Q4 2022 Berkeley Lights Inc Earnings Call
I will begin the call today by providing updates on the progress we've made against all the pillars.
Our strategic operating plan and will then turn over the call to meal.
Who will review, our fourth quarter and full year 2022 financial results in more detail.
Starting with our first strategic pillar.
Building, a world class Lifesciences leadership team with a proven track record and profitably scaling life Sciences tools companies.
Since I joined Virtualized, nearly a year ago.
We made significant progress building out a very strong team with seasoned executives.
With external hires bringing leadership.
Deep life Sciences experience.
Well as internal appointments.
That bring critical knowledge update RG technology platform and Berkeley lights.
These key hires include Chief Financial Officer, Chief Human Resources Officer head of strategy and corporate development and Chief legal officer. Additionally, with the anticipated closing of the acquisition of <unk>, Sean Mcgann will join the combined company as Chief product Officer.
Yes.
Looking forward, we are focused on building a strong global commercial team in 2023 with the <unk>.
We'll of establishing teams and partnerships in key regions.
I am confident the combination of our experienced leadership team and our strengthened commercial team will drive a culture of innovation customer centricity and the commitment to excellence in quality.
We anticipate making original commercial appointments in the next few weeks.
Moving on to our second strategic pillar prioritizing R&D return on investment through increased focus and rigor on development initiatives.
We made considerable progress in 2022, as we streamlined our R&D focus areas by narrowing the scope of many projects and shifting our product portfolio from complex multigenerational launches to a more simplified approach. We believe this approach will enable us to better fulfill our customers' needs.
As we have previously shared we believe there's a significant opportunity for our technology to add value in cell and gene therapy space.
We are focused on improving the cost and therapeutically relevant for.
While manufacturing AAV based gene therapies to our platform and we will continue to dedicate ample resource development of an AAV manufacturing workflow throughout 2023.
We are taking commercial.
And technology partners.
Develop a strong out licensing technology model and are currently in discussions with several potential industry partners for this advanced therapy initiatives.
We are also focusing our resources on PCI discovery, where our technology has been very useful for large companies involved in specialized personalized cancer vaccines and enables people to make personalized discussed around TCR similar to our antibody discovery workflow.
We believe that these two areas are the highest value for our customers.
And consequentially for the entire biotech industry.
Moving on to our third pillar of delivering consistent commercial execution through our new sales structure and enhanced product portfolio and pricing strategy.
We are materially enhancing our approach to the market with the introduction of a more flexible configuration and pricing strategy that encompasses a total cost of ownership in line with this approach in early January we.
Introduced Beacon select is too cheap single cell Optofluidics system for cell line development, enabling scientists to clone culture assay and select top loans in a single run on a single platform.
The selected approximately half the price of the previous peak in model and will be available through different purchasing options enduring capital placement leave a reagent rental.
With Columbia reduced capability from our first platform. This will increase customer accessibility and expand the customer base as it is ideally suited for small to midsized biopharma and Seattle and CDM Oz.
Okay.
We believe broadening our portfolio of platform will allow us to access a wider array of potential customers in the market and the products that are more tailored to their needs and budgets.
Going forward, we intend to launch application specific models the beacon system periodically.
In line with this scale, we expect to launch Beacon Quest, a lower cost device intended for the academic market in the second quarter for this year.
We are already seeing early interest in this model as <unk> said previously in terms of our go forward product roadmap. We believe that our technology can provide significant value in high growth academic research segments. For example, gene editing and immuno oncology applications.
A top priority in 2020 will be to form economic collaboration pilot programs to help guide the design of this new applications.
Turning to our fourth strategic pillar of evaluating mergers and acquisitions opportunities that will help us accelerate profitable growth and leverage.
Structure.
On December 21 last year, we announced our intention.
Consolidation in the single cell biology industry with the combination of Berkeley lights, and ISO plexus to create Phenom X.
As anticipated combination drives towards a broader diversified sell biologic company focused on understanding the female by providing a deeper analysis of cell function, one uniquely preserving the live cells of interest.
