Q3 2021 MaxCyte Inc Earnings Call

[music].

Good day, ladies and gentlemen, and welcome to the Mack side third quarter earnings Conference call.

At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time.

If anyone should require assistance during the conference. Please press Star then zero on your Touchtone telephone.

A reminder, this conference call is being recorded.

I would now like to turn the conference over to your host Mr. Sean <unk>.

Okay.

Okay.

Good afternoon, everyone. My name is Sean and Rguest and I'm an analyst on the Max. Thank you. Thank you all for participating in today's conference call on the call for Mac site, we have Doug Barclays, Chief Executive Officer, and Amanda Murphy Chief Financial Officer.

Earlier today <unk> released financial results for the third quarter ended September 32021 copy of the press release is available on the company's website before.

Before we begin I need to read the following statement.

Statements or comments made during this call maybe forward looking statements within the meaning of federal Securities laws any statements contained in this call that relate to expectations or predictions of future events results or performance are forward looking statements actual results may differ materially from those expressed or implied in any forward looking.

Statements due to a variety of factors, which are discussed in detail.

SEC filings the company undertakes no obligation to publicly update any forward looking statements, whether because of new information future events or otherwise and with that I will turn the call over to Doug.

Thank you, Sean and good afternoon, everyone and thank you for joining <unk> third quarter earnings call.

I will begin with a discussion of our business and operational highlights during the quarter and then will follow with a detailed financial review for Maria.

We will then open up the call for questions.

Very excited with our performance in the third quarter of 2021, our second time reporting as a NASDAQ listed company.

During the quarter, we continued to deliver on all financial and strategic aspects of our plan as the Premier So engineering platform technology.

Reported the development of advanced cell based therapy therapeutics.

Amanda will provide more details later in the call, but I note that we realized very strong third quarter results as outlined in the press release published earlier today driven by strong performance in our core so engineering business as well as substantial.

L, which is strategic platform license program related revenue recognized during the quarter.

To summarize total revenue was just over $10 million, representing a 50% growth compared to the same period in 2020.

Our core instruments and disposables business grew 25% in the quarter, which lines up with our historic five year CAGR of 25%.

We also recognized $2 million in pre commercial clinical milestone revenues from our strategic platform license commercial partners. This was well above our expectation for $1 million of SPL related revenue for the remainder of the year, which we communicated last quarter.

Speaker 1: and pre-commercial clinical milestone revenues from our strategic platform, licensed commercial partners. This was well above our expectation for $1 million in SPL-related revenue for the remainder of the year, which we communicated last quarter. Revenue recognized from our SPL partners in the quarter was a result of multiple clinical milestones recognized in the quarter, some of which were recognized earlier than we initially anticipated as our partners achieved clinical development progress.

Canoe recognize from our SPL partners in the quarter was the result of multiple clinical milestones recognized in the quarter some of which were recognized earlier than we initially anticipated as our partners achieve clinical development progress.

Speaker 1: So to preempt any specific questions about the specific drivers about their revenues during the Q&A session. Thank you.

So to preempt any specific questions about the specific drivers of milestone revenues drove the Q&A session.

Speaker 1: And as we have previously indicated to ensure the confidentiality of our partnership agreements, we will be unable to answer any questions related to the FBL partners and progression of their program specific.

As we have previously indicated to ensure the confidentiality of our partnership agreement, we will be unable to answer any questions related to the SPL partners and progression of their program specifically.

Speaker 1: We believe the key takeaway is that this quarter's performance shows the power of our business model and our ability to share in the economics of our partners on going clinical success.

We believe the key takeaway is that this quarter's performance shows the power of our business model and our ability to share in the economics of our partners' ongoing clinical success.

Speaker 1: invested into and innovation in next generation cell therapies has been explosive and continues at a high level throughout 2021.

<unk> into an innovation and next generation cell therapies has been explosive and continues at a high level throughout 2021, we have all seen the reality of regulatory uncertainty in the space.

Speaker 1: We have all seen the reality of regulatory uncertainty in the space as developers navigate a new world of advancing novel cell therapy approaches through the clinic. But we have also seen powerful data updates and progression toward approvals for next-generation cell therapies. And consequently, this quarter's results show the potential for Moxite to participate in that progress.

Developers navigate a new world of advancing novel cell therapy approaches through the clinic, but we have also seen powerful data updates of progression toward approvals for next generation cell therapies and consequently, this quarter results show the potential <unk> participated in that progress.

Speaker 1: why we expect our partners to evolve their broader pipelines over time. More importantly, we have not seen any change by our partners in their intentions to invest in ex vivo cell therapy.

While we expect our partners to evolve their broader pipelines over time more importantly, we have not seen any change by our partners and their intentions to invest and so ex vivo cell therapies.

Speaker 1: The support that we have seen continued growth in our SPL partner base, as we believe Max Hight's proprietary activation platform provides both the scalability and high performance that is essential in supporting the development and manufacturer of complex next generation engineered cell therapies in a CGMP compliant environment.

To support this we have seen continued growth at our SPL partner base as we believe Mac sites proprietary electroporation platform provides both scalability and high performance that is essential in supporting the development and manufacturer of complex next generation engineered cell therapies in a cgmp compliant.

Speaker 1: MaxSight's value continues to be further validated by our expanding customer base, including the ongoing success we have had in signing SPLs with four of these arrangements signed year-to-date, as well as the value of our FDA master file and equivalent technical files outside the US. We now have signed 15 SPLs.

Okay.

<unk> value continues to be further validated by our expanding customer base, including the ongoing success. We have had an exciting spl's with four of these arrangements signed year to date as well as the value of our FDA Master file an equivalent type of technical sales outside the U S. We now have signed <unk>.

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Speaker 1: signed after adding SANA biotechnology in the third quarter, and then CARTA therapeutics announced earlier this month. We continue to build a burgeoning pipeline of SPL partner opportunities across a variety of cell types, approaches and indications in ex vivo cell therapy.

After adding.

Biotechnology in the third quarter, and then in Cardiff Therapeutics announced earlier this month we.

We continue to build a burgeoning pipeline of SPL partner opportunities across a variety of cell types approaches and indications in ex vivo cell therapy.

Speaker 1: From an investment and growth acceleration perspective, we're committed to investing in the business and as such, as focused on refreshing and refining our long-term strategic plan. We intend to ramp investments in our research and development and sales and marketing competencies to take advantage of opportunities we see in this base to provide added value to our customer base.

From an investment and growth acceleration perspective, we're committed to investing in the business and as such.

Thats focused on refreshing and refining our long term strategic play out.

We intend to ramp investments in our research and development and sales and marketing competencies to take advantage of opportunities. We see in this space to provide added value to our customer base.

Speaker 1: This includes expanding our manufacturing footprint as our partners move closer to potential commercialization. We are moving into a 67,000 square foot facility in 2022 and are working to further in-source key elements of our manufacturing process, particularly around processing assemblies. We're also making significant investments in our process development lab, which will benefit both our cell therapy and biomanufacturing markets and customers.

This includes expanding our manufacturing footprint as our partners move closer to potential commercialization.

We are moving into a 67000 square foot facility in 2022.

Working to further in source key elements of our manufacturing process, particularly around processing assemblies. We're also making significant investments in our process development lab, which will benefit both our cell therapy and bio manufacturing.

Markets and customers.

Speaker 1: We are also focused on further developing our product portfolio. We're on track for release of our new VLX platform under the expert brand by the end of the year. While the market expansion opportunities for the VLX and the large scale by oppressing applications will take time to evolve, we're encouraged by the preliminary interest for municipal customers.

We are also focused on further developing of our export product portfolio. We are on track for release of our new <unk> platform under the expert brand by the end of the year.

While the market expansion opportunities for the <unk> and the large scale bioprocess applications will take time to evolve. We're encouraged by the preliminary interest from initial customers. We are constantly evaluating potential market opportunities for the <unk> and look forward to updating investors on the evolution of the <unk> product roadmap over time.

Speaker 1: We are constantly evaluating potential market opportunities for the VLX and look forward to updating investors on the evolution of the VLX product roadmap over time.

Speaker 1: We launched the RF 50 by eight, processing assembly in September , 2021. This exciting portfolio expansion will allow scientists to do more transactions in less time and add a reduced cost per transaction, which will open up new applications for research on their platform and accelerate optimization. We believe this product can attract new customers to the technology and new applications and an earlier stage in their programs, helping us to establish relationships earlier and growing our customers.

We launched the <unk> 50 by eight.

Processing Assembly in September 2021, this exciting portfolio expansion will allow scientists do more transactions in less time.

At a reduced cost per transaction, which will open up new applications for research on their platform and accelerate optimization.

