Q4 2022 Singular Genomics Systems Inc Earnings Call

We continue to build out our north American sales team with nine key territories to continue driving demand and growing the funnel of leads and opportunities.

We expanded our marketing presence at 14 industry trade conferences, and talks, including Shg, Hebt App and pmw see increase.

Increasing our brand awareness and communicate the value proposition of the G. Four.

We signed partnerships with 12 library prep and analysis partners, bringing the total as of year end 2018.

This is designed to remove barriers to adoption of the <unk> and facilitate the seamless integration into existing library prep workflows and data analysis pipelines.

In operations, we successfully completed an ISO 9001 audit of our dedicated manufacturing facility and commission state of the art clean rooms, and lab space for scaling production of enzyme nucleotide flow cells and reagents.

We progressed R&D work on our G. Four instrument and consumables roadmap to bring improved flow cell specs and new kits to market.

Lastly, we progressed the PX our second system.

Product development pipeline.

This system is developing the capabilities and methods for high throughput <unk> spatial and single cell analysis.

Building several prototypes systems during the year and more recently signing our first partner for the technology access program.

All of these accomplishments play an important role in establishing a foundation for cross functional success going forward.

I want to thank the entire team at singular for their amazing contributions made in 2022.

Turning to new data and product announcements. It was all on display at the <unk> conference in early February we.

We hosted a successful customer and KOL event with over 60 lab directors and scientific leaders in attendance.

The event provided an opportunity to develop relationships.

So let's feedback on the value proposition of the G four generate new lead and drive opportunities forward.

Presented 14, new datasets 11 with industry, leading genomics partners collect really showcasing high accuracy of the <unk> system across many diverse applications, including single cell sequencing.

Whole genome sequencing and somatic whole exome sequencing.

These datasets reinforced the <unk> ability to fit into a robust and diverse set of workflows, putting the G. Four speed flexibility accuracy and power on display.

We launched our <unk> kits for single cell sequencing with enthusiastic customer response.

<unk> single cell kit will allow users to get up to $800 million leads per flow cell or $3 2 billion REIT per run at the low cost of $200 per sample for $1 per million Reed.

<unk> provides a novel method to achieve novus seek level pricing for single cell sequencing on the bench top system. The flexibility of the <unk> flow cells allows users to scale their run up or down based on sample volume at the same favorable economics, we intend to begin shipments in the second quarter.

In addition, we were pleased to announce that singular joined the Tenex genomics compatible partner program demonstrating that G force compatibility with the Tenex genomics chromium single cell platform.

The flexibility of the <unk> for flow cells, and four independently matches precisely with the most widely used sample configurations on taxes genomics chromium runs, providing an efficient way to optimize run sizes for single cell experiments.

And lastly, we improved the specification of the <unk> and F. Three flow cells for both accuracy and rig counts.

Accuracy was raised to 80% to 90% greater than or equal to Q30, the throughput range of the <unk> II and <unk> III Clos cells was increased up to $250 million and up to $450 million reads, respectively. All.

All datasets and product specifications are posted on our website and we encourage you to visit and see for yourself.

The third topic I'd like to talk about today is how we're thinking about success this year with.

2023, four pillars of success.

First <unk>.

Commercial execution.

This means executing on and measuring the following key items.

<unk> system placements.

Agent pull through and customer satisfaction, we are a good start with initial G. Four placements in the field customers starting to sequence and we're receiving positive feedback and beginning to collect the data to set and deliver on each of these metrics.

Second <unk> Tam quantification this.

Means establishing G for product market fit and specific market segments applications and customer types with the goal of credibly framing the G four Tam and measuring our progress in capturing market share.

Third operational excellence.

This encompasses goals in the manufacturing side, where we have objectives to improve supply chain manufacturing efficiency quality and system performance and reliability.

While challenges were overcome and progress was made on supply chain and manufacturing in 2022. This is a key area of continued focus with scale up this year.

For innovation and product pipeline, we have an exciting pipeline of innovation, including improvements in performance and specs on the <unk> platform, new reagent kits offering higher throughput higher accuracy and longer read length.

For specialty application kits with novel content and workflows for specific applications and of course advancing the PX. The first high throughput Institute sequencing platform. We look forward to updating you through the year as these all progress.

Before I turn it over to Dylan, we would like to provide some color on the 2023 outlook.

