Q1 2022 Nautilus Biotechnology Inc Earnings Call

May 3, 2022

Ladies and gentlemen, thank you standing by your conference costs that again, let me again. Thank you for standing by your conference call 70 momentarily. Thank you.

[music].

Thank you standing by and welcome to the Q1 2020 earnings Conference call. At this time, all participants are in a listen only mode.

After the Speakers' presentation, there'll be a question and answer session.

Ask a question at that time. Please press Star then one on your Touchtone telephone.

As a reminder, today's conference call is being recorded.

I'll now turn the conference will be held this outcome with Investor Relations. Sir you may begin.

Thank you earlier today <unk> released financial results for the quarter ended March 31 2022.

Adam 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 model.

Joining me today from Nautilus are Ctrip hotel co founder and CEO , Rob Malik co founder and Chief scientist and Anna Murray Chief Financial Officer.

Before we begin I'd 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.

Information regarding these risks and uncertainties appears in the section entitled forward looking statements in the press release model issued today.

As required by law, <unk> disclaims any intention or obligation to update or revise any financial and product pipeline projection or other forward looking statements, whether because of new information future events or otherwise.

Conference call contains time sensitive information and is accurate only as of July of broadcast may 3rd 2022.

With that I'll turn the call over to <unk>.

Thanks, Alex.

And thank you to everyone for joining us on the call today, We will review our results for the first quarter of 2022 and provided an update on our range of recent scientific and related activities.

My remarks will be relatively brief as parag has much to share with you.

I'll begin by thanking our teams in the Bay area and Seattle for their dedication and hard work again this quarter because of their efforts. We've continued to make strong progress against our key scientific business goals. Each scientific objective, we reach and each business milestone we achieve gets us one step closer to our ultimate perp.

Of improving the lives of people around the world.

By providing ubiquitous access to the protium <unk>, we expect to expand countless research horizons and enabled boundless scientific exploration and discovery.

Our team of scientific and engineering innovators is fully aligned towards and committed to realizing these important objectives.

Now more than ever we believe Nautilus has the potential to revolutionize biomedical research by unlocking the potential of the proteome.

The world needs, a dramatic acceleration and target identification and therapeutic development, but researchers have been hobbled by the lack of sensitivity scale and reproducibility of both traditional and emerging approaches.

We believe both scientific leap is required to overcome these limitations and to radically reinvent proteomics something we continue to view as one of the last and most significant untapped opportunities and biological science today.

We envision powerful research uses for our platform for example, proteomics could make it possible for researchers to more quickly identify the mechanistic origins of diseases ranging from cancer to Alzheimers understanding those mechanisms is key to identifying effective treatments.

We also envision the platform being used to identify biomarkers, which are able to stratify patients by disease severity whereby which.

Treatments are most likely to be effective.

As physicians and researchers use advanced proteomics technologies to Cadillac the Protium <unk>.

More and more diseases, they will be able to identify molecular targets for therapeutics with higher likelihood of success create new protein based diagnostic tools better understand mechanisms of drug resistance and more precisely monitor therapeutic effectiveness.

When Richard Proteomics data begins to drive deeper research insights, we foresee significant increases in patient well being and health.

A key to our continued success, we'll be scaling up a world class team across a broad range of disciplines and keeping that team laser focused on our long term mission.

One of novel assist superpowers is the deep integration of capabilities across life Sciences, computer and data Sciences, and physical Sciences and engineering.

The heart of those engines as our talented team and their dedication that Nautilus is critically important and we will create a clear point of competitive differentiation for us in the long run.

I am pleased to report that we have hired Glenn well as our chief people officer to lead our continued scale up to deepen our existing high performance culture and to do so in a way that creates an inclusive driven and highly collaborative work environment Gwen.

Glenn and I have worked closely together in the past and I've seen firsthand the type of impact you can have on an organization.

Im pleased that she has chosen to join us and could not be more excited about the opportunities for success that lie ahead.

When I look back on the progress made in Q1 and the successes of the year, leading up to it I am struck by how far we've come in such a short period of time and.

In 2021, we began our journey as a publicly traded company announced a strategic partnership with App camp and signed research collaborations with Amgen and the University of Texas, MD Anderson Cancer Center, along with our ongoing work with Janet.

But these exciting developments are only the beginning and as we look ahead to the remainder of 2022 and beyond.

We're excited to have you along on this journey with us and look forward to updating you on our progress along the way.

I'll now turn the call over to <unk> for an update on our research and development activities.

<unk>.

Thanks Dugal, the first quarter was highlighted by solid progress against our scientific goals continued maturation of development processes for both our consumables and our instrument and an increased number of opportunities to share our innovations with the scientific community.

We take very seriously our commitment to always operate with the appropriate openness and transparency.

Pleased that Q1 provided a number of really great opportunities to put that philosophy into practice.

For example, I was excited to have the chance to share important results from our collaboration with Genentech a U S hoopoe.

The U S arm of the human Proteome organization in March.

One, particularly memorable moment came when a well known researcher shared with me his view the biology happened at the single molecule level.

Sentiments like these from our future customers represent validation of the potential impact of our technology.

Since you Bo I also presented just talk on the development of a novel single molecule Proteomics analysis platform at the annual Congress of the European Proteomics Association Cuba.

I was gratified that a packed house several hundred researchers came to the presentation. The presentation itself was well received and afterwards, our team was inundated with great questions.

Well I had a number of conversations with attendees at Uva, one really stood out to me immediately following my talk and fantastic discussion with a highly respected German researcher. After the event. He wrote to me and suggested a number of really creative applications and workflows leveraging the nautilus platform that could enable researchers to ask an investor.

<unk> fundamentally different questions than ever before are possible.

And frankly, many of his recommendations for how one might use the modulus platform were ones that had never even cross my mind.

It was exciting to hear our biology focused proteomics power user see the potential of our platform to serve as a valuable complement to traditional analysis methods.

