Q3 2021 Berkeley Lights Inc Earnings Call
Yeah.
Ladies and gentlemen, thank you for standing by and welcome to the Berkeley Lights third quarter, 20th 21 earnings call.
At this time, all participants lines on a listen only mode. After the <unk>.
<unk> presentation. It would be a question and answer session to ask a question. During the session you would need to press star one on your telephone.
If you require any further assistance. Please press the star is zero.
And what now like to hand, the conference over to your speaker today carry them in the mail and Investor Relations.
Can you. Please go ahead and Adam.
Thank you.
Earlier today, Firstly lights really financial results for the quarter ended September 30th 2021.
If you have not received this news release or if you'd like to be added to the company distribution list. Please send an email to I R. At first he likes Dot com.
So I need me today from Berkeley like are are cops, Chief Executive Officer, and Kirkwood Chief Financial Officer.
Before we begin I'd like to remind you that management will make statements. During this call are forward looking statements within the meaning of federal security Bot.
These statements and whilst material risks and uncertainty that could cause actual results, Oregon to materially differ from those anticipated.
Some more information please refer to the risks uncertainty and other factors discussing that with an R. S. A SEC filings.
Except that is required by law personalized disclaims any intention or obligation to update or by any financial projections are forward looking statements are there because of new information future events or otherwise.
This conference call can take time sensitive information is accurate only as at the live broadcast December 4th 2021, but that I'd like to turn the call over to Eric.
Thanks, Kerry and thank you everyone for joining us this morning.
We delivered record revenue of $24.3 million during the third quarter of 2021 coming in at the high end of the revenue range, we preannounced in mid October.
Our team members across the globe continue to execute on our strategic initiatives and we're well positioned to find the biology that cures disease.
On today's call I will provide details and the continued progress we were making a cross our business I will then turn the call over to occur to discuss third for furniture results and sure I'll look for the remainder 2021.
The industry continues to experience strong growth at the same time, it's going through some significant transformation.
We are increasingly seeing companies outflows, both R&D and manufacturing two zeros C. D Roms, which was the main growth driver for our business during the quarter.
This trend was accelerated by COVID-19, we expect this outsourcing trend to continue for the foreseeable future.
As a result, approximately 40 per cent of our third quarter revenue came from heroes and C D months.
Revenue from C. R O C D Mo customers grew more than 150% for the first nine months of 2021 competed compared to the same period in 2020.
Capacity utilization as well as global adoption of our technology in this customer group continues to expand as evidenced by five repeat Berkeley lights platform purchases year to date.
And more than a two fold year over year increase inconsumable revenue.
Demand for antibody discovery is primarily driven by the need to access increased levels of biological diversity in terms of species and sell typesetter screen and search for therapeutics against her to hit targets.
Our customers continue to see significant differentiation with our platforms capability when it comes to the hard to hit target classes, such as G. P. C R and I of channels.
As high resolution and the ability to run complex Selby functional assays becomes even more critical.
Access to more biodiversity and different cell types continues to be strong a strong driver for expanding our opportunity an antibody discovery.
With the rollout of auto antibody discovery 4.0, we are focused on product development activities that brought in the species access.
I'll also antibody discovery 4.0 dramatically increases access to biodiversity.
But it also includes the ability to deeply and Terry a primary human cells. This is significant and early access customers are seeing promising results, which can be further appreciated and the Vanderbilt webinar on the customer page on our website.
Translating more complex antibody products, such as multi specifics into highly productive cell lines requires increasingly deeper polyfunctional clone interrogation and selection.
Are off to assure product line enables our customers to do just that at unprecedented scale and speed.
In Q3, we continue to see global deployment of that capability by industry, leading see the amount, which is yet. Another example of the value proposition enabled by folks who like to technology.
Other trends emerging are searose, integrating downstream, adding selling development to their product offerings.
<unk> is a recent example of this with proven success in discovery and development of antibodies against the challenging target choosing the Berg who likes platform. It recently invested in the third beacon with.
With two platforms dedicated to antibody discovery and the latest dedicated to their expansion into cell lines development.
Glaxo Smith Kline also she has a success with our platform on an analyst customer panel.
They have switched the majority of their cell line development work to the <unk> to the Berkeley like speaking platform.
Which has enabled them to accelerate their decision, making from a timeframe measured in weeks now and just a few days.