The transaction is expected to close by the end of first quarter of 2023, and our integration planning is in full swing.
When the merger closes the combined company will have about 400, plus installed base in all of the top 15 pharmaceutical companies by revenue and 80% of comprehensive cancer centers in the United States together there'll be more than 100 sales and support employees with.
Greater reach to academic Biopharma and CLO companies globally.
Additionally, the combined company will have a strong 600 patent portfolio at stake.
We will also have a balanced product portfolio with significantly diverse price points for our customers to access and substantially expanded reach to a much larger cell biology market.
The combined product portfolio as genome X will include our Beacon system.
The Beacon select for cell line development launched in January .
And the existing instrument platforms from our surpluses.
Spock and ISO light.
We expect to launch several new technology offering as genomics in 2023.
This includes the beacon select for antibody discovery workflow.
<unk> quest for the academic market in the second quarter of 2023.
Well as I saw flexes bulk.
Bulk proteomics platform called Flex Q.
We plan to unveil the genomics comprehensive product roadmap in the summer of 2023, and our planned investor event.
The combination.
Of Berkeley Lights Alliance of Lexus will represent an important milestone and lay a great Foundation for a very strong life Sciences tools company.
Importantly, we expect this transaction to accelerate our progress across every pillar.
Our strategic plan.
We believe Fino X will have the power to bring to market much more ubiquitous cell biologic tools, which could be used by every single scientific institutions in the world.
We look forward to joining forces with ISO plexus team as we embark on this new chapter.
And create value for our customers employees and shareholders.
In addition to Isa plexus recently acquired all of the technology assets from <unk> Biotechnologies.
All of us of a system capable of light cracking cellular interactions.
The alternative interactive property of course to single cell functional analyses.
The city will help accelerate the development of our pipeline.
With this purchase Berkeley lights acquired the entire patent portfolio.
Completed 17 patent families and also city prototypes and software source code for approximately $250000 compared to the $20 million spent on developing the technology.
Finally, I'd like to give an update on our fifth strategic pillar of generating positive operating cash flow.
We are focused on building, a growing profitable and sustainable business rather than pursuing growth at any cost when.
When we first announced our new strategic operating plan, we anticipate achieving this goal by 2025.
We are making significant progress against our goal with revenue accelerating supported by an updated market driven product portfolio and pricing strategy as well as disciplined expense and cash management.
We have taken several actions in Q1 2023 to reduce our overall head count spend including transitioning existing employees approximately 9% of the workforce closing open positions and reducing our consulting and contractor spend. This is in addition to our.
Business optimization initiatives in July 2022, now I would like to turn the call over to <unk> Joshi to discuss our fourth quarter and full year 2022 results.
Thank you said ARPA revenue in the fourth quarter was $17 8 million.
Bringing full year results slightly above the range, we pre announced in early January .
Revenue this quarter was impacted by the timing of certain beacon platform placements and as previously communicated our ongoing initiatives to reshape our partnerships and services business away from low margin contracts too focused initiatives on AAV and TCR discovery.
We also experienced a tightening macroeconomic environment similar to what our industry has been facing.
With elongated sales cycles and constrained capital budgets.
By geography, North America accounted for 30% of total revenue in the fourth quarter 2022.
Followed by APAC at 36% and EMEA at 34%.
Platform revenue was $10 2 million in the fourth quarter 2022.
Up 5% compared to $9 7 million in the fourth quarter 2021.
Our installed base grew by seven placements during the fourth quarter of 2022.
Including six deacon placements.
This brings the total installed base to 135 platforms.
Q4 sales were representative across all customer segments, including Biopharma.
Crow CMO and academic customers.
Recurring revenue was $6 $4 million in the fourth quarter of 2022 up.
Up 6% compared to $6 1 million in prior year, we are focused on expanding the installed base to drive stable predictable recurring revenue.
Revenue from partnerships and services decreased to $1 2 million in the fourth quarter 2022, compared to $7 $4 million in the prior year.
This includes revenue from restaurant and Bayer partnerships.
