Q4 2021 Berkeley Lights Inc Earnings Call
Thank you for standing by and welcome to the Berkeley Lights fourth quarter 2021 earnings Conference call. At this time all participants are in listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone as a reminder, today's program may be recorded I would now.
I'd like to introduce your host for today's program Gary made it bill.
Relations. Please go ahead.
Thank you.
Earlier today.
Released financial results for the quarter and year ended December 31 2021.
If you have not received this news release or if you'd like to be added to the Companys distribution list. Please send an email to IR at Berkeley lights.
Joining me today from Berkeley lights are Erik <unk>, Chief Executive Officer, and Kurt what Chief Financial Officer.
Before we begin I'd like to remind you that management will make statements. During this call that are forward looking statements within the meaning of federal securities laws. These.
These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated.
More information please refer to the risks uncertainties and other factors discussed in our SEC filings.
Except as required by law, frankly light disclaims any intention or obligation to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise.
This conference call contains time sensitive information and is accurate only as of the live broadcast February 2004 and 2022.
I'd like to turn the call over to Eric.
Thanks, Carrie and thank you everyone for joining us this morning.
On today's call I will provide details on our continued progress for me across our business I will then turn the call over to Curt to discuss the fourth quarter and full year 2021 results and share our outlook for 2022.
During the fourth quarter of 2021, we achieved revenue of $23 2 million.
Bringing total revenue for 2021 to $85 4 million above our pre announced ranged in early January .
Key revenue growth drivers were our strategic partnerships and services business strong sequential recurring revenue, including consumables and direct placements.
At Berkeley lights, our mission is to find the biology that cures disease.
To achieve this mission we have created the most advanced platform to access and understand my primary biology at an unprecedented speed and scale.
Underlying our strategy, we will continue to focus on opportunities, where our innovative platform can be applied to disrupt the market and unlock significant value.
In the early days of brake lights, our platform was developed to solve high value problems for customers by providing a significant improvement over existing solutions.
As we've continued to develop our platform we are advancing opportunities, where we believe the brooklynites platform provides the only commercially viable solution.
We have started to experience increasing levels of demand for these proprietary solutions, allowing for near term revenue opportunities as well as longer term participation and downstream economics, such as milestones and royalties.
In 2021, we significantly expanded our strategic partnerships and services business growing revenue more than threefold from $5 8 million in 2020 to $19 $9 million in 2021.
Which included transactions with future downstream revenue participation.
Total strategic partnerships and services contract value grew from $200000 in 2000 $20 million to $42 million in 2021.
During 2021, we announced two key partnerships with Thermo Fisher scientific and Bayer crop science, the demonstrated our ability to capture deeper value through our technology.
In Q4, 2021, we signed two additional partnership agreements with contract values up to $8 million.
One was with a top five pharmaceutical company and the other was with Anika Biosciences.
Which includes potential downstream royalty revenue.
In this partnership <unk> will use our high throughput functional screening services based on our proprietary cell free expression technology.
To rapidly identify and optimize functional anti microbial peptides capable of killing harmful bacteria, including those that cause outbreaks of food borne illness.
In addition, our platform will be used to find peptides that are toxic to bacteria to create a new anti bacterial tag that will then be applied to their bacterial spore based barcoding technology to protect the food supply chain.
An important aspect of these partnerships is the future transition into long term services engagements and revenues.
In this business model, we start with an R&D partnership to develop the required workflow and biology.
Can span multiple years and has been followed by a distributed service offering at the customer site or internal service and our Biopharma.
In 2022, we expect to continue to accelerate growth across our strategic partnerships and services business and.
And these engagements are partners are leveraging the capacity of our Biopharma just all highly complex problems.
To serve this rapidly growing part of our business. We recently completed the full build out of our Boston Biopharma.
Rich will provide additional campaign capacity as the business grows.
We continue to see expansion opportunities for new and existing customers driven by increased use cases enabled by our workflows.
Over the course of 2021, we announced several technology development with three key standouts.
The first was the ability to leverage our proprietary cell free technology to enable the expression of specific proteins in each nano pad.
