Q4 2021 Nautilus Biotechnology, Inc Earnings Call
[music].
Good morning, ladies and gentlemen, thank you for standing by and welcome.
While technology fourth quarter 2021 earnings.
Earnings Conference call at this time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press. The Star then the one key on your Touchtone telephone.
You recall offer assistance at any time, Please press Star then zero.
I'd now like to turn the conference.
Conference over to your speaker host, Alex kind of Investor Relations.
Thank you earlier today <unk> released financial results for the quarter and full year ended December 31 2021.
<unk> received this news release or if you'd like to be added to the Companys distribution list. Please send an email to investor relations at Nautilus stockpile.
With me today from Novelis Soochow Patel co founder and CEO Raj Malik co founder and Chief scientist and Anna Murray Chief Financial Officer.
Before we begin I would like to remind you that management will make statements. During this call that are forward looking within the meaning of the federal Securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated additional information regarding these risks and uncertainties appears in the section entitled forward looking statements in the press release issued today, except as required.
By law, Nautilus disclaims any intention or obligation to update or revise any financial product.
Hi, Brian projections or other 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 24 2022.
With that I'll turn the call over to Sue Joe.
Thanks, Alex.
And thank you to everyone for joining us on the call today, We will review our results for the fourth quarter and full year 2021, and provide an update on our range of recent activities.
Since our last call. We've continued to make strong progress against our key scientific and business goals due to the efforts of our incredible teams in the Bay area and Seattle.
Any game changing innovation to the market requires not just a great idea, but a team willing to do what it takes to succeed.
I'm very proud of the way our team has risen to the challenge and embraced the opportunity through focus intensity and a deep sense of scientific curiosity to provide ubiquitous access to the proteome for every lab researcher and clinicians around the world.
To begin I want to take a moment to remind everyone of our broader mission when I speak with potential customers partners and key opinion leaders.
To hear an increasingly common refrain the primary role they see for innovative next Gen. Proteomics is to drive revolutionary improvements in drug discovery diagnostics and human health in the decades to come.
There is no doubt in my mind that <unk> will be a leader in this vibrant and valued space.
For many years, we've been told that a wave of precision and personalized medicine based on the intricate details of each patient's biology is just over the horizon.
Fortunately, except for niche cases like drugs targeting specific mutation in cancer cells, where genome editing for rare diseases. This wave has not come.
This is perhaps because our hopes for personalized medicine has been primarily tied to advances in genetics and genomics yet as we all know well genomes help us understand general susceptibilities, they do little to inform people about the state of their current health, where if their lifestyle choices.
Higher metal factors have increased or decreased their disease risk.
Proteomics technologies like Nautilus on the other hand into reveal staple information, telling us what's happening right now.
Proteins carry out the majority of cellular function the dynamic patterns of these ever changing proteomics profiles, comprising thousands to millions of protein variation can reveal whether were healthy <expletive> will have greater potential to become sick.
These same proteins can help us individualize, our treatments based on what's happening in our body today and what has been happening throughout our lifetime.
We fully believe that proteomics is a critical ingredient in making personalized medicine a reality.
The reach and impact of Nautilus is innovation is potentially in that.
Recent estimates are that the proteomics market is approximately 25 billion and.
And growing at a 12% CAGR.
This opportunity is an immediate and exciting area of focus for US, we believe that technologies that improve accessibility and reproducibility and deliver faster turnaround time with reduced complexity like Nautilus.
We will be the catalyst to expand this market opportunity.
Simply put our goal is to democratize proteomics, and then doing so revolutionize biological science, we expect that researchers in biomedicine, regardless of their background will be able to use our technology and as parag and I have both said before we hope to make it possible for anyone who wants a protium.
To get to prevail.
Nonetheless, as widely accessible proteomics platform aimed to dramatically accelerate target identification and drug development using it we expect researchers will be able to establish proteomics for any sample they wish ranging from tissue culture model systems to preclinical Sarah tissues to human clinical.
With these in hand, it will be easier to figure out how disease processes impacted our body and to create drugs that target the molecular underpinning of each disease and with fewer side effects.
