color.
Did you guys are watching.
Including the top projects like is there any more quantitative measurement you can give about that funnel. So tap you said.
Completed one like another 50, just <unk> yeah.
<unk>.
Yeah, I think on the final we can say that the tap funnel, we built a plan for how we wanted to see to tap starting up in temple <unk> pardon me that we we built a plan for how we wanted to see the G.O. <unk> instrument funnel develop over the year. We we're ahead of that plan, we have more instruments in the final than we expected to.
I have I'd say, oh larger fraction of those instruments in the final than we'd expected are actually tied to N.G.S. readout, which is something I'm very pleased about as we've only begun to begin yeah. We've only begun promoting that around late February into H.B.B.C. meeting, the leading indicator of for in G.S. and discuss.
Reentry that comes through our task program is also great a third of the task orders that we're getting which is by the way in total twice what we got last year, our our focus on a G.S. read out so I'd say all those indicators are extremely healthy.
And and the you know we also that was a focus on the G.O. <unk> final, but are encountered phone was remarkably strong too and you know, but for the coven 19 disruptions to our customers you know I think we would've been tracking right, along where we expected to be for the year on our original guidance.
And then and it may be one 100% Kobe could be brought up corporate opportunity both our current encounter.
Is there any.
[laughter] could be got [laughter].
You're providing and the pools.
Create a notable [noise].
Revenue opportunities as we get to the back after 2021 or they just kind of a nice to have.
You know some you know important capabilities to like customers might want to use your products because we've had.
Obviously across some other companies that are more directly involved with testing there's been some material benefit they've been able to.
Possibly t. if I'm just wondering if we look back 369 months from now and you know like National results.
Cove it'd be like a notable driver of of growth.
I don't think that Cobin 19 will be a primary driver grow up for us to this year, we want to make a great research contribution I think at the margin. It may drive some incremental demand for encounter consumer Wolves, N.G.O. <unk> <unk> <unk> replacements, but it will be secondary to the main areas that we traditionally focus.
On like cancer immunology in neurology that being said I mean, cobin 19 is and the urgency and the need for rapid results on F.F.P. tissue that comes with that area is a great demonstration ground for the capabilities of both you encounter in the G.O. <unk>.
And we are we are working especially in the <unk> side, along with our partners Abcam in biotech in the A.C.D. to develop some cobin specific reagents sets that can make a very rapid contribution and are very important public health contribution with respect to understanding that disease.
Showcase the capabilities of both G. elements and our partners essays, but I do not think that it will become a primary growth driver for us.
God, maybe one more final when you sit down 50 years from our company.
For the quarter I guess.
We were me whatever may 7th we think hopefully in the next six weeks are better than the prior six weeks, but I guess, you're just taking a conservative stance on that front like.
Went wide taken any improvement right now so it just assume that the base case, and we'll see where it goes.
Yeah, that's right I mean, we we we are watching as I mentioned, a series of leading indicators, including surveys laboratories and some of her own stats and I can share a little bit of color on that you know according to some or some surveys that we've been tracking up to 40% of academic labs and 15.
Per cent of industry labs at this stage remain completely closed meeting people can't get in there to do their work nanostrings amongst our own customer base. When we've surveyed we think that about 30% of our own customer labs remains fully close with perhaps another 60%.
Who are only partially open at this stage.
Tobin 19 is appearing to impact reagent purchase patterns more than it is instruments because of course, if people are not in the lab using their instruments, they're not using reagents and that that's that's a very steep decline and we saw that are actual numbers for April when we look across kind of how has the indicators.
Change from say the first week of able to the first week of May we actually seem very modest change I mean things are not coming back very quickly quoting volumes from us have been pretty steady throughout all of April it into may when we look for a glimmer of hope and I don't want to say, there's not a glimmer over the leading indicator that.
Seem to suggest that may could be better and then June could be better yet would be you know us we're starting to see some recovery and the volume of calls coming into or help line, which suggests that people are starting to get back in the lab and and and pick up where they left off and we we note.
Surveys of research customers indicates some optimism about being back in the lab in in June but that being said, we just don't know if that optimism will be realized at this stage. So we are planning for and we encourage you to expect the the trends of April which is a fish.