We believe this product can attract new customers to the technology and new applications at an earlier stage of their programs, helping us to establish relationships earlier and growing our customer base.

Speaker 1: We're also investing meaningfully in people in hiring at the fast pace.

We're also investing meaningfully in people and hiring at a fast pace. This.

Speaker 1: This year we have made key hires and announced important internal promotions with Custon on the previous call. We have added resources to our Alliance Managed Matin as a reflection of increased interest on the part of commercial self-herapy developers to work with us on a more strategic base.

This year, we have made key hires in announced important internal promotions discussed on the previous call.

We have added resources to our <unk> management team as a reflection of increased interest on the part of commercial cell therapy developers to work with us on a more strategic basis.

Speaker 1: As we look to the fourth quarter and into 2022, I continue to expect MaxSight to invest and grow headcount in all major areas of the organization. We have a bright future and are investing in the people who help get us there.

As we look to the fourth quarter and into 2022 I continue to expect Max site to invest and grow head count and mall major areas of the organization, we have a bright future and are investing in the people.

Help get us there.

Speaker 1: For example, our sales and marketing team is growing as we see opportunities to move into new applications and geographies. Investing in growing our sales and marketing team includes the hiring of James Lovegrip, as Senior Vice President of Global Markets.

For example, our sales and marketing team is growing as we see opportunities to move into new applications and geographies.

Vesting in growing our sales and marketing team includes the hiring of James Love Group as senior Vice President of Global marketing James brings deep experience in cell therapy to the role and we look forward to his efforts to grow adoption of the <unk>.

Speaker 1: James brings deep experience in self-therapy to the role and we look forward to his efforts to grow adoption on an ex-site expert platform in cell-based research and next generation drug development. In addition to Jim, we look forward to expanding the commercial team to support market development and customer engagement.

Expert platform and cell based researched and next generation.

In addition to Jim we look forward to expanding the commercial team to support market development and customer engagement.

Speaker 1: We announced that our board of directors has appointed Richard Douglas's chair on the board. Richard Douglas has been a board member since February 2018. He succeeds, Jay Stark Thompson will remain as a consultant to Max Ike. I look forward to Richard's leadership in his new role and thanks Stark for setting the Global Foundation as we built Max Ike. It's been a true honor to work with him and we thank him for his dedication and perspective.

We announced that our board of directors has appointed Richard Douglas as chair of the Board Richard Douglas has been a board member since February 2018.

Succeeds Jay start Thompson will remain as a consultant to Max site I look forward to Richards leadership in his new role.

Stark for setting the global foundation as we built that site.

Been a true honor to work with him and we thank him for his dedication and perspective.

Speaker 1: In closing, we have had a strong third quarter as we continue to execute on our financial and strategic goals. We are very excited about our opportunity going forward, particularly in the cell therapy market and believe we are making the right investments to drive growth across the business.

In closing we have had a strong third quarter as we continue to execute on our financial and strategic goals. We are very excited about our opportunity going forward, particularly in the cell therapy market and believe we are making the right investments to drive growth across the business.

Speaker 1: I will now turn the call over to Amanda to discuss our FANTR results. Amanda?

I will now turn the call over to Amanda to discuss our financial results Amanda.

Speaker 2: Thanks, Deb, and hello everyone. As I mentioned, we saw very strong revenue grettes this quarter with total revenue of $0.1 million, which was up 50% over the third quarter of 2020.

Thanks, Dan.

As Doug mentioned, we saw very strong revenue growth this quarter with total revenue.

Which was up 50% over the third quarter of 2020.

Speaker 2: This growth is driven primarily by strength in our underlying self therapy business, as well as SPL-related program related revenue, which I'll dive into in more detail in just a minute.

Go ahead, thats, driven primarily by strength in our underlying business.

STI program related revenue without diving too.

A detail in just a minute.

Speaker 2: Cell therapy revenue of 6.2 million grew 38% over the third quarter of 2020. This is a quick background. Cell therapy represents a sales or licenses of instruments and sales of disposables to customers that are using the expert platform to manufacture ex vivo based cell based therapies for human use, whether that be in preclinical clinical or ultimately commercial use.

Therapy revenue of $6 2 million grew 38% of the third quarter of 2020, just as a quick background therapy represents a sale or licenses of instrument sales of disposable.

That are using the expert platform manufacturer ex vivo based all base.

Therapies for human you whether that be in preclinical clinical and ultimately commercial.

Speaker 2: Despite a more difficult year of your comparison all to the third quarter, getting COVID-related dynamics.

Despite a more difficult year over year comparison relative to the third quarter Covid related dynamics.

Speaker 2: We reported growth in the core cell therapy business that's exceeding our historical run rate.

We reported growth in the core cell therapy business, that's exceeding our historical run rate.

Speaker 2: instrument purchases in cell therapy can often act as a precursor to SPLs as customers first purchase platforms in early stage programs. So that's encouraging in terms of the potential for SPLs in the future and we talked about our burgeoning pipeline in that area.

Instant ticket business out there you can often act as a precursor to USD.

Purchased platforms and early stage programs.

That's encouraging in terms of the potential.

For Este out in the future and we've talked about our burgeoning burgeoning pipeline in that area.

Speaker 2: Notably, our cell therapy customers are also less tied to CAPEX spending, so to speak. So we're seeing a dynamic where revenue from our core business is less weighted to the fourth quarter, as we've seen in the past given the strong performance this quarter.

Notably our cell therapy customers are also thats tied to capex spending so to speak so we're seeing a dynamic where revenue from our core business last weighted to the fourth quarter as we've seen in the past given the strong performance we saw this quarter.

Speaker 2: And that's particularly driven by our self-aeropie customers ramping clinical trials.

And that's particularly driven by our cell therapy customers ramping.

Clinical trial.

Speaker 2: In terms of drug discovery as a reminder, drug discovery represents sales of instruments and disposables to customers using the export platform for smaller scale bio-manufacturing applications, such as transient protein production, and the manufacturing of protein, such as monoclonal antibodies, cyrovectors, vaccines, and for small molecule discovery. And those sales went primarily made to large pharma.

In terms of drug discovery as a reminder, <unk> represent sales of instruments and disposables to customers using the expert platform.

Scale bio manufacturing applications, such as change in protein production and manufacturing of proteins, such as monoclonal antibody viral vector vaccines and for small molecule discovery net sales are primarily made to large pharma.

Speaker 2: So I've discovered revenue in the quarter with 1.9 million, which was down side percent over the third quarter, but slightly up on an absolute basis over the second quarter.

So discovery revenue in the quarter with $1 9 million, which was down 5% over the third quarter is slightly up on a on a absolute basis over the second quarter.

Speaker 2: Drug discovery revenue was notably strong in the third quarter of 2020, as people got back to work after the lockdowns of COVID. So we had to also had a more difficult year of year comparison in that segment as well.

Jack Discovery revenue was notably strong in the third quarter of 2020 people got back to work after the lockdown.

Covid. So we had also had a more difficult year over year comparison in that segment as well.

Speaker 2: Ultimately, drug discoveries to come a smaller part of our overall revenue mix given the strong growth in cell therapy. The shift in revenue mix towards cell therapy has been consistent over the past five years. And we saw that spat again this quarter with cell therapy representing 77% of revenue, excluding milestones and drug discovery representing just over 23% of revenue, excluding milestones.

Ultimately attract discoveries to comment is not part of our overall revenue mix given the strong growth in cell therapy. The second revenue mix towards out therapy has been consistent over the past five years, I mean that again this quarter with cell therapy, representing 77% of revenue, excluding milestone and that discovery, representing just over 22% of revenue.

Speaker 2: That said, we are encouraged by the sequential uptick and the rest in the drug discovery business versus the second quarter of this year. It's a business that's been more challenged over the past couple of years, driven by COVID and also a more challenging environment.

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We are encouraged by the sequential uptick in the in the drug discovery business versus the second quarter of this year. It's a business that's been more challenged over the past couple of years, driven by Covid and I'll say, a more challenging environment.

Speaker 2: So we're cautiously optimistic regarding the impact of some of the multi-welPA interventions that we've made over the past couple of years that serve to lower the purchase and section cost for customers.

So we are cautiously optimistic regarding the impact of some of the multi <unk> introductions that we've made over the past couple of years that serve to lower the purchase transaction cost for customers.

Speaker 2: and also have had active efforts to expand academic collaborations with translational centers that seem to be gaining traction.

And also have had active efforts to expand academic collaborations with.

Translational centers that seem to be gaining traction.

Speaker 2: We reported 2 million in program related revenue from our SPL customers in this quarter as compared to 0.3 million in the third quarter of 2020. As I've mentioned earlier, we recognized SPL program related revenue from some of our customers earlier than we had anticipated. And these were made up of multiple milestones from customers.