G. S. K also purchases third begin during the quarter moving upstream in the value chain by adding beacon antibody discovery workflow capabilities to their antibody therapeutic development and manufacturing capability.
So gene therapies continued to drive significant pipeline growth and are becoming a larger part of the total therapies under development and the Biopharma industry.
In line with this tramp non antibody therapeutic revenue as a percentage of total sales grew to nearly 25% in both the third quarter and year to date revenues.
We continue to build our presence and translational centers by driving that appointment a cell therapy products and demonstrating access to primary biology that previously did not exist.
Globally, we are placed 20 platforms across the academic sector.
Development efforts around an integrated cell therapy development to ATC and closed loop manufacturing solutions continues to progress nicely.
Recently Doctor Anthony Zimmer from the medical College of Wisconsin presented at the Khaki summit on how he was leveraging the Berkeley like lightning tool to identify how modifications in Khartoum sell manufacturing can improve in vivo persistence and clinical efficacy.
A link to this Lebanon and others like it can be found on the customer spot like pages of our Berkeley lights website.
Expanding into new markets remains a key aspect of our growth strategy.
The industry trend to Purger and core technology development has driven growth of our business development activities.
Here, we are developing new solutions with partners by providing access to capacity through our bio foundry.
We currently have two principal engagement models.
Both partnership offerings start with an R&D capacity subscription that can span over multiple years.
This is either followed by a platform placement of the customer for the developed application or.
Or the arrangement is transitioned into a service offering for Brigid ice blends the established workflow and our biohazard.
And <unk>, we may share in downstream economics via milestones and or sharing the created downstream economic benefits on a per unit basis.
This model continues to gain momentum and both pipeline activity as well as revenue contribution.
In 2020 full year revenue from partnerships with $5.8 million compared to $12.5 million during the first nine months of this year.
We expect revenue from partnerships and services to cheat $18 million in 2021 and account for approximately 20% of this year's projected revenue.
Our current service in partnership backlog for 2022 has it gone to approximately $20 million at the end of the third quarter.
To serve this rapidly growing part of our business. We recently completed the build out of Boston, Biopharmacy, which will provide additional campaign capacity as we enter 2022.
Before I hand, the call over to <unk> I'd like to again, thank our team for their hard work and dedication towards making our vision a reality.
We were at the forefront of something profoundly important and we continue to push the envelope everyday and what is possible through the cutting edge fusion of biology and technology.
Our platform is becoming essential and some of the most important field such a cell therapy antibody discovery synthetic biology and many more.
As we have advanced the capabilities are platform, we increasingly hear from our customers. How our technology is enabling them to solve complex problems that were previously thought to be insolvable.
We're still early in this journey and there's work to be done to integrate our technology platform across many new market segments as.
As we have demonstrated this quarter, we are continuing to make great progress we remain more excited than ever about the road ahead.
I will now turn the call over to Kirk for more details on her finances hurt.
Thank you Eric.
Revenues for the three months ended September 30th 2021 increased to $24.3 million up 34% year over year and 26% sequentially. This.
<unk> set a record for quarterly revenue with $16.7 million coming from product revenues and $7.6 billion from service revenues.
Regionally North America accounted for 46% of revenues and a quarter followed by APAC at 40% an E M B a at 14%.
Looking at a break out across the three revenue streams revenue from direct platform sales was $14.1 million, increasing 24% sequentially and 14% versus the prior year.
These results were driven by strong platform placement, including eight Capex beacons, three tech access subscriptions and to lightning platforms, ending the quarter with an installed base of 105 platform.
As a reminder, last quarter, we watched a new tech access subscription offerings tailored to the specific capacity needs a smaller antibody discovery and so on development customers.
As of the end of September approximately 10% over a year to date placements are the tech access customers in North America N E. M. Yet we have not yet washed tech access in APAC region, which we expect to do in 2022.
Recurring revenue, which includes revenue related to consumable purchases subscriptions and service and warranty was $4.7 million, an increase of 29% over the prior year and 20% sequentially.
The sequential growth from last quarter was primary primarily driven by an increase in consumable purchases.
As a reminder, we recognize consumable revenue when a consumable is purchased by the customer.
Therefore, the timing of the purchase is not necessarily reflective of when they consumable ultimately used on the system and different customers deploy different procurement strategies for.