As with many proteomics meetings.

Has a heavy focus on the use of mass spectra metric methods for proteomics.

The positive attention. Our presentation received was a good sign for things to come with this critically important and influential buying audience.

I believe now more than ever the Nautilus platform is going to spur tremendous creativity and innovation.

In the broader proteomics community.

In addition to those opportunities are associate director of applications development, Dr. Greg cap presented a poster at the American Association of cancer researches annual meeting on our single molecule approach.

In addition, as part of that ACR presentation, we shared for the first time internal development results that demonstrate our ability to produce antibodies that bind to trimer and Petro mer peptide targets at Picomolar EC <unk>.

That is incredibly strong binding many orders of magnitude stronger than the therapeutic antibodies Houston medicines today.

When we conceived of the platform, we recognize the challenges associated with creating a novel class of antibodies that were not typically built because they were not protein specific.

This data clearly demonstrates that our hypothesis was correct and validate the ability of our internal teams to build these antibodies.

Another important scientific cornerstone of our platform is our ability to create high quality hyper dense single molecule protein arrays that allow massively parallel detection and identification.

Critical to that is our ability to deposit single protein molecules is uniformly and completely as possible across the 10 billion landing pads on that hyper dense array.

Using our nano fabricated chip and innovative proprietary technology based on DNA nano structures we.

We demonstrated single molecule Pat occupancy of over 90%, while simultaneously limiting co localization.

This breakthrough enables accretion of hyper dense single protein molecule arrays.

Where there are almost never two proteins on a single pad.

Thus, enabling high speed analysis of complex protein samples in a way that achieves both high sensitivity and wide dynamic range.

The manuscript highly dense and scalable single protein arrays for single molecule studies.

Describing this important achievement is now available on bio archive.

Q1 saw continued focus on advancing our commercial instrument.

The process of taking an instrument from concepts to build to commercial use involves a number of important phases that are closely orchestrated collaborations between our engineering software integration and applications teams.

We continue to successfully transitioned to a manufacturing posture as we build towards full commercial availability.

Before I turn things over to Anna to review, our financials I want to take just a moment to tell you a little bit more about our new Vice president of affinity region development, Dr. Cheri Wilcox.

For those who might not be aware sure. He comes to knowledge from Soma logic, where she was instrumental in the development of various products and where she most recently served as senior director of global scientific engagement. She is a renowned protein scientist, whose presence is already making an impact here at novelis, even in the early days of her time with us.

We're all very excited to have her on our team.

With that I'll hand, the call over to Anna.

Thanks.

Total operating expenses for the first quarter of 2022 or $16 million and 90% increase from $8 $4 million in the first quarter of last year.

That growth in spending was primarily a result of an increase in head count and related costs to support ongoing development of our products as well as taking on the cost associated with being a public company.

Research and development expenses for the first quarter of 2022 were $9 $7 million compared to $4 $8 million in the first quarter of last year.

General and administrative expenses for the first quarter of 2022 were $6 4 million compared to $3 6 million in the first quarter of last year.

Overall net loss for the first quarter of 2022 was $15 8 million compared to $8 $4 million in the first quarter of last year.

Turning to the balance sheet, we ended the quarter with approximately $349 million in cash cash equivalents and investments.

We continue to be well capitalized, giving us cash runway through commercialization.

<unk> heard from suitable in Prague, we are using those resources to invest in key personnel and initiatives to advance our mission and scientific progress prioritizing spending on product development launch and initial commercial readiness efforts.

With that I'll turn it back to digital.

Thanks Anna.

Looking ahead, we are thrilled to be hosting our inaugural analyst day in late September at our R&D headquarters in San Carlos, California, We will have a full agenda that day, including a preview of our planned pricing model and the public unveiling of our instruments.

We continue to believe even more firmly based on extensive market analysis and kols interviews 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 are 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 thought possible.

We continue to make good progress and look forward to updating you all along the way as we continued toward commercialization of our platform and beyond.

With that I'll turn the call back to the operator operator.

Thank you again, ladies and gentlemen, if you'd like to ask a question. Please press Star then one on your Touchtone telephone again to ask a question. Please press Star then one.

One moment please.

Our first question comes from Brandon Couillard with Jefferies. Your line is open.

Hey, guys. This is Matt on for Brennan, just wondering thanks for taking the questions.

First one I think last quarter, you indicated you begun our supply chain exercise to ensure diversification of key components I'm. Just curious if you could start to see the benefit of this and then more broadly if there's any bottlenecks within the supply chain as you look to finalize and scale up instrument development here over the next few quarters.

Let me go take that this is schedule. Thanks for the question. So I think when we talk about diversification in our supply chain, there's kind of two important areas that that we should discuss one is on the hardware and the pieces that go into our instrument we have to make sure that we've got good diversity.

Suppliers and that we are managing our single source components supply of well that we've got a pipeline of those parts and that we've got good supplier relationships and.

Manufacturing supply chain <unk>.

And at this for.

Something many decades, she is proactive and that work continues well the other side that we should talk about is really on the reagent side and as many of you will recall our system relies on 300 different assistant maybe reagents roughly to go and perform the iterative finding that.

Required tier comprehensively quantified proteome and we've done a lot of work in our agreements with external parties like App camp for example to make sure that we perfected our supply for the long term and that we've got the terms that we need to make sure that we will be able to scale effectively once we're in.

That revenue ramp post commercialization and so from that regard I feel very good about our supply chain strategy.

The other question you asked or at lease underneath what you asked was really about supply constraints and you guys know probably from hearing from.

Companies that are our peers, then companies larger than us that supply constraints are there a concern out there equipment lead times for things that we use in our own lab are significantly extended.

<unk> shortages appear here and there and what I would say on that front is I mean, we are no different than any other company. We were aware of it we're managing it well and.

We don't see any significant impact on our progress.