We reported $2 million in program related revenue from our STL customers in the quarter as compared to zero point $3 million in the third quarter of 2020 as Doug mentioned earlier, we recognized STI program related revenue from some of our customers earlier than we had anticipated and these were made up of multi multiple milestones from some customers.

Speaker 2: The prizes like this are encouraging, and again, in our view, a testament to the value that Maxi provides to our partners and the uniqueness of our revenue model and our ability to participate in downstream economics of our customers program.

Things like this are encouraging and again in our view a testament to the value that macs they provide to our.

<unk> and the uniqueness of our revenue model.

And our ability to participate in downstream economics of our customer program.

Speaker 2: It does also demonstrate the difficulty we face in predicting the timing of SPL revenues as these are predicated on our customers, clinical successes, and regulatory process given the early stage nature of our South Therapy customers pipeline. So we do expect timing of milestone events to be lumpy for the near term until we see SPL partner pipelines mature and as the number of SPL partners and active programs continue to expand.

It does also demonstrate the difficult TV based in predicting the timing of <unk> revenue.

As these are predicated on our customers clinical successes and regulatory process given the early stage nature of our cell therapy customer pipeline.

Can you do you expect timing of milestone events can be lumpy for the near term until we see FPL partner pipeline.

Mature and as the number of SCR partners any active programs continue to expand.

Speaker 2: The Bureau best to provide visibility and SPL-related revenue, potential over time as the milestone, the milestone stack continues to grow.

We'll do our best to provide visibility to FPL related revenue potential over time as the milestone.

That continues to grow.

Speaker 2: We continue to be encouraged however by the potential of a SPL-related program revenue over the next 12, 18, 24 months, particularly as our partners progress and enter and move through the clinic and given the potential for approvals even in the next couple of years. So we anticipate a growing and more broad day for every stream related to the SPL's over the long term.

We continue to be encouraged however by the potential.

Sps related program revenue over the next 12, 18, 24 months, particularly as our partners progress enter and move through the clinic and given the potential for approval even in the next couple of years.

Anticipated growing in more broad based 70 accumulated into the Npls there for the long term.

Speaker 2: Moving down the P&L, growth margin was 91% in the quarter versus 89% in the third quarter. With the difference being to have been almost entirely by milestone revenues. So excluding milestone related revenues, growth margins were flat relative to the second quarter of last year.

Moving down the P&L gross margin was 91% in the quarter versus 89% in the third quarter with.

With the difference being driven almost entirely by milestone revenue excluding milestone related revenues gross margins were flat relative to the second quarter of last year.

Speaker 2: Total operating expenses for the third quarter of 2021, we're 11.6 million compared to 8.9 million in the third quarter of 2020. This increase was primarily driven by increases in headcount. As Doug mentioned, we are expanding in many areas in the business in terms of adding resources, as well as growth-based, stock-based comp, which was driven primarily by the increase in our stock price. And as a reminder, there were no meaningful karma-related expenses in this quarter.

Total operating expenses for the third quarter plants anyone were $11 6 million compared to $8 9 million.

Third quarter 2020.

This increase was primarily driven by increases in head count as Doug mentioned and they are expanding and many areas in the business in terms of adding resources as well as growth base stock based comp expense driven primarily by the increase in our stock price and as a reminder, there were no meaningful karma related.

In this quarter.

Speaker 2: As Doug mentioned, we are making and plans to continue to make increases in investment in many areas of the business. And we saw that this quarter R&D was up 36% over the last year's quarter. And that's excluding karma-related expenses. Sales and marketing was up 58% over a year ago. And again, the primary goal here is to take advantage of the opportunity as we see to accelerate organic growth over the next few years that we talked about.

As Doug mentioned, we are making in plans to contain continuing to make.

Increases in investment in many areas of the business.

And we saw that this quarter R&D was up 36% over the over the last years quarter and Thats, excluding primarily related expenses sales and marketing was up 58% over a year ago and again. The primary goal here is to take advantage of the opportunity opportunities, we see to accelerate organic growth over the next few years that we've talked.

About <unk>.

Speaker 2: We expect this investment to continue to ramp into 2022, primarily driven by additional headcounts and overall investment in operations, particularly around investment in manufacturing and marketing product development. And we can talk about this more in the Q&A.

We expect this investment to continue to ramp into 2022, primarily driven by additional head count and overall investment in operations, particularly around investment in manufacturing and marketing product development and we can talk about this more in the Q&A.

Speaker 2: We are coming into the end of 2021 and in 2022 with a very healthy balance sheet. We have total cash and short-term investments of 256 million as is the end of the third quarter and no debt.

We are coming into the end of 2021 and into 2022 with a very healthy balance sheet.

Total cash and short term investments of $256 million at the end of the third quarter and no debt.

Speaker 2: Lastly, we wanted to update our fiscal year of 2021 revenue guidance given the strengths we were seeing in the core felt there at Keep Business and drug discovery markets here today.

Lastly, we wanted to update our fiscal year 'twenty, one revenue guidance given the strength you're seeing in the core cell therapy business and drug discovery markets year to date.

Speaker 2: The success of our self-derived partners this year has shifted the typical seasonality. We normally see, as I mentioned, where we normally see revenue heavily weighted to the fourth quarter, which is more driven by CAPEX, an end of your budget cycle.

This does the success of our cell therapy partners. This year has shifted the typical seasonality we normally see as I mentioned.

Normally see revenue heavily weighted to the fourth quarter, which is more driven by capex.

And end of year budget cycle as you can imagine in clinical trial timelines are less correlated to these dynamics and we've seen some of our partners ramping ahead of progression in the clinical trial.

Speaker 2: As you can imagine, clinical trials, timelines are less correlated to these dynamics. And we've seen some of our partners ramping ahead of progression in the clinical trial, clinical trial progression. And so we are encouraged by that progression, but it does change the seasonality a little bit for this year.

Clinical trial progression and so we're encouraged by that progression, but it does.

Change the seasonality a little bit for this year.

Speaker 2: As a result, we expect total revenue growth to the year to be greater than 33 million. This implies growth of roughly 26 million, so slightly ahead of where the beat in the quarter would put the numbers for the year, versus their prior target of greater than 30 million. This does include SPL program-related revenue. As it relates to our expectations for program-related revenue in the fourth quarter, we would guide you to think about the magnitude as closer to what we saw in the first and the second quarters.

As a result, we expect total revenue growth for the year to be greater than $33 million. This implies growth of roughly $26 million. So slightly ahead of where the beat in the quarter would put the numbers for the year.

As our prior target of greater than $30 million. This does include FPL program related revenue as it relates to our expectation for program related revenue in the fourth quarter. We would guide you to think about the magnitude is closer to what we saw in the first and second quarters.

Speaker 2: Again, timing of these SPL milestone recognition that data points can be hard to...

Again timing of these FPL.

Milestone recognition.

That data points can be hard to pinpoint.

Speaker 2: So we continue to track above our five year, 25% revenue CAGR for the full year. And we're encouraged by the strength in our core cell therapy business. I will just note cautionary language around any meaningful changes in COVID. We obviously are assuming status quo as it relates to COVID. And I'm sure many companies are making the same comments that want to make that caveat. With that, I'll turn it back over to Doug.

We continue to track above our five year, 25% revenue CAGR for the full year and we're encouraged by the strength in a course of therapy business I will just note.

Scenario language around any meaningful changes in Covid, we obviously are assuming status quo as it relates to Covid and I'm sure. Many companies are making the same comments that when I.

Make that caveat with that I will turn it back over to Doug.

Speaker 1: Thank you, Amanda. We remain excited about the opportunity to lead the industry forward as the premier cell engineering platform technology supporting the development of advanced cell-based therapeutics. Following the successful completion of our NASDAQ IPO, we were pleased to report strong third-quarter results and update full-year client guidance. Next site remains well positioned for growth, and we are excited about the opportunities ahead.

Thank you Amanda we remain excited about the opportunity to lead the industry forward as the Premier cell engineering platform technology supporting the development of advanced cell based therapeutics.

The successful completion of our NASDAQ IPO, we were pleased to report strong third quarter results and update full year guidance metric remains well positioned for growth and we are excited about the opportunities ahead.

Speaker 3: Ladies and gentlemen, if you have a question at this time, please press this bar and then the number one key on your touchstone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the Pound key.

Ladies and gentlemen, if you have a question at this time. Please press the star and then the number one key on your Touchtone telephone. If your question has been answered or you wish to remove yourself from the queue. Please press the pound key.

Speaker 3: And our first question is from Julie Simmons from Penn, Your Gordon. Your line is open.

And our first question is from Joseph Simmons from Panmure Gordon Your line is open.

Speaker 4: And I'm well done on an excellent course. A quick question.