For example, some customers make one time purchases for their anticipated annual usage, while others purchase consumables as needed and place orders consistently throughout the year.
Additionally, some customers implemented procurement strategies in 2020 designed to derisk potential supply chain disruption from Covid shutdowns, resulting in higher inventory levels over the course of 20, 2021, and a lower correlation between purchase and usage.
Joint development agreement in partnership revenue with $5.5 million in Q3, throwing 155% from the prior year period, and 40% sequentially you.
Year to date, we assign to significant partnerships with industry leading participants.
Thermo Fisher scientific and bare crop sciences.
Together these segments carry a potential contract value of more than $30 million to date, we have recognised approximately 6 million of the $30 million in backlog, including $2.7 million in Q3.
Looking ahead, we anticipate our business development driven revenues to grow both in absolute dollars and at the percentage of total revenue while maintaining our stated long term objective of achieving 70 per cent gross margin.
Gross profit for the third quarter of 2021 was $15.4 million compared to $12.8 million in the prior year period gross margin for the third quarter of 2021 with 63.4 per cent compared to 70.3% in the third quarter of 2020.
So more to private quarters are gross margin was impacted by the cumulative impact of the ginkgo workflow by down.
This impact increasing 2322, a ramp and activity as we near completion of one of the workflows and co development, excluding the impact from Ginkgo gross margins for the third quarter, where approximately 69% in line with our long term target of approximately 70 per cent.
Total operating expenses for the third quarter of 2021 $35.4 million inclusive of $5.9 million of stock based compensation compared to $21 million in the third quarter, Twenty-twenty, which included $2.4 million in stock based compensation.
The increase of $14.4 million was driven by an increase in our D. G. N. A related expenses, we transition to a public company stock based compensation and investment in our business development and sales and marketing teams.
Net loss for Q3 was $20.4 million compared to a net loss of $8.6 million for the third quarter of 2020.
All of that last numbers are inclusive of stock based compensation.
We ended the third quarter of 2021 with a cash in cash equivalent balance of $197 million in available liquidity of $207 million, including the unused portion of a revolving debt facility announced last quarter.
Turning to our outlook for the remainder of the year, we expect revenue for 2021 to be at or above $90 million in the low nineties. The lower end of our previously stated guidance range misrepresent the growth rate of approximately 40% over 2020.
With that will now open it up to questions operator.
Thank you as a reminder to ask a question you would need to press star one on your telephone to withdraw your question Kristi pounder half tea.
Please stand by while we can talk while we compiled Q&A roster.
Yeah first question comes from <unk>.
Savant.
Stanley.
Hey, guys. This is Edmond <unk>. Thank you for the time just wanted to ask you about your direct instrument revenue. It seems like your guidance is at the lower end of what you guys have provided before meeting a scrip model has been fairly successful first on that actually can you comment on how it's been tracking and.
What your expectations are in terms of trucks and going forward.
I missed it took care of that question Edwin.
<unk> <unk>.
Yeah, well actually I can get to that later, but first can you just comment on how the subscription model is tracking given your lower end of the guidance it sounds like it's going well according to your expectations.
Well you know I think we watched that at the end of the queue to it already accounts for 10% of the placements. We have made this year. We've additionally booked one additional one so far in queue for so I think that's tracking well as we have what would expect we are seeing some increase.
Demand N C. R O N C D M O, which obviously you could be a trade off there on a tech access and let the customer goes there either case is good for us because we get the market share of the campaign, but we're pleased with the progress we're making on that product in a relatively short period of time.
Great. Thank you for that and then looking forward I think the street is kind of the estimating around 61 million of direct sales revenue based off of 36 around 36 direct to be beacon placements for 2022.
Is that still a reasonable assumption.
Do you mean 2021 or 2022.
2022, the street is going to be estimating about 61 million into that goes in you drive off of about 36 direct placements.
Yeah, It's a little early for us to give 20 twenty-two guidance will do that in a future call I think what we're seeing now is we're we're set up nicely Eric mentioned we.
We have already this year, our business development team has booked $30 million in new business of which 20 million will be recognized on the business development side for next year. So we have a nice growing installed base, our business and backlog in that area and then your installed base is growing pretty rapidly this year and that'll that'll drive additional consumable spend.
Next year, but the specifics of that will break out on a on a future call. We're still finalizing our plans for next year.