We are incredibly encouraged by the magnitude of interest and engagement from a GBT with the sales funnel well into the triple digits in terms of qualified lead.

We are seeing strong interest, especially in academic labs, where longer budgeting and sales cycles. Typically result in instrument purchases in the second half of the year.

Our funnel is strong and growing with real opportunities engagement with customers indicates the <unk> kits will be significant adoption drivers of the G. Four as they become available in the coming months.

We are currently applying learnings from early placements and taking the necessary time to improve on things such as system deployment.

Support and service and instrument reliability to make sure we meet customers' expectations and lay the right foundation for sustainable success.

This means a slow and moderate as deployment early in 2023, ensuring a consistently positive customer experience. During this early launch phase and equally important preparing for a scaling phase later this year.

We will provide additional color and update on 2023, and our Q1 earnings call.

With that I'll turn the call over to Dale to go over the details of our fourth quarter financial results.

Thank you drew I'll start by covering the Q4 2022 financials, then I'll provide directional remarks on key metrics for 2023 and overall cash runway.

Revenue for the fourth quarter of 2022 totaled $765000 made up predominantly the revenue recognized on three instrument placements during the quarter.

Gross margin was approximately flat during the fourth quarter of 2022, driven by consumable and extended warranty credits as well as higher costs associated with the installation training and support of our first system placements.

Operating expenses for the fourth quarter of 2022 totaled $22 5 million compared to $19 7 million for the fourth quarter of 2021.

These totals included noncash stock based compensation expense of $3 $1 million in Q4, 2022, and $2 9 million in Q4 2021, the year over year increase in total operating expenses was driven primarily by scaling head count and infrastructure to support our growth, including the <unk> launch.

Our product pipeline and R&D roadmap.

Net loss for the fourth quarter of 2022 was $21 1 million or 29 per share compared to $19 8 million or 27 per share in the fourth quarter of 2021.

Our weighted average share count for the quarter used to calculate net loss per share was approximately $71 6 million.

Ending cash cash equivalents and short term investments, excluding restricted cash totaled $244 $6 million.

Turning to directional comments on 2023 as drew mentioned, we have been excited by recent customer feedback and we believe our value proposition is resonating more than ever.

Believe it will be essential to focus on and support early placements, we intend to moderate G. Four placements in the first year of launch as appropriate.

As such we expect the <unk> placements in the first half of the year it could be lumpy and trend around the lower end of the range as previously discussed.

We are our highest priorities is to ensure the installation and bring up training and support experiences are positive.

This is foundational to our long term success, because we are still in the early days of establishing credibility as an emerging company in the space.

We expect 2023 investment related to our product priorities to increase across commercial manufacturing operations and R&D.

However, we are mindful of the macro environment and need for focused capital management. Our intent is to manage existing resources to extend cash runway into the second half of 2025.

Thank you and back to drew for closing remarks.

Thank you Balan.

In closing I want to reiterate the themes of today's update first I'm incredibly proud of the singular team in 2022, it was a busy and productive year filled with many milestones for our company.

We brought the <unk> to market placed initial systems in customer labs and generated our first revenues all while navigating challenges in scaling the supply chain and manufacturing.

Second recent product announcements like the Max re kits for single cell sequencing and spec improvements in quality and throughput for the <unk> II and <unk> III flow cells have enriched our portfolio continuing to differentiate the <unk> from the competition cut.

Customer interactions and feedback from prospective partners continue to validate product market fit simply.

Simply stated we built the right system.

And third we're excited about the opportunities in front of us for 2023, a year in which we will largely match success across four pillars first commercial execution in the form of installed base revenue and customer satisfaction.

Second <unk>, Tam and product market fit evidenced by customer profile and growing adoption in our target market segments.

Third operational excellence measured by our ability to improve manufacturing efficiency manage supply chain and deliver high quality products at greater scale and for.

Innovation pipeline, which in 2023 includes bringing additional G. Four kits to market and advancing R&D on the first Institute sequencing platform. The PX now, let's open it up to questions operator.

Thank you at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

One moment, while we pull for questions.

Thank you.

Our first question is coming from John <unk> with.

With UBS. Please pose your question.

Hi, Thanks for taking the question maybe.

Maybe just digging into a little bit of the manufacturing headwinds that you have there do you see these now behind you and recall just on that to clarify it sounds like you're going to be at the lower end of that 2% to four per months.