He per cent dropping consume more revenue to <unk> to continue <unk> throughout the second quarter I'd say, there's more upside the that estimate the downside, but I would not get too far out of myself on that.
God. Thanks, I appreciate it.
Sure.
Yeah.
Kind of some line.
Mm.
Thanks, Brad I wanted to dig into the pull through on G.O. mixing some of the inputs that at one point or another we're we're baked in there can you just talk about how you feel about price per experiment on the assumption of $500 that you've mentioned prior maybe particularly in the context of the whole trend.
Script product, that's coming on down the road, which which looks like it's going to be at a meaningful premium and then on the other side of the equation. The number of samples per year, which I think you kind of pencil then as 150 on average it seems like that will be a challenge this year.
But do you feel okay about resuming something close to that as an exit rate maybe in the back half of the year. We don't go round two on lab closures.
And can this kind of roll up to 2021 being the year, that's sort of back on track with the way that the model is set up initially.
Yeah. Thanks for these questions Dan So let me talk about sort of the pull through experience so far the actual and how we're feeling about that and then I'll talk about how it's going to evolve over time based on the new essays in or road map. So you know our guys just <unk> going into a into the launch was.
<unk> encounter read out customers, we would expect to run about 150 samples of the year at about $500 a sample.
So far are realized athlete price per sample is probably a little north of $500, which were happy about the it turns out that our customers are using that module or format that we've that we've developed to buy up a little extra content on the protein side beyond where we had estimated the woods. So that's a good.
<unk> that's a good thing long term as you said, it's just it's not only disrupted by Tobin 19, but it's also just too early and they're both of our install base to understand what the run rate of samples per system for a year are likely to be a covert 19 doesn't help but it's also true that very many of our.
Sides adjust become a trained and we're just beginning to use their system. When Tobin 19 hit so it's really too early for me to validate or change in any way that 150 samples per year, but there's really nothing that would have us change that number at this point, you're right that as we move into the discovery research.
Market with M.G.S. as the read out of Dallas and much higher Plex ass a.'s that pull through number could very easily change certainly the cost per sample will go up sort of cancer Transcriptome ask Atlas Ass say, which we described at the age you'd be T. meeting.
It's going to be priced at 1200 and $50 per sample. So you know more than two x., what the what the average price was expected to me for the encounter read out. So if people run large numbers of symbols or a similar number of samples that could be a very high pull through <unk> for us it's.
Little too early for us to speculate on the volume of samples per system that will be run, but I think there's upside to our previously described pulled rustiness as you pointed out in your question damn that'll become even more true when we launched the whole transcript dumb ass, saying 2021 that would be expected to be price at a premium.
To the cancer transcript <unk>, let's ask say and similarly to drive pulled through aboard so in conclusion, yeah. I wouldn't say there was nothing we've seen that makes us worried about the guidance that we've provided so far at that 75 to $80000 per system for a year, there's some reasons.
I believe that as we move into a more in G.S. enabled installed base in 2021, there could be upside to that to those estimates.
Okay that is some really helpful commentary into your point on the transcript don't work on the new tap project that you're taking on are you doing transcript don't work for some customers there on either the cancer or the whole transcript nomads say ahead of the product launches and then there.
Is there a chance that we see some publications around the launches themselves jobs, yet good dated H.B.T. just wondering about the publication flow went back and look like as you do get to the point, where these are are gonna be going to customers.
<unk> yeah. So on the cancer Transcriptome Atlas, which is the 800 plus gene Ass say that includes cancer and immune system jeans, you know that accounted for about one third of our 50 tap orders in Q1, So probably you know 15 to 20 of those orders.
So we are yeah, we'll begin delivering those results you know now and shortly and we certainly hope that they'll give rise to peer reviewed papers you know as maybe later this year or beginning next year. We're not currently offering the old transcriptome Atlas Ass say under our tap.
Program, we would expect that to begin late then 2020, but we as we presented at H.U.B.T.. We have had customers run the old transcriptome Atlas as say several of them presented their work last year sorted last February and we do expect some of that work to come out and if you're in the literature I will say so.
