Q4 2020 Bionano Genomics Inc Earnings Call
Welcome to the via the Conference Center. The next available comfort of specialist will be with you momentarily.
[music].
Your line.
You know on structure and a variety of clinically relevant.
Areas of.
On the clinical side, specifically, we are seeing sapphire bring value to site of genomic analysis by reducing the total reagent cost turnaround time labor cost.
By simplifying the analysis of genomes and cancer patients and patients who are suspected suspected of having genetic disease on.
All compared to today's workflows inside of the genetics and we believe that south of our offers.
And I truly better faster.
Cost and more cost effective tool.
And that overall will accelerate.
The actionable results and improve patient outcomes.
We believe that this path to widespread adoption of optical genome mapping.
With the Sapphire and.
And bus requires three main per prerequisites.
First publishing multiple large studies that show concordance with the existing standard of care.
There is a requirement for labs that adopt the south of our system across.
Across the U S.
To develop assays for clinical applications and validate those assays as laboratory developed tests.
And lastly, a clear path for <unk>.
Clinics and labs that are operating optical genome mapping assays.
They need to be able to bill insurance providers and being reimbursed for their test before.
The comfortably convert over from our from the standard of care.
Now one of the most important areas of validation and 2020 was with the University of <unk>.
Iowa hospitals and clinics.
Who switched their method of molecular testing for patients presumed to have F. S. H D, which is a rare muscular disease with no approved therapy.
Two optical genome mapping with the Sapphire system.
In addition, we had a very meaningful publication come out using sapphire data from UC, San Francisco children and in collaboration with OCA and children's Hospital.
Here, researchers and clinicians were able to diagnose.
Additional 18.
And of children, who were otherwise on diagnosed.
Standard of care testing using the Sapphire system.
Now this kind of work and all of the studies that have gone on over the course of 2020.
Our truly groundbreaking and.
Per se the scientific advances that they bring and showing how diseases can be diagnosed with new tools, but they really enforced why everybody of bio nano genomics shows up for work every day, we are truly determined to revolutionize the way diseases are diagnosed.
And and in particular for children were of diagnosis of the disease can have a profound effect on their lives on their family's lives and on the lives of the caregivers and the and the health care system overall.
Our goal is to shorten the diagnostic journey.
No Ernie and accelerate the path that these patients are on to managing their disease and in many cases, the most effective treatment.
Now on 2020, we've also made significant advances and our.
Knowledges and released.
Jurist upgrade to our safety software capabilities, which together have continued to improve the capability of sapphire.
We introduced.
Our newest DNA isolation kits, which allow for faster and much simpler isolation of ultra long genomic.
DNA from.
Smaller and smaller amounts of samples, including solid tumors, which has removed one of the most significant hurdles and the study of structural variation and solid tumors.
We also saw our users conduct comprehensive structure.
Structural variation analysis through out oncology, where theyre able now to detect.
Rare variance that may be the drivers of different diseases, including and genetic and inherited diseases as well as being able to the off target.
Effects that may be occurring during CRISPR based gene editing.
All of the while using the Sapphire system, and telling us that it's easier to use and other genome analysis systems and their labs.
And so this feedback and the progress that we.
Targeting makes us believe that our system is ready to serve the needs and.
And as what is in and what is an increasingly large market for structural variation and analysis, both on the clinical side and.
And on the research side.
Expansion and the number of labs.
Laboratory developed test or <unk> Ts in the market is another driver of wider and wider adoption.
We announced last.
Quarter.
And the German and accreditation of Sapphire for the detection of various types of structural variation.
Patients the cause constitutional genetic disorders, and this is a prime example of how sapphire can be and alternative to existing tools getting too faster diagnoses, but also reducing costs.
<unk> accreditation processes are underway.
For genetic diseases, and leukemias and other parts of Europe as well.
Here in the United States.
Labs, such as practices have launched a menu of laboratory developed tests and obtained reimbursement codes for them.
Augusta University is also developing a novel laboratory developed tests for cancer based on their results and heme malignancies and solid tumors.
Which had been presented at the cancer Genomics consortium median.
And so for Us 2020.
It was really of a spectacular year and now that we've had a chance to cover many of the advancements I want to turn the focus to 2021 and talk a little bit about what we see ahead.
2021 is truly shaping.
It would be another transformation all year for the company.