Both of these partnership contracts are now complete and we expect no revenue from strategic partnerships and services agreements to be recognized in the first quarter of 2023.
As we shift to the new operating model for our partnerships business.
We see high levels of interest in our AAV and TCR discovery solutions and anticipate having a number of customer contracts in the second half of 2023.
Gross profit for the fourth quarter of 2022 was $12 million compared to $16 million in the prior year gross margin for the fourth quarter of 2022 was 67, 3% compared to 68, 8% in the fourth quarter of 2021.
<unk>.
Operating expenses in the fourth quarter 2022.
Were $41 $7 million inclusive of $5 1 million of stock based compensation.
Compared to Opex of $33 8 million.
Inclusive of $5 1 million of stock based compensation in the same period of the prior year.
Operating expenses in Q4 2022 included large onetime fees for legal expenses related to a customer arbitration.
Expenses for M&A, and approximately $2 5 million of noncash restructuring expense as we continue to streamline and simplify our business.
Net loss for the fourth quarter 2022 were $29 3 million.
Compared to a loss of $17 7 million for the prior year period.
All net loss numbers are inclusive of stock based compensation and restructuring expenses.
We are laser focused on operating expenses and cash flow and expect our Q1 opex to be down approximately 25% from Q4 of 2022.
Okay.
Looking at the full year total revenue for 2022 was $78 6 million.
Down 8% year over year.
Regionally North America accounted for 49% of total revenues in the year, followed by APAC at 34% and EMEA at 17%.
For 2022 revenue from direct platform sales totaled $35 8 million.
Driven by 'twenty four placements in 2020 to.
Recurring revenue was $24 8 million.
An increase of 30% from 2021.
Partnerships and services revenue was $18 million.
Compared to $19 9 million in.
In 2021 and reflects our shift in strategy away from low margin business.
Gross profit for full year, 2022 was $53 8 million.
Compared to $56 6 million in.
In the prior year.
Gross margin for 2022 was 68, 4% compared to 66, 2% in the prior year total operating expenses in 2020 to $151 $8 million comprising.
Comprising.
$53 $2 million of R&D expenses, $95 $1 million of SG&A and $3 $5 million of restructuring costs.
Stock based compensation included in operating expenses.
$22 $2 million, an increase of approximately $1 million year.
Year over year.
Net loss for 2022 was 98.0 million compared to a loss of $71 $7 million in 2021.
We ended the year with a cash balance of $132 8 million, which included our cash cash equivalents and short term marketable securities representing a cash burn of approximately $11 million.
From the end of the fourth quarter of 2022.
Our ending cash balance also reflects approximately $9 2 million that was recovered due to the unauthorized issuance of shares that we previously announced in 8-K filed with the SEC dated December 16th 2022 and February 14th 2023.
Our cash is being managed appropriately and we reached our year end cash balance goal.
Our available liquidity is $142 8 million.
Includes our revolving credit facility.
At this time, we will not be providing 2023 guidance given the pending acquisition of <unk>, which we expect to close in March.
We affirm our commitment to the goal of being operating cash flow positive earlier, and we will provide guidance after one full quarter as seen Alex.
With that we will now open it up to questions operator.
Thank you.
And as a reminder, if you would like to ask a question press star one on your telephone keypad.
And we will pause for just a moment to compile the Q&A roster.
Okay.
And we will take our first question from perhaps with Morgan Stanley . Your line is open.
Hey, guys. This is edmund on potatoes. Thank you for taking my questions. So Don you mentioned integration planning I was just wondering if you could provide more details around that.
Ahead of the deal will have you done to ensure that youll hit the ground running upon the close of the deal.
Yes.
Ed and.
Given my regards to pages as well.
We have.
A very strong integration planning push ongoing ever since we announced the transaction in December and I'm happy to report that we are making very strong progress on all matters, but have to just set the context for what is this indication about.
Yeah.
Three main areas of synergies diverse synergy not just being about the cost, but about synergistic business processes between mercury licenses of Lexis number one is to make sure that we are utilizing the SG&A structure, specifically the G&A structure built in case of Isa <unk> and Virtualized for both.