Hello.

Well done on an excellent quarter.

Quick question on <unk>, just wondering in terms of sales clearly Scott sort of application in both drug discovery and cell therapy applications is that going to be a sale or a license opportunity when you get that to market.

Speaker 4: In terms of sales, clearly it's got some of application in both drug discovery and therapy applications. Is that going to be a sale or a license opportunity?

Speaker 1: But Julie, thanks for your continued support and appreciate your comments. So the VLX is on track to release it in the by the end of this year, at December of 2021. You're right, it's gonna be in both the self-aeropsy space for the LG NAX health therapy and also in...

But julien thanks for thanks for your.

Continued support.

I appreciate your comments so the <unk> is on track to release.

By the end of this year.

2021.

You are right its going to be in both the cell therapy space for LG <unk> cell therapy and also.

Speaker 1: the development space for rapid production of monoconals.

The drug development space for.

Production of monarch totals.

Speaker 1: and also for certain biodechers production and insistmention. So we're working through the value pricing model for those applications.

So for certain bulb vector production.

Suspension cells.

We're working through.

The value pricing model for those applications.

Speaker 1: They may in fact be different. I would expect that we will have a hybrid model, some say something, some leasing, and some licensing, depending upon the application. Well, we're trying to work in that field, and we'll be rolling that out as we become more comfortable with the full product launch in 2022.

May in fact be different.

I would expect that we will have.

Kind of a hybrid model some sales and some leasing some license include depending upon the application, but we're kind of working that through and we'll be rolling it out.

As we become more comfortable with.

Full product launch in 2000 22022.

Speaker 4: Brilliant, thank you very much. And another one, just on recruitment, clearly you're sort of scaling up various different parts of the business following the NASDAQ IPO, which is all very encouraging. Are you finding there are any areas where it's more difficult to recruit than others than is that a limitation on how far you can grow them?

Brilliant. Thank you very much another one just on recruitment clearly you're sort of scaling up there.

Okay.

Following the NASDAQ IPO, which is very encouraging.

Finding there are many areas, where it's more difficult to recruit than others.

The limitation on how fast you can grow at the moment.

Speaker 1: Yeah, it's a challenge. Obviously, having a NASDAQ symbol now moves us up in the popularity of who else. So I think people are recognizing us and they can find out more information about us, which is good. Most of our work is in hiring and process development of what are hiring and.

It's a challenge.

Obviously, having a NASDAQ symbol now.

It moves us up in the.

The popularity of if you will so I think people are recognizing that they can find out more information about us which is good.

Most of our work is in.

We're hiring in process development, we're hiring.

Speaker 1: sales and marketing. Unfortunately, over the years, we've been able to have gone our really excellent reputation in the field. So it's never easy to find the right kind of people, but we're building our recruiting resources. The answer question specifically, I think in the process development area, it's justified people. I think in those finances, it's difficult because we're seeing quite a bit of

Sales and marketing Unfortunately over the years, we've been able to garner a really excellent reputation in the field. So.

It's never easy.

Finding the right kind of people, but we're building we're building out our.

Recruiting resources.

To answer your question, specifically I think.

And the process to boliden area, it's tough to find people.

I think in this.

Sciences are difficult because we're seeing quite a bit of.

Speaker 1: Investors are coming into the space and there aren't a lot of people

Investment coming into the space and there are a lot of.

Speaker 1: people with a lot of experience and self therapy. I think that plays our strength because we have a very, very strong team from a commercial perspective. So on one hand, it's a challenge from a recruiting perspective, but on the other hand, from a marketing and sales perspective, we take that step in advance and we can bring to the market place by helping customers solve their problems.

People with a lot of experience in cell therapy.

That plays to our strength because we have a very very strong team from a commercial perspective. So on one hand. It is a challenge from a recruiting perspective, both on the other hand from a marketing and sales perspective perspective, we think that's it.

We can bring to the marketplace by helping customers solve their problems.

Brilliant thank you very much.

Speaker 3: And our next question is from Max Masuchi with Carbon and Company. Your line is open. Hi, thanks.

And our next question is from Max Masucci with Cowen <unk> Company. Your line is open.

Hi, Thanks for taking the questions nice quarter.

Speaker 5: So to start, nice to see that the sales leadership higher, along with some other hires in the commercial organization and recent quarters.

So just to start and nice to see the sales leadership higher along with some other hires in the commercial organization in recent quarters and Q3 product revenues beat you've now signed for SPL. This year above the original expectation of three.

Speaker 5: The Q3 product revenues beat and you've now signed four SPLs this year above the original expectation of three.

Speaker 5: So can you give us your latest view on the sales targeting strategy in terms of...

Can you give us your latest view on the sales targeting strategy in terms of customer types and the applications and the amount of focus that you're committing to new customer wins versus same customer growth.

Speaker 5: Customer types, applications, and the amount of focus that you're committing to new customer wins versus same customer growth.

Speaker 1: So next, I think our view is it's just more the same. We're standing.

So some exits.

Think it's.

Our view is it's more of the same.

We're expanding.

Speaker 1: I'm building the market more specifically in the digital world. I think that's one thing. I think we're also finding a lot of opportunities with our existing partners as they expand their programs that they do the indication to an application for that to be exciting.

Our ability to market more specifically the digital digital World I think Thats one thing I think we're also finding.

A lot of opportunities with our existing partners as they expand their programs.

Indications for the application so that's exciting.

Speaker 1: You'll be seeing some work that we're doing in and

You'll be seeing some work that we're doing.

Speaker 1: and attracting earlier stage cell therapy assets.

Is attracting earlier stage cell therapy assets onto the <unk> platform I think you saw some of that with the release of the ACX too.

Speaker 1: on to the NYC platform. I think you saw some of that with the release of the ATX about two years ago in the...

Two years ago.

<unk>.

The.

Speaker 1: the launch of a number of additional disposable, which plastic families, which reduce the transmission costs for these earlier stage companies. The last thing to come on our platform, that are the more economic level for them to be able to afford in their early stages of development.

The launch of a number of additional disposables, which prospects assemblies, which reduce the.

The transaction costs for these earlier stage companies.

It allows them to come onto our platform more.

More academic level for them to be able to afford the early stages of development.

Speaker 1: So I don't think we're really focused on the new one particular area. I think we've got a really robust pipeline and part of our job, whether it's a nurturedness company to the pipeline and trying.

I don't think we are really focused on any one particular area I think we've got a really robust pipeline.

Part of our part of our job, whether it's a virtual those companies in the pipeline and flying to new assets being developed.

Speaker 1: The new aspects have been developed both to universities and, you know, a number of these early states.

And universities.

The number of leads.

Early stage incubators.

Speaker 5: Great. On PAs, launch them are 50 by 8 PAs in September . You've also launched a number of other processing assemblies in the past, say, six months. You know, understanding it's still early. You speak to the demand you've seen for some of the more recent PAs launches and maybe just any tests that drove the strength in the Razor Razor Blade model during the quarter.

Great.

On <unk> launch them are 50 by.

In September.

<unk> launched a number of other processing assemblies in the past six months understanding it's still early but can you speak to the demand you've seen for some of the some of the more recent launches and.

Maybe just any tests that drove the strength in the razor razorblade model during the quarter.

Speaker 1: Yeah, so one thing we do do when we launch the supposed rules are processing some of these is we do, you know, we're careful in terms of the rollout to ensure that we can support the customers and we have the account range or we can build out that business and so we're doing quite a bit of that, which is important. We're seeing pretty much across the board and increases in PA sales. So.

So.

One thing we do when we launched disposables are processing some wins as we do we're careful in terms of the rollout to ensure that we can support the customers and we hope with all the inventory that we can build out that business and so we're doing quite a bit of that which.

Which is important.

We're seeing pretty much across the board.

Increases in NPA sales so.

Speaker 1: I mean if you have any further thoughts about that split, but I think just across the board that we're seeing really strong.

Hello, Amanda if you have any further thoughts about that split.

Just across the board.

We're seeing really strong growth in the business both in PJM.

Speaker 1: Growth in the business, growth in P and them, and then instruments and licenses.

Instruments lending licenses.

Yes, I would just add that.

Speaker 2: The new PA launches in the past couple of years have really been focused on the drug discovery side of the market as I've mentioned in terms of blowing. They're their multi-wow lowering transaction costs and we have more to come there. And so I think that's contributed to better results on the drug discovery side. And we mentioned we're cautiously optimistic there in terms of the impact. We have a roadmap that obviously were

Speaker 2: Working on it where we haven't discussed for say in terms of self therapy as it relates to the PA's and trying to find the sweet spot for the various of an application. You'd asked earlier about some of the SPLs that we've added.