And then test the function of that express protein against live primary cells.
We've expressed a variety of proteins from small peptides all the way to full length antibodies and have tested their function to kill particular cell types or bind to desired targets.
This advancement to our technology is the basis for our high throughput functional screening service.
The second advancement was developing a scalable way to perform terminal assays without any significant loss of life biology.
In addition to cloning and culturing cells and the National Pen, we can now terminally differentiated or even life a subset of the cells, while ensuring carnality of the surviving sub population.
This allows us to perform terminal assays or capture internal components of a cell while maintaining the viability of a subset of the cones in the nano pad.
Once the analysis of the terminally differentiated or lifestyle has been completed we can use our ODP technology to recover the viable subset of live costs.
This opens a whole class of solutions for our customers such as poly functional assays, polygene editing and precious sell interrogation.
It is also a core technology, enabling the stable viral vector line workflow that is currently under development.
The third development wasn't the application of our T cell characterization are killing assay to apply to patient samples.
Our goal is to ensure our customers have access to the most relevant biology there.
A huge number of cell types in particular primary disease cells and <unk> that come directly from humans that cannot easily be cultured and leveraged in therapeutic studies today.
Access to primary biology can be achieved through speed enabled by nano fluidics and automation.
With this capability customers can discover new antigens in Tcr's answered questions regarding particular disease progressions and estimate the efficacy of a particular therapeutic solution.
Our Berkeley lights, we are committed to continuing to develop and deliver capabilities that were not previously thought possible through our technology and workflow advancements.
As we look ahead into 2022, we are focused on three key areas to drive growth across our business.
First growing our strategic partnerships and services business to enable downstream economics to our differentiated offerings.
Second continuing to release high value workflows, and our core antibody therapeutics market.
And third ramping up our high throughput functional screening service workflows.
In terms of Capex sales, we are experiencing cash conservation around large capital purchases, where those customers are accessing our platform through <unk>, and CD modes, and postponing or eliminating capex purchases.
We believe this is in part driven by the current macroeconomic environment and a shift towards conservative capital allocation.
While this pressure may cause some delays in the near term we are confident that our differentiated access models, including tech access and strategic partnership and services, which are designed to better serve our customers' needs. In this environment. We will continue to see increased demand as we move into 2022.
Further in 2022, we will continue to drive innovation and expand into new market opportunities.
Starting with antibody therapeutics, we will continue to deliver and advance our core workflows in both antibody discovery and in cell line development.
In antibody discovery, we will continue to expand the diversity of antibodies customers can evaluate on the <unk> platform.
This year, we plan to release, a rabbit memory, b cell workflow and a human memory b cell workflow.
In addition to these new species, we will also continue to drive assays that help our customers find the highest quality product.
Additionally, we plan to release, the ability to understand and rank affinity on chip during the discovery process.
Adding additional access to diverse antibiotic solutions and incorporating deeper understanding of how the antibodies will perform will further increase the probability of success that our customers will find treatments and curious against more challenging targets.
And cell line development, our customers face challenges manufacturing by specific and multi specific antibodies.
In these modalities sales are edited to make the bi specific but the sales also produce unwanted variance leading to additional cost and timelines during manufacturing.
Late last year, we presented data from our collaboration with a major pharma partner showing we can measure the quality of bi specifics being manufactured by the cells at the time of clonal selection.
In 2022, we plan to provide turnkey reagent kits. So our customers can include this level of understanding and characterization and our cell line development workflow.
Turning to our opportunity in cell therapy, we will springboard off the great work completed by our internal teams to accelerate the manufacturing and quality control of cell therapies.
Additionally, we will continue to enable access and understanding of complex cancers by Onboarding additional primary tumor types, which will further the understanding of the killing or inhibitory mechanisms using the <unk> cell killing assay.
In gene therapy, we expect to deliver our stable viral vector clone selection workflow to thermo Fisher scientific as part of our collaboration agreement and wrap up additional commercialization efforts with other partners.
Related to synthetic biology, we anticipate releasing certain workflows to ginkgo over the next couple of quarters to increase their production efforts.