Thanks to your support our shareholders, we've taken major steps to secure the financial future of the company by raising a substantial amount of capital which sets the stage for execution of our plan without the overhang of capital limitation.
<unk> 2021 is going to be critical to the long term growth. We are squarely focused on driving the global development of Sapphire based assays for use.
And clinical testing of patients with genetic diseases and hematologic malignancies.
And CS and on the adoption of Sapphire for use and larger clinical studies that will allow us to obtain of critical mass of data on sapphire application across a number of key areas, including prenatal and postnatal genetics.
And what's the logic malignancies, including leukemias and lymphomas.
And then solid tumors.
These data are expected to expand the number of publications, including peer reviewed ones.
And support and increase and the number of laboratory developed tests.
And the market.
With the goal of.
The reimbursement of Sapphire based laboratory developed tests by third party payers.
In the U S and around the world.
Now a big part of our ability.
And to drive adoption of Sapphire stems from the successful acquisition, we made of linear gin in 2020.
Which added important products and skills, including the content.
Domain expertise required.
Tests on build a reimbursed diagnostic menu on Sapphire.
By combining these products and the services business, we believe that we can accelerate.
The broader adoption of Sapphire as the technology.
For clinical assay development through outside of genetics.
Genetics.
Overall 2020 was of great year, and a challenging against the challenging backdrop, and we are continuing to gain traction and in many important ways and we are seeing evidence that this strategy is working with 2020.
Showing us.
The Sapphire is ready to serve the.
Difficult need and a.
Substantially.
Large and growing market.
We see that our customers are ready to adopt the new technology.
And I believe our goal of establishing <unk> as the next great genomics.
Company is greater than ever.
And with that I would like to turn the call over to Chris for an overview of financials Chris.
Thanks, Eric.
And they start with a review of our financial results for the fourth quarter and year ended December 31.
2020.
Revenue in Q4 was approximately $4 million consistent with the preliminary results that we issued back on January 7th. This represents an increase of 43% compared to $2 8 million and the same period of 2019.
The increase was primarily driven by.
By a $1 $1 million increase and service revenue largely from our lineage and subsidy subsidiary acquired in August of 2020.
Revenue for the year came in at $8 5 million down $1 6 million or 16% from 2019.
Largely due to.
The restrictions on our customers' lab operations related to COVID-19.
Whilst activity is picking up we do believe that COVID-19 restrictions will continue to affect revenue across our business.
Our gross margin came in at 30% down 9% from the same period last year.
Here, who mainly to lower instrument selling prices and some year end accounting entries related to inventory value cleanup.
And as Eric mentioned at the beginning of the call. We ended the year with the installed base of <unk> 97, and Sapphire systems and increase of 24 from the year end two.
And 2019.
Our reagent rental and our services programs are doing well, reflecting an increasing interest in sapphire and the incredibly novel and meaningful data that the system can produce.
We are actively trying to make it easier for potential customers to obtain and use sapphire data, which we believe.
<unk> lead to instrument and consumables revenue down the road.
Operating expense for the fourth quarter of 2020 was $12 3 million and increase of approximately $3 4 million compared to $8 9 million and the same period of 2019 the.
The increase is primarily.
We've got two and increase in salary expense during.
During 2020 head count increased by 49, including 33 that joined US as a result of the lineage and acquisition.
Operating expenses for the year ended December 31 was $41 3 million on.
Due east of approximately $11 4 million from the $29 9 million and the same period of 2019.
The increase was comprised of about.
About $4 $5 million of salary expense.
And $3 4 million of legal and other outside services related.
And to the lineage at lineage and acquisition and other corporate activities.
$2 6 million of lineage and expenses and just under $1 million of various other net changes.
Finally, our cash balance as of December 31 was $38 4 million.
So clearly 2021 is off to a great start since the beginning of the year, we raised about $335 million through two underwritten public offerings sales on our ATM facility and the exercise of outstanding warrants for our common stock driven by the increase and our share price.
And our strong balance sheet allows us to shift.
I guess to achieving our long term vision of disrupting genomics and thereby contributing to advances and health care through the global adoption of Sapphire.
Our main objective for 2021 revolve around clearing additional barriers to widespread adoption through the execution of our clinical studies.
Continuing to build on the.
Our first published studies showcasing the power of Sapphire and Sapphire data.
Supporting the development of <unk>.
And building on the market momentum that we started to see through the course of 2020.
With that I'll turn the call back over to Eric to discuss some of our stuff.