We continue to see a broad array of users for our instruments from researchers in Biopharma and academic institutions to clinical practitioners, we believe our instrument will fit the needs of a wide range of proteomics users among.
Among those groups the common thread will be their need to dig deeper and more quickly into proteins and protein forms of interest. We believe that non list will enable them to develop more effective therapeutics to build more precise diagnostics and to pick the best therapy for a particular patient.
As we start 2022, we are more confident than ever that the single molecule protein measurement platform that we're building will deliver value to biological researchers in a way that's simply not possible through any other method.
We are excited to have you along on this journey and look forward to updating you on our progress along the way.
I'll now turn the call over to Parag for an update on our research and development and partnership activities Parag.
Thanks to Joe I want to start by echoing <unk> comments about the remarkable team. We've assembled when you have a purpose as audacious as ours you need a team of people capable of embracing of vision Dreaming, a very big Dream and then applying everything they have to help make that dream a reality.
I am very proud to say that we built such a team.
And want to personally thank them for their extraordinary efforts last quarter and throughout last year.
We continue to make solid progress against our scientific goal.
And then rapidly matured our development processes for both our consumables and our instrument through a mix of internal and external efforts.
We note that our consumables include the reagents for mobilizing proteins on our nano pattern chips.
<unk> and flow cells. The labels, we use to detect our probes approach themselves and the various buffers and chemical agents used for sample preparation and for on platform detection.
As part of these development efforts were focused on our verification and validation tool and the underlying analytical techniques required for assessing the quality of our consumables.
In the past year dozens of metrics and assays have been developed and optimized to assess the quality of every step in our process from a reagent creation all the way through to on platform performance.
We are additionally focused on methods to significantly increase production scale and decreased process costs.
These steps are critical for ensuring a successful transition to a manufacturing operation fully capable of supporting our commercialization objectives.
One such recent effort reduce the time of region accretion by a factor of 10 with an additional improvement in yield by a factor of two.
Lastly, we are focused on improving our processes for instrument assembly integration and execution.
These efforts are close collaborations amongst our system integration software and engineering teams.
As we continue to mature our development effort. We are also being intentional about working with a range of partners across our instrument and consumable ecosystem to both de risk our timelines and ensure we have sufficient supplier diversification for.
For example, we now have four separate partners working with us on chip fabrication and functional <unk> efforts.
Partners working with us on instrument design, and build and test frameworks and it begun outsource manufacturing of key reagent components.
Our efforts in probe development have been augmented by our relationships with external probe development and supply partners like <unk>, which <unk> will comment on further in just a few minutes.
We've also begun supply chain exercises to ensure a diversification of suppliers for key components.
Overall, we continue to successfully transition to a manufacturing posture as we build towards full commercial availability.
In late December Nautilus was awarded our fourth U S patent the patent covers methods for making single molecule protein arrays using structured nucleic acid protocols.
Which we refer to as snaps.
This latest patent complements our three existing granted patents and focus on more general processes and methods associated with our platform.
We expect this latest patent with our three other issued patents to be just the tip of the iceberg as we continue to significantly expand the scope of our intellectual property portfolio.
The hard work of our R&D team has also manifested itself in a number of important scientific papers over the last few months building on that momentum we began editor outreach for paper, which <unk> demonstrates our platform's ability to detect and measure the molecular heterogeneity of <unk> forms of <unk>.
<unk> drug target through serial interrogation of individual protein molecules.
We are incredibly excited.
By the work, we're doing with Genentech and I look forward to sharing details regarding our results when I presented at the U S. Human Proteome organization, who pose annual meeting later this month.
This work with Genentech also reflect the experimental research being done with our other announced collaborators Amgen and the University of Texas, MD Anderson Cancer Center the.
The initiation of these relationships is a clear and unambiguous indication of a growing understanding the protium farms will be an important driver of high value Nextgen biological research in the future.
Pretty forms the different forms of a protein produced from the genome with a variety of sequence variation spliced isoforms and post translational modification.
Spite their clear value.
Presents an area of biology, with an underserved and unmet need which we believe the novelist platform is in a unique position to support.