Of those being public companies that have significant exposure to build to support these two companies to come to public markets.
And there is a.
The amount of cost reduction that will take place between those functions.
Next if we talk about the sales and marketing functions. This transaction provided an opportunity for both companies to significantly expand the commercial reach.
The combined company will have more than 100 people across the world supporting sales marketing customer service support and technical services functions and in fact for a company of this scale that is a very nice scale for us to be able to achieve very quickly and very.
<unk> technical areas of commercialization that is very difficult to build so it gives us a significant advantage in coming to the market across all the geographies with a combined sales and marketing footprint.
The third area of integration is in the innovation here most companies.
Being small companies with a fairly high expectations on growth on this very small companies that are interested.
Ahead of the time on research and development initiatives on oftentimes, what I have found throughout my career and especially through here between both companies.
A lot of initiatives in place and in fact.
We're doing the initiatives it is not easy to execute against all of them. So we have taken the approach of simplification between the two business is focusing on a few initiatives in doing them really well.
What is even more important to highlight the company's come with incredible technology overlap.
Merchandise platform has the ability to really unprecedented ability to track lighting sales manipulate them and still vehicular them for future analysis <unk>.
<unk> technology allows those cells to be studied in an incredible depth.
A level.
That has not been seen before by their tools and at the same time from a commercial perspective ISO plexus technology is introduced in a box that is significantly lower cost than adult life platform play example license <unk>.
Technologies offered in the market anywhere between 100 $250000 of value that is a <unk> home is sold between 1 million to $2 million of pricing point.
Going forward, we are making significant progress on our innovation teams to come together to offer as many of our competencies from technology perspective in a lower cost device.
That is a much more stronger software suite, which we weren't able to fortunate to be found in ISO flexes. The software capabilities that <unk> team is fantastic and it really has created a push button answer.
Box kind of a device approach to do we use in life sciences tools industry, which we are very keen to the combined for our combined portfolio. So hopefully this gives you an idea overall I do want to tell you that the combined company's cost of debt was about $200 million.
The revenue base that combined company has does not need that level of expenditure and we are committed to.
Going after approximately $70 million of cost reductions majority of it will come from obvious functions like public company expense reductions, but also some of that will come from standardizing our it.
Research and development initiatives for complete will be effectively managing our execution plans. Hopefully this is comprehensive and happy to answer further questions on this.
No. It's both about Super helpful. Thank you for the color and I guess, just spending on the basketball innovation point in bringing the two technologies together.
It has been announced for a couple of months have you started to get any early customer feedback on.
The possibilities of merging these technologies together any interesting applications.
Okay.
Yes in fact, that's a great question had been the often when individual company employees have reached out to our customers for what additional things they would like.
Especially in the area of cell and gene therapy.
Maintenance demand for people to use these two technologies in tandem in other words people are often interested in preserving the cells of interest from both less platform and then doing a deeper analysis on the <unk> platform and that combination has been requested by customers. So I think the casual discuss.
And ill for quite some time and in fact that is one of the main reasons for the technology overlap that has given us the attractiveness to bring these two companies together both for us as well as for the <unk> management team. However, we will be unveiling some of the full detailed comprehensive.
Product roadmap for the combined companies to bring to market in 2024 and beyond we will be disclosing that sometime in the summer months, we have in full.
Look to work with our colleagues on the other side for a full quarter or so in the 2023 year.
Got it. Thank you guys very much for the time today.
Thank you.
And we will take our next question from Chad, We had trustee with Cowen Your line is open.
Okay.
Hi, guys, you guys Shanghai <unk> on for Steve Moss.
With regards to the AAV and TCR discovery customer contracts that youre expecting to come this year.
What can we expect in terms of deal structure.
Typically are you are you noticing any hesitancy from perspective partners to deploy R&D dollars upfront and does that create an opportunity to capture any downstream economics.
Yeah.
John Thank you for your question a good question I think depending on the type of customer we're talking about there is different arrangements, we're going to make sure. We're not going to go into specific details here on the structure of our specific customers, but I can tell you that our first very successful customer experience and that was all upfront R&D.