For the first half of the year is what Youre thinking is for.

<unk> replacements.

Hey, John Thanks for the question.

I guess I'll take it.

Two parts on the manufacturing side, we made tremendous progress we've talked about it in the prepared remarks.

Significant progress, but still work to be done.

Anytime you're developing deploying a complex instrument youre going to learn things in the field. When you have instruments in your first few customers hands.

Running repeatedly that you didn't see internally they break things new ways. So theres, obviously going to be ongoing improvements. There also improvements on how long it takes us to manufacture which means that build an instrument and then bring up which is kind of testing and handoff to either internal customer external there's definitely going to improvement on how quickly we can.

Do that measured in.

Weeks, and we have internal goals to get the current timed out even further we mentioned 25% improvement from where we were at the end of last year.

We are now.

On the instrument side, yes, we will be on the lower side in the first half of the year.

Took a little bit of a pause.

To apply learnings from the first five shipments for the first part of Q1.

And we expect kind of Q1, and Q Q2 to kind of be on the lower side with.

Much more.

Steeper ramp in deployments moving into the second half of the year.

Thanks Bye.

My last question just any additional color on learning maybe across software installation or our feedback from from those initial five customers out there that you can you can share with us yes.

Yes, yes, I mean overall everyone's really happy.

And the sequences are up and running producing data and we have five happy customers that will serve as five reference sites that I think thats an important point. We want every every early placement of replacement for the foreseeable future to be a reference site. The learnings really are across the board shipping how do.

Make sure you ship, an instrument and you don't have to spend extra time once it shows up making sure it's calibrate or wasn't damaged in shipping installation learnings learnings on customer bring up.

And then ongoing support and then Theres also learnings obviously on the instrument side certain areas of robustness and reliability a lot having to do with customer training.

Packaging and kits I mean, it's really across the board overall, we're exactly where we want to be.

And they're working very well and producing high quality data, but theres also learning that you want to apply before you put more units out there and make sure that you have that consistency of customer experience before you really go pedal to the metal on putting units out there. So we're just working through that.

We expected and feel really good about where we are in.

That's kind of the learnings are really across the board.

Thanks, and then last one here maybe for Dale.

I appreciate the color on the cash runway into the second half of 2025.

Any additional puts and takes you can give us on just the cadence this year and how we should think about that Brian .

Yeah, Hey, John Thanks for the question, Yeah, Q4, Opex and burn was a little bit lower there is some seasonality.

In there related to some payroll and labor related items.

In addition to that we're going through our 2023 annual budgeting process looking through the prioritization of activities and investment I think just natural course of that flowed pace of spend a little bit. If you look historically, our quarterly burn in expense run rate has been about $25 million and I think thats a good baseline to think about.

Starting Q1 here in 2023, adjusted a little bit for kind of annual salary merit increases for the employee base, but I think thats, probably a pretty good baseline to start the year.

Got it thanks for the questions and congrats on the revenue milestone.

Thanks.

Thank you. Our next question is coming from Judy a crane with J P. Morgan.

Please pose your question.

Thanks for taking my question this is Mike.

Julia.

Thank you.

Ask about.

The customer mix.

And Smith academic by you hope to see et cetera.

Yeah.

Fine lifestyle whats your expected customer down.

23 basis.

Any color you can share there.

Yes, I think we expect the current funnel to be fairly representative of what we think the installed base will look like right now its majority academic either core labs or investigator labs.

It's probably.

I think around 60% academic and 40% others. So it's not a huge skew in one direction. We think it will even out more over time I think we're learning that the academics and a lot of ways are kind of early adopters some.

Private companies as well, but when you talk about Biopharma crows or other central labs or people that are doing clinical testing those are probably.

Going to be what we call qualified leads in the funnel further out and we think that that will that mix will change over time as we kind of get the system out there an established market.

Alright. Thank you and then just a quick question.

How has the sales cycle change for Q and how is it trending so far in 'twenty three.

Yes, so sales cycles for these types of instruments, there is a little bit longer.

We expect a six to nine months sales cycle. Similarly, we expect it to take a rep. That's hired six to nine months to really get fully up to speed and be able to hit quotas.

I don't know if theres much changed from last year into this year.