Okay, Great and then another kind of higher level question, just it's been a few quarters since you and a handful of other emerging proteomics companies enter the public markets I'd be curious not so much on the competitive differences you discussed prior but more so your updated thoughts on how conversations have evolved over the last six to 12 months.

I'm more familiar with you is while it's kind of a proteomics category more broadly.

Especially now that you've been able to present, some papers and data over the last few months here.

Yes, Matt.

This is C. J I will tackle this first and then I'll, let <unk> add a little bit of color here and I think it's important to kind of talk about different constituent groups right and let me start with kind of the investment community one of the things that I've been really excited to see us over the course of the last I'd say six months I've started to see.

Many of the investors who.

We have significant positions in the Dx and tool space spend a lot of time on the proteomics market in particular, many of the new entrants and I feel like the conversations that I have with the investment community.

As well as the Wall Street analysts are are much more informed today investors are much more aware of the differences in approaches and ultimately the specifications of the products that different companies are bringing to the market or have brought to the market.

I feel like the interest in the proteomics.

Revolution, Thats coming up in front of US continues to grow in the investment community.

The other audience, it's important to talk about is really bad.

Scientific community, which includes collaborators potential customers and partners and I think that over the course of the last six months, partially because of the.

Activity with companies, becoming public companies and new approaches coming out into the marketplace. But also the continued ongoing sort of innovation, that's being brought to the scientific community through conferences papers and publications were seeing a lot of interest.

In new approaches in particular approaches outside of mass spectrometry to go and try to tackle this single molecule comprehensive proteomic profiling and I'll pass it to <unk> in a second but.

But we continue to see increasing engagement with the scientific community and potential customers and it gives us a lot of confidence that when we move through our EAP. Our early access program and then two to full commercialization.

That will be able to get off to a really quick start product you want to add some comments there.

Yes, I'll, just add a little bit about as the different approaches are coming to the forefront.

Also becoming clear or are some of the axes upon which they agree and disagree and art.

What applications.

We are informed by that.

So for instance, some of the key criteria are around.

It is a single molecule based approach.

Just how large is the space that is able to be measured.

That has direct implications on sensitivity has direct implications on dynamic range.

And those are now we hear from the community how important those those factors are.

We also hear a lot about reproducibility and throughput.

Being really important differentiators and so we're paying very close attention.

Two.

Our customers and what are they asking for and getting increased clarity through our voice of customer exercises as well as conversations at these conferences.

Thanks, That's really helpful. And then one quick one for Ann I think Opex came a little bit below our expectations for <unk> any color you can provide on cadence as we move through the rest of the year and maybe expectations around head count additions I think last year nearly doubled that should we expect a similar pace. This year do you expect it to level off a little bit. Thank you.

Of course, Matt happy to take that one.

Last quarter I made the comment that our Opex would grow as you mentioned, we still expect that to be the case and we expect the pace of investment to pick up over the next several quarters. The majority of our spending is driven by head count either directly or indirectly and as we look at our pipeline of candidates today, we feel really good about our ability to grow the team.

Over the remainder of the year.

Super Thank you.

Thank you. Our next question comes from Max Masucci of Cowen Your line is open.

Hi, This is Stephanie on for <unk>.

Thanks for taking the question.

The first question.

I will provide some additional detail.

Key learnings or takeaways I mentioned that in fact collaboration how are you moving these learnings to inform your other collaboration.

And any other collaborations.

I can I can take that one this is parag.

I think one of the key things that we've been learning has been the tremendous interest and excitement about pretty of forums.

And in particular the recognition that.

The biology happens at the single molecule level, so the ability to look at a diversity of protein forms.

When their AD mixed together an intact protein molecules.

It has become.

Increasingly important and increasingly recognized as we continue our studies with those partners. The other thing that we've been actively working on is using these partnerships to understand how different content.

That is commercially available.

The process of Onboarding that content.

So that we are able to run a diversity of.

Of panels on the platform.

<unk>.

Onboard them quickly and efficiently and so those those learnings have translated over we also have become much more formal about our expectations around around controls on experimental design.

As well as data interpretation and analysis for.

What is frankly, an entirely new data modality.

Yes.

Got it that's helpful. Thank you.

And also it's great to see.

The appointment of the new.

Yes.

Recently could you provide some color on New York.

Actual items are key projects for Taco Bell call.

So I can't provide too much detail there not speaking to forward projections, but I can comment that her scope is as all things affinity reagent and so.

Shoring that we have a mature mature pipeline, both internally and externally.

Driving the development of that pipeline as well as helping us.

With that as an executive our expectation is that she will contribute.

More broadly than just the scientific mission to all aspects of of.

Of culture, and planning and strategy as well.

Got it and if I could.

One more I spoke earlier about how view.

Okay.

I wanted to climb thankful about new application Coronado had acquired with <unk>.

For all lines of adding some additional color on <unk>.

With recommendation.

Sure I think one of the.

One of the very exciting opportunities and looking at the protium is recognizing its incredibly dynamic nature as well as recognizing the differences between regulation at the genomic scale. The transcriptome at scale and then ultimately at the proteomics scale and the handshakes between those scale.

The handshakes are really driven by a series of kinetic processes of protein turnover.

Of RNA turnover, how protein molecules are created and destroyed and what cadence and.

And the ability to do those studies on our platform was one that I had.

Always been excited about the potential of but maybe hadn't quite.

<unk>.

Great.

Figured out immediately how one might approach that that challenge.

And very quickly this researcher was able to.

Come up with a really elegant experimental design to allow us to directly look at.

Protein turnover.

As a dynamic process.

Got it thats great to hear thanks again for taking my question.

Thanks, Stephanie Thank you.

Our next question comes from Tejas Savant of Morgan Stanley . Your line is open.

Thanks, guys. This is edmund on for patients today.

Just a quick question on the last call you guys mentioned the compression of probe schedule delivery and you also talked about.