Over the course of the year, we plan to also accelerate our high throughput functional screening capacity and move beyond AG bio.
We expect to see additional deal flow here in 2022.
As we shared at the beginning of this year I will be transitioning from my role as CEO to president of the antibody therapeutics business.
The <unk> board of directors has initiated a search for a new CEO that is progressing well.
Before I hand, the call over to Curt I'd.
I'd like to again, thank our team for their hard work and dedication towards making our vision a reality.
At the forefront of southern profoundly important and we continue to push the envelope everyday on what is possible through the cutting edge fusion of biology and technology.
As we have advanced the platform's capabilities, we increasingly hear from customers, how our technology is enabling them to solve complex problems that were previously thought to be unsolvable.
I will now turn the call over to Kirk for more details on our financials Kurt.
Thank you Eric total revenue for the three months ended December 31, 2021 was $23 $2 million up 7% year over year regionally North America accounted for 60% of total revenue in the quarter, followed by APAC at 33% and EMEA at <unk>.
7%.
Looking at a breakout across the three revenue stream.
In the fourth quarter of 2021 revenue from direct platform sales totaled $9 7 million. These results included six platform placements in the quarter, including five Capex Beacon and one tech access subscription ended the quarter with an installed base of 111 platforms.
As a reminder, in Q2 of 2021, we launched a new tech access subscription offering tailored to the antibody discovery and cell line development customers with lower annual campaign capacity requirements.
As of the end of the year, approximately 10% of our year to date placement for Nick Clegg active customers in North America and EMEA.
We plan to begin offering the TEG access subscription in the APAC region later in 2022.
Recurring revenue, which includes revenue related to consumable purchases subscription and services and warranty was $6 $1 million in the fourth quarter, an increase of 27% over the prior year and up 30% sequentially.
The sequential growth from last quarter was primarily driven by the seasonal increase in consumable purchases normally seen in the fourth quarter.
Strategic partnership and services revenue was seven $4 million in the fourth quarter of 2021 up $1 $6 million from the prior year and up $1 $9 million sequentially.
These increases were driven by the first full quarter of activity on bare crop science initiative as well as revenue recognized on our newly signed agreement with a top five pharma customer that Eric mentioned earlier for the full year, we signed agreements with a total contract value of up to $42 million compared to approximately $200000 in contract value in.
The prior year.
These bookings include our agreements with marquee players like Thermo Fisher scientific and Bayer crop science as well as $8 million of new deal signed in the fourth quarter.
Of the $42 million signed during the year approximately $11 million was recognized as revenue in 2021.
Gross profit for the fourth quarter of 2021 was $16 million compared to $14 $8 million in the prior year period.
Gross margin for the fourth quarter of 2021 was 69% compared to 68% in the fourth quarter of 2020, excluding the impact from Ginkgo gross margin for the fourth quarter was approximately 74% above our long term gross margin target of approximately 70%.
Fourth quarter 2021, operating expenses were $33 8 million compared to $26 6 million in the prior year and included $5 1 million and $5 7 million of.
Stock based compensation respectively.
The increase was driven by $1 8 million and R&D $2 $7 million in G&A and $2 $7 million in sales and marketing.
Net loss for the fourth quarter of 2021 was $17 7 million compared to a loss of $12 1 million for the prior year period.
All net loss numbers are inclusive of stock based compensation.
Looking at the full year.
Total revenue for 2021 increased to $85 4 million.
Up 33% year over year.
Regionally North America accounted for 48% of total revenues in the year, followed by APAC at 41% and EMEA at 11%.
For 2021 revenue from direct platform sales totaled $46 4 million.
Recurring revenue was $19 2 million, an increase of 38% over 2020.
Strategic partnerships and services revenue was $19 9 million growing more than three fold over the prior year.
Gross profit for the full year 2021 was $56 6 million.
Compared to $44 $6 million in the prior year.
Gross margin for 2021 was 66% excluding ginkgo full year gross margin was 71, five which is well aligned to our long term model.
Total operating expenses in 2021 were $127 3 million comprising.
Comprising of $58 $5 million of R&D, $43 $4 million of G&A and $25 $4 million in sales and marketing.