Post translational modifications Pts contribute to the vast diversity of pretty forms that drive biological processes. Currently very little is known about the molecular heterogeneity of part of your farms. This gap can be primarily attributed to a lack of methods to analyze at massive scale, Pts an intact single protein molecules.
A better understanding of pretty farms through the work, we're doing with Amgen Genentech and MD Anderson holds the potential to expand our collective thinking about cell signaling pathways development of companion diagnostics epigenetic regulation.
Biomarker identification and drug staging target discovery and candidate discovery as well as characterizing disease mechanisms and understanding mechanism of action for candidate Therapeutics.
Single molecule proteomics approaches like Nautilus's are an emerging complement to existing approaches that we believe will allow interrogation of proteoform had a greater sensitivity.
And at a greater detail than is currently possible.
We continue to repeatedly here that the market is excited about single molecule protein analysis methods. We additionally, here, but the market is less focused on a target number of proteins measured but instead is excited about novel approaches that can unlock new biology.
My enthusiasm about our platform's ability to unlock the value of Proteoform detection and identification of steepened as we've leaned in with our research collaborators and we've seen their excitement about proteoform biology and about our platform.
That enthusiasm in no way diminishes, our excitement about our ongoing broad scale D coating work both areas represent high value uses of the novelist platform and we will continue to pursue each with vigor.
With that I'll hand, the call back to usual.
Thanks, Paul.
Since we became a public company in June we have significantly scaled our team and product development activities.
As you heard from Parag, we're very excited about the progress we've made since then but despite that progress we have not yet achieved our first broad scale proteomics profiling milestone.
That said, we still anticipate reaching comprehensive coverage of the human proteome in the middle of 2023, and we remain confident in an end of 2023 commercial launch.
The root of our confidence in our commercial launch schedule requires a bit of explanation.
As a reminder, and as described in the foundational manuscript we made available on bio archived in Q3. The novelist platform is based on an integrated computational experimental method, that's capable of identifying 95% of the proteome roughly 19000 genes encoded protein.
This method serially interrogates the single molecule binding of a collection of several hundred reagents that we call multi affinity probes.
Each of these probes are first discovered through methods like <unk> or phage display than prior to use within our platform. They undergo extensive characterization and our coupled to our proprietary fluorescent labels, which enabled detection.
As described in the manuscript the number of probes is not linearly correlated with the percentage of the protium that can be identified let me explain.
Roughly speaking the first third of our probe set will only be able to decode a small percentage of the protium.
From there the second and third of our probes that exponentially increases the percentage of the protium, that's identifiable approaching 60% to 80% of the proteome.
Finally, the last third of the probes that gets us to comprehensive identification and provides more confidence around protein identification.
Additional probes increased confidence of identification.
And enable more detailed detection of mutations and protein forms, but do not substantially increased the percentage of the overall protium that could be identified.
Last year, we plan to begin to scale development of the multi <unk> probes as soon as the capital from our public offering was enhanced that scale development Intel's, both internal and external efforts focused on developing <unk> antibodies via standard and proprietary methods.
When we announced our strategic partnership with App Cam on our last quarterly call I mentioned, the likelihood that we'd be signing similar agreements with other partners in an effort to Derisk our platform development timelines.
And we signed agreements with three additional strategic partners. These relationships will not only help us most efficiently achieved broad scale proteomic profiling, but we also anticipate they will enable us to effectively scale reagent production as demand for our platform growth.
While the scale up of our internal and external probe development strategies is exciting both our internal and external efforts began later than anticipated now that we've begun.
We're pleased with the development and supply strategies that we have in place the significant number of planned probe deliveries from these strategies and the early data that we're seeing.
With all of this our product delivery schedule is compressed into a shorter time period, which is good from the perspective of reaching our commercial launch goal, but it also puts a lot of pressure on our probe characterization and integration efforts, which sits downstream from probe discovery.
Recognizing that compression it no longer makes sense for us to articulate a firm schedule for milestones like when will reach 2000 proteins identified indeed, with our <unk> delivery schedule being compressed in this way, we're unsure whether our first step will be able to identify 70 hungry proteins per sample or 5000 proteins percent.
<unk> or something in between.
