Q1 2022 Olink Holding AB (publ) Earnings Call
Good day and thank you for standing by welcome to the Old Link Proteomics first quarter 2022 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 star one on your telephone please be advised that today's conference may.
Be recorded.
Require any further assistance. Please press Star then zero I would now like to hand, the conference over to your host today, Jan Medina, Vice President Investor Relations and capital markets. Please go ahead.
Thanks, Michelle and good morning, everyone. Thank you all for joining today's conference call on the call. We have John <unk>, Chief Executive Officer, Oscar <unk>, Chief Financial Officer.
Earlier today <unk> released financial results for the first quarter ended March 31 2022.
Copy of the press release and an updated corporate presentation are available on the company's website.
Before we begin I'd like to remind you that management will make statements. During this call that include forward looking statements within the meaning of the U S. Federal Securities laws, which are made pursuant to the safe Harbor provisions of the US Private Securities Litigation Reform Act of 995.
Any statements contained in this call that relate to expectations or predictions of future events results or performance are forward looking statements.
Actual results may differ materially from those expressed or implied in the forward looking statements due to a variety of factors.
A list and description of the risks and uncertainties associated with <unk> business. Please refer to the risk factors section on form 20-F Commission final number 001 dashboard zero to 707 filed with the U S Securities and Exchange Commission on March 17, 2022, and in our other filings with the SEC.
We urge you to consider these factors and you should be aware that these statements should be considered estimates only and are not a guarantee of future performance.
Also in our remarks or responses to questions management mentioned, some non <unk> financial measures reconciliations of adjusted gross profit and EBITDA and certain other non <unk> financial measures to the most directly comparable <unk> measures are available in the most recent earnings press release available on.
The company's website.
This conference call contains time sensitive information and is accurate only as of the live broadcast today May 12 2022.
<unk> disclaims any intention or obligation to update or revise any financial projections or forward looking statements.
Because of new information future events, or otherwise, except as required by law and with that I will turn the call over to John John .
Great. Thank you Jim.
Good morning, everyone and thank you for joining <unk> first quarter 2022 earnings call.
First I'll begin by saying that in these difficult times, our minds and hearts remain with those impacted by the war in Ukraine. The OLED community has contributed its own modest way to relief efforts in the hope of improving situation and we continue to do what we can to support them.
And Perry and efforts.
I will start by providing some recent financial and operating highlights discuss the few areas, where only driving the science of Proteomics, then I'll wrap up things by quick then discussing our outlook for the remainder of 2022 I will then turn over the call to ask Scott to provide more financial detail.
During the first quarter of 2022, only continued to execute and build on its considerable progress from last year, we remain confident in achieving another year of strong growth with further accomplishment in the fast growing nextgen proteomics industry that permits us to reshape drug research and development.
<unk> health.
We're pleased to have delivered quarterly revenue of $22 $7 million, representing 66% <unk> growth over the first quarter of 2021.
Cumulative explore installation is during the first quarter reached 27, and we delivered nine additional signature instruments to customers as well.
These were in line with our plan and consistent with expected seasonality given customer buying patterns.
The net impact of the pandemic environment was largely as we anticipated during Q1, and we continue to remain vigilant with our customers to navigate the COVID-19 impact on their work.
Explore representing 6% to 9% of our total revenue in the latest quarter.
Hope to keep revenue was $4 million up 41% over Q1 2021.
While service revenue totaled $16 6 million up 74% compared to Q1 2021.
Total kits revenue represented 18% of total revenue in Q1 2022, consistent with our internal plan.
Just about a year ago that the explorer kits were launched and on a trailing 12 month basis explore keeps represented 29% of total next door revenue and 19% of total revenue.
Generally speaking initial pulled through with explorer kits is coming towards the high end of our internal expectations.
And during the first quarter of 2022 target keeps became a more substantial growth driver due to the recent the recent launch of signature.
Overall, we remain confident in the continued shift of our revenues from services.
With our 2022 outlook supported by the performance of the first quarter.
As we've discussed the first quarter is traditionally openings lowest revenue quarter of the year, given their procurements and budgeting cycles over many of our customers, including governments or grant funding customers academia customers and biopharma customers.
However, our underlying business momentum and explore targeted focus remained very strong in Q1, and thus we have entered Q2.
Explore continues to benefit from strong pull through and continued uptake of <unk> III.
We remain on track to expand to 4500 protein biomarker targets later this year and we continue to aggressively would've been about our library of antibodies as long as our customers tells us to do so to drive their clinical and diagnostic research efforts.
We're also committed to make our explorer lineup product as accessible as possible in line with this ambition, we're collaborating with multiple partners to enable explore on several of the new sequencing instruments entering the market.
This effort will translate into increased flexibility as customer will be able to choose from a menu of detection platform alternatives.
Oh link also continues to expand its reach within the low end mid plex proteomics market with signature, which began deliveries to customers late last year that.
<unk> product platform to address multiple use cases at the same customer is becoming more and more clear with market. Both signature customers also being explored users.
Our balancing efforts toward diagnostic application continues.
February our partner <unk> Bioscience had a significant presence at the <unk> meeting in West Palm Beach, Florida with multiple posters preterm patients highlighting the utility of the MSB a protein signature right with <unk> Technology, Inc.
<unk> signatures relationship with sbcs.
Sbcs activity and progression.
We believe <unk> also showcase the very deep analytical and clinical validation steps octave have performed with the MSP a tech update is preparing plans for early use of the MF defeat activity test infill.
In select.
Multiple sclerosis centers over the course of the year.
Only thing continues to prioritize collaborating with customers and thought leaders to advance the field or proteomics.
We're truly excited to be part of the ongoing groundbreaking scientific discovery effort when the UK Biobank project and we continue to deepen our relationship with the 13 pioneering biopharma members.
As we've previously discussed by the end of last year, we delivered 56000 sample to U K Biobank consortium and in 2022, we began running the expansion phase on the explore 30 72 platform.
Data from this research in club is published later this year.
Using OLED units of expression MTX or normalized protein expression, providing all link a unique opportunity to help define the language of next generation proteomics.
We believe the UK Biobank project would be the most comprehensive datasets available to aid the research and discovery of critical clinical and diagnostic solutions.
Today, only get part of several consortia exploring the role of protein by markets. The UK Biobank of course, scallop, which is appropriate genomics effort for bce's orders like coronary artery disease rheumatoid raw materials.
Bipolar disease heart failure dementia or metabolic syndrome.
Carl for neurological conditions.
Call debris for inflammatory bowel disease.
Beyond this we see significant <unk> across many large and strategic courts around the world. We see continued we are executing against the opportunity to deepen our strategic relationships across the industry.