Stock based compensation, including in operating expenses was $21 million and increased $10 $3 million year over year.
Operating expenses were up $42 4 million from $84 $9 million in 2020, due to an $11 $3 million increase in R&D $10 $9 million increase in sales and marketing and a $22 million increase in G&A as we transition to a public company.
Net loss for 2021 was $71 7 million compared to a loss of $41 $6 million in 2020.
We ended the year with cash and cash equivalent balance of $178 million, our available liquidity is $188 million, which includes our revolving debt facility.
Turning to our 2022 outlook as we shared at the beginning of the year, we expect revenue for 2022 to grow approximately 30% compared to 2021.
With prior years, we expect revenue to be more heavily weighted to the back half of the year as more business development collaborations and partnerships come online coupled with our typical seasonality.
Embedded in this outlook are a few key assumptions.
We expect strategic partnerships and services to grow at a faster rate than other areas of our business similar to what we experienced in 2021.
Second we expect Crows and CDN mode can you continue to be a growth driver.
Third we expect campaign capacity to be in line with 2021 campaign.
We continue to see APAC is an important market for antibody therapeutics business.
Before we turn it over to Q&A I would like to Echo Eric's appreciation for our team for their continued hard work.
As we have advanced the Berkeley lights platform's capability, we increasingly hear from our customers. How our technology is enabling them to solve complex problems that were previously thought to be unsolvable. We look forward to continuing to provide revolutionary technology to our customers and to help them advance their discoveries.
With that we will now open the lineup for questions operator.
Here.
Certainly ladies and gentlemen, once again, if you have a question at this time. Please press Star then one on your Touchtone telephone. If your question has been answered and you'd like to remove yourself from the queue. Please press the pound key our first question comes from the line of Julia Qin from Jpmorgan. Your question. Please.
Hi, good morning, Thanks for the question.
Scott on the.
Organization.
You mentioned that business segment alignment as key near term focus to drive the revenue section on a conference. So could you maybe give us a progress update and if you could give some color on the current morale and team stability.
Yes, thanks for the question Julia.
Good to hear from you this morning.
As we continue to move into 2022 crude had mentioned.
Growth drivers include growing our strategic partnership and services business for ensuring that we enabled the downstream revenue and second to continue to release, our high value workflows and our core markets.
Our team couldn't be more excited as we continued to deliver key capabilities and our innovative therapeutics market.
Our development teams continue to be motivated to deliver both the species expansion in antibody therapeutics plus an additional affinity assays.
And not only those things, but and cell line development. We've got some very interesting capabilities that we're delivering in the bispecific space.
So.
<unk> continues to be motivated to continue to move forward on our mission of helping our customers find the biology that curious disease.
Great and then on a quarter specifically.
Instrument placements, including Tech Axis, I remember when you pre announced.
At the beginning of the year.
Eight placements so could you maybe bridge the gap for US has there been additional delays and then on a related note given the noise about biotech funding environment are you guys expecting any meaningful change in the mix of capital versus tech.
Yes.
Julian This is Kurt I'll take that first part I don't think we ever specifically said, how many placements were in the year. We just gave a revenue number so the fixed placements for the quarter is in line with where we were at the beginning of the year when we pre announced and as you recall, we said we had a few that shifted out of the fourth quarter and into the first half of this year.
<unk>, so that kind of no change there and those orders that have moved from the fourth quarter not a matter of.
When if theyre going to hit its when its in the first half we still feel confident about that and then I'll, let Eric address the second question there.
Can you repeat the second question for me please.
I was just wondering in light of the noise around biotech funding environment are you guys expecting any meaningful change in our capital versus Tec axles next step yet.
Yes, I mean of course, we're all seeing cash conservation.
Potentially happening in that market, but the wonderful thing about our offerings as we have not only the tech access model, but we also have strategic partnerships and services, which.
We saw triple from $5 8 million in 2020 to over $19 million in 2021 the.
The additional backlog, we mentioned that we signed $42 million in contract value. In 2000, 22021 that of course gives us a backlog into 2022 and I think.