Looking into efforts to scale characterization integration capabilities I'm wondering if you guys can circle back to that and maybe touch upon some of the low hanging fruits that you saw or some of these strategies that you've identified and are implementing now in terms of scale.

Scaling up the characterization and integration capabilities.

Yes.

Thanks for the question. This is C. J, let me take the first half of that and I'll pass it to parag to talk about.

Scaling of our integration and qualification efforts.

On the previous earnings call. What we had said was that we have.

A lot of irons in the fire on the probe development side of our house, we have multiple initiatives away internally, including initiatives based on optimum development in antibody development and we have a number of external third parties that are helping us on the development of antibody <unk>.

This page display and traditional methods and on the Optimer front and with the number of concurrent projects that are going on but each of them having them, but each of them having a lead time that led to this compression in the delivery schedule, where we have a large number of probes that are coming in in a short period of time.

On the development of these affinity agents is a time consuming process. So we're just.

Quarter end since our last update so I don't have a whole lot of updates other than to say that we continue to see that same effect occurring later in the year with this compression of the deliveries that are coming from our external partners and our internal initiatives and I would say that we're starting to see.

What we expected which is that some of our external parties are putting up very good data and results and we will continue to invest in those partners and accelerate our investments in those partners and we have some partners that are having a more challenging time.

Developing these short epitope binders and for those partners will will decide to either continue with them or to lower investment levels, there and redirect those investment funds to strategies that are working really well and I think that's all proceeding according to plan and.

As Parag mentioned at ACR poster that we presented had.

Some really nice data, which highlighted four short epitope <unk> tetramer binders that have affinities and the <unk> melt arrangements. So that was really exciting to see product you want to talk about scaling our integration and qualification efforts under Dr. Wilcox.

Sure I'm happy to this.

This is parag.

To your question about.

What are what are we doing to scale our efforts.

One of the key challenges that we faced early on which we discussed previously was in the availability of our.

In our process, we have a number of different types of reagents. We have reagents. We're mobilizing proteins on surfaces, we have reagents, which was the subject of this manuscript.

That's now available on our archive, we have reagents for labeling our affinity reagents.

Have you seen any regions themselves and one of the major challenges that we're having in accelerating the throughput of characterization of our affinity reagents was having sufficient volumes.

Qualities of.

Both the other constituent reagents in the system. So we've done a lot of work over the last several quarters on scaling.

The availability of the fundamental snap reagents, which are used to mobilize the proteins on the surface as well as the.

<unk>.

The reagents that we used to label the affinity reagents, and so that process being able to make more of them make them better quality understand their quality has paid dividends throughout the rest of the characterization process, just allowing us to label more candidates more.

More quickly get them on the platform more quickly.

And ramp our ability to characterize these reagents.

Just to add just one last bit of color on this this is <unk> again, one of the things that I think.

Is confidence building for me is that both on the probe development side and on the probe qualification and integration side, we have a lot of automation, that's enabling us to internally, enabling us to perform development activities and qualification activities and integration.

<unk> in parallel and from an external perspective.

Partners that we use are used to doing lots and lots of kidney reagent development and so their processors and already parallel and for us.

This is a platform, where we only need to have hundreds of affinity reagents to comprehensively quantified the entire human proteome and thats very different than a traditional proteomics assay, where you may be trying to add thousands of affinity reagents into the next revision of your platform and so that the power of this computational approaches that.

We need very very few if any to reach its relative to other approaches to reach virtually the entire proteome.

Got it. Thank you for all the color that was very helpful. And then I was wondering if you guys can provide us with an update on the progress you've made with your.

Partnerships with Amgen and MD Anderson I think on the last call you guys said there was a little too early in the stages of discussion, but now that you have some more time I was wondering if you guys have had the.

Turning to figure out what the roadmap from here and if it.

I don't know if its too early to say, but when can we expect some data from these collaborations and how do you envision these projects scaling up.

Mark you want to tackle that or you want me to tackle.

Okay.

I think I can tackle that but.

I think I think.

Briefly it is it is still a little early to share too much information about about those partnerships. They are proceeding really well we're excited about the progress that's being made.

But.

At this time, we won't be making any statements about their status.

Got it and if I could squeeze one more in now.

Now that you guys will be articulating a firm timeline associated with milestones with specific number of proteins, which should investors look at to track the progress we're making towards launch.

Yes. This is Steve So let me tackle that one I think.

What I would say on that front as well we are not committing to a firm timeline on these intermediate milestones what we said on our previous earnings call was that we continue to be confident in our end of 2023 commercial launch and as you saw with our progress in.

Q1, we do intend to continue to provide the investment community and our potential customers and the scientific community with updates through papers and publications posters and abstracts at conferences and so what I would say for investors and what I say to investors. When they asked me. This question is to keep looking.

For that data just because we haven't committed to a firm timeline to reach intermediate milestones doesn't mean that we don't have immediate milestones in that we won't be publishing and.

And showing that data once we are at once we're there and I think that.

The the thing in Q1 that you saw was a little piece of that rate, which is <unk>.

You saw us present, the data on our short.

Affinity reagents and as we continue through the remainder of this year as we had scientific advances will continue to use.

Methods like that to get our results out of the marketplace and show progress incrementally towards our early access program and then ultimately our broad commercial launch.

Got it thank you very much for the time.

Thank you.

Thank you. Our next question comes from David <unk> of.

Goldman Sachs. Your line is open.

Hey, guys great to hear about your continued active involvement in the scientific community publishing and presenting at conferences. We know you have a very powerful and exciting technology.

As far as opportunities for improvement that have come out of these discussions.

I'll take this one that's parag I'd say the.

At this time I think what we've been mostly excited by is every time, we talk to somebody.

They have a new cool application for the platform.

And those conversations have led us to say Wow, that's a really interesting exciting exciting application area that.

That helps us refine the specifications.

Of that early earliest product.