<unk> is well positioned to be a key contributor in protein and multi omics studies, given our product platform and service capabilities.
The foundation of <unk> success, a science.
And there are more than 860 studies published to date, describing the use of pega conducted by thousands of researchers across the globe covering every major therapeutic category.
These studies highlight only clinical impact and we thought it would be helpful to share two of them today.
A recent study published in circulation by a team from University College, London, along with cardiovascular thought theatres, including Professor if I estimate from the home Marsh consortium and Alexander <unk> from Gallup supports the role of <unk> in identifying relevant no.
Protein drug targets.
The study investigated the role of 90 cardiovascular proteins in heart failure.
We are derived from 3019 participants with 732 heart failure events.
So these heart failure associated proteins with them investigated using PQ tailed data generating from those genome wide Association studies in over 30000 individuals.
The findings were striking.
44 of the 19 proteins were positively associated with risk.
Incident heart failure with eight of these four to four proteins showing evidence of Corso Association with heart failure.
Two of the associated proteins of order had been targeting ongoing early clinical trials to provide biological validation for these findings and five of the remaining six are classified as current.
Jean According to public databases.
And now the publication from the University of Mississippi used publicly available <unk> data from the mass General Hospital longitudinal COVID-19 study to understand that frequently seen link between COVID-19, and cardiovascular implications.
As some background Oldenkamp previously joined forces with MGH to quantify the abundance of over 1400 proteins in plasma of patients from a cohort of 306, COVID-19 patients and 78 virus negative patients.
What the authors found we're clear association between different types of immune system T cell pathways.
The level of important Cardiome, Adam metabolic proteins.
Potentially explaining the cardiovascular complications associated with severe systematic inflammation in COVID-19 patients.
These are just two recent examples of how <unk> is helping inform their own low protein in disease and further downstream action ability.
The studies represent just the latest data points in the expanding body of evidence that speaks to the importance of proteomics and the quality of the data of the <unk> platform.
More importantly, it supports the sentiment Chatham by many of our customers in their real world experience as well.
Operationally, we continued to strengthen <unk> already considerable talent pool, we started the year with 416 employees and reached 465 by the end of the first quarter, including 163 full time entries in the commercial team.
In April we appointed two new independent board members to our board of directors.
Mary a rumored CFO Taylor pharmaceuticals, and Bolton chair and CEO of Natera, both Bob and Mary have considerable experience and expertise and we welcome their contributions in helping shape the future of our company.
Additionally in March we were excited to publish our inaugural system maintenance sustainability report, which can be found on our investor Relations website.
The report online.
Outflanked holdings contribution to improving global health, including early progress with our partner <unk> Biosciences and.
We look forward to further refining our system being sustainability principles over time.
Feeling our promise to science and society put a better future for generations to come.
Turning to our expectations.
We are maintaining our 2022 revenue guidance range of 138 to 145 million U S dollars and <unk> will go into more detail in a bit.
Beyond this year and over the long term, we remain very optimistic about both strategic and financial outlook.
In summary, we remain confident in our ability to execute and expand and need the largely untapped check nextgen proteomics market there are exciting things happening at the holding.
I will now turn the call over to Scott to discuss our financial results.
Scott.
Thanks, John and Hello, everyone.
First quarter revenue totaled $22 7 billion very strong growth of 6% to 6% year over year, which included immaterial FX headwinds revenue growth was led by services, which were largely in line with our expectations and driven by buying activity broadly across our customer base with average project.
Spend of roughly 50% of the average Q4 projects.
Driven by continued investments in line with our strategic plan adjusted EBITDA was negative $9 1 million for the first quarter of 2020 as compared to negative $3 7 million for the first quarter of 2021.
As John mentioned at the end of Q1, we had 27 externally place revenue generating explore installations, which achieved roughly 700 and average customer pull through during the 12 months ended March 31 two.
'twenty two.
<unk>.
With this level of growth throughout the grabbing the kits on the market for just about a year during our own experience that we've seen the average annual growth.
Range from 500 to 750000, but the individual spend ranging from less than $100000 to multimillion dollar orders, we continue to expect variability in quarter to quarter pull through which will be further impacted by our customer spending seasonality.
<unk> revenue for the first quarter of 2022 grew 41% to $4 million or 18% of total revenue as compared to $2 8 million for the first quarter of 2020 or 21% of total revenue.
Continue to be the most significant component of <unk> revenue.
And <unk>.
<unk> target.
<unk> contributed more meaningfully given the recent launch of signature.
Analysis services revenue for the first quarter of 2020 grew 74% to $16 6 million or 7% to 3% of total revenue as compared to $9 6 million for the first quarter of 2021 or 70% of total revenue.
The mix of chips versus analysis service revenue was in line with our expectation and <unk> continues to expect progress.
Throughout the remainder of 2022 and beyond increasing the mix towards kits.
Other revenue was $2 1 million for the first quarter of 2020.
<unk> to $1 2 million for the first quarter of 2021 of the revenue growth was driven primarily by the sale of signature instruments.
By geography revenue during the first quarter of 2022.
<unk> was $9 7 million in Americas, $10 $1 million in EMEA, and $2 8 million in China rest of the world consumer.
Consolidated adjusted gross profit profit was $14 2 million or 6% to 3% of revenue in the first quarter of 2022.
Versus $9 2 million or 68% in the first quarter of 2021 and by segment adjusted gross profit margin for kits was 8% to 9% in Q1, 'twenty two as compared to 82% in Q1 of 2021.
Q1 2020.
<unk> adjusted gross profit for notice of services was 58% as compared to 6% to 4% in Q1 2021. The decline in the service margin was driven primarily by our continued to build out a lot of capacity there.
We continue to expect service margin to revert to normalized levels that we've observed historically in the second half of this year.
As we consider total Cogs, we expect our strategy of increasing revenues.
Revenues as a percentage of total revenues will have a positive impact on gross margins over long term and quarter to quarter variations also be expected given the seasonality of our business and our ongoing product launches.
Furthermore, the introduction of explore 30 72 should provide support for margin expansion over time, leveraging our internal antibody library.
Adjusted gross profit margin for <unk> was 47% in Q1, 'twenty two as compared to 62% for the first quarter of 2021. The decline in other gross profit margin was primarily related to the sale of signature Q1 hundred instruments.
Total operating expenses for the first quarter of 2020 to $29 5 million as compared to try two 4 million for the first quarter of 2021.
The increase was largely due to continued and accelerated investment into all links commercial organization, our research and development and driven by additional cost as a public company.
Operating expenses are broken out as follows.
<unk> expenses for Q1 2020.