I think the result of the market situation right now really gives credence to that strategic partnership and services business model, which is one of the pillars one of the pillars of our our focus in 2022 to achieve and exceed our outlook.
Got it last one from me you said, you're expecting to deliver the cell line development workbook.
<unk>, <unk>, which I believe will kick start the subscription revenue stream for you how should we think about the policy and how long do you expect that subscription revenue stream to last.
I believe you also said in prepared remarks that you plan to wrap up additional commercialization efforts with that partner.
So just wondering if you could be more specific.
If I if I can go and how to think about the associated milestone.
This is in regards of course to the to the viral vector workflow. So yes, we will be delivering cell lines through the partnership agreement in Q2 and Q3 two three.
Fisher scientific.
Team continues to develop the workflow and it's progressing quite well.
Entertaining discussions into additional additional customers participating in that market with us. So that will we'll keep you updated with additional announcements as we do with our strategic partnerships and services business as those materialize.
And Julien we've talked about before embedded in that contract is.
On the delivery of that.
Work flow to to thermo they will have a subscription on the backend that last couple of years that's.
Not a tech access subscription obviously, it's a <unk>.
Significantly higher priced.
Quarterly type of payment aspect that last multiple years.
Got it thank you.
Thank you. Our next question comes from the line of P. J <unk> from Morgan Stanley . Your question. Please.
Hey, guys good morning.
And thanks for the time here. So maybe one for you Eric on the five direct placements of the Beacon that you talked about in the quarter can you just give us some color on new versus existing customers.
And then any color on sort of application mixed assets.
We continue to see additional new customers and additional customers with mix in zero zero business to us.
Really driven by the workflow applications in antibody therapeutics antibody discovery Cove point of view, but also the roadmap of adding additional species in 2022.
And also the affinity assay.
I think as we continue to move forward as we briefly talked about before we do see the.
The rotation of the business towards towards more of the.
Strategic partnerships and services business for us as we move into the future as we talked about in Q3, we had.
GSK.
<unk>, they're at Beacon and also <unk> acquiring their third weekend. So we continuing to see great pull from existing customers, but we also have new customers, who are understanding that without the technology. They are left with older older methods to find antibodies, which are putting more and more difficult to find the hard to hit targets.
Yes.
Got it that's helpful.
And then on the on the subscription side of things Erik I think you guys talked about one subscription this quarter.
So that's a bit of a step down versus the three you saw in <unk>.
Can you just sort of help us sort of contextualize that a little bit, particularly given your commentary on a little bit of conservatism or caution among your customers on capex purchases.
In 2021, we saw our subscription business.
About approximately 10% of our overall placements on the year end.
That was pretty good in the first year first year of us going out here.
As we move forward I do believe I do believe that we will likely as cash cash conservation continues to move forward that we can we will see more of that subscription business that being said to us right.
Customers also look at longer term, rois, and which is better for them to purchase the equipment rather than through the subscription and so.
We will continue to let our customers decide would of course is best for them in regards to their financial situation.
But we do provide both offerings for our customers to support them in the decision that they need to make.
Which would be best for their business.
Hey, Curt if I can just add one thing in there you also see as we talked about on the last call and again on this call about the increased demand coming from <unk>. So we have seen their campaign usage be slightly higher than what we would anticipate that would tell me that some folks are going that route which again is.
We said before we're indifferent because that means the technology of FERC license is being used and we're getting that campaign market share.
Got it.
Couple of other quick ones for you.
To follow up on that sort of cash conservation mode comment I mean, how are you thinking about your opex cadence through this year I think.
You talked about sort of doubling your commercial team in 'twenty. One then.
Obviously R&D investments as well.
Just walk us through what your expectations are for Opex on the cadence through the year.
Look.
Opex will grow it we don't give guidance on Opex in general, but what we're anticipating is obviously opex will grow at a at a lower rate than what it did in 2020, and obviously at a lower rate than what we're anticipating our revenue to grow when we said revenue would go up about approximately 30%.
Obviously, and particularly with some of the geopolitical uncertainty that unfolded overnight.
We remain cautious.