Got it. Thank you and then it sounds like the C. R. O C. D. M. O demand is still going very strong I was wondering if you can help us walk through what your customers are thinking when they're making the decision to either sign up for a subscription unit or to leverage maybe you can even if that's what he placed at a C. R O.
[noise], yeah, having to jump in on this one you know when you think about when when you. When you think about their purchasing decision whether they purchase <unk> B can go for a tech to access or work with this hero C D Mo, but our customers because there's a really thinking about you know more importantly, what's the probability of success.
And the reason the reason many of our customers go to Sierra C. D. M O. There's actually driven by the desire to access enhanced levels of biodiversity. So you want to make sure that that they get a therapeutic candidate and so each of the Sierra C. D and most have access to different animal models and biodiversity and that really is one of the primary.
Decisions they make did they evaluated making their decision on where they they put they put their money down to to find access to their therapeutics and you know as we look forward into 2022 right an antibody discovery, we believe the outsourcing trend to C. R. O T. C. You know this is going to continue and it's.
<unk> mentioned, we will continue to support that with placements into the segment those placements go into pharma companies biotech and chair of the C. D Roms and and so is Kurt also mentioned and you know it's it's our intent to capture the vast majority of the campaign capacity in the in the market to drive market share ownership of the campaign in the field.
Alright, Thank you very much.
Your next question comes from Mark Massaro C T I T.
This is thinking about how can I. Thank you for taking my question.
Absolutely go about.
Hi, I can actually think about 15 model and capital paste it makes them looking clothing.
Could you also maybe discuss how wetzler utilization that's it.
Fiction customers and get paid as in Sam workloads are only on Dec inscription model.
Sure Kurt would you like to take that one in terms of snakes.
Yeah I'll take it in terms of mix you know I I think <unk> you Gotta remember, we've got three legs of our business model that we've talked about you got the direct placements, which includes you know the capex model and the subscription you've got the service business, which falls into our partnership and development wide items, which is where we are performing the screening.
On behalf of the customer add a bio foundry that we're doing and typically yeah. That's what we're doing with the the thermo Fisher's and that there. So the world and then third what you see is no. We we take a percentage of the.
The the asset of revenues that are generated in the back and what does that through a mile.
Spell and also and unit economics.
As it relates to what you were talking about for the mixed going forward, we expect that business development in partnership revenue to increase it's already going it's already going to be 20% of this year and is Eric mentioned, we've already got backlog that will exceed the total absolute dollar value of this year. So we've got you know as we ended Q3 $20 million a bag.
Blog secured for queue for 2022 already in that that aspect as we think about in the mix in a short term subscription a tech access I again, I think we'll we'll defer the theatrical mixed flesh and guidance for that for 20 twenty-two when we give more specific guidance, but I'll refer to you that we watch the the subscription model for <unk>.
<unk> access at Lake you too we've already got three placed in we book another one this quarter uhm. So we're seeing good demand on that front, but we'll give you the specifics as it relates to 2022 on a future call. When we talk specifically about guidance for that year.
Okay Awesome can you tell me what I need to ask him how the website of all his name was <unk> kind of thing.
And then it gets out network and can dial with gingko lifestyle, Uhm Basseterre made I'm <unk> I'm I'm, having to see that new lifestyle impacting a combo.
Yeah, I'll I'll jump on this it was it was great to be if he can go from that can you go from it and and then last week and and talk with Jason and Barry and we continue to to move forward and work and we are on track for delivering works. Those pinko. This year. So that's that's gonna be very well in regards to the bear.
<unk> in regards to the there were so you know we are we aren't speaking you know of all of the details of the workshop with a absolutely. It looks so continues to be developed in our Bioherm Green is is moving forward on track and again, that's that's quite exciting for us in terms of of the ability to to take you know a DNA in from our customers write express.
Different proteins and in Indiana, and and test those against primary biology, and and so I think that's a very interesting capability that we will happen or bio foundry as we continue to move forward. It and all of these things are part of our overall strategy and you know what we we engage we find you know high value I tell you.
<unk> product opportunities, we work with the industry leaders and then we engage in these partnerships and and I think it's important to highlight how how critically important those partnerships are not only for opening new markets right in a business development late but I'd also building enterprise value in the long term as as we see you know the.
These these these you know the termination of these business development deals is not the end, it's mainly just at the end of the deal could actually leads to either placements of platforms at the customer or we run the the we transitioned into a service offering will run the established works loan or by file hungry and so in either model and.