Beyond the platform development efforts I just described in 2021, we significantly increased the number of detailed conversations we had with customers across Biopharma academic and research and diagnostics. We heard from these customers significant excitement about getting early access to single.
Molecule data single protein molecule data.
These customers are aware just like we are that there are many assays out there that performed bulk measurements, which are limited in terms of sensitivity.
There are also several newer companies working on early development efforts towards peptide sequencing, which is limited in its dynamic range and ability to accurately match the proteoform landscape.
And of course, there is mass spectrometry based proteomics, which entails a complex workflow and is limited in both sensitivity and dynamic range.
We believe more strongly than ever that Novelis has the potential to provide complete identification and detailed proteoform mapping at the intact protein level outperforming existing methods and those currently in development elsewhere.
Customer conversations in conjunction with a significant amount of market research and increased our conviction that customers are eager to run samples on our platform. We're energized by this feedback and motivated by the chance to make a difference in how biological research is conducted.
Hopefully.
Really all of that gives you some additional color around our development path and our confidence in a commercial launch at the end of 2023, we look forward to updating you regularly on our progress and on our product development milestones and publication.
In the meantime, we believe that all of the necessary components are in place and everyone. At Nautilus is heads down focused on execution.
Let me turn the call over to Anna for an update on our financials.
Got it.
Thanks Danielle.
Total operating expenses for the fourth quarter of 2021 were $16 8 million compared to $5 3 million in the fourth quarter of last year overall that growth in spending was primarily a result of scaling up our team to our head count of 113, roughly doubling our size year over year.
Research and development expenses for the fourth quarter of 2021 were $9 9 million compared.
Compared to $3 9 million in the fourth quarter of last year that increase was primarily driven by growth in personnel costs as well as spending related to scaling up our development pipeline and our experimental capacity.
We also expanded the development services supporting the continued development of our platform.
General and administrative expenses for the fourth quarter of 2021 were $6 9 million compared to $1 4 million in the fourth quarter of last year.
The increase was primarily driven by growth in personnel costs and professional services related to operating as a public company.
Overall net loss for the fourth quarter of 2021 were $16 7 million compared to $5 $4 million in the fourth quarter of last year.
Turning to the balance sheet, we ended the year with approximately $362 million in cash cash equivalents and investments.
In terms of how we plan to allocate our capital we estimate that spending will grow roughly 75%. This year as we continue to invest in research and development personnel and development pipeline, both internal and external.
In G&A, we will be absorbing the full year cost of being public.
We will also be making initial investments in commercial teams and activities to support our early customer engagement and in preparation for a commercial launch by the end of 2023.
Our near term capital investment needs remain modest and are focused on building our inventory of completed instrument.
Our pace of investment combined with our limited capital needs gives us confidence that we have the cash we need to get through commercialization.
With that I'll turn it back to Sergio.
Thanks, Anna we're pleased to be hosting our inaugural analyst day in late September at our R&D headquarters in San Carlos California.
We'll have a full agenda that day, including a preview of our planned pricing model, while im not going to let the cat out of the bad just yet I will share that the recent in depth market analysis that I mentioned earlier, along with deep internal pricing studies and a significant amount of feedback from potential customers has increased our confidence.
And the pricing estimates we've previously shared with you.
We now believe even more firmly that are anticipated pricing will be supported by the extraordinarily valuable data that users will be able to derive from the platform and its ongoing use.
We're excited about what lies ahead for Nautilus and the difference we plan to make in biological science, our mission to positively impact the health and lives of people around the world remains our North Star I am grateful to our investors our strategic partners, our research collaborators and our team for joining us.
On this journey to transform proteomics and empower the scientific community in ways never before possible.
We continue to make good progress and look forward to updating you all along the way as we continue towards commercialization of our platform and beyond.
With that I'll turn the call back to the operator.
Operator.
Thank you, ladies and gentlemen, if you'd like to ask a question at this time.
I'll need to press the Star then the one key on your Touchtone telephone to withdraw your question you May press the pound key.
While we compile the Q&A roster.
And our first question coming from the line of Matt <unk> with Cowen. Your line is now open.
Hey, thanks for taking the questions.
Just a big picture one year, just curious where you stand from a head count perspective compared to the Q3 call in.