On the academic side, we certainly haven't really seen much change, although understanding budgeting cycles, better is giving us more visibility into when those purchases and when this demand will convert into placements and thats really looking more into the second half a lot of the academic budgeting cycles. They will look at different options for the first half of the year put their request in mid year, and then there'll be look.

To take delivery and pay on the second half and most of the Q4 on the private side I think we are seeing people a little more hesitant.

To adopt new technology or spend money in the current macro environment. So I think that will change at some point.

So maybe longer sales cycle with private companies academic unchanged.

Alright, Thank you for taking my question.

Thank you. Our next question is from Matt <unk> with Goldman Sachs. Please pose your question.

Hey, good afternoon, thanks for taking my questions.

Sure maybe the first one for you you mentioned that Tam analysis that you guys have done we'd love to get a little bit more additional color on sort of the output of that analysis, if youre willing to share and just kind of where you feel like the realistic Tam is and where you think.

The sort of differentiation with <unk> four is resonating and what that does to the sort of addressable portion of the Tam.

This year and into the future yes.

Yes, absolutely, we're happy to share kind of our models and our numbers separately I guess at a high level summary, if you think about the current market of Ngls and again there is all different Tam analysis of how how big it's going to be in five or 10 years and where the growth is but start with the 6 billion current market about half of that is academic and if you look at this.

Breakdown, the majority of the academic or going to be doing targeted panels RNA seek and single cell. So when we think about early adopters and where those things converge.

RNA in the academic environment in single cell RNA, our real sweet spots for us, especially with <unk> coming we think that'll be a real driver of adoption since its such a differentiated solution for that really popular academic.

Location, when we look at the clinical side of things the majority of its targeted panels and thats something that were very interested in addressing and demonstrating we think that <unk> kind of specs throughput.

Speed are really well suited for your academic medical center or your hospital lab or even a centralized click.

Clinical lab.

Due to the fact that you can run individual samples very quickly at a really good price point, but as we mentioned earlier, we think those are probably further on the adoption curve. The early adopters likely arent, putting patient critical samples onto a new technology. That's just the reality of how new technologies go. So that we can definitely spend more time with you on those.

Tabs, but the point is sitting here a year from now if we say we were going to win in the academic single cell market, we want to be able to show you proof points of that have real customers understand the use cases, those customers and have metrics in effort to telling you we're going to play in.

Academic medical centers and start doing targeted panel as well where the early proof points on that and where are we getting traction and how do we think about what part of that market. We can we can win so that's what we mean and we'll share more on it.

Got it and maybe just following up on that comment about <unk> I'm just kind of lead into my second question, which is just based on the feedback you've gotten and if we focus on sort of academic where you've had some success.

Products like <unk> and other products you might have in the pipeline.

Shifting your priorities in terms of where you want to spend some of the R&D to develop products to maybe focus specifically on those applications you mentioned, but on the academic channel and where they are kind of interest lie I mean has it shifted any of your priorities in terms of spend and focus for product development, yes. It has.

We will.

We've talked about <unk> being a technology that can serve other types of short read applications. So.

Finally, we have kind of re prioritized our roadmap on kit development.

Single cell RNA will be the first match food application and beyond that we're looking at a traditional RNA seek application to develop.

And then we have a list beyond that that we haven't really decided on but there is another couple of applications that are used in the academic environment that lend themselves to short reads.

And then I think to the point you are getting at yes.

The reception, specifically <unk> and the nature of how our funnel has grown from say Q4 to now we've seen our funnel in terms of a qualified lead more than double in the last three to four months and a lot of that those additions to the funnel are academics, who look at the Max re kits.

I'd say that solves a unique solution for me and that's really a motivated our driver to adopt.

Got it and just maybe one last one just sort of on the on the ramp this year. Thanks for the color on sort of the cadence in beginning of the year as you kind of prepare for ramping in the back half of this year, what sort of like the sort of initial installed base that you kind of look to have to get sort of the comfort that things are kind of in line performing.

Well, you've taken care of a lot of the clear issues and on the manufacturing side Youre ready to scale up like is there a sort of a target number that youre looking for that you want to get too or is it more just about just a collection of feedback youre getting.

It's a good question I think if.

If you go back to that.

The comments and the color we provided I think it was almost six months ago now on being able to do two to four units per month moving into this year.