And so I don't know that we have.

As yet.

<unk> had folks come to us and say Oh, if you did things this way it would materially impact what youre doing but instead, we've heard a lot of <unk>.

I could use that for this.

It's really exciting.

Citing to here.

Okay great.

<unk>.

Great to see your managing cash really conservatively.

It looks like you have a really long runway and is there any additional color you can give on how you expect that to trend.

Hi, Dave This is Anna.

Like everyone, we're keeping a close eye on market conditions and are very thankful to have raised $345 million last year, we still have a really strong balance sheet with $349 million in the bank that de risks us through this next phase as we're achieving our scientific milestones.

To your question, we are investing for growth, but we're being very diligent about maintaining our cash runway through commercialization.

<unk>.

Sure.

Is that.

That's really our plan over the next.

Phases of the business.

Great. Thanks, guys.

Thank you.

Ladies and gentlemen, im showing no further questions at this time.

This does conclude today's conference. Thank you all participating and have a great day you may all disconnect.

Okay.

Yes.

[music].

Yes.

Okay.

Yes.

[music].

Thank you standing by and welcome to the knowledge Q1 2022 earnings Conference call.

At this time, all participants are in listen only mode.

After the Speakers' presentation there'll be a question and answer session to ask a question at that time to four Star then one on your Touchtone telephone.

As a reminder, today's conference call is being recorded.

I would now like turn the call to the host Mr out Scott with Investor Relations. Sir you May begin. Thank you earlier today <unk> released financial results for the quarter ended March 31, 2022. If you haven't 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 Novelis stockpile.

Joining me today from Nautilus are Ctrip hotel co founder and CEO , Rob Alec co founder and Chief scientist and Annemarie Chief Financial Officer.

Before we begin I'd 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.

Claims any intention or obligation to update or revise any financial or product pipeline projection 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 July broadcast may 3rd 2022.

With that I'll turn the call over to Joe.

Thanks, Alex Good morning, and thank you to everyone for joining us on the call today, We will review our results for the first quarter of 2022 and provided an update on our range of recent scientific and related activities.

My remarks will be relatively brief as parag has much to share with you.

Each scientific objective, we reach and each business milestone, we achieve gets us one step closer to our ultimate purpose of improving the lives of people around the world.

By providing ubiquitous access to the protium <unk>, we expect to expand countless research horizon and enabled boundless scientific exploration and discovery.

Our team of scientific and engineering innovators is fully aligned towards and committed to realizing these important objectives.

Now more than ever we believe Nautilus has the potential to revolutionize biomedical research by unlocking the potential of the proteome.

The world needs, a dramatic acceleration and target identification and therapeutic development, but researchers have been humbled by the lack of sensitivity scale and reproducibility of both traditional and emerging approaches.

We also envision the platform being used to identify biomarkers, which are able to stratify patients by disease severity whereby which.

Treatments are most likely to be effective.

As physicians and researchers use advanced proteomics technologies to Cadillac the Protium <unk>.

More and more diseases there'll be able to identify molecular targets for therapeutics with higher likelihood of success create new protein based diagnostic tools better understand mechanisms of drug resistance and more precisely monitor therapeutic effectiveness.

When Richard Proteomics data begins to drive deeper research insights, we foresee significant increases in patient well being and health.

A key to our continued success, we'll be scaling up a world class team across a broad range of disciplines and keeping that team laser focused on our long term mission.

One of novel assist superpowers is the deep integration of capabilities across life Sciences, computer and data Sciences, and physical Sciences and engineering.

The heart of those engines is our talented team and their dedication that Nautilus is critically important and will create a clear point of competitive differentiation for us in the long run.

I'm pleased to report that we have hired Gwen world as our Chief people officer to lead our continued scale up to deepen our existing high performance culture and to do so in a way that creates an inclusive driven and highly collaborative work environment Gwen.

Glenn and I have worked closely together in the past and I've seen firsthand the type of impacts you can have on an organization.

Im pleased that she has chosen to join us and cannot be more excited about the opportunities for success that lie ahead.

When I look back on the progress made in Q1 and the successes of the year, leading up to it and struck by how far we've come in such a short period of time and.

In 2021, we began our journey as a publicly traded company announced a strategic partnership with App camp and signed a research collaboration with Amgen and the University of Texas, MD Anderson Cancer Center, along with our ongoing work with Genentech, but these exciting developments are only the beginning and as we look ahead.

The remainder of 2022 and beyond.

We're excited to have you along on this journey with us and look forward to updating you on our progress along the way.

I'll now turn the call over to <unk> for an update on our research and development activities.

<unk>.

We take very seriously our commitment to always operate with the appropriate openness and transparency.

Pleased that Q1 provided a number of really great opportunities to put that philosophy into practice.

For example, I was excited to have the chance to share important results from our collaboration with Genentech a U S hoopoe.

The U S arm of the human Proteome organization in March.

Our poster titled single molecule detection of isoform specific Tau phosphorylation drew significant attention and interest from attendees and led to a number of high value conversations throughout the event and afterwards, one, particularly memorable moment came when a well known researcher shared with me his view that biology happen at the single molecule level.

Sentiments like feeds from our future customers represent validation of the potential impact of our technology.

Since you Bo I also presented to talk on the development of a novel single molecule Proteomics analysis platform at the annual Congress of the European Proteomics Association Cuba.

I was gratified that a packed house several hundred researchers came to the presentation. The presentation itself was well received and afterwards, our team was inundated with great questions.

Well I had a number of conversations with attendees at Uva, one really stood out to me immediately following my talk and a fantastic discussion with a highly respected German researcher. After the event. He wrote to me and suggested a number of really creative applications and workflows leveraging the nautilus platform that could enable researchers to ask an investor.

<unk> fundamentally different questions than ever before are possible.

And frankly, many of his recommendations for how one might use the nautilus platform were ones that had never even cross my mind.