Two were $9 5 million versus $5 7 million for Q1 2021 administrative expenses for Q1 2010 to two of our $14 4 million versus $12 4 million for Q1 2021 and.
And R&D totaled $6 million and $4 2 million for Q1, 'twenty to Q1 'twenty to 'twenty one respectively.
Other operating income was 328000 in the quarter as compared to other operating loss of $105000 in Q1 2021.
Net loss for the first quarter of 2022 was $12 2 million as compared to a net loss of $14 3 million for the first quarter of 2021.
Net loss per share for the first quarter of 210 based on break.
<unk> average number of outstanding shares of 119 million 10097, as compared to a net loss per share of <unk> 48.
For the first quarter of 2021 based on a weighted average number of outstanding shares of $38 million $926000.
And with the shares.
Driven by the conversion of receivables recorded during our seasonally strong Q4, we generated $2 million of cash during Q1, ending the quarter with a strong balance of $120 2 million in cash and cash equivalents.
While Omega yet.
Looked at have turned the corner and generating sustainable.
Profitable positive cash flow, we believe our cash conversion during Q1 shows our ability to responsibly balanced investment needs with the efficient use of capital at consequently oil link remains sufficiently capitalized to achieve our return to profitability.
Our existing strategic plan.
Moving to our outlook for 2022, we are pleased with our performance for the first quarter, which deliver according to plan and we are maintaining our 2022 revenue guidance range of $138 million to $145 million.
As we previously indicated revenues to be weighted to the second half of the year fourth quarter specifically.
The guidance also anticipates the pandemic environment similar to what <unk> experienced to date and the impact of the geopolitical environment remains known material overall.
Considered longer time horizon, we believe we remain well positioned for continued strong growth beyond 2022 as well.
I'll now turn the call over to John for his concluding remarks.
Thank you very much Oscar.
The first quarter of 2022 marked another period of strong execution for Olin.
<unk> continued to grow our leadership position and are benefiting from robust adoption across our entire portfolio of products and services selling into a broad diversified and growing customer base across the proteomics clicks spectrum.
Looking forward into the remainder of 2022 and beyond the <unk> team remains committed to executing against our strategic and financial goals.
At this point, we will open up the call for questions.
Operator.
Thank you if you have a question at this time. Please press Star then one on you touched on telephone. If your question has been answered already wish to remove yourself from the queue. Please press the pound key.
First question comes from the line of Matt <unk> with Goldman Sachs. Your line is open. Please go ahead.
Hi, Good morning, John and Oscar and Thanks for taking my questions. Maybe the first one just to dig into the kit revenue in the quarter understanding the seasonality of the two incremental installations that you saw this quarter.
How much of that is seasonality versus difficult operating environment and it sounds like it's in line with your expectations, but how should we think about kit revenue as we progress through the year.
Yes, good morning, Matt Thanks for your good questions.
Yes.
I consider this.
Base to how we see our marketing customer base.
We are sort of running their business. So think about Q4 seasonal a lot of Keith purchase a stocking up a bit so in our experience throughout we now when we keep the company off we've seen in Q1.
Our slowest quarter and that also goes to Keith.
But overall this was a very very strong quarter for us and as we look into the remainder of the year.
Very confident on the numbers that we've talked to you about the split between kits and services.
The ramp of the external installations and so forth. So masks, we feel very good that we're getting this was just as we have seen it played out over the year and what we.
<unk> four.
And perhaps a little bit better than we had anticipated.
We remain very solid look out for this quarter and the remainder of the year.
Got it thanks for that Jonathan.
Just on.
I assume that there's some level of conversion from analysis service customers to externalization.
As the operating environment and the difficulty of that keeping customers in analysis services longer or is that not necessarily a dynamic we should focus on.
No I don't think you should focus on that and we tried to be very careful and thoughtful about everything we do.
<unk>.
<unk>.
The capacity that we have generated in the market for these external labs and what they can cater is a very significant number now.
Supporting <unk>.
<unk> searches.
Around the world So.
We've talked about doing this in a diligent and careful way focusing on quality, which is extremely important.
No.
This is yet again going exactly how we carefully considered way switching our business from a fee for service to keep business model.
And taking all those factors into consideration.
Yet again.
Yes plan very feel very good about where we're at when you're looking to the remainder of the year looking at our pipeline looking at the excitement that <unk> got some discussions we're having so we are very good Matt.
Great. Thanks, and just one last question for me just maybe an update on your progress with agro Sarah.
Just given the importance of vertical integration and reducing maybe some of the license fees you might pay how is that progressing and any kind of timeline on how that can be better vertically integrated over time.
Thanks, Matt.
Good question.
Getting to the size of it yes, no I mean I.
I mean I've seen a few M&A you might correct, but I don't think that's been a successful one that this one I would say that.
It's an amazing team of people and leadership and science and technology.
So we are going from clarity to clarity or we have very high expectations. As we bought that was there a few years back.
But we have delivered.
Did they have delivered above and beyond those expectations, we are improving.
We're learning a lot about the processes of improving everything from ampligen to purification of the antibodies.
And are really increasing our what we say heat rates on the targets that we are generating so we are actually expanding efforts at <unk>.
Moving and transferring some of the upstream.
Upstream R&D efforts that we're doing with it no link to further.
Take advantage of the great comp attempts and skill set we see within agro Sarah too actually.
And accelerate further than we had anticipated as we acquire them so it couldnt be better excellent.
Great. Thanks very much.
Thanks, Matt.
Thank you and our next question comes from the line of Puneet <unk> with SBB Securities. Your line is open. Please go ahead.
Yeah, Hi, John Oscar Thanks for the questions. So first one is on the guide.
I appreciate that the seasonality is there and.
Obviously, I think that is now understood well versus earlier days when you when you when.
When the company came to the public markets.
But maybe just help us understand the.
Mix of service versus kits, how should we think about that sort of through the year, how should we think about the cadence there.
Because obviously services came in stronger this quarter.
But you had only two installs on the explore and so maybe just talk to us how the explorer installs are ongoing.
If there was any impact in January from Omicron from.
In terms of getting into those labs, and how should we think about the explore sort of mix sort of ramping up through the year, because I think obviously that's an.
Important key driver for OLED expansion.
Yes, good morning, and thank you very much puneet, yeah, that's kind of.
Alluded to a bit in Matt's question is well first of all I don't think I mean on.
<unk> impacted much of anything actually all of our business in the first quarter.
We're obviously, keeping a careful eye on that but.
I think we showed during 'twenty, one and also the first quarter here that we have taken the appropriate <unk> on top of that situation for now.
We have a very careful and considered plan on how we switch our business from.
The vast majority of people service into kits.
And.