Sure.
Where the head count stands in some key function key roles and if theres any way or youre still looking to add.
I can start with that.
We ended the year at 113, which is continued progress over Q3 and doubling year over year. We expect we will continue to invest in growing our head count and that's one of the primary drivers of the Opex spend growing by 75% this year.
Continuing to invest in R&D, we're innovative.
Developing an innovative product.
That'll be our focus in this.
As we get closer to launch we'll be making some early investments in the commercial team.
And beyond that.
And that those trends will continue.
Okay, Great and then I just want to.
Clarify on that point per augment I think there was a comment that we could see an update.
From the Genentech collaboration.
Later this month or next month I, just wanted to clarify what exactly we should be looking for.
Sure.
Sure I'll take that.
What I was I was commenting on is that the U S. <unk> meeting is this.
This weekend and.
And we will be presenting.
Presenting some of the work from that collaboration there.
Okay great.
And then maybe just one final one.
And if we just turn to the MD Anderson Amgen partnerships.
Yes, I know understanding it's still early just curious if there's any updates you can provide in terms of how that's going in the early days or even if there is any way we can think about the timing of any updates.
That could come out of those partnerships.
Max's decision I'll I'll take this one.
Those agreements were recently signed and once we signed these agreements we get through a process of understanding what exactly.
Are the questions that we want to answer in terms of biological insight, we have to figure out what affinity reagents, we want to use where we're going to source them from integrate them into the platform and then we can go and run the experiments and shared the data with our collaborator in some places.
There's a good better profit there in particular because.
We're at the very early stages.
Putting our platform to use with collaborators and partners and in this early stage all of the regions that our customers want us to use our new to us and so.
We don't have we don't have an update for you on the exact timing of when we will announce.
Some results out of those partnerships, we are still in their early.
Early stages at those scoping activities and getting the reagents and getting ready for those experiments.
Makes sense.
Any other detail you could share on the agreements with the three new partners during the quarter, just maybe in terms of pads.
Additive to your internal reagent strategy, but.
Also how it could be complementary or different from there.
The deal you have previously signed with IBM.
Yes, why don't I take this one so.
One of the <unk>.
Most important thing that we wanted to tackle once we closed our public offering and have the capital in hand was to increase the number of probe development strategies that we had and increase the diversity of those strategies.
And so in terms of the types of strategies, both internally and externally. We are now leveraging after more based from discovery strategies and antibody based purchase equity strategies on the antibody side, we're using traditional antibody.
Development and proprietary method as well as using page display and so we've got a lot more diversity in there. The three additional external partners are a mix of those strategies and they are complementary to app can one of the big things that we did in 2021.
Was that we focused on trying to.
Thank you out for which types of probes and which epitopes, we were going to distribute to which partner and which strategy to create an optimal mix to get the product out and so with all of that work and had each of the partners is focused on a piece of the job and then theres a significant amount of AUM.
Lap as well so that we have additional margin and cover to be sure that we get to the final 300.
Approximately 300 approach that we need to reach comprehensive profiling by the middle of 2023.
Great. Thanks for taking the questions and.
Good luck this weekend.
Thanks Max.
And our next question coming from the line of Matt <unk> with Goldman Sachs. Your line is now open.
Hi, good morning, Thanks for taking my call.
Maybe just.
So Joe on the comments you made about the.
The compression of the probe schedule.
Maybe talk about some of the drivers.
Of that and it doesn't sound like it's got any impact on commercial.
Commercial launch timing and things like that but just maybe just a little bit more color on that.
On the causes and drivers of that.
Sure, Matt, Let me go which kind of walk through that a little bit and I think for bank headline message perspective, if I look at the end and then I'll explain I think you summed it up nicely, which is that we are behind but with the strategies, we have in place and the compression in the schedule, we feel like we will.
Be able to achieve our comprehensive proteomic.
Profiling milestone and full commercial launch by the end of 2020 on time I think that we're.
We're going to pause probably some more step along the way, but we feel good with the strategies that are in place. So if you think about what we did once we closed our public offering in middle of last year, we went and had to scale up our internal pipeline and we had to go and get our agreements in place with the external parties that we are going to help us and.