It was exciting to hear our biology focused proteomics power user see the potential of our platform to serve as a valuable complement to traditional analysis methods.

As with many proteomics meetings.

Has a heavy focus on the use of mass spectra metric methods for proteomics.

The positive attention. Our presentation received was a good sign for things to come with this critically important and influential buying audience.

I believe now more than ever the Nautilus platform is going to spur tremendous creativity and innovation.

In the broader proteomics community.

That is incredibly strong binding many orders of magnitude stronger than the therapeutic antibodies Houston medicines today.

When we conceived of the platform, we recognize the challenges associated with creating a novel class of antibodies that were not typically built because they were not protein specific.

This data clearly demonstrates that our hypothesis was correct and validates the ability of our internal teams to build these antibodies.

Another important scientific cornerstone of our platform is our ability to create high quality hyper dense single molecule protein arrays that allow massively parallel detection and identification.

Critical to that is our ability to deposit single protein molecules is uniformly and completely as possible across the $10 billion landing pads on that hyper dense array.

Using our nano fabricated chip and innovative proprietary technology based on DNA nano structures we.

We demonstrated single molecule Pat occupancy of over 90%, while simultaneously limiting co localization.

This breakthrough enables the creation of hyper dense single protein molecule arrays.

Where there are almost never two proteins on a single pad.

Thus, enabling high speed analysis of complex proteins samples in a way that achieves both high sensitivity and wide dynamic range.

The manuscript highly dense and scalable single protein arrays for single molecule studies.

Describing this important achievement is now available on bio archive.

Q1 saw continued focus on advancing our commercial instrument.

We continue to successfully transitioned to a manufacturing posture as we build towards full commercial availability.

Before I turn things over to Anna to review, our financials I want to take just a moment to tell you a little bit more about our new Vice president of affinity region development, Dr. Cheri Wilcox.

For those who might not be aware sure. He comes to us from Soma logic, where she was instrumental in the development of various products and where she most recently served as senior director of global scientific engagement excuse me a renowned protein scientist, whose presence is already making an impact here at nautilus even in the early days of her time with us.

We're all very excited to have her on our team.

With that I'll hand, the call over to Anna.

Thanks.

Total operating expenses for the first quarter of 2022 or 16.0 million and 90%.

<unk> increased from $8 $4 million in the first quarter of last year.

That growth in spending was primarily a result of an increase in head count and related costs to support ongoing development of our products as well as taking on the costs associated with being a public company.

Research and development expenses for the first quarter of 2022 were $9 $7 million compared to $4 $8 million in the first quarter of last year.

General and administrative expenses for the first quarter of 2022 were $6 4 million compared to $3 6 million in the first quarter of last year.

Overall net loss for the first quarter of 2022 was $15 8 million compared to $8 $4 million in the first quarter of last year.

Turning to the balance sheet, we ended the quarter with approximately $349 million in cash cash equivalents and investments.

We continue to be well capitalized, giving us cash runway through commercialization.

<unk> heard from seasonal in Prague, we're using those resources to invest in key personnel and initiatives to advance our mission and scientific progress prioritizing spending on product development launch and initial commercial readiness efforts.

With that I'll turn it back to digital.

Thanks Anna.

Looking ahead, we're thrilled to be hosting our inaugural analyst day in late September at our R&D headquarters in San Carlos, California, We will have a full agenda that day, including a preview of our planned pricing model and the public unveiling of our instruments.

We are 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.

We continue to make good progress and look forward to updating you all along the way as we continued toward commercialization of our platform and beyond.

With that I'll turn the call back to the operator operator.

Thank you again, ladies and gentlemen, if you'd like to ask a question. Please press Star then one on your Touchtone telephone again to ask a question. Please press Star then one.

One moment please.

Our first question comes from Brandon Couillard with Jefferies. Your line is open.

Hey, guys. This is Matt on for Brennan. Good morning, Thanks for taking the questions.

First one I think last quarter, you indicated you began a supply chain exercise to ensure diversification of key components I'm. Just curious if you could start to see the benefit of this and then more broadly if there's any bottlenecks within the supply chain as you look to finalize and scale up instrument development here over the next few quarters.

Let me I'll take that this is schedule. Thanks for the question. So I think when we talk about diversification in our supply chain, there's kind of two important areas that we should discuss one is on the hardware and the pieces that go into our instrument we have to make sure that we've got good diversity.

Suppliers and that we are managing our single source components supply of well that we've got a pipeline of those parts and that we've got good supplier relationships and.

Manufacturing supply chain Mary Ocwen.

And at this for.

Something many decades is proactive and that work.

<unk> well the other side that we should talk about is really on the reagent side and as many of you will recall our system relies on 300 different affinity reagents roughly to go and perform that iterative binding that's required tier comprehensively quantified proteome.

And we've done a lot of work in our agreements with external parties like App camp for example to make sure that we've perfected our supply for the long term and that we've got the terms that we need to make sure that we will be able to scale effectively once we're into that revenue ramp post commercialization and so from that.

Regard I feel very good about our supply chain strategy.

The other question you asked or at least underneath what you asked was really about supply constraints and you guys know probably from hearing from.

Companies that are our peers the company larger than us that supply constraints are there a concern out there equipment lead times for things that we use in our own lab are significantly extended.

Random shortages appear here and there and what I'd say on that front as well.

No different than any other company, we were aware of it we're managing it well and we don't see any significant impact on our progress.

Okay, Great and then another kind of higher level question, just it's been a few quarters since you and a handful of other emerging proteomics companies enter the public markets and I'd be curious not so much on the competitive differences you discussed prior but more so your updated thoughts on how conversations have evolved over the last six to 12 months.

Become more familiar with you is while it's kind of a proteomics category and more broadly.

Especially now that you've been able to present some.

Papers and data over the last few months here.

Yes, Matt.