Quality is a very important aspect of what to do and I Hope also everyone sort of starting to recognize and appreciate how important that is to.
Support.
Hi, its standard of science.
So that these external explore labs are executing and delivering only data to external customers on the same high quality manner that we do.
Integral to our whole strategy.
And I will definitely not emphasize only too.
Rather that we now expanded with two <unk>.
<unk> can you explore partners.
Onto the market and that this market is growing very rapidly we see.
A lot of excitement and interest in sort of moving into the next <unk> and really going into proteomics and waste at this market hasn't done in the past so.
All of those factors are really playing out in a very positive way.
But it doesn't happen overnight so hands.
<unk> seen very good this is exactly sort of how we have laid our plans for the year and going back to your seasonality question.
This is a very strong first quarter the strongest ever in our history as a company.
We also see the seasonality as I said in kits. So Keith if you have some year end money available that's a very easy way to spend and sort of stocked up a bit and keeps our usually lighter in the first quarter.
Obviously, we had plans so as well and hands as we look at our pipeline the discussions we're having.
I think we see a whole other we feel very good so it's sort of basically stay tuned and we will continue to deliver.
Okay. That's great and then on UK Biobank could you elaborate what's left there and how should we think about that in the second quarter and also related to second quarter. We obviously hearing from a number of.
Those companies in terms of the China impact.
Should we think about that impact in the second quarter.
Yep, starting with you combine bank Super exciting of Corso.
Yes.
The expansion phase we basically.
Sort of half of that project.
Completed by now we did not take any revenues from that in the first quarter.
We will de lever our next data set in June and that would be.
Revenue recognition of that delivery.
We will plan to wrap the whole project up over the summer. So we are executing exactly according to plan as well so super exciting and all good.
On the China situation.
Yes, we had a strong quarter actually in APAC in Q1.
Obviously, how coal mix now unfortunately are not being at home and then.
Obviously, a more difficult environment too.
To work from but also keep in mind that <unk>.
Packaging General and China in particular are still relatively small piece of our business. So if you look at the whole world picture.
We don't.
We're not.
Worried at all but I wouldn't expect tremendous revenues from China in particular in the second quarter.
Alright, okay. Thank you.
Great. Thank.
Thank you and our next question comes from the line of Tejas Savant.
Stanley. Your line is open. Please go ahead.
Hey, guys. Good morning, So John I, just wanted to follow up on the comment you made on UK biobank here just to make sure I heard that right did you say you had no U K biobank revenues in the first quarter and then.
If that is so I mean at least relative to our model you did about 7 million better on analysis service actually in the first quarter.
Which implies given the unchanged guidance, there's a bit of cigna.
Significant U shape, even more pronounced than we had initially at the start of the year. So could you just walk us through the moving pieces. There as you think about the evolution of that phasing through the year.
Sure.
<unk> took us seven years always.
Yes, so youre correct, we have no UK biobank revenues in the first quarter of this year. So.
You know right, we recognize revenue when we deliver either data or reagent kits. So we did not deliver any data. So we have the milestone based approach with the UK Biobank consortium.
Sort of a set schedule. So the next day delivery will come up here. Shortly and then we will recognize revenues for the second quarter, but not in Q1.
And.
Yes, we see.
A very exciting market we.
We see a local interest in proteomics and in particular around the <unk>.
Leading <unk> platform.
Researchers are definitely shifting towards proteomics.
Well, we have definitely a market leadership and are in the position so hence new customers often come aboard as analysis service.
Hans.
We are winning out there people are expanding and newly into proteomics.
And hence we are growing rapidly as a company.
No.
But we have a very powerful.
We have a very clear strategy.
Which will also carefully implementing as I alluded to in the previous questions in terms of how to convert that business into our product business.
<unk>, which we are implementing month over month quarter over quarter that very diligently and continue to deliver a Paul so yeah.
Yes, I agree it was a very strong quarter.
It was weighted towards analysis service win.
Which was within our expectations and how we've seen over the years have played out as well so hopefully that addresses your question.
Great opportunity great market <unk> is a leading platform and.
A lot of excitement or Ron So just stay tuned on we will continue to deliver this year and according to the plan that we've communicated.
Expansion towards kits.
Got it.
That's helpful. John and then any color you can share around.
The early traction for <unk> and then as you think about expanding that library to about 4500 targets.
Is that is that a chance there that we could see you sort of just keep from that step in launching even.
At a broader panel.
Towards year end or perhaps early next year.
Yep. Thanks pickup yes, there are a lot of excitement around the <unk> product, which war.
As we alluded to in prior earnings calls, we should or maybe just take a step back sometimes and.
Remember and Thats only kept driven protein research to escape wakes never been before.
Hi, as standard of quality, where you basically doing single Plex protein research in massive parallel scale unparalleled throughput.
So.
<unk>.
The whole academic and industry research markets are very excited about this and those are sort of the facts that are driving the trends that I've been speaking to here today about how proteomics. It now for the first time ever at scale and quality driving re.
Searches towards proteomics.
Closer to the theme of type.
<unk>.
Impactful results for science.
So.
Yeah, I mean, we've seen.
Good about that and.
We're very happy with where we're at so did that answer your question.
Sure.
And then.
Quick one for Oscar on.
On FX I mean also could you just update us on what's the revised FX assumption that you are embedding into your forecast or is it the same as at the start of the year.
Yes, so I think that we sort of discussed previously we view our guidance is largely dominated I think sort of the.
The minor sort of headwind we saw in Q1 will.
We're comfortable we can sort of execute.
Through the year.
Based on current rates within that guided range.
Got it Okay, and then I wanted to go back to your comments on.
On cash burn here.
But could you just walk us through.
I know you mentioned Youre service sufficiently capitalized to return to profitability, but as you think about the outlook for this year.
What's your sort of anticipated cash burn given all the investments et cetera that youre, making here.
And then as you think about.
Perhaps extending that runway out to bake in some incremental cushion.
This is a question we get a lot given the capital markets in <unk> any color on that would be helpful.
Yeah, no. So I mean, we.
I think we've discussed previously we expect to grow.
Cash for four.
<unk> I assume it's sort of in line with what we did for <unk>.
Leveraging.
The strong platform that we have a return to profitability and sort of cash.
Co generation over the next couple of years and using sort of existing cash that we have.
Got it very helpful. Thank you guys.
Thanks.
Thank you and I'm showing no further questions at this time I would like to turn the conference back over to CEO , John Hymer for any further remarks.
Okay. Thank you very much team for joining us today and for your continued interest in <unk>, Inc. We look forward to keeping you updated on our progress so have a great day everyone. Thank you.
This concludes today's conference call. Thank you for participating you may now disconnect.