Given that we ended up closing a little bit more capital than we had originally anticipated we actually scale up.
The plan to go and give us additional coverage and to make sure that we're going to be able to get to the number of probes that are needed to get the comprehensive profiling on the internal side, our initiatives kind of scaled up a little bit later than we would have liked because one is that true.
<unk> took a little bit longer than we wanted it took us some time to hire the people and to scale up the teams that are necessary for our internal electric phage display efforts.
It took us a little bit of time to procure the equipment and reagents.
Supplies tight and so that took a little bit of time got our internal pipeline off about a little bit later than we had hoped but we're really happy with what we're seeing in those internal pipeline today.
On the external side.
One we had to negotiate deals.
With multiple parties and that's you've added them up.
Four of those that we've talked about externally here that were helping us on the development front and with each of those parties. We didn't want to just enter into a development agreement, but we wanted to make sure that we.
We were covered for our long term supply needs, both from a cost and manufacturing scale perspective, and being able to tackle that in conjunction with the development agreements have had a.
It took us a while longer than we had hoped all of those agreements are now behind us.
Often running and we're super happy with where they are coming as well and so in total we feel good about.
All of the efforts that are in place, but what that means is that literally if I look at our product delivery, our anticipated post delivery schedule there literally some quarters, where we have 100 probes coming in at various obviously those go through well sophisticated characterization and integration process Theres fallout from.
That process, but not all 100 are going to make it into the product.
The downstream tax characterization and integration have a lot more pressure given that there are so many posts coming in a shorter timeframe and so a lot of the focus of our R&D organization under prerogative Super. Thank our SVP of product development a lot of their focus is on scaling our integration effort scaling.
Our characterization efforts so that we can.
Secondly deal with the scale of the product that's going to be coming into that pipeline.
Got it that's really helpful color. Thanks.
And just maybe just one more from me.
You think about the end markets and I know this might be getting ahead of myself, but.
I know you've got partnerships on the Biopharma side on the academic side, but as you think about sort of the clinical diagnostics market and you kind of envision the value you provide to that end market could you talk about where you see.
The greatest value that you can add to that end market and will this be an end market that probably it will be later to develop post sort of biopharma academic being sort of the first two markets.
Perhaps you want to take the first.
Last question and then I'll add some color.
I guess I'll just ask a clarifying question first so when you think about the different different phases and types of markets Matt.
You mentioned academic and Biopharma outside of that what are the specific markets you're thinking about.
More of a just in that sort of the clinical diagnostics.
The use case.
Okay.
I think I think that the.
The way that we think about that.
That landscape is that is.
We require the research use partners to first use the platform in their early stage efforts and they're finding that they are novel targets. They are finding that their novel Biomarkers and that.
That lays the foundation for downstream clinical application because part of those drug discovery efforts as target discovery effort those mechanism of action studies, they're going to say Oh, there's a great companion to my drug.
You should measure this protein or this proteoform.
For some of those things that are discovered it'll be natural to use existing platforms.
Lumina ex ally's et cetera.
To measure them, particularly when they're low plex.
However over time, they're going to be.
Molecules that are that are discovered particular proteus farms for instance.
Where our platform is.
Really the only effective way to measure it or panels of dozens of markers that together create a signature that is more predictive and more specific and again scaling too.
Two typical targeted assays with that.
Number of markers becomes challenging for existing platforms and so that will encourage.
Folks in the development side say instead of trying to make that Elisa instead of trying to make that MRM assay, let's instead, just use nautilus, which was the discovery platform to begin with and that will drive us to say okay.
Clear clinical need there is a clear assay, let's do the work with the FDA to push this through to become a clinical test.
And in that way that will really accelerate our pull through the FDA approval process.
And in particular in orphan diseases.
Other areas like that those are great early use cases.
As a follow on for the FERC more clinically targeted applications.
Got it thank you.
Yeah.
And our next question coming from the line.
With Morgan Stanley Your line is open.
This is Hugo on the call for today, Thank you for taking our questions.
Just on this in your opening remarks, but could you further elaborate on how you measure and not elisa platforms to be positioned versus competitors developing protein sequencing platforms. What are some pros and cons to your approach versus the sequencing approach.