Dollars.
We believe that the value is significant and for us to fully capture the value driven I want to have further contracts structured in a way that allows us to participate in the <unk>.
The downstream revenue in addition to having a reasonable margin business by providing us a visit to that in our first phase.
So going forward you will see.
In our target margins are actually in that north of 60, 70% gross margins. In addition to that we would be expecting that the customers share with us the downstream value creation, because the value creation as we've talked about it instead of doing this kind of projects localized platform could be used in all sorts of research applications.
Thankfully, we could get bold evolution approach, yet, but we've identified two places theres opportunity for us is high but more importantly opportunities for our customers to add value for their customers is even very very strong here and that allows us to reasonably expect participation in the downstream economics. So you should expect more.
All of that but there's a lot more discussions and negotiations going on so I'm not going to comment on the specifics right now.
Got it thanks, and then just regarding the combined sales force do you expect to cross train.
Reps and are there any opportunities like with the launch of the Beacon one planned for this year to maybe leverage each other's <unk> sales channels.
It's a fantastic question Jordan the Beacon, one has been renamed to Beacon Quest.
Applying the quest is in discovery in science and the research academic market.
And you are absolutely correct. One good thing about these two companies coming together, it's not just a random manage of two life science systems companies with their different product lines. We saw blood cell biology based companies both suffering in the customer segment that are overlapping and speaking the common language. So we will be able to go.
Lastly in the personnel and there is a very large focus for riders and planning of course, the transaction has not closed year, we're expecting it to close in the next few weeks here and as soon as the transaction is closed.
Intend to start the cross training between the two teams.
Thanks, and just to add one more thing to that Doug just one more thing on that jet.
Monthly lights capabilities on a commercial side has been significantly invested in the biopharmaceutical customer segment.
We have some academic markets transactions, but not because we specifically targeted salespeople to the X segment until recently however.
However, the <unk> team is very strong in the academic market segment has a significant economic presence in fact.
Many of the units are actually placed in the largest cancer research centers in North America, and a very strong presence in terms of the the combined installed base as we mentioned in the prepared remarks, approximately a total of 400 installed base.
Really giving us a much significant increase not only from our customer access from a sales point of view, but also having a lot more customers who can speak for us every week days of obligation with which site a product that was used from EDA companies products now.
Thanks, again lay out looking forward to more updates throughout the year.
Thank you Chad.
Okay.
And we will take our next question from Mark Massaro with BTG. Your line is open.
Okay.
Okay.
Mike Thanks for taking my question.
I don't want reporting final Q4 results and give you that there'll also be impacted by instrument placement timing and longer sales cycles.
And on that note.
Many placements during the quarter perfect.
Al Gore Tex access subscription.
Could give us any flavor there.
So.
We're still an independent company. So we're not going to comment on <unk> fourth quarter results.
Youll have to wait until they publish their results on the number of placements we had seven placements.
In the fourth quarter six were beacon placements and one was a lightning placement. So those were our capital sales.
We did not earn any revenue from tech access new Tech access placements. However, we have.
<unk> booked a tech access placement that will get installed and start earning revenue shortly.
Okay, great. Thanks, so much and just a quick follow up and you briefly mentioned and I think the acquisition of the patent portfolio.
Updated thinking around M&A.
Okay from that coming months.
Primarily going to be an ACO platform.
Thanks.
Yes, Vivien for the for the next quarter, we are Super focused on executing the integration planning and the subsequent accident that need to take place.
And the entire management team is now fully focused on that on both sides. As we discussed earlier on the call. There is also a lot of heavy lift to be done on a commercial integration and training cost training cost the business as well as significant amount of work to do on.
Making sure that we have a robust product portfolio road map for the next three years and we will be unveiling all of that later in the summer at the Investor Day. However, I think to go back to the transaction you mentioned it was a.
The transaction that was pursued in parallel with <unk>.
And it is quite interesting people, who actually was in Germany with some very capable engineers and scientists trying to do this work around cell cell interactions.