[music].
Okay.
Yeah.
Yes.
[music].
[music].
Good day and thank you for standing by welcome to the <unk> Proteomics first quarter 2022 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 the session you will need press star one on your telephone please be advised todays call.
May be recorded if you require any further assistance. Please press Star then zero I would now like to hand, the conference over to your host today, Jan Medina, Vice President Investor Relations and capital markets. Please go ahead.
Thanks, Michelle and good morning, everyone. Thank you all for joining today's conference call on the call. We have John <unk>, Chief Executive Officer, and Oscar <unk> Chief Financial Officer.
Earlier today <unk> released financial results for the first quarter ended March 31 2022.
Copy of the press release and an updated corporate presentation are available on the company's website.
Before we begin I'd like to remind you that management will make statements. During this call that include forward looking statements within the meaning of the U S. Federal Securities laws, which are made pursuant to the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 995.
Any statements contained in this call that relate to expectations or predictions of future events results or performance are forward looking statements.
Actual results may differ materially from those expressed or implied in the forward looking statements due to a variety of factors.
For a list and description of the risks and uncertainties associated with the oil linked business. Please refer to the risk factors section on form 20-F Commission final number 001 dashboard zero to 707 filed with the U S Securities and Exchange Commission on March 17, 2022, and in our other filings with the SEC.
We urge you to consider these factors when you should be aware that these statements should be considered estimates only and are not a guarantee of future performance.
Also in our remarks or responses to questions management mentioned, some non <unk> financial measures reconciliations of adjusted gross profit and EBITDA and certain other non <unk> financial measures to the most directly comparable <unk> measures are available in the most recent earnings press release available on.
The company's website.
This conference call contains time sensitive information and is accurate only as of the live broadcast today May 12 2022.
<unk> disclaims any intention or obligation to update or revise any financial projections or forward looking statements.
Because of new information future events, or otherwise, except as required by law and with that I will turn the call over to John John .
Great. Thank you John good.
Good morning, everyone and thank you for joining <unk> first quarter 2022 earnings call.
First I'll begin by saying that in these difficult times, our minds and hearts remain with those impacted by the war in Ukraine. The OLED community has contributed one modest way to relief efforts in the hope of improving situation and we continue to do what we can to support them.
Terry on efforts.
I will now start by providing some recent financial and operating highlights discuss the few areas where oil linked is driving the science of proteomics, then I will wrap up things by quickly and discussing our outlook for the remainder of 2022 I will then turn over the call to ask Scott to provide more financial detail.
During the first quarter of 2022, only and continue to execute and build on its considerable progress from last year, we remain confident in achieving another year of strong growth with further accomplishment in the fast growing nexgen procurement industry that promises to reshape drug research and development and.
Human health.
We're pleased to have delivered quarterly revenue of $22 7 million us dollars, representing 66% <unk> growth over the first quarter of 2021.
Cumulative explore installation is during the first quarter reached 27, and we delivered nine additional cigna <unk> instruments to customers as well.
These were in line with our plan and consistent with expected seasonality given customer buying pattern.
The net impact of the <unk> environment was largely.
<unk> during Q1, and we continue to remain vigilant with our customers to navigate the COVID-19 impact on their work.
Explore represented 6% to 9% of our total revenue in the latest quarter total kit revenue was $4 million up 41% over Q1 2021.
While service revenue totaled $16 6 million up 74% compared to Q1 2021.
Total <unk> revenue represented 18% of total revenue in Q1 2022, consistent with our internal plan.
Just about a year ago that the explorer kits were launched and on a trailing 12 month basis explore keeps represented 29% of total next door revenue and 19% of total revenue.
Generally speaking initially proved through with explorer kits is coming towards the high end of our internal expectations.
And during the first quarter of 2022 target became a more substantial growth driver due to the recent the recent launch of signature.
Overall, we remain confident in the continued shift of our revenues from services.
With our 2022 outlook supported by the performance of the first quarter.
As we discuss the first quarter is traditionally <unk> lowest revenue quarter of the year, given their procurement and budgeting cycles over many of our customers, including governments or grant funding customers academia customers and biopharma customers.
However, our underlying business momentum and explore targeted focus remained very strong in Q1, and thus we have entered Q2.
Explore continues to benefit from strong pull through and continued uptake of our new exploratory take it.
We remain on track to expand to 4500 protein biomarker targets later this year and we continue to aggressively build out our library of antibodies as long as our customers tells us to do so to drive their clinical and diagnostic research efforts.
We're also committed to make our explorer lineup products as accessible as possible in line with this ambition, we're collaborating with multiple partners to enable explored on several of the new sequencing instruments entering the market.
This effort will translate into increased flexibility as customer will be able to choose from a menu of detection platform alternatives.
<unk> also continues to expand its reach within the low end and Eplex proteomics market with signature, which began deliveries to customers late last year that.
<unk> product platform to address multiple use cases at the same customer is becoming more and more clear with market. Both signature customers also being explored users.
Our balancing efforts toward diagnostic application continues.
February our partner <unk> Bioscience had a significant presence at the <unk> meeting in West Palm Beach, Florida with multiple posters presented patients highlighting the attainment of the MSB a.
Protein signature right with <unk> technology.
Including the Cigna relationship with <unk> disease activity and progression.
We believe <unk> also showcase the very deep analytical and clinical validation steps bulk Dave have performed with the MSP a test.
David preparing plans for early use of the MF defeat activity tests.
In select.
Multiple sclerosis centers over the course of the year.
All the inconvenience to prioritize collaborating with customers and thought leaders to advance the field or proteomics.
We are truly excited to be part of the only growing groundbreaking scientific discovery effort when the UK Biobank project and we continue to deepen our relationship with the 13 pioneering biopharma members.
As we previously discussed by the end of last year. We delivered 56000 accomplice did you buy a bank consortia and in 2022, we began running the expansion phase on the explore 30 72 platform.
Data from this research in club is published later this year.
Using OLED units of expression MTX or normalized protein expression, providing all link a unique opportunity to help define the language of next generation proteomics.
I believe the UK Biobank project would be the most comprehensive data set available to aid the research and discovery of critical clinical and diagnostic solutions.
Today OLED as part of several consortia are exploring the role of protein Biomarkers. The UK biobank of course, scallop, which is appropriate genomics effort for <unk> orders slide coronary artery disease rheumatoid arthritis.
Right.
Bipolar disease heart failure dementia or metabolic syndrome.
Carl for neurological conditions and call debris for inflammatory bowel disease.
Beyond this we see significant <unk> across many large and strategic course around the world we.
We see continued we are executing against the opportunity to deepen our strategic relationships across the industry.