These and these this development partnerships, we share we can share and downstream economics, neither be via milestones and are sharing counselor and economic benefits on a on a per unit basis. So this model continues to gain momentum and I think it's important to highlight <unk>. What <unk> stated, which was you know we anticipate $18 million in revenue this year.
Here in those business development activities, but the backlog for next year is already 20 million. So it's Ah it's beyond and this is at the end of the third quarter Uhm. So C very nice progress there.
And then visiting I would just jump in to say you know the the bear obviously, we just find that Dale deal in August. So it's still very early on the other one that I think is making good progress is what we announced earlier in the year with Thermo Fisher scientific around the table viral vector manufacturing and we continue to make it's great <unk>.
The address and pushed the boundaries of technology.
Okay, great. Thanks for taking my question.
Mhm. Thank you.
Your next question comes from the lineup Julia Quinn of J P. Morgan.
Hi, good morning.
Uhm, starting with instead of an appointment and you know I have left you have to be too placement of should repeat customers, which is obviously thank you see I'm curious now that you know many of you early our customers have had to sit down for a couple of years do you expect them mixed up with Pete that's nice to kick up going for it.
Yeah, I mean as I I'm, sorry, Oh go ahead <unk> go ahead <unk> go ahead.
Well, Yeah, I was just gonna say that I mean, this is exactly the trying to review been seeing over the years Julia that our customers get the technology platform in in their businesses. They run it get get familiar with it see the value in continuing to expand and so it's great to see our customers continue to buy there were two they were.
Two notable press releases from this quarter, <unk>, which which fought their third begin which is which is of course, you owe to integrate both selling development an antibody discovery into into a complete workflow and and also G. S. K Glaxo Smith Kline did the same thing now they brought.
Antibody discovery onto an existing telling to them. It works, though but the key important point is that these two companies are joining other pharma companies, who have integrated both antibody discovery it shall I develop it and there's a significant reason to do so in the sense that the overall time to the clinic can be dramatically accelerated by going directly.
From antibody discovery into skyline development activities with functional characterization happening in parallel so I think it's important to notice that you know as we as we projected in the I P. O discussions that integration across the value chain was going to be important and what's going to be kind of our our our mission.
And each of the market segment stuff that's happening and this is of course, our first antibody therapeutics as those of course are first market that what we said was going to happen is happening and continue to be excited about seeing our customers further integrate berkeley lights across the entire value chain.
And enjoy the last hurdle with that you guys actually I would also note that you know <unk> <unk>.
We certainly expect to see repeat customers continue and we had a nice mix of that this quarter, but an example of that is a C. R. O S. T. D. M O space. If that continues to grow you know that's a capacity players they need more.
More business their business is dependent upon the Berkeley life.
Go buy more tools, we saw that in Q3, and we saw that you know earlier in the year as well and then I think the other thing we look at the mix of business with new customers. You know there's things we do is they they learn more about the beacon.
We we start then talking a little bit more about business development of deeper collaborations of what what we can do with those customers. So I think you'll see a mix of those continuing ongoing business with customers driven by consumable usage driven by 12.
<unk> placement as well as some deeper partnerships in some cases on the business development and service a side of the business as well.
Your next question comes from Brian Weinstein William Blair.
Hey, guys. Good morning, Thanks for taking my question.
<unk>, Hey, so you've kind of joked around on this a little bit, but I I was hoping to tend to need to get a little bit more specific on just kind of what the funnel 444, new account to work. So I can kind of what the sales process in general and what the cycle looks like is your <unk> not only working with you more traditional partners.
But as you're transitioning more to the C. R O C B M O space <unk>.
How does that funnel in sales cycle, how does that work right now versus maybe what it looked like historically.
Yeah think about doing that hey, Brian <unk>, Yeah, Yeah, I'll jump in the morning, Greg good to good to hear from you and and thanks for the question you know as we continue to talk and and stay close with our heroes see Nemo customers right. They continue to be you know add capacity limitations and so those discussions of course.
Increase in and the question is how do they how do they add to their to their overall capacity to serve their customers. This general trend about so we're seeing in the market. We see is something that you know has been happening in and it's been accelerated by Covid and it will continue we don't see that that returning you know.