Speaker 2: This year we continue to expand the types of cells we're using. So a couple of the folks that we added, for example, are working in K cells. And so we're always thinking about that in terms of our PA launch planning going forward.

Okay, well I'm just planning going forward.

Speaker 2: You can imagine that we're keeping that coast to our chest at this point as a relationship to South therapy.

You can imagine that we're keeping that close to our chest at this point as it relates to sell therapy.

Speaker 2: On the south-earope side, the strength came, it was strong quarter generally, but we saw a particular strength on the instrument side between the sails and the leases.

On the south therapy side the strength Kim.

And it was strong quarter generally, but we saw a particular strength on the instrument side between the sales and leases. So the leases is encouraging and that that's recurring revenue right because once you're part of the SPL then that becomes an annual.

Speaker 2: So the lease is encouraging in that that's recurring revenue, right? Because once you're part of the SPL, then that becomes an annual access fee, so to speak. So the more that makes up of our install base, sort of the better from a visibility recurring revenue standpoint. And then on the sales side, it does give us...

Access so to speak.

So the more.

That makes up of our of our installed base sort of the better from a visibility recurring revenue standpoint, and then on the sales side. It does give us.

Speaker 2: visibility into future SBL, meaning a lot of our partners are buying initially and then as they move forward into the clinic getting tie-in to enabling studies, that's where they start to convert. So encouraging all around. And I think state tuned on the South therapy size, it relates to some new EPA's there. Again, thinking about sweet spots of application.

Visibility into future Spl's meeting a lot of our partners are buying initially and then as they move forward into the client getting tightened enabling studies, that's where they start to convert so encouraging all around and I think stay tuned on the south therapy size it relates to some European.

There again thinking about sweet spots of applications.

Speaker 5: That's great. If I could just maybe sneak one more in. Is there any feedback you can share from users of the first generation BLX instrument that's being used during the early access period? And then second, just if you look at the roadmap to getting that instrument launched.

That's that's great if I could just move sneak one more and is there any feedback you can share from users of the first generation <unk> insurance, that's being used during the early access period and.

And then second just if you look at the roadmap to getting that instrument launched.

Speaker 5: are the final adjustment to the interface to standardize the instrument sort of done and just hearing up for the launch or there's still some technical factors that you're solving for ahead of the launch.

Are the final adjustments to the interface.

To standardize the instrument sort of done and just gearing up for the launch or there's still some.

Technical factors that you are solving for ahead of the launch.

Speaker 1: Are you talking? Can you face the second part of the question back? Is that around the PAs or is that something?

Alright.

Refers to a certain part of the course he broke because the.

Soda roamed the producers which would be perfect.

Speaker 5: Yeah, so just the roadmap between now and when the VLX is officially launched broadly, just curious. Yeah, if there are still some technical factors in our final adjustments you're making to the technology or if it's just gearing up ahead of the commercial launch.

Yeah. So just the roadmap between now and when the <unk> is officially launched broadly just curious.

If there are still some technical factors and our final adjustments you are making to the to the technology or or if it's just gearing up ahead of the commercial launch.

Speaker 1: So the first part of me, we spend a tremendous amount of effort with voice accustomer. So our team is out there.

So the first part of it.

Tremendous little Gopher was supposed to work or <unk>.

Speaker 1: really understanding in a very intimate basis what our customers need to do their work and expand the applications for our technology. And I think we've been quite successful and frankly handling it. So I'm finding out exactly what the customer needs are and delivering it to them.

Really understood.

What goes with what our customers.

To do the work experience applications for took over to you because I think we've been quite successful.

And frankly, they really like whether you have exactly what the.

Post to report the delivery good for them.

Speaker 1: in a timely manner so they can utilize the pH.

That would probably be better so they can be utilized.

Was the Cougars.

Speaker 1: On the VLX side we haven't released yet. And I would say I think I have to tell you that there's always some last minute.

<unk>, we haven't released.

So if you could help with.

So you that there is always a plus.

Speaker 1: changes that you're making when you're without some additional products. Then I don't think it.

Changes that you make it with you.

Forgot to release a product.

I looked at the movies or.

Speaker 1: major technical issues that's more fine tuning for manufacturing management.

A major technical issues.

<unk>.

Going through the improved the new factory management.

Speaker 1: And just five more than one of the basic PEA's themselves for the project. LA.

The first clause more than.

Bruce.

Some shelves for billboards.

Speaker 5: Great. That's a solid course. Good, thank you. I just want to add one thing and just, you know, your typical CFO here. So.

Great accidentally.

Solid quarter.

Thanks.

Add one thing and.

Your typical.

CFO here so so.

Speaker 2: So the VLX has been, to be clear, the VLX has been on the market. What we're doing now is bringing it under the expert brand, which involves things like improving the user interface and even thinking about design and whatnot.

So the <unk> has been done.

Are clear the <unk> has been on the market. What we're doing now is is bringing bringing it under the expert brand, which involves things like improving the user interface and even thinking about design and whatnot.

Speaker 2: and it really puts us in the potential for...

And it really touches and the potential for entering new markets entirely and large scale bioprocessing application. So I would think about this is more of a release of that under the expert umbrella and then from there we've got to build out.

Speaker 2: entering new markets entirely in large-scale bio-processing applications. So I would think about this as more of a release of that under the expert umbrella. And then from there, we've got to build out data to support large-scale applications like transient and processing production and viral vector manufacturing. So we're encouraged by the interest there from early customers and happen. I mean, otherwise, we wouldn't have made the choice to bring it into the expert brand in the first place.

Data to support.

Large scale applications like transit and protein production and viral vector manufacturing. So we're encouraged by the interests are from from early customer and have been I mean, otherwise it wouldn't have made.

Made the choice to bring it into the expert brand in the first place, but it's definitely a longer term.

Speaker 2: But it's definitely a longer term, revenue vector, so to speak, for us, since it's newer markets.

When you factor so to speak fries since it's newer markets and as I said it it could be something that could play a role in salt therapy.

Speaker 2: And this looks at it could be something that could play a role in South therapy as those businesses scale, but again, those markets are still early stage. So it does not so that we get ahead of ourselves. We're excited about the product.

Businesses scale, but again that those markets are still early stage. So does not so there'll be gone ahead of her songs were excited about the product.

Have seen obviously early interest or we wouldn't have been investing in it and and think we can see some.

Speaker 2: I've seen obviously early interest or we wouldn't have been investing in it. And I think we can see some.

Speaker 2: Addressable Market Expansion from it, but just to put that caveat on there.

Dreadful market expansion from it but just to put that cabinet on there [laughter].

Super helpful. Thanks for the color.

Speaker 3: And our next question is from Dan Areas, Lib Steeple, who line is open.

And our next question is from Dan areas with Stifel. The line is open.

Speaker 5: Hey, this is actually Evan Stamperon for Dan. Thanks for the question. Obviously, I spoke to this. There are a couple of data points that came out in the quarter that clearly kind of spooked the market in terms of, you know, the outlet for cell therapy.

Hey, this is actually I haven't stamper on for Dan. Thanks for the question [noise].

Obviously, you spoke to this there are couple of data.

Data points that came out in a quarter of that.

Kind of spooked the market in terms of the outlook herself therapy.

Speaker 5: Just kind of wondering if it's like in your conversations with your customers or just people in the industry.

Just kind of wondering if like in your conversations with your customers and or just people in the industry, if you've seen any slowdown or even acceleration activity I kind of any change in sentiment in the near term and then kind of longer term. If you think that I mean, I guess he's were too.

Speaker 5: If you've seen any slowdown or even acceleration and activity, or I kind of any change in sentiment in the near term and then kind of longer term, if you think that, I mean, I guess these were, you know, few kind of always predicted that there would probably be some kind of...

He's predicted that they would probably be some kind of options.

Speaker 5: you know, opting down, but you know, longer term, I mean, do you envision this having any, you know, impact on not being made out of the outlook, but the tender for longer timelines to market and potentially just kind of a longer, you know, timeline for you guys actually getting milestones just because of the regulatory backdrop.

Some downs, but no longer term I mean, do you envision as having any.

Impact on not making me happy.

Outlook, but.

The potential for longer timelines to market and potentially just kind of a longer timeline for you guys actually getting milestones just because of the regulatory backdrop.

Speaker 1: So let me get crack it this first with an advocate to fill in the blanks.

So that would be perfect because crowkeepers first the vanilla coke.

Reports.

Speaker 1: First off, I think that's good. So we're still in the very early stages of these advanced health areas. So I think we can do the stab of that. Secondly, manufacturing focus on manufacturing is huge. And our sense is that that...

First of all sorts of <unk>. So we're still the very early stages of these would be a sofa.

Establish that.

Secondly.

I couldn't focus on video cartridge is huge.