This is CJ I will tackle this first and then I'll, let <unk> add a little bit of color here and I think it's important to kind of talk about different constituent groups right and let me start with kind of the investment community one of the things that I've been really excited to see us over the course of the last I'd say six months I've started to see many.

Of the investors, who have significant positions in the Dx and tools space spend a lot of time on the proteomics market in particular, many of the new entrants and I feel like the conversations that I have with the investment community.

As well as the Wall Street analysts are much more informed today investors are much more aware of the differences in approaches and ultimately the specifications of the products that different companies are bringing to the market or have brought to the market and I feel like the interest in the proteomics.

<unk> evolution Thats coming up in front of US continues to grow in the investment community.

Other audience, it's important to talk about is really the.

Scientific community, which includes collaborators potential customers and partners and I think that over the course of the last six months, partially because of the.

Activity with companies, becoming public companies and new approaches coming out into the marketplace, but also the continued and ongoing sort of innovation, that's being brought to the scientific community through conferences papers and publications were seeing a lot of interest in.

In new approaches in particular approaches outside of mass spectrometry to go and try to tackle this single molecule comprehensive proteomic profiling and I'll pass it to <unk> in a second but.

But we continue to see increasing engagement with the scientific community and to potential customers and it gives us a lot of confidence that when we move through our EAP. Our early access program and then two to full commercialization.

We'll be able to get off to a really quick starts.

You want to add some comments there.

Yes, I'll, just add a little bit about.

As the different approaches are coming to the forefront, what's also becoming clear or are some of the axes upon which they agree and disagree and our.

What applications.

Are informed by that.

For instance, some of the key criteria are around.

It is a single molecule based approach.

Just how large is the space.

Is able to be measured.

That has direct implications on sensitivity has direct implications on dynamic range.

And those are when we hear from the community how important those those factors are.

We also hear a lot about reproducibility and throughput.

Really important differentiators and so we're paying very close attention.

Two.

Our customers and what are they asking for and getting increased clarity through our voice of customer exercises as well as conversations at these conferences.

Thanks, That's really helpful. And then one quick one for Ann I think Opex here came a little bit below our expectations for <unk> any color you can provide on cadence as we move through the rest of the year and maybe expectations around head count additions I think last year nearly doubled that should we expect a similar pace. This year do you expect it to level off a little bit. Thank you.

Of course, Matt happy to take that one.

Last quarter I made the comment that our Opex would grow as you mentioned, we still expect that to be the case.

And we expect the pace of investment to pick up over the next several quarters.

Majority of our spending is driven by head count either directly or indirectly and as we look at our pipeline of candidates today, we feel really good about our ability to grow the team over the remainder of the year.

Super Thank you.

Thank you. Our next question comes from Maxim <unk>.

Your line is open.

Hi, This is Stephanie on for Matt.

Thanks for taking the question.

On the first question.

We will provide some additional detail on some of the key.

<unk> learning, our takeaway and mentioned that impact collaboration.

How are you moving these learnings to inform your other collaboration with Amgen.

And any other collaboration.

Okay.

I can I can take that one this is parag.

I think one of the key things that we've been learning has been the tremendous interest and excitement about protein forms.

And in particular the recognition that.

The biology happens at the single molecule level, so the ability to look at a diversity of protein forms.

When their AD mixed together an intact protein molecules.

<unk> has become.

That is commercially available.

The process of Onboarding that content.

So that we are able to run a diversity of.

Of panels on the platform.

<unk>.

Onboard them quickly and efficiently and so those those learnings have translated over we also have become much more formal about our expectations around around controls and experimental design.

As well as data interpretation and analysis for.

What is frankly, an entirely new data modality.

Got it that's helpful. Thank you.

And also grateful for the appointment of the new.

And being creative about that recently could you provide some color on it.

Actual items are key projects for tougher Wilcox.

So I can't provide too much detail there not speak forward projections.

But I can comment that her scope is as all things affinity reagent and so.

Ensuring that we have a mature mature pipeline, both internally and externally.

Driving the development of that pipeline as well as helping us.

With that as an executive our expectation is that she will contribute more broadly than just the scientific mission to all aspects of of.

Of culture, and planning and strategy as well.

Got it.

And if I could sneak in one more plausible spoke earlier about how you.

Okay Thats fair.

I wanted to conference calls about new applications quite a lot of it platforms and follow up with you.

For all lines of adding some additional color on <unk>.

Recommendation.

Sure I think one of the.

One of the very exciting opportunities and looking at the protium is recognizing its incredibly dynamic nature.

As well as recognizing the differences between regulation at the genomic scale the transcriptome at scale and then ultimately at the proteomics scale and the handshakes between those scale.

The handshakes are really driven by a series of kinetic processes of protein turnover.

Of RNA turnover, how protein molecules are created and destroyed and what cadence.

And the ability to do those studies on our platform was one that I had.

<unk> always been excited about the potential of but maybe hadn't quite.

Great.

Figured out immediately how one might approach that that challenge.

And very quickly this researcher was able to.

Come up with a really elegant experimental design to allow us to directly look at.

Protein turnover.

As a dynamic process.

Got it that's great to hear thanks again for taking my question.

Thanks, Stephanie Thank you.

Our next question comes from Tejas Savant of Morgan Stanley . Your line is open.

Thanks, guys. This is edmund on for patients today.

Just a quick question on the last call you guys mentioned the compression of probe schedule delivery and you also talked about.

Looking into the efforts to scale characterization of integration capabilities I'm wondering if you guys can circle back to that and maybe touch upon some of the low hanging fruits that you saw or some of these strategies that you've identified and are implementing now in terms of scale.

Scaling up the characterization and integration capabilities.

Yes.

Thanks for the question. This is <unk>, let me take the first half of that and I'll pass it to parag to talk about.

Scaling of our integration and qualification efforts.

So on the previous earnings call. What we had said was that we have.