And prudent where we're going to invest.
Last year, obviously, the first year being a public company you have expenses like year, one socs, we obviously had some litigation expense.
And some other things that were going on in the P&L that we expect to be nonrecurring. So we expect some scale there, but we do believe.
We said with any company Theres, a certain amount of critical infrastructure that you need and that scale is pretty nicely thereafter, and we will continue to be prudent and when the new CEO comes in.
I'm sure one of the first things on their mind is going to be hey.
What do we need to do to ensure we preserve as much cash as possible to give us as much optionality as possible and focus on the critical items that matter and continue what Eric has has put into place here.
Got it and then one final one for me on supply chain.
Are you seeing any signs of sort of disruptions.
Youre doing proactively to just.
Stock up on inventory.
Perhaps like chips and other components.
I mean to what degree are you sort of future proofing your.
Manufacturing you'd given some of the volatility.
Yes, I think you hit the nail on the head there obviously some of the supply disruptions are.
Particularly in the micro chip in semiconductor shortages that you see impacting audio and others are certainly not immune to us we have semiconductors that are put into our.
Our.
Tools, particularly around the optics, we have gone around and try to secure those.
These types of items as much as possible and in some cases buying components that have those chips embedded in them. So that we can.
As much optionality and flexibility.
A very low cost chip that's used but it's obviously a critical chip so buying buying as much as we can on there, but we obviously have enough demand or enough supply to meet what we believe our demand is for.
At least through 2022.
Got it very helpful. Thanks, guys I appreciate the time.
Thank you.
Thanks Louis.
Thank you. Our next question comes from the line of Brian Weinstein from William Blair. Your question. Please.
Hey, good morning, guys how are you.
Thanks for taking the question.
It's probably not much you can say on the CEO transition, but I am curious.
If you have any kind of thoughts on transition timing and also what the board is focusing on as far as qualities that theyre looking for.
In a new CEO .
Yeah, absolutely Brian Thanks for thanks for the question Ryan.
As we discussed.
At the beginning of January and now that the board has initiated the search we've got Russell.
<unk> rental than doing the search for us and we've been seeing some very very interesting candidates.
I think of course, we can't disclose where we are throughout the process, but in regards to the to the characteristics of the board is looking forward right, having a CEO with a proven track record and experience to drive.
Our type of business right around a business segment strategy is going to be important to support the next level of growth.
And so the board is diligently looking for a person with those characteristics and I am confident that we will find that person.
As I said in regards to timing.
It's not tomorrow and it is not in the year. So there is some time in between there and I know thats, a large range but.
But that's where we're at.
Okay.
Then.
On the guidance to 30% growth I think that gets you to about 110 $111 million or so in revenue are you guys able to give us any kind of direction as to the makeup that you expect.
That revenue to look like in terms of partnership recurring revenue and direct in 2022, and then longer term how do you see that mix playing out we have you guys been able to to better refine what you think that longer term.
Breakout looks like between the various categories.
Yes.
Hey, Brian Thanks for asking the question, obviously, when we say approximately 30% for the year. We gave a few nuggets in the script was saying that we expect.
<unk>.
Strategic partnership and services business to grow at a faster clip.
We had about seven point.
For $7 5 million of partnership and services revenue in Q4, I would expect that to be kind of flattish as we go into Q1 and then we expect similar to what we saw in 2021 that should accelerate a little bit in the back half of the year, We're obviously going to grow that business and if you look at what we did.
Last year.
We signed up to $42 million of new contracts last year.
In addition to that some of them now start to have additional upside in the form of downstream revenue participation, whether that'd be milestones in the cases there.
BCS or if it's.
The royalty that we saw with Anika that we announced and signed as part of the $8 million and deals we signed in Q4. So we're seeing good progress there. So I think that's going to be call. It in.
Mid 20% to 30% of total revenue recurring revenue is going to be.
Pretty well predictable and then the fall out of that is going to be your direct placements, but we do anticipate it being more back end.
Loaded and historically has been in that 60, 40 split and I think thats, probably what youre looking at this year as well.
60, 40, meaning 60 in the back half 40 in the front half just to be clear yes.