We don't think it's going to be necessarily two to four units per month every month, especially in the first half we think it's going to be lumpy like like I said, we it took some time to implement changes in the first half of this quarter.

But if you think about that two to four as an average over the whole year.

We expect to be somewhere in that range just back end loaded.

Again, I think we feel really good about where we are but it's definitely going to be one of those situations, where we monitor and learn as we put the next wave of instruments out.

And.

Gauge appropriately.

So I think hopefully that gives you an idea on the low end.

Before you are in the low <unk> and the high end <unk>.

To the low <unk> mid <unk>, so I think somewhere in the middle of theirs.

Ideally, where we would be but it's hard to articulate where that will be just given the fact that we're going to make sure we pace our deployments with making sure every customer has success in the instruments are performing as we like.

Got it thanks, very much and congrats on the revenue milestone in Q4.

Okay.

Thank you once again, if there are any remaining questions or comments. Please press star one on your phone at this time.

Thank you. Our next question is coming from Dan Brennan with Cowen. Please pose your question.

Great. Thanks, guys.

The first one drew Dalian so just.

I know you've given a lot of color so far but.

What is it that it's specifically pointing you to the lower end it doesn't sound like it's demand you said you want to delight. Your customers is it something about what's going on with the first products in the field and the training and it's taking longer or are there issues just kind of what is pointing to the lower end.

Yes, I think it's exactly what we said I mean, we put the first five out really at the very end of Q4. So there was a tremendous amount of learnings as we got back from the holidays to process and then there are improvements that we wanted to make across the board. So it was kind of slowing down for the first part of the quarter and implementing some of those improvements and as we think about kind of the ongoing nature of those continue.

The learnings and putting additional systems out, it's just going to be a slower moderated deployment for the for the first half of the year, and then really putting putting the gas down in the second half.

There is nothing more to it it's really just taking learnings applying them in.

And improving the entirety of the experience of building instrument deploying it and getting customers up and running.

And is it is it more on the building or is it more like when you place a box in our customers' hands.

Is it like they're taking longer to ramp it and we need to be instructed on how to use it or just like any any specific examples about life.

What it is these learnings are focus on.

I don't think we want to get into specifics it really broadly kind of everything.

There is different parts to bringing a complex instrument up internally that's still improvements we want there is improvements on the installation and customer bring up and then there's also improvements on the system itself. We have three in early access right now thats more broadly becoming available in the quarter.

System upgrades and software upgrades and process. So theres upgrades across the board that we're applying in rolling in and thinking about how we want to time different improvements or upgrades in processes or systems with the next wave of systems.

Got it Okay now thats helpful.

ASP should we be using something in the $2 50 range or below versus losing something higher like what's the right way to think about the ASP going forward for the <unk>.

Yeah, Hey, Dan This is Dylan.

Asps.

Were actually in line with kind of where we're expecting them to be I think from a revenue standpoint.

A couple of things happening.

For the first three systems here that got accepted we gave some consumable credits and extended warranty and from a revenue recognition perspective, the value of those kind of credits gets carved off deferred and will be recognized in subsequent periods. So asp's were about in line with where we thought they would be there was some discounting.

Kind of for I guess, the early part of the launch here.

We'd expect that to.

Change and become a little bit more favorable for US here is just the system gets more established in the market.

But really it's kind of those two things impacting kind of the revenue side of things from a Cogs standpoint, if you look at margin there was a little bit.

Higher cost associated with kind of that white glove shipment installation and additional training service. So.

Kind of all combined.

Those are kind of things impacting the ASP and margin.

Great and then.

The funnel well into the triple digits.

Any color on again like what constitutes a funnel and it's a big number.

Again, we're not going to give you the specifics on all of the details, but just how do we think about that funnel.

Yes, I mean, those are qualified leads and when we think about a qualified lead we're thinking about criteria that means it's a real opportunity. There is four things that we think about does the customer have a need do they have the budget are we speaking with the right person who has authority to make a purchase and then what does the timing look like so I mean, you can throw a funnel of numbers around it.

But unless they're qualified and you understand the likelihood or how real those opportunities are.

We haven't been willing to talk to them, yet so that well into the hundreds is meeting all four of those criteria, meaning we think it's a real opportunity and we have a chance to converted this year.

And then sorry dealing or did you guys talked about maybe slower demand trends at private labs.

Customers I think you said so.