Senses this up as the.

Speaker 1: the tone of the last year or so that we need to make sure that we're better characterizing these products.

For the tone of the last year, or so, but we need to make sure the butter characterize with these products.

Speaker 1: that we're being able to measure potency more and we can manufacture them on a consistent basis. So those are three important aspects of manufacturing that we think that might actually contribute to. And we think that that...

Were.

Are you able to measure potency more or we can manufacture them on a consistent basis. So those are three important.

Aspects of Roger Trucker that we think that looks like they're actually contribute to replace it but.

That's.

Speaker 1: That issue, those issues will be a good way for Max to get me to build our business house. Because we think that's a good trend for us to help enable the industry. We're seeing a lot of interest from our partners and making sure they get this right.

The issue of those issues will will will be a good.

Away from it I could I could get to the the grilled our business golf was with me, but that's that's a good trip for us to help the available to industry.

We're seeing a lot of interest from our partners and breaking shortly get this right.

Speaker 1: spending more time on product characterization, which again benefit is nice. I haven't seen very many folks move away from programs. I think we're trying to rationalize what they have. The clinic is clearly a lot of stuff there, if he's going after some of the same targets. I think there's going to be not only a clinical rationalization, but also a commercial rationalization with some of these products from the crew.

Spending more time with credit card physician will begin benefits.

I haven't seen very many books move away from programs I think we're trying to rationalize what they'd have a clinic because.

It was clearly a lot of so therapies going after some of the same target. So I think there's gonna be a lot over your political rationalization, but also a commercial rush position with some some disclosures coming through.

Yes, I have and I would just add.

Speaker 2: Can I say as Doug said it's early, but we've also seen some positive surprises. I mean, we...

As to as Doug said, it's early but we've also seen some positive surprises I mean b.

Speaker 2: Obviously spoke to some of the milestones we received this quarter. While we can't speak to them specifically, we weren't really expecting them. So that would imply that at least some of our partners are moving forward more quickly than we thought. And I think if you look at some of the...

Obviously spoke to some of the milestones we received this quarter.

While we can't speak to them specifically.

We weren't Murray on expecting them, so that would imply that.

At least one of our partners I'm moving forward more quickly than we thought.

And I think if you look at some of the.

Speaker 2: PR and the space around investments that are being made. They're so quite a lot going on, especially partnerships between events of our own SPL partners.

And the space around investments that are being made.

There are still quite a lot going on especially partnerships between even some of our own SPL partners.

Speaker 2: So not to not take clinical hold seriously as we should, but I mean it happened before with other players. And so I think there's puts and takes here just given the early stage nature, but I think

So not to.

Not take.

Clinical hold seriously as as we shed, but I mean, it happens it's happened before with other players.

And so I think there's puts and takes here just given the early stage nature, but.

I think.

Speaker 2: Certainly, we aren't seeing.

Certainly we aren't teen.

Speaker 2: Any change in priority is, I mean, we continue to sign the SBLs and I think to us, that's our key scorecard, right? In terms of, is the space moving forward? Are we generating downstream economics? And are we seeing that pipeline continue to grow, which we are? So, that's helpful.

Any change in priorities I mean, we continue to define the SPL is and I think to US that's our key scorecard right in terms of.

Is the space meeting farmers are regenerating downstream economics and army.

Seeing that pipeline continue to grow which we are so.

Helpful.

Speaker 5: You know, that's super helpful. Thanks. And just, I guess, maybe an easier question for you guys. Just for the quarter, you mentioned kind of the strength and the instruments, which I saw in terms of kind of pulters in the quarter. I mean, how did that kind of trend versus 1Q and 2Q? And then in terms of the mix between least and sold, is there anything notable there or any change there?

Oh, that's super helpful. Thanks, and just I guess, maybe it was easier question for you guys just.

Just for the quarter.

You mention kind of strengthening insurance, which which.

Shall I saw in terms of kind of pull fairs, and a quarter I mean, how how does that kind of trim versus <unk> and then.

In terms of a mix between Lisa and sold is there anything notable there are any change there. Thanks.

[noise] I guess I'll take a stab we we haven't changed the ranges that.

Speaker 2: I mean, as I take a step, we haven't changed the ranges that we put out there in terms of pool.

It would be put out there in terms of pull through.

Speaker 2: So, generally, as we said in the commentary, self- Therapy continues to be a bigger part of our business. It's faster growing and generally has a higher pull through. And that can really fluctuate though, depending on where partners are in the cycle. And...

So generally as we said in the commentary South therapy continues to be a bigger part of our best asset faster growing and generally has a higher fall through.

And that can really fluctuate depending on where our partners are in the cycle and.

Speaker 2: You know, with, I think we've said, we'll update these metrics towards the end of the year, the end of the year, where we talked about 75 programs and 15% of those give or take. Or in the clinic, obviously, with three new SPLs, those numbers are likely to be higher.

I think we've said mobile update these matrix towards the end of the year at the end of the year, where we talked about 75 programs and 15% of their give or take her in the clinic, obviously with three new spl's those numbers are likely to be higher.

But.

Speaker 2: So our N is still relatively small. And again, we've talked about high usage in the pre-conical setting with lower volume PA and then that sort of pulls back with the state of F-E1. We're obviously the patient population smaller, depending on the indication of course and that ramps up. And we're seeing that same trend and over time that starts to normalize. So they were still within the ranges that we've given. And we haven't really formally updated anything there.

Okay. So there are and is still relatively small again, we've talked about high high usage in the preclinical setting with lower volume PAF and and that sort of.

Pulls back with it.

Assays, one we're obviously that patient population is smaller depending on the indication of course and that ramps up a mercy and at the same trend and over time it starts to normalise that they were still.

Within the ranges that means Kevin.

And but we haven't really formerly updated anything there.

Speaker 2: And in terms of the leases, just with the SPLs, we sign and given that the instruments that fall under those SPLs are leased and they're not leased in a traditional way, but it's more of an item, like we talked about in Access C. Those are becoming a bigger portion of the installed base, so to speak, as a percentage. And we thought that again, but yeah, that's it's slow, but sure, right? Because obviously...

And in terms of the leases.

Just with the Spl's me sign and given that.

The instruments at fall under there is S tales are least and they're not least furniture to song way, but you know it's more of a item that like we've talked about an access fee, they're becoming a bigger portion of the installed base so to speak as a percentage and we saw that again, but yes, it's slow but sure right because.

C.

Speaker 2: Again, there's a smaller end of the folks that are in the clinic. If that's helpful. So, they haven't given specific numbers, and we'll update some of that information at the end of the year as we did last year. But that those are the sort of qualitative transfers.

Again, there was a smaller and folks that are in the clinic if.

Is that helpful. So.

Given specific numbers and we'll we'll update some of that.

Information at the end of the year as we did last year, but.

But that doesn't serve qualitative trends are saying.

Speaker 5: Okay, and if I just need more more in here, I know you're not gonna talk about.

Okay, and if I used to sneak one more in here I know you're not going to talk about.

Speaker 5: uh... program related revenues reporter but not not really given specific but you just kind of go back and i guess just repeat kind of what you said i think you said you say you give the number of uh... customers at the revenues came from and i think you all talked about having some of them customers actually had multiple milestone payments keep he's kind of clarify or reiterate really just what you said you said

The program related revenues for the quarter, but.

No not really give me specifics, but can you just kind of go back and.

Just repeat kind of what you said I think you said did you say did you give the number of customers at the revenues came from and I think you also talked about having some of them are your customers actually had multiple milestone payments can you just kind of clarify or.

Really just what you said you said already.

Speaker 2: Yeah, I'm sorry if I was confusing. What we were just trying to say was that the program related revenue didn't come from one customer.

Yeah, I am sorry, if that was confusing we were just trying to stay with that.

The program related revenue didn't come from one customer.

<unk>.

Speaker 2: So we didn't specifically say whether there was multiple, multiple revenue received from the same customer. We just said it's not often one. So there was more than one milestone received in the quarter.

So we didn't we didn't specifically say whether there was multiple multiple revenue received from the same customer and we just we just said it's not often one so there so there was more than one.

Milestone received in the quarter.

Speaker 2: That's kind of the extent of it. Obviously, we just have to be careful. We say there. And we did say that we weren't amazing to ask quarter, we said we were expecting a million for the year, which would have implied about half a million, whether you put it in this quarter or next quarter. And so obviously...

That's kind of the extent of it obviously, we just have to be careful what we say there.

And and we did we did say that we weren't I mean, I think last quarter. We sad we were expecting a million for the year, which would have been implied about half a million whether you put it in this quarter or next quarter.

And so obviously.

Speaker 2: We saw a bigger number that was surprised in terms of the progress that our partners are making and that's definitely encouraging.