As we engage with them we saw that there is something very important here that we could leverage into our combined platforms, especially as we were already discussing the combination with <unk>, we saw a huge opportunity for us to acquire.
Total assets at a significant discount at eight 1% of the total investment value for which it was created approximately $250000 for an asset that was good up to $20 million of investment. We believe this kind of opportunistic transactions have something we will still keep an eye on.
And just as a kind of a matter of.
Our perspective on the industry life Sciences tools industry got tremendous investment in what was the end stage of the bond markets and devote approximately $4 5 billion venture capital funding and related funding had gone into creating all sorts of life Sciences tools companies and then candidly. Unfortunately.
Many of those technologies will become companies and not that many of the companies that are formed will become going concerns.
And therein lies the opportunity for a company like us having a robust leadership team and a very clear pathway for becoming a broad functional cell biology complete will be very selective about it. But then also be very strategic about continuing to look for assets like these so.
We will not be making any large transaction announcements in Q2, I can assure you of that but it will continue to look for opportunistic transactions like the one we just described today.
Thanks for taking my question.
Okay.
Thank you again.
Pardon me, we will take our next question from Matt Larew with William Blair. Your line is open.
Okay.
Hi, good afternoon. Thanks for taking my questions I apologize if you covered this could add some connection issues early on but just on click and collect obviously.
That launch in that.
In the quarter and that was something you expected I just wanted to.
Understand maybe early interest that you are seeing obviously is that a.
Different price points and opened up the market a bit more for you. So how maybe some of the preorder.
Our customer conversation activity from the end of last year has converted into.
Further interest our sales early on this year.
Yes exactly.
So let me just make sure that we explain sort of what we.
We intended to launch Beacon select later in the year, but we were able to accelerate launch of the beacon select in Q1.
In.
And specifically for cell line development workflow, which is where we initially thought there is going to be significant demand for accessing our portfolio of products at a lower cost upfront in exchange for a higher consumable cost in the long run.
As you know the sales cycles for capital instrument is actually a two to three quarter long cycle. So we are building the funnel right now our salespeople are trained on the new tool now and they are building the funnel as we speak. So we don't have a specific panel report to give off to you, but we have some early success in the transactions, we will disclose that.
The Q1 is finished.
But we will continue to.
Informing on that the second thing I would say that given the beacon select success that we're seeing in the early just because of the customers. We have also decided to launch a beacon select platform for antibody discovery workflow, which is a different application and we will be launching that sometime in Q2.
Again as our commercial team is getting more successful explained the total cost of ownership equation to our potential customers.
This is something that vitaros valuable to do to lower that barrier upfront barriers for most of our customers hopefully that answers your question Nick.
Yes. Thank you.
Manual understanding that youre not providing guidance.
It might be helpful.
The strength for us.
Yes.
Comp issues from the previous year, any previously communicated margin dynamics or seasonality issues regional.
My question is do you want us to be aware of as we're putting a model together ahead of a more formal update after that.
Transaction closes.
Yep.
I think Matthew let me take that.
<unk> may hold for specifics on the discussions here, but.
Just let me step back for a second and make sure that we extend.
The reason for not providing guidance.
As you know I would think on the job now for three three.
Three plus quarters coming onto my fourth quarter finish here.
As a CEO of this company.
We came in and we decided to look at everything with a fresh set of eyes with a very specific orientation toward life sciences tools market and being very fact based in fact focused.
We've made some significant progress on laying out the principles by which will run the company.
<unk> made significant progress towards each one of the pillars that we laid out.
And <unk>.
We were fortunate to be able to.
<unk> identified and conclude a transaction that really lays out the proof of that strategy going forward.
I think it will be important for us not having vantage the company under our wings until at least a quarter or so to start providing guidance for something we don't yet own and I think it's important for us to just make sure that we make that after appropriate amount of deliberation and owning the business for a little bit more importantly.
As we plan through integration planning, we are making active trade off decisions between costs and revenues and also synergies in all aspects of the company.
Excluding the operations function, where gross margin is going to be designed between the two companies broad lines.