Upcoming milestones.
A number of and we'll open the call up for Q&A Eric.
Yeah, Thanks, Chris for that summary.
And.
You know what what I think is clear here is that 2020 has really set.
And of incredible Foundation for Us.
And our fund raising here and <unk>.
2021 has cleared the path for us to really focus.
On execution going forward.
What we've put together here is a summary of important milestones and what we see.
See as the timing for each of them and.
The key takeaway from these milestones is that while we are focused on the commercialization and commercial adoption and utilization of Sapphire and optical genome mapping very broad.
Lee.
We want to make sure that we.
Really emphasized the importance of clearing the path to.
Truly significant adoption overall and so a lot of these milestones are based on.
That aspect and so the.
Beginning with.
Broad and the second quarter, we expect to see important accreditations for the.
And the capabilities of Sapphire and certain European markets. These accreditations and lower barriers for other labs and other markets to adopt more broadly.
Will it be.
With ending.
The commercial release of.
Assays and capabilities on Sapphire, including prenatal assays for the first time and the third quarter as well as expanding <unk>.
Additional pediatric assays around different sample types that can.
Expense adequately handled.
For optical genome mapping.
And then what we'll begin to see and the fourth quarter is the number of the key.
Programs that are underway and clinical studies.
Starting to show results. So we are expecting to see the interim.
Be publication of results from our pediatric clinical studies, we expect to see validation of additional laboratory developed tests and other reimbursement codes emerging from these clinical study sites.
We're going to have a prototype of a next generation of high throughput Sapphire, which will.
And Paul band capabilities of optical genome mapping even broader than what they are today and.
And importantly, we expect the installed base of Sapphire systems to grow.
By as much as 50% on a year over year basis to 150 systems.
As a key step and <unk>.
Increasing the amount of utilization of Sapphire, that's taking place and the market.
And so when we look at this progress we see it as being very important and.
We see it also in the context of of much larger vision.
And that vision.
And really about where and what is the future of genome analysis and to understand that vision, we look to the past and what we see is that the first 20 years and this <unk>.
Century of focused on genome analysis Thats based first on micro arrays, and then on next generation sequencing.
And the impact of these technologies of had on health care broadly defined has been simply incredible.
And for investors the value creation has been remarkable as well.
But it's clear that innovation and these technologies is leveling off and so when we look to the future what we see.
Is that the era of Big Biology, and genomics is going to be driven by new technology, and certainly we see optical genome mapping and the Sapphire system at the center of the next big wave, which is going to be focused on genome structure analysis and so we.
We think.
See we are really at the beginning.
Of this incredible journey, we're pleased with the progress that we have but we're very focused.
On.
What the future brings and we couldnt be more excited about where we're positioned and so.
With that on.
Operator.
And I'd like to turn it over to you for Q&A.
Ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone keypad and you.
And are using a speaker phone. Please make sure your mute function of turned off to allow your signal to reach our equipment again.
The star one to ask the question.
Our first question comes from Kevin and Doug ETA of Oppenheimer. Please state your question.
Hey, guys. Thanks for taking my questions just a couple from me today.
First with regard to.
The.
The next day on optical imaging.
<unk> and the target to have a prototype of <unk> can you just walk us through a little bit on in terms of the target product profile there and.
Incrementally what are the primary operational challenges to meet that for.
<unk> the timeline.
Sure. So what we're focused on is building a platform that can serve the.
Substantially higher throughput.
Operating labs.
Compared to your traditional.
The community Cytogenetics lab, the community Cytogenetics labs represent the vast majority, but these higher volume labs take a significant amount of the volume and so.
We are anticipating.
By the time the system is launched and.
Up to full.
Speed that it will represent a increase of approximately <unk> <unk>.
14 fold over the current <unk>.
Throughput of the Sapphire assistant, which is roughly 5000 human genomes per year, and so that's a pretty substantial overall.
Uh huh.
Increasing throughput when you talk about the milestones and work that needs to be done.
It's relatively straightforward and that we've built these instruments before and the principles of operation are not changing but we are adapting a completely.
Lately novel optical imaging.
That form which is of course off the shelf available today, and we need to implement it and the configuration, that's useful for optical and genome mapping, but theres really no substantial invention involved and so we believe that the program overall.
As relatively low risk.
And I guess, a fair number of questions from investors with regard to the addressable market for Sapphire and the pediatric and prenatal markets and you just comment on how you see the addressable opportunity and those two segments.