<unk> is well positioned to be a key contributor in protein and multi omics studied given our product platform and service capabilities.
The foundation of <unk> success is science.
And there are more than 860 studies published to date, describing the use of pega conducted by thousands of researchers across the globe covering every major therapeutic category.
These studies highlight only clinical impact and we thought it would be helpful to share two of them today.
A recent study published in circulation by a team from University College, London, along with cardiovascular four theatres, including professor face amount from the hallmarks consortium and Alexander smell uptake from Gallup supports the role of <unk> in identifying relevant no.
Protein drug targets.
The study investigated the role of 90 cardiovascular proteins in heart failure that were derived from 3019 participants with 732 heart failure event.
The effects of these heart failure associated proteins were then investigated using PQ tailed data generating from those genome wide Association studies in over 30000 individuals.
The findings were striking.
44 of the 19 proteins.
Positively associated with risk.
Okay incident heart failure with eight of these for the for protein is showing evidence of Corso Association with heart failure.
Two of the associated proteins have already been targeting ongoing early clinical trials to provide biological validation for these findings and five of the remaining six are classified as <unk>.
<unk> according to public databases.
Another publication from the University of Mississippi use publicly available <unk> data from the mass General Hospital longitudinal COVID-19 study to understand the frequently seen link between COVID-19, and cardiovascular implications.
As some background holding kept previously joined forces with MGH to quantify the abundance of over 1400 proteins in plasma of patients from a cohort of 306, COVID-19 patients and 78 virus negative patients.
What the authors found we're clear associations between different types of immune system T cell pathways.
And the levels of important Cardiome, Adam metabolic proteins.
<unk>, explaining the cardiovascular complications associated with severe systematic inflammation in COVID-19 patients.
These are just two recent examples of how all link is helping inform their own low protein in disease and further downstream action ability.
The studies represent just the latest data points in the expanding body of evidence that speaks to the importance of proteomics and the quality of the data of the oil linked platform.
More importantly, it supports the sentiment is shared by many of our customers in their real world experience as well.
Operationally, we continued to strengthen <unk> already considerable talent pool, we started the year with 416 employees and reached 465 by the end of the first quarter, including 163 full time entries in the commercial team.
In April we appointed two new independent Board members to our board of Directors <unk>, Mary rumored CFO , Taylor Pharmaceuticals, and Bourbon Chair and CEO Natera, both Bob and Mary have considerable experience and expertise and we welcome their contributions.
In helping shape the future of our company.
Additionally in March we were excited to publish our inaugural since the vein and sustainability report, which can be found on our investor Relations website.
The report outlines.
Our clients <unk> contribution to improving global health, including early progress with our partner <unk> Bioscience in MF.
We look forward to further refining our assist debating sustainability principles overtime.
Two quick feeling our promise to science and society put a better future for generations to come.
Turning to our expectations.
We are maintaining our 2022 revenue guidance range of $138 million to $145 million and Oscar will go into more detail in a bit.
Beyond this year and over the long term, we remain very optimistic about both strategic and financial outlook.
In summary, we remain confident in our ability to execute and expand and need the largely untapped check nextgen proteomics market there are exciting things happening at the holding.
I will now turn the call over to Scott to discuss our financial results.
Scott.
Thanks, Joe and Hello, everyone.
First quarter revenue totaled $22 7 million very strong growth of 6% to 6% year over year, which included immaterial FX headwinds.
Revenue growth was led by services, which was largely in line with our expectations and driven by buying activity drove net <unk> per customer base with average project spend of roughly 50% of the average Q4 project.
Driven by continued investments in alignment with our strategic plan adjusted EBITDA was negative $9 1 million for the first quarter of 2020 as compared to negative $3 7 million for the first quarter of 2021.
As John mentioned at the end of Q1, we had 27 externally place revenue generating explore installations research achieved roughly 700 and average customer pull through during the 12 months ended March 31.
Slide two.
We are satisfied with this level of pull through App grabbing the kits on the market for just about a year during our early experience with <unk>. We've seen the average annual growth range from 500 to 750000 with the individual spend ranging from less than $100000 to multimillion dollar orders, we continue to expect variability.
And quarter to quarter pull through which will be further impacted by our customer spending seasonality.
<unk> revenue for the first quarter of 2022 grew 41% to $4 million or 18% of total revenue as compared to $2 8 million for the first quarter of 2020 or 21% of total revenue extra.
Explorer continues to be the most significant component of kits revenue.
And.
<unk> targets.
<unk> contributed more meaningfully given the recent launch of signature.
Analysis services revenue for the first quarter of 2022 grew 17, 4% to $16 6 million or 7% to 3% of total revenue as compared to $9 6 million for the first quarter of 2020 or 70% of total revenue.
The mix of chips versus analysis service revenue was in line with our expectation and <unk> continues to expect progress.
Throughout the remainder of 2022 and beyond increasing the mix towards kits.
Other revenue was $2 1 million for the first quarter of 2020 as compared to $1 2 million for the first quarter of 2021 of the revenue growth was driven primarily by the sale of signature instruments.
By geography revenue during the first quarter of 2022 was $9 $7 million in America, $10 $1 million in EMEA and $2 $8 million in China rest of the world.
Consolidated adjusted gross profit profit was $14 2 million or 6% to 3% of revenue in the first quarter of 2022 versus $9 2 million or 68% in the first quarter of 2021 and by segment adjusted gross profit margin for kits was 89% in Q1 'twenty two.
As compared to 82% in Q1 of 2021.
Q1, 2022, adjusted gross profit for analysis services was 58% as compared to 6% to 4% in Q1 2021 the.
Line analysis service margin was driven primarily by our continued build out of love capacity with.
We continue to expect service margins to revert to normalized levels that we've observed historically in the second half of this year.
As we consider total Cogs, we expect our strategy of increasing revenues.
Revenues as a percentage of total revenues will have a positive impact on gross margins over long term and quarter to quarter variations are to be expected given the seasonality of our business and our ongoing product launches.
Furthermore, the introduction of explore 30 72 should provide support for margin expansions over time, leveraging our internal antibody library.
Adjusted gross profit margin for <unk> was 47% in Q1, 'twenty two as compared to 62% for the first quarter of 2021. The decline in other gross profit margin was primarily related to the sale of signature through 100 instruments.
Total operating expenses for the first quarter of 2020 to $29 5 million as compared to $22 4 million for the first quarter of 2021.
The increase was largely due to continued and accelerated investment into all links commercial organization, our research and development and driven by additional cost as a public company.
Operating expenses are broken out as follows.
<unk> expenses for Q1, 2022 were $9 5 million versus $5 7 million for Q1 2021 administrative expenses for Q1 2022 of our $14 4 million versus $12 4 million for Q1 2021.