And there are significant opportunities for operational synergies, but it all required a lot of heavy lifting work. So we need to own the business for a little bit before we start providing a specific guidance deep do however, real firm.
Earlier state mandate, the combination will allow us to become cash flow positive earlier than when we stated in the in the previous discussion so with that maybe let me handover to me to see that it is specifics that he can provide the color.
Yes.
I don't think I'll provide any specifics the only thing I'd add to what they are which I think was pretty comprehensive.
As we combined our commercial teams and the footprint that will have and the cross training that will occur we believe.
Having that coverage across multiple industry segments will enable us to drive revenue with with our enhanced product portfolio as we've talked about with the Beacon Beacon select Beacon quest as well as the <unk> products and so we have high aspirations.
But.
<unk>.
Uncover all the details.
And create the integration strategy around commercial.
We don't really want to lay out any specific guidance.
Yes.
Okay understood I'll look forward to the next update thanks.
Okay.
And we will take our last question from Gaurav cooperation with Aaron Berg. Your line is open.
Yeah.
Hey, guys.
With the introduction of Beacon selected and coming release of Beacon question are you planning on Offloading the tech IPO subscription as an option given the given.
Seemingly muted demand there and as a follow up why do you think customers are more receptive to selected quest.
Seemingly out and protect access.
Yes, good question.
I anticipate changing what has been offered to our customers that are people, who might only have it operational expenses budget for them Tech access is a better fit for them. Some people might have budgets earmarked for capital purchases and of course, that's a very different type of processes for organizations to run for spending their budgets. So.
We will offer both.
The specifics on why it is not attractive for economic market segment anything north of $1 million a day.
A very very long shot unless it is absolutely something that is core to the person does for the work most academic limestone justify that level of capital spend so we have to introduce something that is more sensible for academic market segment and thats, what the <unk> will do with Beacon.
We decided to go after a market segment that is not fully addressed here, yet which is the smaller to midsized biopharma companies as well as <unk>.
And some of the early stage companies that.
Interest in our technology, but do not have the capital upfront budgets for $2 million.
Okay.
<unk> for us to be able to offer them a capital placement opportunity. So that they can actually on the Japan get their personnel training and fill more offered rather than just having a DAC access which is a kind of a partial commitment on their part here. So hopefully that explains to you do you want to be flexible with the introduction of this amazing technology.
In a way that customers see feet not sort of.
Dictate how the customers with access it.
Got it that makes sense and then one quick follow up from me on kind of on a similar angle.
You mentioned right one lightning placement out of the seven overall are you seeing any pickup or maybe just equilibrium and demands for lightning and culture station.
Yes, it's a great question.
And we said, there's a few things about likely launch evaluating sort of all the things that have happened in the Companys commercial initiative for last 40 years and one of the things I think was a missed opportunity that lighting was offered at a significantly lower feature set compared to what the customers can do in fact.
The export of cells is manual, which is one of those things that actually customers mirroring not like because it requires a.
Person to sit next to the machine for a long time to export the cells and as a result, the technology is not offer it is full Claude if you will so beacon quest has been kind of an answer for that we are offering a large part of our capability to academic researchers in that beacon.
Design that we are pursuing right now and do you believe that's actually a better solution for people, who want to use our technology not to say that some people are still noninterest enlightening, depending on the application and the kind of labor resources. They have to deploy against this technology. Some people still might want lightning and we will continue to support them with that.
Our second thing I'll say is our commercial footprint in front of economic market that would have been that strong.
To support Lightning at a white label there are thousands of academic research labs that we couldnt have reached with the limited number of commercial employees that we add so having this combination of commercial footprint between ISO plexus, and Luckily life SP X and will be able to take both of our technologies Beacon.
As well as lightning to the academic customer base.
With a lot more access available to the customers.
Awesome, Thanks, Ed I appreciate it.
Thank you.
Okay.
And ladies and gentlemen, this concludes firstly late fourth quarter and full year 2022 earnings conference call. We thank you for your participation and you may now disconnect.
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