Sure I mean, we we.
We typically look at it from the perspective of the number of labs that are out there.
And if those labs were to adopt sapphire and convert their their menus over what would that look like so and cytogenetics broadly speaking there.
As you know roughly 2500 labs worldwide.
Probably somewhere between.
And 2 million samples per year of being processed for this type of molecular pathology.
And.
Overall of that represents.
Somewhere in the neighborhood of a.
Three to three and $5 billion market for us that includes some of the research market as well.
But it's something that I would really emphasize.
For these investors who are asking questions.
Is that that's that's the market that is right in front of us today.
And with.
With the technology.
Accelerating capabilities as quickly as it is being used and research to discover new applications.
The total market opportunity for optical genome mapping goes well beyond that.
Low single digit billion number and there's.
And is substantially larger it's harder for us to quantify it specifically because some of the applications haven't even been developed.
Question on.
Others are still on the come so think about when.
Optical genome mapping is used more broadly and prenatal testing and throughout pediatric testing.
Think about more broadly the situation where the.
Genome analysis.
This is conducted on.
Every newborn so not just the.
The idea of doing sequencing and looking at snips, but starting to look at genome mapping and structural variation as well. So the potential. We believe is is really very significant but some of these proximal.
Some of markets.
Add up to being in that range.
No very helpful. And then lastly from me with regard to the fourth quarter, what was the consumable revenue and can you.
Just comment on the relative split between inside of the day outage and other applications.
Yeah.
So consumable revenue.
Was let's see.
Got it right in front of me here of about $4 million.
Excuse me.
Sorry.
Give me one second here.
Couple of things going on.
Consumable revenue was about one point.
$3 million and Q4.
And qualitatively how do we think about the split between the.
How do we think about the split between Cytogenetics and you know of.
And markets.
Yeah outside the United States.
Let's just say outside the United States.
And it's you know.
$75 25 to $8 20.
And and I would say it's.
It's not quite 100 per cent human, but but it's almost entirely human and then within that it's $75 25 of lot of the non human is still focused on drug development.
And then so we've really shifted from a.
Basic research tool that's used throughout genome analysis to one that is primarily used in human applications and.
And outside the U S SEC.
70, 525 and.
Yeah.
Plato vs versus research and the U S.
It's more balanced we see increasing.
Scytodes types of applications, but it's closer to maybe 60% research 40% <unk>.
Some of our I'll call I'll get back from the care Congrats.
And then on our progress.
Thank you Kevin.
The next question comes from Jason Mccarthy of Maxim Group.
Please state your question.
Hey, guys. Thanks for taking the questions.
Opposed.
And I.
Thinking about the revenue last year, even this year.
Can you talk a little bit more broadly.
About the should not Miss shortcomings of the this call of the shortcomings of and GFS, whether its long range of short reads.
And where that missing components of genomics interrogation.
Really matters and and maybe in the context of you know.
The 50% of cancers don't get the proper diagnosis and and genomic disease and are even worse.
And how sapphire completes that puzzle, if you would and and that's the story I think investors need.
The need to here over this year.
Yeah.
Yes.
I mean, I appreciate that that sort of opportunity, Jason because I think that that's really where the focus should be we have labored hard to develop the product and make it relevant and.
Really really important and markets and what we're seeing now is that those markets are adopting and so sure. It's important that we're selling the product and that people are paying for it that sort of validates that it's that it's.
A viable commercial product, but our focus is on really clearing the path too.
Two thing this much much wider adoption to fill these critical gaps and.
On a on a regular basis.
Publications are appearing showing that.
Sequencing as powerful as it is for detecting short small small.
<unk> variance.
Really underperforms when it comes to the detection of large structural variations and if you if you just.
Read through and I know youre of kind of Guy who would read through the medical guidelines not everybody would but.
And if you look at the medical guidelines for.
The testing and genomic diseases.
Is hematologic malignancies, and solid tumors. They all recommend as the first line of analysis.
Some form of structural variation detection, whether that's carrier typing micro arrays fluorescence in situ hybridization and as much as there is and the interest in having sequencing.
Address those.
On markers the.
And the publications show that that sequencing cannot.
And Furthermore.
To really get next generation sequencing and particular to work well and the clinic, it's still it still requires.
Jordan Aerie depths of coverage, which means that.