To go back the other way anytime soon and so we we continue to stay in close contact with our customers happy discussions in regards to overall timelines you know previous timeline six to nine months I would say it's about the same what has really dramatically accelerated though right is the is the business development pipeline and the time.
Lines on the business development activities, Great I think you know the business development team in our our deal desk has just done a great job that continuing to work with our customers as we see you know continue to interest in demand for how do we build those workflows of the future how do we enable our customers to do things that they're just not able to do today and and so.
<unk> you know things that are possible with a particular platform just can't be done very easily or economically other ways and so I think you know it's very it's very encouraging to see that growth in our overall pipeline leading to a a very nice backlog for next year.
And then Brian just to add to that I think there you have to break that down a little bit between existing and new customers. So it just kind of give you. An example, if I. If we've we've placed of our top 10 users of the tools over the last four quarters eight of them have placed orders for new additional tools obviously.
That sales cycle for an existing customer that already has experience with the platform is much shorter when you get a new customer that's new to the Berkeley likes name. There's oftentimes a feasibility study that goes in as we've talked about before a lot of times people. They they here and they do reference checks, but they're skeptical of whether the the technology will work initially.
On their unique biology, and time and time again, we prove that and we do feasibility studies and that the timing of that it was it was always you know dependent upon the customer of you know getting us to biology running the test and that can take a little bit of time on there and then the business development pipeline that Eric was mentioning that varies depending on the complex.
The city of the deal like we talked about the Thermo deal you know that that came to fruition and just you know one or two months. The birdie all took a little bit longer than that and others. We have in the pipeline are kind of between the two that we've been working with but there were getting good traction with that and it's one part of the process of proving the technology works to accomplish.
What they're envisioning doing and then the second part for them on the sales cycle for the tool is then going through the you know funding Yo Yo.
Portion within process within their company and in that process differs between tech access and and and the Capex with a capex takes a little bit longer tech access as a lower financial commitment and generally can be done on a month or two sooner than what we see on the capex side.
Understood.
Just transitioning quickly to kind of geographic mix them break down there and you guys are kind of unique given you know you're you're not overly focused on just the U S market Uhm. So I'm curious about you know some of the trends that you're talking about how prevalent today are in areas outside the U I should just just what are.
The different trends that you're seeing in various geographies at this point.
Yeah, absolutely I mean, and as we've I would really mentioned in the last three or these calls right. The growth in Asia Pacific region. Cheap you know continues to grill high high level of interest in an antibody discovery in APAC I think our our head of Asia Pacific You. A dog is just doing a fantastic job building the team building.
T. There as we continue to execute in that region, it's not just in China.
Placements in Japan, and Korea, and also lots of discussions happening in Singapore area. So you know I I think that that overall region is is a very very important region for us to to continue to focus on and you know in the in the EMEA. Gareth Jones is also doing a great job.
Bringing bringing up and and I think the placement the placement of GSK is really significant in terms of you know leading to full integration of the perfect spot for there across you know antibody discovery installing development. So you know globally, we continue to see high levels of demand from our customers, whether it's you know find the customers or so.
Zero C D, most and and in particular, the Asia Pacific region continues to try with high levels of demand an antibody discovery.
Okay, great. Thank you guys so much.
Thanks Bye.
Your next question comes from the line of Dan Arius Stifel.
Hey, guys. This is even on the phone for Dan. Thanks for the question [noise].
Sorry to bring it up a little bit of a sore subject, but I'm. Just wondering you know the report that came out a couple of months ago I'm I'm just actually just wondering if that is impacting her that's coming up in conversations with with customers Uhm and if that's impacting.
I guess the sales process at all.
My first question.
Yeah, I have a habit of jumping in and take this one I mean the claims in the report have left our customers you know relatively speechless in terms of some of the blame lies and false statements created against our technology and I think it's important to note as a matter of fact that we had multiple repeat purchases and a quarter posted a short report being published but on the bright side.
The report is further submitted the strong relationships, we have with our customers. Many have offered to continue to provide branches tore towards pretty light. So in general the customer response has been very positive as we move forward. So I think you know in general we have not seen a dramatic impact from the Scorpion sure report.
I mean anything from new customers, though.
At Orange as familiar with the with the.
<unk> yeah.
Yeah, Fray any new customer any new customer who has a question is is you know it is more more than welcome to have discussions with our existing customers in and they do reach out in a small community. It's not it's not a broadly based community and people people do have those discussions so our new customer screen any chow.