We saw a bigger number that was a surprise to others in terms of the <unk>.

The progress that theme of our partners are making and that's that's definitely encouraging.

Speaker 2: And then we said that we're expecting something similar in Q4 relative to Q1 and Q2. So...

And then we said that we're expecting something similar in queue for relative to Q1 and Q2 so.

Speaker 2: It has some more numbers that you saw in the first half of the year or each quarter. So just so seen progress from our partners, maybe not quite as much as we saw this quarter. And then, you know, next year, again, as we see the stack build were...

Yeah I've.

Some more number that you saw in the first half of the year each corner. So just seeing progress from our partners, maybe not quite as much as we thought this corner.

And then next year again as the as I see the stack build where.

Speaker 2: I think we're depending on how this how our visibility trends and it is difficult because you're talking about partners and the FDA and can imagine that's not easy for a company like us to predict exactly where that falls per quarter to speak. But the more we sign, the more...

I think we're depending on how this higher visibility trends and it's difficult because you're you're talking about partners in the FDA and can imagine that that's not easy for for for for for a company like ours to predict exactly where that follow up for quarters so to speak.

But the more refined more.

Speaker 2: programs are stacked within time period. And so we'll be able to guide, I think, hoping more so as we go along here, just because it still be.

Programs are stacked with any time period and so.

We'll be able to guide I think I'm having.

More so I think I think I'll I'm here, just because they'll be.

Speaker 2: You know, less risk of something using corded a quarter, but that's a reality we face. As you can imagine, serving a biotech world. Yeah.

Last the rest of it something recent quarter to quarter, but that's just the reality we face.

As you can imagine in a serving a biotech world.

Yeah, no awesome. Thanks, so much for answering my questions.

Speaker 3: And our next question is from Matt Leroux with William Blair. Your line is open.

And our next question is from that in the room with William Blair. Your line is open.

Speaker 6: Hi, good afternoon. We're interested to see the NKAR-STL, because I think there was this first confirmed NK cell therapy program. And I was curious, you referenced the burgeoning pipeline on the SPL-partner side. So just curious, if there's a bit of notable changes to the composition of that pipeline with respect to cell-piped approaches or indications.

Hi, good afternoon.

Was interesting to see the inquiry SPL because I think that was the first confirmed in case I'll therapy program and I was curious you referenced the burgeoning pipeline on the top part SPL partner just curious if there's a bad headache notable changes to the composition of that pipeline with respect to sell pipes approaches or indicate.

<unk>.

Speaker 1: Yeah, so I think we mentioned the last time that that typewriter of a normal bus that it is and this continues to build and grow.

So I think that was the last part of it.

But hopefully more robust.

Contributors to build and grow.

Speaker 1: I think the way that I should look at it, I think we look at it. If you look at companies, I think it's just before they've been financed for almost a couple of years.

I think that the way the <unk>.

I kind of look up I think we looked at it if you look at companies. Okay. This just before that within five minutes with wells couple of yours.

Speaker 1: and their approaches, whether that be different cell types or different molding molecules, different indications. I think we're tracking pretty well to...

There are approaches with a b.

Different cell types or.

Moving molecules.

Perfect invitations I think we're trucking.

Pretty well too.

Speaker 1: The broad array of approaches are going on in these advanced way of the therapy.

The the broad array of approaches to grow with all of these.

Therapies.

Speaker 1: So that's pretty exciting for us. Right? A lot more out of your neck than it was a few years ago, we were seeing different kinds of self-action of the game too. You know, moving into non-uncology medications, which we think are quite exciting. And so I think from the, just abroad, a broad view, we're tracking pretty consistently that where this entire field is moving.

So that's that's pretty exciting for us.

A lot more those related cause it was a few years ago.

Cause it's so approach will begin to.

No moving into the college of indications.

Quite excited.

And so it looks like <unk>.

Oh gloves abroad trucking pretty consistently sir.

This is Garfield is.

So it was moving.

Speaker 6: And that is on the, the cellularity also has an MK based approach as well as part of the.

And that then.

Cellular already also has an MK based approach as well as part of their pipeline.

Speaker 6: Okay, got it. I guess we can see that those confirmed. Okay, and then just thinking about the pacing of the team addition zero of the next 12 days month obviously the new sales litter in place, but I guess anything to think about in terms of next year, in terms of pacing of team addition throughout the year.

Okay got it got it okay. So we can see that I was confirmed.

Okay and then just.

Thinking about the pacing of the team additions here over the next 12 months apathy there sales that are in place, but I guess anything to think about.

The next year in terms of pacing of team addition throughout the year.

Speaker 1: Well, we are building the marketing team. We mentioned the chain lock which is showing us how much or sell it out.

Well, we are building marketing truly we mentioned.

Brokerage destroyed those of us or so ago.

Speaker 1: comes with just an instrument that's a matter of experience and energy and understanding of the global markets. So what is the other thing to be on?

Terms with just need a tremendous amount of experience.

Energy and understanding of the global markets.

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Speaker 1: And part of what is, is that help us build a scalable marketing organization that would line up with Con Rathu.

Reported with us.

So help us build a scalable.

Marketing organization that was Lola.

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Speaker 1: Leadership is doing a global, scalable sales organization. So in the form of the process, we both of those.

Leadership is good in the global scalable sales.

Sales organization so.

<unk> with both of those things.

Speaker 1: I mentioned that we're building out process development labs inside a max height to better.

Eventually that we're building up process development.

So.

Looks like the butter.

Speaker 1: to better line up with what our customers are using our products and as they move both in self-efficiency and mild process. And so we're excited about that.

Oh brother loading up with what our customers are using our products.

Luke open software for your whole process, so excited about that.

Speaker 1: There's obviously some SGNA that they're beginning to build this because we're now public happening.

There's obviously some.

We're moving to bill just because of what was happening.

Speaker 1: And another major of well-invested, it will be in the manufacturing.

And another major.

That will be in the valley new furniture.

Speaker 1: So that we see a real opportunity for us to become more basic.

So we see a real real opportunity for us to become more big certain certain relevance of the cross of this process of Assembly line factory.

Speaker 1: certain elements of the process and assembly manufacturing. We have more flexibility and instrumentation as you like me know. We're pretty basic and instrument manufacturing. So we want to bring more of that in-house, which will allow us to have better control of the quality and also more flexibility of this, and that I just feel is key to, to develop over the course in the next several years.

More flexibility and instrumentation.

No, we're pretty pretty Switzerland, Switzerland record, so we want to bring more of the other girls.

Which will allow us to better control over quality and also a more flexibility doses.

Hi, This is field cause considers good.

To develop a of course, but several years.

Okay. Thank you.

Speaker 3: And our next question is from Mark Macerro with BTIG. Your line is open. Hi guys, this is video.

And our next question is from Mark Massaro.

Your line is open.

Okay.

I think they're getting the question.

Speaker 7: So can you discuss pipeline initiatives as it pursues to updated disposable? I know you were touched on cell therapy. And if there's any room to improve on transfection efficiency or any other on met demand you're sending on the couch.

Mm pipeline initiatives and as it pertains to update a disposable.

I know you have touched on.

And if there's any room 10 pages on transaction efficiency or any other unmet demand get something on the customer say thanks.

Speaker 1: I think we've got, it's great question. I think we were always pushing to improve the efficiency of our process in the scale of building the process both against humans and the stone.

I think it's great question I think we were always pushing.

Improve.

C a R process.

The process both niches of disclosures.

Speaker 1: We're also spending quite a bit of time to ensuring that they have more utility. Our strategy by aid is a really unique product that can do, it's a stripper aid, but it can also turn into an indexes well-plied, with extraordinarily high consistency across from one of the world, which is really important. Certain aspects of discovery, both in small and large molecules of discovery, but also in the sculpture factory.

We're also spreading quite a bit of a charge to ensure that they have more utility.

Or or 58 is a really unique product that can do that.

It's a stroke or eight but it can also turn it into a 96 will play with extraordinarily hard consistency across with more of the world, which is really important certain aspects of a discovery.

And.

Small and large molecule discovered but also a sofa.

Speaker 1: Another area that we're, you know, felt just didn't write down, I think you talked about this, just in our own.

Another area that we're focused in that they've been talked about this with the.

Speaker 1: trying to use the pros and how we can better integrate the work that we're doing with the pre- and pros-to-letter operation processes so that we can provide more of a plug-in to our few old solutions to our partners and have them integrate our new operation into a larger future. If you look closely at what many companies are thinking about doing in the near future.

To the use of proceeds in so we can better integrate.

The work that we're dealing with.

Post electroporation processing facility.

So look into it.

You will provide more of a plug in plug if you will solutions for partners integrate.