To make it work reliably and consistently at high throughput and at low cost.
It's not possible to do a whole genome analysis, that's that's with next generation sequencing and I'm not even talking about long read sequencing.
And so it really.
Sleeves and opportunity.
For optical genome mapping to come in and be the.
The go to solution.
To look at structural variation the that's let's say 500 base pairs and bigger so where would that matter well that's what all of the medical guidelines or are calling force. So it clearly.
Really there, but let's talk about drug development and cancer, where.
Fusion.
And as for example are incredibly important and of course, there are many known ones out there that are the target of different.
The therapeutic development programs, but for every infusion.
And matter of protein that's known.
We believe that there are many many that have yet to be discovered because of tool like the south of our system is not being used broadly yet and so think about and.
Oh and environment, where.
Essentially every genome that's being analyzed is run.
On through.
Maybe sequencing fine to look for small variance, but also through.
Optical genome mapping to look for large.
Genomic variation because.
It's definitely complimentary to single nucleotide variance and maybe the more on.
<unk> story.
And optical genome mapping on the south of our system is the only one that's capable of doing that at of throughput that matters of cost that matters and out of turnaround time that matters and so that's really where this technology is positioned and so the the opportunity is really.
Really significant and Ive said this and my prepared remarks, but I think it's really important which is that.
We're at the very beginning of the story, we're just riding the introduction right now.
Right and then and then also just one more of.
Broad thought that maybe you can help out with us.
It's kind of got rolled up with Nextgen sequencing right and Nexgen took them out you know the western blots got rolled up and digitize proteomics and then the natural progression for cytogenetics is not if it's when it's going to move on to something else.
And it should be something like.
Michael variation can you.
The kind of give your view of of that view the wood.
Yeah. So thank you for pointing out two examples and history, where a technology has consolidated other platforms into a single.
Structure of my workflow, so and G. S did it not only to the micro arrays, but completely revolutionized sanger sequencing and so on.
And next generation sequencing is an amazing example of that.
Western Blot is another amazing example of that and that that was done by by companies and the industry. So illumina we know.
Screeners around next generation sequencing of Encana around the cell surface marker analysis, and so it's really I think.
Very clear and.
And and.
Obvious path for optical genome mapping to.
To streamline and industrialize the cytogenetics workflow.
And.
Something that's very interesting about this cytogenetics space is that laboratory directors, there and people who work inside of genetics.
See the technology.
And other elution that optical genome mapping provides.
It's something that they've been waiting for in many cases their whole career. So as you know Dr. Orca Tshombe joined us as our first Chief Medical Officer.
And our last August.
And.
The rubber she sees the south of our system as that thing she's been looking for her entire career as of Cytogeneticist inside of genomics professional.
And she's not alone and that view and so we really see sapphire industrializing this workflow and becoming.
Something that's used incredibly.
Broadly and for that reason, we actually call.
The sort of euphoria that sapphire bring cytopia, because it's like Utopia for Cytogeneticist and it not only improves.
You shouldn't outcomes, but it positions cytogenetics at the center.
Of.
The drug development and other areas of important discovery research where.
It just isn't used today, because it's so laborious and time consuming so it's we're about to see a truly of revolution and genome analysis.
Around structural variation detect.
Sapphire Greens.
Again, not if when thanks Eric.
Youre welcome.
Our next question comes from Jeffrey Cohen of Ladenburg Thalmann. Please state your question.
Oh, Hi, Chris and all kind of how are you.
Okay.
And how are you hi, Jeff.
The referring so just a few questions just one follow up to Kevin's questions earlier, it sounds like youre going to have to ask of us as far as the platform one more for a high throughput of facilities and one of the current one to continue with our kind of of the.
And that R&D side of things.
The safe assumption.
Yes and.
And and and which is to say that.
We will offer both platforms and that will enable the naval us to serve the market.
And.
On the oddly as possible, but we don't see the current.
Platform going away.
Got it Okay and then.
Secondly, could you talk about revenues and placements by geography of these kind of and the tobacco standpoint for 2020, and maybe you know give us some sense of how that may look.
As Brian the one.
Yes.
So we're seeing strength and in Europe.
They're moving forward faster with getting systems validated and into their workflow.
On you.
<unk> is lagging a little bit behind the.
We.
For 'twenty hunger and.
And the research market and the U S. And then we have been traditionally, but we're starting to see and uptake in and and clinical revenue and.