Okay.
Okay Jonathan.
<unk>. Thanks for the question so.
When we think about the competitive landscape. There are a number of interesting things to think about one is that we believe that the primary.
Gold standard method for Discovery Party unmixed today is leveraging workflows around the mass spectrometer and relative to the mass spectrometer that advantage that <unk> provides is really a significant advantage in coverage, meaning we're getting getting too high percentage of the protein side.
Being able to have greater sensitivity and a much wider dynamic range if.
If you look at us versus assays and.
It's really a lot of those same things higher coverage better sensitivity better dynamic range and then there is a new class of company and you mentioned.
And the protein sequence Theres really all the companies that we see out there today are really peptide sequences because they're all based on.
Variance of admin degradation, which is an old scheme to sequence peptides and so the first step with all of the techniques.
I have to digest proteins into peptide to then go and try to analyze them and.
I would characterize all of those efforts still in the early research phase and all of the products that we've seen that are contemplated suffer from a dynamic range and sensitivity.
Issue relative to what we expect our first product specifications to date and so part of the sensitivity comes from the fact that even if you have a single single molecule peptide sequencer with molecules that youre talking about when you say single molecule does or peptide and if your sequence.
Type as opposed to identify whole protein you lose two loss sensitivity right off the top because of that on the other side is the question of dynamic range dynamic range is directly a result of how many molecules you can analyze and so if youre only capable of analyzing past few million peptides.
In a single run that needs due to effective dynamic range of something thats pretty similar to what the Max back can do today, and what we've heard loud and clear from customers and Biopharma over the last five years is that there is a desire to be able to reach a dynamic range, where we can.
C down to one protein molecule and a 100 to 1000 101000 cells that very common sample type and format and being able to see one protein molecule on 102000, thousands kind of require a dynamic range that is close to $10 nine tended to attend because theres about one.
Protein molecules per cell, so multiply that out at 10 billion principal molecule and so we've designed our system from day, one to have a very wide dynamic range enabled by this very large chip and we think that fundamentally that gives our platform a significant competitive advantage in a lot of flexibility the customers.
Choose to use that whole check for one sample and get extremely high dynamic range and single protein molecule sensitivity, where they can choose to multiplex and have multiple samples run on that chip to increase the throughput in a single day and get more samples through the system at a slightly lower dynamic range, but still.
Orders of magnitude better than any of the contemplated peptide sequencing company.
Thank you that was super helpful and then.
Mike.
Follow up with <unk>.
Inflation on top of minds right now would you comment on what you're seeing along those front end any impact do you anticipate your business going forward.
I'm happy to take that one.
It's certainly top of mind for everyone out there and we are experiencing the effects in both our hiring in supply chain on the personnel side, it's an extremely competitive market, which means it's harder to find great people and our costs are labor costs are increasing.
With that said, we've taken steps to remain competitive and that other visibility from being public has helped on the supply chain side, we're navigating both higher cost and longer lead times, which.
As Joe mentioned, that's why we felt it was essential to negotiate agreements as we're signing on with these external development partners.
Also identifying long long lead time components and are planning a carton accordingly.
In either case, we are anticipating those cost increases and are prioritizing our spending to ensure we can meet our objectives.
Within our target spending envelope.
Great. Thank you so much.
And that's all the time, we have further question in Q&A session.
Ladies and gentlemen that does conclude our conference for today. Thank you for your participation you may now disconnect.
[music].
Okay.
[music].
Okay.
Yes.
[music].
Okay.
[music].
Sure.
[music].
Yes.
Yes.
Okay.
Yes.
Yes.
Yes.
Okay.
Okay.
Yes.
Sure.
Yes.
Yes.
Yes.
Okay.
Sure.
Okay.
Okay.
Yes.
[music].
Okay.
Yes.
Okay.
Okay.
Yes.
Yes.
Yes.
Yes.
[music].
Yes.
Sure.
Okay.
Okay.
[music].
Okay.
Yes.
Yes.
Yes.
[music].
Yes.
Yes.
Okay.
Okay.
Okay.
Okay.
Okay.
Thank you.
Okay.
[music].
[music].
[music].