A lot of irons in the fire on the probe development side of our house, we have multiple initiatives away internally, including initiatives based on <unk> development in antibody development and we have a number of external third parties that are helping us.

The development of antibody <unk> data display and traditional methods and on the <unk> front and with the number of concurrent projects that are going on but each.

Each of them, having them, but each of them, having a lead time that led to this compression in the delivery schedule, where we have a large number of probes that are coming in in a short period of time.

The development of these affinity agents is a time consuming process there were just a.

Quarter end since our last update so I don't have a whole lot of updates other than to say that.

We continue to see that same effect occurring later in the year with this compression of the deliveries that are coming from our external partners and our internal initiatives and I would say that we're starting to see what.

Developing these short epitope binders and for those partners will will decide to either continue with them or to lower our investment levels, there and redirect as investment funds to strategies that are working really well and I think that's all proceeding according to plan and as <unk> mentioned at AAC.

The poster that we presented had.

Some really nice data, which highlighted four short epitope <unk> tetramer binders that have affinities and the Pico Milt arrangements. So that was really exciting to see probably do you want to talk about scaling our integration and qualification efforts under Dr. Wilcox.

Sure Im happy to this.

This is parag.

To your question about.

What are what are we doing to scale our efforts.

One of the key challenges that we faced early on which we discussed previously was in the availability of of our in our process. We have a number of different types of reagents. We have reagents. We're mobilizing proteins on surfaces, we have reagents, which was the subject of the manuscript that was.

That's now available on our archive.

Have reagents for labeling our affinity reagents.

And then we have the affinity reagent themselves and one of the major challenges that we were having in accelerating the throughput of characterization of our affinity reagents was having sufficient volumes in.

Qualities.

Both the other constituent reagents in the system. So we've done a lot of work over the last several quarters on scaling.

The availability of the fundamental snap reagents, which are used to mobilize the proteins on the surface as well as.

The.

More quickly get them on the platform more quickly.

And ramp our ability to characterize these reagents.

Just to add just one last bit of color on this this this digital again one of the things that I think.

Is confidence building for me is that both on the product development side and on the probe qualification and integration side, we have a lot of automation, that's enabling us to internally, enabling us to perform development activities and qualification activities and integration.

In parallel and from an external perspective.

Partners that we use are used to doing lots and lots of affinity reagent development and so their processors and already parallel and for us.

This is a platform, where we only need to have hundreds of affinity reagents to comprehensively quantified the entire human proteome and thats very different than a traditional proteomics assay, where you may be trying to add houses as affinity reagents into the next revision of your platform and so that the power of this computational.

<unk> is that we need very very few Sydney reagents relative to other approaches to reach virtually the entire proteome.

Got it. Thank you for the color that was very helpful. And then I was wondering if you guys can provide us with an update on the progress you've made with your.

Partnerships with Amgen and MD Anderson I think on the last call you guys said that it was a little too early in the stages of the discussion, but now that you have some more time I was wondering if you guys have had the opportunity to figure out what the roadmap from here and if it.

I don't know if its too early to say, but when can we expect some data from these collaborations and how do you envision these projects scaling up.

Why would you want to tackle that area.

Go ahead.

I think I can tackle that but.

I think I think.

Briefly it is it is still a little early to share too much information about about those partnerships. They are proceeding really well we're excited about the progress thats being made.

But.

At this time, we won't be making any statements about their status.

Got it and if I could squeeze one more in net.

Now that you guys will be articulating a firm timeline associated with milestones with specific number of proteins, what should investors look at to track the progress we're making towards launch.

Yes. This is Steve So let me tackle that one I think that what I would say on that front as well we are not committing to a firm timeline on these intermediate milestones what we said on our previous earnings call was that we continue to be confident in our end of 2023 commercial launch.

And as you saw with our progress in Q1, we do intend to continue to provide the investment community and our potential customers and the scientific community with updates through papers and publications posters abstracts at conferences, and so what I would say for investors.

What I say to investors when they asked me. This question is to keep looking for that data just because we haven't committed to a firm timeline to reach intermediate milestones doesn't mean that we don't have immediate milestones that we won't be publishing and.

And showing that data once we have once we're there and I think that.

The the.

Thing in Q1 that you saw was a little piece of that rate, which is <unk>.

You saw us present, the data on our short.

<unk> reagents and as we continue through the remainder of this year as we had scientific advances will continue to use.

Methods like that to get our results out of the marketplace and show progress incrementally towards our early access program and then ultimately our broad commercial launch.

Got it thank you very much for the time.

Thank you.

Thank you. Our next question comes from David <unk> of Goldman Sachs. Your line is open.

Hey, guys great to hear about your continued active involvement in the scientific community publishing and presenting at conferences. We know you have a very powerful and exciting technology in it.

As far as opportunities for improvement that have come out of these discussions.

I'll take this one that's parag.

I'd say the.

At this time I think what we've been mostly excited by is every time, we talk to somebody.

They have a new cool application for the platform.

And those conversations have led us to say Wow, that's a really interesting exciting exciting application area.

That helps us refine the specifications.

That early earliest product.

And so I don't know that we have.

As yet.

<unk> had folks come to us and say Oh, if you did things this way.

Would materially impact what youre doing but instead, we've heard a lot of <unk>.

I could use that for this.

Which is really exciting.

Exciting to hear.

Okay great.

Great to see your managing cash really conservatively.

It looks like you have a really long runway and is there any additional color you can give on how you expect that to trend.

Hi, Dave This is Anna.

To your question, we are investing for growth, but we're being very diligent about maintaining our cash runway through commercialization.

And.

Yes.

Does that.

That's really our plan over the next.

Phases of the business.

Great. Thanks, guys.

Thank you.

Ladies and gentlemen, showing no further questions at this time.

This does conclude today's conference. Thank you all participating and have a great day you may all disconnect.

Q1 2022 Nautilus Biotechnology Inc Earnings Call

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