The operation and through a larger.

If you look closely which was really really tough.

Good.

In the near term.

Speaker 7: Okay, great. And if I could just add a quick follow up, given the revenue mixture towards self therapy, what test is self therapy, clinical trials, are you involved with or enabling at the moment? And how do you see this face evolving moving forward?

Okay, Great and then if I can check out a quick call up and.

The revenue makes his toy okay uhm.

What part of this topic clinical trials are you involved with or nibbling at the moment and how do you see a space evolving moving forward.

Speaker 1: So I think, I mean, Andy, can I talk about some of these public links? I think we have talked about a relationship with Kismer, our relationship with precision and products that are being developed by both those companies and they go by next week's day.

So I think.

Victor I talked about some of these public schools I think you talked about a relationship with Christopher.

My relationship with precision.

And products that are available both those copious vehicle diagnosed with stability.

Speaker 1: I'm gonna go to the .... The Manitas seller and their production s?

Work and work with other classes of products.

Four.

Speaker 1: and also up here on this to come to Indiana. And so we're seeing progress across the board and all those programs.

And also a pure rubbish that's up to you.

And so we're supposed.

Replace the board with all those all.

For those for those programs.

You really don't get specific about.

Speaker 1: Any programs that are not publicly disclosed by our partners is sort of when they talk about our topic that this was by our partners.

And the programs that or not.

Publicly disclosed.

Wednesday towards.

Disclosed by our partners.

Uh-huh.

The question.

Speaker 3: Again, if we have a question at this time, please press this star then the number one key on your touchstone telephone. And our question is from Jacob Johnson with Stevens. Your line is open.

Again, if you have a question at this time. Please press the Star then the number one on your Touchtone telephone and our question is from Jacob Johnson, We'd Stevens your line is open.

Good afternoon, Congrats a nice quarter.

Speaker 8: Maybe Doug, going back to something you mentioned earlier, you talked about working with earlier stage customers.

Doug going back to something you mentioned earlier, you talked about working with the earlier stage customers can you just talk about your efforts to work with large academic medical centers and maybe how important that is for you to kind of filled out the beginning of the funnel.

Speaker 8: Please talk about your efforts to work with large academic medical centers and maybe how important that is.

Speaker 1: Great question. It's always been important for us as you do imagine.

[laughter].

Great question triggered but it's always been important crossroads with your bedroom both of the.

Speaker 1: Also the advanced therapies related to self-care can have cut line effect.

Most of the events therapies related software Colorado.

Speaker 1: and we're continuing to see that that can try and continue. So what we have been doing is more formalizing those relationships with these groups, when we've had long-standing electric issues.

If we could do to see the the controlling continue so what we have been doing is.

We're formalizing those relationships with these groups.

God loves to dig Electrostriction some of the.

Speaker 1: You know, major academic translation medical centers, but we also see the opportunity for us to expand our footprint into a number of more ones that have, that's kind of gotten on the bandwagon, if you're all building out centralized facilities, core facilities for self-care, I'd be a lot of...

Extra done the translation political service, but we also see the opportunity for us to express footprint.

Into a number of the newer ones that are.

Gotten on the Bandwagon, if you will go to jail for us. So these court facilities for herself there'll be a lot more.

Speaker 1: You know, a lot more interest, again, I've been mentioned before in new applications.

A lot more interest as soon as I mentioned before a new application.

Speaker 1: of self-care people outside of oncology, which is really, really exciting. And so we're spending, we're hiring people to better understand.

Of cell therapies outside of oncology.

Will be exciting.

And so we're spending.

And people to better understand.

Speaker 1: how we can build those alliances with the large translation academics in this globally, what their requirements are. And I think you've got a pretty good handle on that. And part of our expansion process is really clearly, make sure that we've got that property resource so we can work with these companies, work with these pre-Is when they're really getting, very early on the navigation, if you will, of these new shell therapies. So that's part of the...

How we can build those alliances with the.

The large translational epithetic sort of globally.

What their requirements only lettuce, instead of a pretty good handle that.

Part of our experienced the process is really to make sure that we've got that.

No property resource and so we can work with these companies work with these.

With them.

Very early in the Aggravation, if you will these these new shell therapies.

That's part of the trip to this.

Speaker 1: is that you also don't want to get involved in what kind of fewer academic research. So that's a fine line that we're working through to make sure that we don't get any sort of whole academic research areas that we're really focusing on, translational therapy, those centers. And then we're going to get going directly toward a potential commercial product.

Is that you also don't want to get involved in what kind of pure academic research. So that there was a flight while you were.

Where.

Working through to make sure that we don't get snow.

Sort of a whole academic researcher who really focusing on.

Translational therapy with those others.

Directed toward.

Coke commercial product.

Got it thanks for a dog and then just Amanda she kinda nitpicky financial questions R&D take down sequentially. This quarter I assume that's related to to carve some karma expenses rolling off.

Speaker 8: Thanks for that, again. And then just a man that's too kind of nitpicky, financial question.

Speaker 8: R&D ticked down sequentially this quarter. I assume that's related to some car make sense is rolling off and I would assume that should start rolling.

And I would assume that should should start growing from here can you just confirm that and then also I think capex picked up a little bit this quarter is that kind of a good run right to think about going forward given the capacity built out that you're pursuing right now.

Speaker 8: And then also I think Cap X ticked up a little bit this quarter. Is that kind of a good run rate to think about going forward given?

[noise] Yeah. Good question. So we did.

Speaker 2: Yeah, good question. So we did, these mentions have the rollout of karma complete in the first half. So.

And have a the rollout of karma compete in the first half so.

Speaker 2: That's part of it. I mean, from here to generally, I would think about, obviously we've talked about a number of areas of investment, but you're going to headcount across all three buckets of operating expenses. Sacbase Comp is year over year also something to think about. This is the Sacus Move.

That's part of it I mean from here to generally I would think about.

Obviously, we've talked about a number of areas and.

Investment Obsequent head count.

Across all three buckets of operating expenses.

Stock based comp and year over year also something to think about this and this talk of moved.

Speaker 2: And then as we build out some other areas in R&D. So I think I would think about it as...

And then.

As a as a build out.

Some other areas and R&D, So I think I would think about it as not necessarily.

Speaker 2: Not necessarily a run rate from here, but investment from here, particularly on the head count side, which is becoming, yeah, obviously, a key for us as we think through our strategic planning. And we've talked a lot about how we see the potential to accelerate organic growth in general. And obviously that all starts right with building out the team. So...

Earlier run right from here, but that investment premier, particularly on the head count died which is to come in.

A key for us as we thank you for our strategic planning and.

We've talked a lot about how we.

See the potential for accelerated organic growth and growth in general and and obviously that all starts right with building out the team so.

Speaker 2: I don't know if that's helpful, but that's how I think about it. We also had obviously a pickup not in R&D, but in pub co-extences and things like that. So I would kind of look at this quarter as the base with further investment from here given the opportunities we see. I don't know if I'm trying to think if there's anything else in the op-ex expense that would be...

I don't know that tough over that's how I would think about it. We also had obviously you pick up not in R&D, but in pubco expenses and things like that.

So I would I would kind of look at this quarter at the base with with no further investment from here given the opportunity to see see I'm trying to think if there's anything else in the opex expense that would be.

Speaker 2: like not recurring, you know, there's probably some

Okay.

Like not recurring there's probably some.

Speaker 2: small stuff that I would think about as it's growing. And then in terms of catbacks, yeah, so we're obviously investing in manufacturing quite a bit.

Small stuff that I would think about it that's growing and then in terms of Capex.

Yeah. So we're obviously investing in manufacturing quite a bit.

Speaker 2: We haven't guided to what that looks like for next year, but we're expanding on the manufacturing side. And today's sense that we think about it and it's three to five year or three, you know, long-term horizon. Even some of the initiatives that we are, have talked publicly about as far as moving up and downstream, but that'd be...

We haven't guided tour, but that looks like for next year.

But we're expanding on the manufacturing side and to the extent that we think about it and it's three to five year or three.

Long term horizon.

Even some of the initiatives that we are have talked publicly about as far as moving up and down stream, but would it be.

Speaker 2: internal build or buy, obviously that likely will affect catbacks in some degree. So again, it's sort of...

And Tom build or buy obviously that that that likely will affect capex to some degree so again, it's sort of.

Speaker 2: I would kind of think about discorders as a good base outside of karma and then sacrifice comping a factor that you have to kind of think through. And then from there, just investment should have across the board. That's helpful.

I would kind of think about this quarter is at a good pace.

Outside of Karma, and then the stock based Comping factor that you that you have to kind of think through and then from there just investment instead of across the board that's helpful.

No that's great. Thanks for that I mean, that's like saying the questions.

[noise].