And then China, it's been pretty quiet, obviously, I think last year.
And a lot of reasons it was a quiet year.
But we see the we see that picking up.
Lagging still behind Europe, and North America. So we expect to see the most of most growth and Europe next year and followed by North America, and and then and then the far east.
Got it Okay, and then lastly from me Eric.
Eric If you could talk a little more about some of the development instead of going on or expect to be going on.
Sure so kind of true disorders, and other neurological conditions and that would be super helpful.
Sure so.
The two hour lineage and business we are.
Providing services to physicians who are.
Managing.
On this relations with.
A variety of neurodevelopmental disorders, including autism spectrum disorder and and other.
Disorders that span.
And <unk>.
Base.
And our focus is to continue to serve them with the existing.
Inc. Standard of care tools, but over the course of this year, we'll begin developing those applications on the Sapphire system.
And making them available through our own CLIA lab.
Working with payers and.
The two.
Two to cover those assays and so yeah.
<unk> and paid one area, where we will be focused on neuro developmental disorders.
Our customers and the research side of the market had been applying optical genome mapping to other neuro degenerative diseases.
Such as all timers and AOS.
That's me.
The results are simply spectacular and we expect that those programs to continue and its expanded beyond.
The diseases that I mentioned, like ALS, and Alzheimer's, which affects primarily primarily.
You know older adults.
And to include now applications and discovery research and pediatric populations and so what we expect to see as the result of this research is that there can be novel content discovered that could be the basis.
Of the future laboratory developed tests and so we'll just have to see how that research plays out, but it's an incredibly interesting area.
And it's an area that that.
We're structural variation is already known to play a significant.
His role and so the Sapphire system.
Almost certainly is going to amplify that.
Got it and then lastly from me it feels like are you broke through kind of the one per cent Tam area on the on the research side of things.
It just it feels like perhaps 2021.
The year of the U breakthrough.
The 1% of term on the commercial side and sort of a good way of approaching the passage of the platform out there and the capabilities and the growth and anticipated for the coming year.
Yes.
The.
You know the numbers that you're citing I would need to get out of my slide rule and.
And verify those calculations, but breaking through barriers is clearly what has been happening for us and it's really been around awareness and understanding and appreciation and.
What what anybody I think and the company would would would relate to you is that.
And maybe down of inbound interests and our target and markets.
It's higher than it's ever been and it'll be higher tomorrow than it than it was today.
But we have certain structural.
Barriers.
You have to call them barriers you have to call. It what it is.
And as we have certain structural barriers debt that we need to address and the reimbursement one of the big one here in the U S. And we have we have great programs that are there that are designed to address that and and the most fundamental and foundational aspect of of dressing that is building and incredible.
The word chest of data that supports the utility of optical genome mapping and these settings and really validates it and.
And that's the that's the basis of of these clinical trials, which our CMO has designed.
And we're in the process of getting on your way and.
Credibly them progressed significantly over the course of 2021 and 2022 and it's that foundation of data like when we start climbing on top of that that's where we're going to keep bursting through the next the next thresholds if you will.
And so.
Yes, we we broke.
And Youll see true in many respects.
And that's given us the opportunity to do more work and those commercial breakthroughs will be.
What we will see them over the course of this year, but it's really after we get.
Some key worked on this year that those commercial breakthroughs will really start to.
Broken think off.
Okay got it thanks for taking the questions and congrats on the readout.
And thank you.
Our next question is from Scott Henry of Roth Capital. Please state your question.
Thank you good afternoon, and congratulations on quite a year.
And so far.
Just a couple of questions and first of I don't know if you gave this but did.
Did you mention how many sapphire placements, whether it be of Lee the same.
Phil.
Were made during the quarter.
Yeah.
<unk>.
Ear of yeah.
Alright, okay.
Alright, and just checking my numbers. So there were 96 installed I had at the end of Q3. So a lot of those I would assume they are out there ready to install and Q1 is that the correct way to think about it.
Or.
12, whenever it may be and yes, Sir yes, that's right yes.
Okay, great. Thank you and then when we look out to <unk>.
2021.
How should we think about the quarters I don't know how much COVID-19 is going to impact the first half of the year.
Just trying to get a sense on Q.
And obviously, there's only eight days left in the quarter.
But just trying to get it of center of how that trajectory and may look throughout the year.
Yeah. So typically I gave the line is a little bit.