Yes, yes, thanks for that clarification, Okay alright.
Okay. Thanks, guys I appreciate it.
Thank you thanks, Brian .
Our next question comes from the line of Mark Massaro from <unk>. Your question. Please.
Hey, guys. Thanks for the.
Questions here I guess.
So recognizing that you.
Six.
Fix placements in Q4, I think that took you to 36 for the year I know earlier in the year you had guided for at least 40%.
But one thing I haven't heard is what your expectation is for capital placements in 2022, I Havent heard any outlook on that and I guess help me think about that in the context of your commentary of how some of your customers.
Customers are postponing or eliminating capex purchases.
Yeah.
Yes, we haven't given we're not giving guidance on particular unit placements in 2020 to Mark, but where we are providing we are providing that 'twenty. Two we expect to continue to grow and we pegged the number at approximately 30%.
As we were just discussing right now with Brian right, 60% on the Bakken and 40% on the front end.
Although we have our strategic partnership in services, we've mentioned that will grow at a faster rate, but we do we do see campaign capacity in the market to be in line, if not higher than 2000, 22020 and campaigns and when we say comparing capacity.
This is the number of campaigns that are there.
We're running for both therapeutic antibodies and reagent antibodies.
So we continue to see the <unk> and <unk> continue to be a growth driver as customers get into that cash conservation mode.
It creates demand and Sierra is in CD mode, and we feel that we're really well positioned both with the tech access model, where even direct placements with those customers into that market. So.
To see additional placements in 2022.
In both tech access and direct placements.
And I do believe that Asia Pacific is going to continue to be an important market as that is an emerging and growing market for us in our antibody therapeutics business.
In March one.
Keep in mind. There is we are seeing customers the trend of them accessing the technology through <unk> and <unk> to aggregate demand obviously for multiple customers. They run at a much higher utilization and therefore use higher consumables, we are seeing that particularly in the capital constrained type and type of environment.
So.
Like Eric said, we're not giving specific guidance on the placements will give color as that unfolds throughout the year.
That's helpful. And then can you can you provide some clarity around the $42 million that you had in your total contract value. It looks like you recognized 11 got $31 million left I mean, how should we think about that.
That backlog playing out in 2022, and just walk us through.
Some of the mix of that.
Yes, no if recall, what we said on the last call is that in.
We had secured we're entering 2022 was about $20 million of.
Firm.
Kind of backlog of partnerships into from this partnership in services.
That's up pretty significantly and Thats, a nice starting point, that's up significantly from the prior year, we continue to sign new deals, including the 8 million that we signed in the fourth quarter of last year.
So from that aspect, we're not giving the exact cadences that goes out into 2023, 2024 et cetera, but I think you can look at our total backlog, including what was on the books at the beginning of 2021.
I believe about $20 million of that is going to be recognized in the.
This fiscal year 2022, and then obviously, we expect to continue to sign new deals and.
That will add to the revenue of the business development or I should say the strategic partnership and services will have for the year and again as you mentioned.
The deals we signed within the calendar year last year, 2021, 11 million materialized out as revenue and so obviously there will be some deals that are signed in 2022 that have meaningful revenue contribution in 2022.
Understood Okay.
And then my last question, Eric you talked about some new assays.
Some.
Turnkey reagent kits.
And some other new products I assume these to be maybe product enhancements, if you will as opposed to like Cigna.
Significant new capital sources of capital purchase or the like can you maybe just expand on the value of these new products and what how should we think about the contribution of them.
The top line.
Yes, I think it's important to put that in context of the overall position we are in the market.
Still new and emerging player.
With with with a ways to go as we cross the chasm into the early majority right and so as we continue to add these.
Our new capabilities and whether its the additional species and rebate or human the affinity assay in the antibody discovery the bi specific assays with the kids and cell line development.
All of these all of these things not only enhance the product experience for our customers. Our current customers, but also lead us to additional new customers to move onto the platform and so and so we continue to see increasing demand from customers who are not currently using the virtualized platform to come onto the platform as we can.