<unk> 19 worth is also leveraging our whole transcriptome Atlas essay as you can imagine we're looking we and our collaborators looking break to bring to bear every technologies solution that we have whether it's in prototype former full commercial for him to help in that fight and so there's a possibility that some of that.
Data could come forth as well.
Okay. Thank you guys appreciate it.
Mm.
Okay.
Okay.
Good question.
And the number one.
Wow.
My next question comes from online.
<unk>.
Hi, This is Chris aren't dog's name things aren't thinking my questions.
I'm just starting with one on the impact of <unk> <unk>, there can be a bullet to catch up and you <unk> reopening or should we think that a lock utilization in the current environment is largely law I'm here and the machine are based on your conversations the customers.
Yeah, I I do not expect a bowl of stuff catch up.
Two of her on consumable utilization you know systems people can only work five or seven days, a week or you know when they come back. So I'm sure. They will be eager to move forward quickly, but it just takes a certain amount of time to design a project execute a project and and then.
And then begin to to to order a consumer holds again, so I I expect that we should a plan for most of that time to be loss with respect.
<unk>.
Okay.
We're saying that it's we're saying that instruments baby quite different I mean instrument purchases are different you know you can make up for last time, thereby coming back and saying well you know I'd I'd planned to have that instrument later in the year I'm still pointed to have it later in the year, let's move forward with a purchase so instruments I don't necessarily think our way.
Lost I do think there could be more of a catch up to read on instrument worse, then there will be on consumer wars.
Okay. That's helpful thing [laughter] maybe.
No the and earlier question you share I encounter any more leaving believe <unk> some new customers.
Like given that there hasn't been seen opportunities eat your customer person.
Mention the top around but anything else you can share on higher adapting you're marketing strategy.
Yeah. The happening to you know one thing. We found is that has researchers leave the laboratory and begin working from home. They are hungry to continue to feel productive many of them or spending time educated themselves about new technologies, engaging and online seminars and.
Educational activities more than they normally would and they're busy laboratory base lives. We've started a program that we call Nanoflex, which is a very aggressive <unk> seminar series using tools like zoom to engage researchers who are working from home.
Both through a novel content that we've developed directly for the purpose and for replays of some of the type of seminars that we've had say at H.G.B.T. and otherwise if you go on our website under seminars you will find that almost an event a day that we're hosting a right.
Now is through April and May and as I said am I prepared remarks, we've had 3000 people participate in these events. So far most of them geared towards Joe Max I Jotted down just a few that I'm excited about coming up soon on May 12th we'll have a web in r. by David room from Yale Who's now got three peer reviewed papers.
On G.O. mix on May 15th where jointly hosting a an on line seminar with Illumina to talk about the pairing of G.O. mix and their sequencing platforms and sort of the upcoming explosion and expected spatial genomic demand on may 19th and 20th we have you know court t. cell therapy.
Carl June it will be present day on some unpublished work that he's done related to the use of G.O. mix to study cell therapy and solid tumors and then on June 2nd we have a researcher named Peter Old tool from York University, and the U.K. Who's talking about his use of G.O. <unk>.
To study the interaction of hosts and pathogen pretty similar in concept at least at the type of things we're doing until the 19 and those are just a taste, there's actually many more ways of interacting and so we find that this that researchers find that's a great use of their time and energy, while they're trapped outside of the laboratory.
And we've had a really exciting dialogues and engagement with them. During this time. So it's really interesting you know I think <unk>. The the commercial ciminero strings years done a wonderful job adapting since you use a digital channels and you know somebody some of the programs that we started here under crisis will probably be things. We continue in the long term.
Right things for 25 things and.
Thank you.
No.
Like now 10, the call back average.
Closing remarks or comment.
[noise] excellent. Thank you and thanks, everybody for joining US today, there will be a replay the call up and the next couple of hours. If you didn't miss any portion of the conversation that you can access that by dialing 805 858367 International callers. Please dial for 166 to one <unk>.
To the conference call I.D. for the same as for 699 305.
So what that will sign off and and look forward to seeing everybody. When we get back into a normal operating retain have a great day.
Thank you for your participation.
Conference call.
[laughter].
[music].