Kipp typically Q1 of the little seasonally soft for us.
Yeah on the lab spend and spend their budgets.
And you want more and then on working on saving money and Q1.
But it won't be dramatic and then we expect to see modest growth through the year.
Quarter on quarter for the full year.
We expect to see like substantial double digit growth.
And.
We don't think it's going to the triple digit growth.
Well, we will see year on year growth by the end of the year and the.
Stanfill double digits.
Okay, Great and I haven't seen the 10-K, yet could you give me a sense of of where the real time shares.
Shares outstanding are given a lot of levers and there.
Yeah exactly so we ended the year with 189 million shares outstanding and right now we've got about 280 million shares outstanding.
All of the work with on.
That's helpful and then I guess, just the kind of a.
Let me share question for Eric.
Obviously, it's a different company today than it was.
Even four months ago, both in terms of market cap in terms of cash balance.
So given that change and those dynamics, how do you think about managing.
The Big company today versus then I mean will there be any changes to the business model, perhaps growing faster of being able to invest more on SG&A and R&D, just try and trying to think of and how you view of today versus four months, maybe you don't view of differently at all but my guess is you probably do.
Yeah, No that's of great. It's a great question.
And I think that that's I. Thank you for asking it. So it's probably a question on on a lot of People's minds.
And we have.
Yeah, we've sort of allowed that question to hang around for a while and haven't gone for and immediate answered, but we're very definitive.
Question on the company is.
Position and you know and absolutely.
Yeah, the exciting substantial.
Market genomics.
With a very differentiated technology that serves an unmet need which.
Bye bye the measurements that we can make on that unmet need is really substantial like the end user markets.
Or are in the billions.
But we're pretty sure.
That.
The total opportunity is bigger than anybody expects today.
And that only the only time and more discoveries and is going to open that up and so we don't think that it makes sense to change the business model at all.
What makes the most sense is to take advantage of the resources that.
Investors have made available to.
Today, and and put that money to work behind the incredible story of optical genome mapping and Sapphire system and.
Helping patients and making new discoveries that are going to transform different diseases.
And really.
Sensing the overall health care objectives of.
Genomics broadly defined in this new era of Big biology, driven by structural variation analysis and so.
You know the the capital is there to help us really double down on this plan it's not.
And there to help us change the plan it doesn't mean that we don't see the need for.
Tuck ins and different technologies that are out there.
And in the space that would accelerate our plan.
But the capital is there for us to double down on the original vision and make that happen sooner than we might.
They're able to make it happen without the capital.
Okay, great. Thank you for the color on that.
Congratulations again and thanks for taking the questions.
Thanks, Kevin.
Oh.
Our next question is from Kevin to Gere of Oppenheimer.
Might of any state your question.
Hey, just to follow up on on Scott's point, just to clarify of our financial model. How are you thinking about the.
The split between rate and the rent on the capital purchase on that kind of call. It 53 or more of you and and share up to price this share.
Hi, Matt Yeah. So right now we see it is roughly 50 50.
And then it gets a little bit.
Interesting because we were starting to see some early reagent rentals that are now converging converting the sales.
So I think we're going to end up seeing going forward is a little bit.
You know of.
50% plus reagent rentals.
And then some of those a lot of those will transition to sales over the course of the six months to a year.
Got it and.
Recognizing you don't provide guidance as such on on operating expenses I think we all.
Do you expect opex expenses to accelerate pretty meaningfully this year any parameters you would.
Provide us the how to think about either over the course of the next 12 months of our longer term are the true.
Hurry up spend thanks.
Yeah. So.
The biggest things, we're investing and this year, our first head count we're.
The head count.
Ross, the sales and marketing organization and and and.
R&D and we're also spending on these clinical trials and that's where you hurt.
From Primerica, where our focus is.
And it was on getting those clinical trials going as fast as we can kind of going so yeah. So opex is going to be up.
We're adding and this year you know I don't think it's going to be staggering I'd say somewhere in the 20 to 40 per cent range. This year.
And then I would probably keep it and that range.
For you know for the next couple of years.
Gross.
The rig that's all from me great. Thank.
Thank you.
We have reached the end of the question and answer session.
And I will now turn the call over to Eric for closing remarks.
Yeah, great. Thank you operator, and thank you to everybody who.
Attended the call today, and we look forward to seeing as soon for our.
The first quarter 'twenty two.
21 call. Thank you very much.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great day.