And R&D totaled $6 million and $4 2 million for Q1, 'twenty to Q1 'twenty to 'twenty one respectively.
Other operating income was 328000 in the quarter as compared to other operating loss of $105000 in Q1 2021.
Net loss for the first quarter of 2022 was $12 2 million as compared to a net loss of $14 3 million for the first quarter of 2021.
Net loss per share for the first quarter.
<unk> 10 based on <unk>.
<unk> average number of outstanding shares of 119 million 10097, as compared to a net loss per share of <unk> 48.
For the first quarter of 2021 based on a weighted average number of outstanding shares of $38 million 926000.
<unk> hundred 70 shares.
Driven by the convertible of receivables recorded during our seasonally strong Q4, we generated $2 million of cash during Q1, ending the quarter with a strong balance of $122 million in cash and cash equivalents.
While Omega yet looked at that turn the corner in generating sustainable.
Profitability.
Cash flow, we believe our cash conversion during Q1 shows the ability to responsibly balanced investment needs with the efficient use of capital.
Consequently oil link remains sufficiently capitalized to achieve our return to profitability and to fund our existing strategic plan.
Moving to our outlook for 2022, we are pleased with our performance for the first quarter, which deliver according to plan and we are maintaining our 2022 revenue guidance range of $138 million to $145 million.
As we previously indicated revenues to be weighted to the second half of the year and fourth quarter specifically.
The guidance also anticipates the pandemic environment similar to what we've experienced to date and the impact of the geopolitical environment remains known material overall as we considered longer term horizon. We believe we remain well positioned for continued strong growth beyond 2022 as well.
I'll now turn the call over to John for his concluding remarks.
Thank you very much Oscar.
The first quarter of 222 months in other periods of strong execution Pro link.
<unk> continued to grow our leadership position and are benefiting from robust adoption across our entire portfolio of products and services selling into a broad diversified and growing customer base across the proteomics clicks spectrum.
Looking forward into the remainder of 2022 and beyond the owning team remains committed to executing against our strategic and financial goals.
At this point, we will open up the call for questions operator.
Thank you if you have a question at this time. Please press Star then one on your Touchtone telephone. If your question has been answered already wish to remove yourself from the queue. Please press the pound key.
Our first question comes from the line of Matt <unk> with Goldman Sachs. Your line is open. Please go ahead.
Hi, Good morning, John and Oscar and Thanks for taking my questions. Maybe the first one just to dig into the kit revenue in the quarter understanding the seasonality the two incremental installation that you saw in this quarter.
How much of that is seasonality versus difficult operating environment and it sounds like it's in line with your expectations, but how should we think about kit revenue as we progress through the year.
Yeah, Good morning, Matt.
Thanks for your good questions.
Yes.
I consider this.
Base to how we see our marketing customer base are sort of running their business. So think about Q4 seasonal.
To keep the purchase a stocking up a bit so in our experience throughout.
When we take the company off we've seen in Q1 being our slowest quarter and that also goes to kits.
But overall this was a very very strong quarter for us and as we look into the remainder of the year.
We remain very confident on the numbers that we've talked to you about the split between kits and services.
The ramp of the external installations and so forth. So masks, we feel very good that we're getting this was just as we have seen it played out over the year and what we plan.
<unk> four.
And perhaps a little bit better than we had anticipated.
We remained very solid looks good for this quarter and the remainder of the year.
Got it thanks for that John and then just on <unk>.
Assuming that there is some level of conversion from analysis service customers to externalization.
The operating environment and the difficulty of that keeping customers in analysis services longer or is that not necessarily a dynamic we should focus on.
No I don't think you should focus on that and we.
We've tried to be very careful and thoughtful about everything we do and.
The capacity that we have generated in the market for these external labs and what they can data is a very significant number now.
Supporting <unk>.
Researchers.
Around the world So.
Now we've talked about doing this in a diligent and careful way focusing on quality, which is extremely important.
No.
This is yet again going exactly all the how we in a carefully considered way switching our business from a fee for service to keep business model.
And taking all those factors into consideration.
Yet again.
Yes plan very feel very good about where we're at and we're looking to the remainder of the year looking at our pipeline looking at the excitement that <unk> got some discussions we're having so we are very good Matt.
Great. Thanks, and just one last question for me just maybe an update on your progress with agro Sarah just given the importance of vertical integration and reducing maybe some of the license fees you might pay how is that progressing and any kind of timeline on how that can be better vertically integrated over time.
Thanks, Matt that's a good question.
Getting to the science of it yes, no I mean.
I mean, I've seen a few M&A scene.
But I don't think <unk> seen a successful run with this one I can say.
It's an amazing team of people and leadership and science and technology.
So we are going from clarity to clarity or we have very high expectations as we bought <unk> back.
But we have delivered.
They have delivered above and beyond those expectations, we are improving how.
We're learning a lot about the processes of improving everything from ampligen to purification of the antibodies and are really increasing our what we say heat rates on the targets that we are generating so we are actually expanding efforts with accuracy.
Moving and transferring some of the.
Upstream R&D efforts that we're doing which has no link to further.
Take advantage of the great comp attempts and skill set we see within Agri Sarah two actually.
Pam and accelerate further than we had anticipated as we acquire them. So yes, it couldnt be better excellent great.
Great. Thanks very much.
Thanks, Matt.
Thank you and our next question comes from the line of Puneet <unk> with SBB Securities. Your line is open. Please go ahead.
Yeah, Hi, John Oscar Thanks for the questions. So first one is on the guide.
I appreciate that the seasonality is there and obviously I think that is now understood well versus earlier days when you when you.
When the company came to the public markets.
But maybe just help us understand the mix of service versus kits, how should we think about that.
Through the year, how should we think about the cadence there.
It is obviously services came in stronger this quarter.
But you had only two installs on the explorer and so maybe just talk to us how the explorer installs are ongoing.
If there was any impact in January from AUM across from.
In terms of getting into those labs, and how should we think about that explore sort of mix sort of ramping up through the year, because I think obviously that's an.
Important key driver for OLED expansion.
Yes, good morning, and thank you very much puneet, yeah, it's kind of.
I alluded to a bit in Matt's question is well first of all I don't think I mean.
<unk> impacted.
Not sure anything actually all of our business in the first quarter.
But obviously keeping a careful eye on that but I think we showed during 2001 and also the first quarter here that we have taken the appropriate <unk> on top of that situation for now.
We have a very careful and considered plan on how we switch our business from.
The vast majority of <unk> service into kits.
Kwan.