To our existing customers, who continue to provide support you know in in regards to what what capability very cheesy with our product. So it's not a it's not a it hasn't had an impact on our overall pipeline.
Oh, that's good to hear Uhm follow up questions related to I guess, you're <unk>, you're having a an evolving business model and you know <unk> Highway Cro's is G. M. C. D. M. O's, but you are also you know within your service business. It's it sounds to some extent like you.
Might be competing with them have you I mean.
Have you senseless from your your <unk> customers are street M O customers that.
Have they brought the shopping has just been impacting any sort of you know shelves yeah shelves.
Yeah. So then the antibody so just to be clear right. We do not compete with our Cvs Jaros CMO customers in the antibody therapeutics based on the antibody therapeutics space, our customers are C or a C. D. M. O customers are executing antibody discovery Towline development workflows. Our service business is focused on new markets and new market development you know we're we're.
We're working on a new spaces like synthetic biology, you know, creating stable cell lines for viral vectors with thermo or working <unk> bear these are completely different markets and so no. There is no conflict between you know the services business, we offer to develop an S and to develop new markets versus existing markets, where we sell <unk>.
And so you know as we engage in different market segments. We delineate them as is this gonna be a service business, we're going to go into such as the I buy a market where is it going to be a platform placement popcorn placement business such as what we've decided what we had decided for antibody therapeutics Oh, so no conflicts there.
Gotcha, and I, just have one or a follow up with <unk> related to that and and that's with the service business you highlight of $20 million for for next my final for next year. It just is that including uhm buyer in Burma.
Yeah, that's fair Thermo and ginkgo.
Okay, great. Thanks.
Mhm.
Your next question comes from the line stand Brendan that's Cowan.
Great. Thanks for thanks for the question guys, just maybe to start off with a question on the guidance really good quarter here in two three you narrow the guy to the lower and was there any time in related benefits in Q3.
You know a leading you to kind of take down the revenue it a little bit for for Ya.
No I think what we said in prior causes which we expect it to be a little bit at the at the lower end of that that range. As we were successful with what we're doing on the business.
So nothing really there it's more of the range that we're doing here is we're still at that level, where you know each tool you're selling one and a half $2 million. So one timing moving in and out of a quarter.
Can have a material impact so that's more what we're saying of the that narrowed range there.
Got it great and any.
Any impact at all from you know all the supply chain issues that a recurring whether impacting kind of customer usage of the platform or your own ability to make the platforms and you know just also wondering with the delta.
Covid impacting two three just you know did that have any influence at all on you know kind of what you guys reported.
Yes, My furniture <unk> go ahead <unk>.
Yeah first one being a customer you say one of the benefits of their birthdays platform is the high levels of automation right until our customers are able to come in the lab police awhile played into tool hit the go button and then many of our customers go home and run the tool remotely and so and so no no major issues. There you know.
<unk>. Unlike other companies you are heavily reliant on the academic space, we operate in a commercial commercial area and and so and with commercial entities, who are heavier heavily leveraging C. R. O C. D. Most of this year as a C. D on those continuing to crank do this time as they gained market share in the space. So it's actually been quite positive and a <unk>.
Business driver for us.
To supply chains and delivery of goods to customers I mean globally. The supply chains are a fragile today uhm and although this could change at any time, we haven't seen a disruption to our overall services as we move through as we move through the supply chain challenges COVID-19 with Covid anything to add.
Nope, Thank you got it.
Great Great and maybe just a few more quick ones. If you don't mind, so cell and gene therapy, It's a quarter of your revenue today I know there was a question earlier on a sales for them, but I'm just wondering how do we think about like that mix for that opportunity going forward. Uhm did you stay there just any any color about how that looks going forward for ya.
Since it the I'll, let her take the the next question in a second but you know look Hello gene therapies continue to grow in the overall the overall market, we see it and everybody else receive it as well these new therapeutic modalities require because he knew therapeutic modalities require you know integrate integrating access.
Seeing and understanding <unk> primary biology, and a very high throughput and scalable a burger that is really well positioned in regards to you know cell therapies. We believe when we integrator characterization capabilities for Q, a Q C into a manufacturing possible, we really will provide the industry with the greatest opportunity to dramatically accelerate appointment itself therapies.