Continued to release these things. So it is not just reagent pull through increases Mark it's additional placements as we move into that early majority segment of the overall market.
Great. That's it for me thanks, guys.
Thanks Mark.
Thank you and just a reminder, if you have any questions. At this time. Please press Star then one our next question comes from the line of Kevin.
<unk> from <unk> capital your question. Please.
Hey, guys. Thanks for taking my call good morning.
So I guess for Q3 earnings I remember you guys had mentioned that you expected the co develop workflows with kimco to be completed by 2021 year and I.
Just wanted to get some more color here was there a slight delay was it externally driven or internally driven and I know you mentioned that you expect them to be delivered in the upcoming quarters. Just I just wanted to get some more light on that.
Thanks, Brian Great question.
We were always targeting Q1 to deliver and of course, we would finish them internally, but we needed to transfer them in Q1, and Q2 <unk> and so continue to work on those overall workflows and make sure that our customers have.
Every functional and reliable workflow that they can operate in their overall <unk>. So.
On track to on track to delivering those this in next quarter and we'll continue to to work with <unk> to make sure that they ramp those into production.
Got it. Thanks, and then are you able to disclose the end market of that second partnership that you mentioned from Q4 that wasn't from on a go.
But one of the top Biopharma that you mentioned or is that <unk> disclosed.
No happy to talk about that is in the antibody therapeutics market as we continue to to move that forward with a top five pharma customer and looking forward to really bridging.
Bridging, adding additional capabilities that bring our antibody discovery closer to our selling belmond workflow.
So then youre up Youre basically opened assigning these new partnerships in the antibody space right because I remember you guys had mentioned that you mostly are majority look for.
Use these partnership opportunities to enter into new end markets. So it's fair to assume that you guys will still I guess address the antibody therapeutics market through these partnerships.
Oh, absolutely I mean, we we saw.
Turns out as the company and in 2013 2014, we signed the Amgen deal, which was one of the first one of the first deals that we signed at the company, but that was followed by BMS Roche Pfizer several others that we did business development deals or strategic partnerships and services deals.
In the early days of the company and that's continued as we as we work to add additional capabilities, whether it's in a market that we're already participating in or into new markets. We do these deals to develop new capabilities and help our customers achieve results that they can't achieve other ways than with the Berkeley Heights platform.
Thanks for the color and then last one for me.
I'm just trying to get an idea of the capacity of the partnerships that you could currently effectively handle.
Looking into subsequent years 2022 2023.
Should we expect the amount of new deals to to exponentially increase year to year or is it more of.
Slight step up from flat each year, just just trying to think about how to look at that moving forward.
Well I think there's a couple of components to that one if you think about how these deals are in bed.
For they generally start out to where were doing kind of a little bit more of the orange.
Well, it's kind of a fixed set of capacity driving to a number of pains or peak in utilization that they can get.
Then move them through somewhat of a development to fine tune that and then when you released the workflow it enters into a separate thing like for example, with BCS We will always run the screens on our in our bio foundry. So when that workflow goes into production and they want to run it in a production environment.
Five two and it's embedded in the contract to a separate.
Contract production screens, and then Youre still continuing development in other.
Developing new proteins and things like that to answer your question in terms of the capacity et cetera.
Generally what it is in the bio foundries for us to be able to get another beacon and then obviously.
Lab technicians to be able to run the tool.
We keep our supply chain.
<unk> ample demand like that we can get something installed within a few weeks.
And we make sure we have ample space in our various facilities to make sure. We can accommodate that and we do expect that over time the amount of activity in campaigns run through our.
Our bio foundry will increase and I think you saw the growth that we exhibited last year was signing 42 up to $42 million a deal and then obviously there is back end royalties on some of those in addition to that our milestones and then you said that we were going to grow at a faster pace than what the.
Overall, 30% approximate 30% growth rate that we said the company was doing the strategic partnership and services would grow at best.
Perfect. That's it for me Thanks, guys I appreciate it thank.
Thank you.
Thank you.
Does conclude the question and answer session as well as today's program. Thank you, ladies and gentlemen for your participation you may now disconnect. Good day.
Yes.
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