Quality is a very important aspect of what to do and I Hope also everyone sort of starting to recognize and appreciate how important that is to.
Support the high.
Hi, its standard of science.
So that these external explore labs are executing and delivering only data to external customers on the science same high quality manner that we do.
Integral to our whole strategy.
And I will definitely not emphasize but we need to.
Rather that we now expanded with two fantastic new explore partners.
Onto the market.
And that this market is growing very rapidly we see.
A lot of excitement and interest in sort of moving into the next <unk> and really going into proteomics and waste at this market haven't done in the past so.
All of those factors are really playing out in a very positive way.
But it doesn't happen overnight so hands.
We've seen very good this is exactly sort of how we have made our plans for the year and going back to your seasonality question.
This is a very strong first quarter, the strongest ever in our history as a company and.
We also see the seasonality as I said in kits. So Keith if you have some year end money available that's a very easy way to spend and sort of stocked up a bit and keeps our usually lighter in the first quarter.
Obviously, we had planned so slow and hands as we look at our pipeline the discussions we're having.
I think we feel while there we feel very good so it's sort of basically stay tuned and we will continue to deliver.
Okay. That's great and then on UK Biobank could you elaborate what's left there and how should we think about that in the second quarter and also related to second quarter. We obviously hearing from a number of.
Towards companies in terms of the China impact.
How should we think about that impacting sort of the <unk>.
Second quarter.
Yes, starting with your combined bank.
Citing of Corso.
<unk>.
In the expansion phase will basically round sort of half of that project.
Completed by now we did not take any revenues from that in the first quarter, we will de lever. Our next dataset in June and will be.
Revenue recognition of that delivery.
And we will plan to wrap the whole project up over the summer. So we are executing that exactly according to plan as well so super exciting and all good.
On the China situation.
Yes, we had a strong quarter actually in APAC in Q1.
Obviously <unk> now unfortunately are locked in at home and then.
Obviously, a more difficult environment too.
To work from but also keep in mind that <unk>.
Packaging General and China in particular are still relatively small piece of our business. So if you look at the whole picture.
Don.
Or not.
I'll read it all but I wouldn't expect tremendous revenues from China in particular in the second quarter.
Alright, okay. Thank you.
Great. Thank.
Thank you and our next question comes from the line of Tejas Shah with Morgan Stanley . Your line is open. Please go ahead.
Hey, guys. Good morning, So John I, just wanted to follow up on the comments you made on UK biobank here just to make sure I heard that right did you say you had no U K biobank revenues in the first quarter and then.
If that is so I mean at least relative to our model you did about $7 million better on analysis service actually in the first quarter.
Which implies given the unchanged guidance theres a bit of Cigna.
Significant U shape, even more pronounced than we had initially at the start of the year. So could you just walk us through the moving pieces. There as you think about the evolution of that phasing through the year.
Sure.
<unk> took us seven years always.
Yes, so youre correct, we have no UK biobank revenues in the first quarter of this year. So.
You know right, we recognize revenue when we deliver either data or reagent kits. So we did not deliver any data. So we had the milestone based approach with the UK Biobank consortium.
Sort of a set schedule. So the next day delivery will come up here. Shortly and then we will recognize revenues for the second quarter, but not in Q1.
And.
Yes, we see.
A very exciting market.
We see a local interest in proteomics and in particular around the.
Needing OLED platform.
So researchers are definitely shifting towards bottlenecks.
Well, we have definitely a market leadership and are in the position so hence.
New customers often come aboard as analysis service.
Hans.
We are winning out there people are expanding and newly into proteomics and <unk>, we are growing rapidly as a company. So.
But we have a very powerful.
We have a very clear strategy.
Which will also carefully implementing as I alluded to in the previous questions in terms of how to convert that into a product business.
<unk>, which we are implementing month over month quarter over quarter than the deal very diligently and continue to deliver upon so yes.
Yes, I agree it was a very strong quarter.
It was weighted towards analysis service win.
Which was within our expectations and how we've seen over the years have played out as well so hopefully that addresses your question.
Great opportunity great market <unk> is a leading platform and.
A lot of excitement all around so just stay tuned on we will continue to deliver this year and according to the plan that we communicated and expansion towards case.
Got it that's helpful. John and then any color you can share around.
The early traction for <unk> and then as you think about expanding that library to about 4500 targets.
Is that is that a chance there that we could see you sort of just keep trials that step in launching even so.
At a broader panel.
Towards year end or perhaps early next year.
Yep. Thanks pickup yes, there are a lot of excitement around the Q3 K product for sure.
As we alluded to in prior earnings calls, we should or maybe just take a step back sometimes and.
Remember and Thats only kept driven protein wheat search to escape, where it's never been before.
The highest standard of quality, where you're basically doing single Plex protein research in massive parallel scale in unparalleled throughput.
So.
<unk>.
And the whole academic and industry research markets are very excited about this and those are sort of the facts that are driving the trends that I've been speaking to here today about how procure makes it now for the first time ever at scale and quality driving re.
Searches towards proteomics.
<unk> closer to the phenotype.
<unk>.
Impactful results for science.
So.
Yeah, I mean, we've seen some.
Good about that and are very happy with where we're at so did that answer your question.
Chuck.
And then.
A quick one for Oscar on.
On FX I mean also could you just update us on what's the revised FX assumption that you are embedding into your forecast or is it the same as at the start of the year.
Yes, so I think as we sort of discussed.
We view our guidance was largely down a bit I think sort of.
The minor sort of headwind we saw in Q1.
What we can sort of execute.
Through the year.
Based on current rates within that guided range.
Got it okay.
And then I wanted to go back to your comments on.
On cash burn here.
But could you just walk us through.
I know you mentioned Youre service sufficiently capitalized to return to profitability, but as you think about the outlook for this year.
What's your sort of anticipated cash burn given all the investments et cetera that youre, making here.
And then as you think about.
Perhaps extending that runway out to bake in some incremental cushion.
This is a question we get a lot given the capital markets environment here any color on that would be helpful.
Yeah, no. So I mean, we.
I think we've discussed previously we expect to grow.
Cash for four.
<unk> tried to I assume it's sort of in line with what we did for <unk>.
Leveraging the sort of.
This drove capital that we have a return to profitability and cash.
Flow generation over the next couple of years and using a sort of existing cash that we have.
Got it very helpful. Thank you guys.
Thanks.
Thank you and I'm showing no further questions at this time I would like to turn the conference back over to CEO , John Hamer for any further remarks.
Okay. Thank you very much team for joining us today and for your continued interest in Knoll, Inc. We look forward to keeping you updated on our progress so have a great day everyone. Thank you.
This concludes today's conference call. Thank you for participating you may now disconnect.