Now that will take time, but but I do believe there is there's great promises at the complexity of biology increases into the future Burger that is very well positioned uhm I don't know if you want to add anything in regards to some of the mixed questions.
No I think you've got it I think you know obviously you got the mix of what we're seeing now at least in the short term, we see that being consistent and will continue to evaluate the market and a job.
Thing about our technology is that's applicable to many different markets is Eric set in his prepared remarks, and and we're ready to play and all of those and have partnerships and relationships with key players in each of those segments. So we're poised and then we obviously use business development to expand what we did you know and the <unk>.
Therapy, with Thermo Fisher and that AG bio with with with bare and I think you'll see us expand into some additional markets.
Here in the next 12 months.
Great and then maybe one last one so of antibody discovery Caroline development.
You you mentioned, how the utility of your platform enables you know more complex Hannah body, Bispecific fragments and whatnot, how much progress customer having using the platform for these verses traditional for my Grand a bunny.
Yeah, we have some great results this quarter on the bike specific side with cell line develop it. It was published at at at one of the conferences, whereby you know, we're able to understand and see with <unk> and this is a project done with one of our customers you know the the relative fraction one of the big challenges in installing development.
For Bispecifics is to ensure that you find the cell lines, which are which are making you know a majority of the by specific that you want not partial fractions of the antibodies that you pay you want and we're at we're able to see that inside of them out of that so we were on multiple assays and again. This is you need to burglarize around multiple assays again, you know the difference.
The age of targets and we can tell you what the relative fractions of of of antibodies that are being manufactured by this thing. So our customers are quite excited about this new capability that that would be D C and and making a lot of progress. There. So these these new you know I think there was a misnomer miss characterization.
You know the overall report that was that was filed that you know complex ahead of ice.
Are not able to be rounded a virtue lights pop on that couldn't be further from the truth actually and the fact that our customers are making great progress on these complex antibodies in the perfect platform.
Great great. Thank you.
Mhm.
And your final question comes from the line of Paul ninth of Keybanc.
Okay. Thanks on the academic side, what are they ordering I know that this has been a developing market relative to the others. So what are you doing there and what are they buying.
Yeah, So as I mentioned in the pair prepared remarks, or we have now have 20 placements globally different academic institutions and you know I think in the last quarter. One of the very interesting things was you know what we saw from Doctor Anthony Zimmer his pocket the car T tcr's on it which he you know.
Provided an overview on on how he's using our lightning platform to identify how modifications a cartoon khaki T cell manufacturing can improve in vivo persistence and clinical efficacy and he's doing that by by determining the mechanisms in specific features of a T cell biology that drive these therapeutic responses and so.
You know, we see we see a real interest of the interrogation of life like biology, what what our customers are really interested in the academic spaces is that you know having access to an interior getting life primary biology from humans. It is really challenging in the sense that the cells you know.
You know don't stay alive long outside of the body and so a platform like the pretty lights platform enables enables our customers to interrogate these things with a velocity that means they can answer many questions prior to the cells expiring or changing and so you know this is seen in work that we did with Vanderbilt also with all your Institute.
I think the analogy and so papers have been published on this where the person who likes platform is being used to use the two to interrogate the tune itself and I I think it's it's quite a promising future for us us there uhm okay.
Have the answer additional questions is it is it fair to say that existing customers are buying platforms in new customers or.
Going to the script subscription model.
There's certainly a mix of both that we see right. We you know as we as we launch into the sea to some customers continuing to buy new customers continue to buy Capex, Please capex orders and and even some existing customers who had capex moving to the tech access subscription so again.
You know I think we're we're still learning about our customers and how they want to interface with our with our technology is a mood board and look we have seen where customers face budget challenges. They go to check access uhm if customers have budget. They they go to capex in the long run it's it's slightly better for them. So any case, we see a mix of both.
Oh no no no clear I don't think there's a clear rule that says these customer we go this way and the customers go this way at this time, but it's great to see to see continue they'll take a break today's technology.
Okay, and lastly are the are the academics tending to go subscription or does it vary.
Let me see we see various there we do have you know platforms placed it with subscription and and again also with Capex. So you know when when people have grass a significant size. They go for the purchase and and if they don't they go for the to go for the Tech access.
Okay. Thanks.
Mhm.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
Yes.
[music].
Okay.
[music].
[music].
[music].