You've heard it throughout 2020 to agile and talked about it a lot.

Earlier this week, but this is just so I'm clear like this is clinical labs that are kind of just.

Dealing with maybe tighter capital constraints. So they are being more cautious or just maybe a little clarity there.

This is more private companies. So I mean, we're not really selling into clinical labs, yet we're starting to have conversations with them, but like we talked about on the prior question.

Having our sequencer and a clinical workflow doing patient samples thats, probably something that we.

We'll be ready for at the end of this year into next year with the new technology. The early adopters are are really more on the academic side or private companies that want to try a new technology in general private companies similar to ourselves people are belt tightening that thinking about extension of runway or getting to profitability and it's just a little bit different.

The buying environment say, it was 12 or 18 months ago.

So thats all.

And on the PX you said you saw in the first Tech assessment I'm, just wondering like what does.

Does that mean the boxes at a customer where that customer is sending you sample and then any more color just about timing for the PX and just kind of remind us I mean, the PX domain.

Rental is like I mean, there's probably a lot, but much much better throughput than what's on the market. Today is maybe you can give us a little more color on the PX.

Yeah. So to answer the first part of the question its a technology access program.

And the agreement that was signed essentially outlines a scope of work and we will physically receive samples.

And conduct experiments with those samples on the PX and provide them back to that academic partner, we plan to do a few of those easier this year.

So that's not an external placement of assistant that samples coming in I would say just the very high level. The PX is taking a lot of the technology, we already developed in the G for the optical system and all of the chemistry and supplying it to sequencing inside of cells and in tissue. So we're actually using sequencing into two as the readout.

And there's two really powerful things about that one you're using sequencing as the readout. So you have the ability to multiplex or.

Determined a lot of information due to the sequencing nature of the readout and the second is the throughput we're working in 96 and 384 well plates. So the sample plaques thing is just very high 96 samples of 284 samples at a time.

Got it and then maybe final one would just be pricing.

Just remind us where are you today in the market like on a price per gig since I guess I mean I know.

It's coming down new elements, obviously stepping on the gas I don't know what Illumina is doing just kind of what with pricing that and is that a topic of discussion with customers are now.

Pricing is always part of the equation, but I think the important thing is to sell on the on the actual performance in the attributes of the system and the differentiation that <unk> has is going to be throughput on a desktop instrument, it's going to be speed and it's going to be flexibility given the <unk> flow cells and each flow cell has different configurations.

Can scale up reps that are scaled down in each photo it's four lanes, which is really nice for customers that don't want to mix a barcode samples. So those differentiating factors are really the basis of what's getting customers interested on the pricing side. If you look at our next week, which is still the predominant choice out there for a bench top sequencer and really what we're <unk>.

<unk> or selling against.

99% of the time it's.

$335000 box and it ranges from about $15, a gig up to maybe 40 to 50, depending on specifics and where pricing.

Quite favorably compared to that the box is about the same at $3 50 list, but again.

Most equivalent to three <unk> in a single box given the power output and the poor flow cells and on a cost per gig standpoint, we're ranging from about eight bucks on the low end. If you are doing through the cycles into the low 20, so youre really going to see massive cost savings versus the next week and youre going to see faster run times more flexibility and then with Max reads, that's where it really.

It becomes competitive.

For single cell applications, and the average customer I think right now for a single cell applications is probably spending 50 to $800 on sequencing cost to read out a single Tenex experiment and with Max rates, we're going to get down to 200 bucks or so so that's going to be a huge driver for us. So again I think when when we think about selling it.

On the actual competitive advantages of our system and then when people turn to price, they're usually very very pleasantly surprised based on where prices versus the next week.

Great. Okay. Thanks, Scott.

Thank you. Our next question is from Michael <unk> with Bank of America. Please pose your question.

Good afternoon. This is Peter on for Mike. Thanks for taking the question.

Definitely understand again here, it's early days, but assuming supply chain doesn't FLIR back up do you have like a rough idea of maybe the production.

Scaling processing when that would be reaching more of an equilibrium with demand.

It's hard to say I think again, if we look at the year in totality and we put those error bars cut out average systems per month, we're definitely expecting to be able to achieve that this year I think I think it's just important that we make sure we get the system.

In the customers' hands.

And meeting expectations and I don't think were looking to rush systems out to for near term numbers.

If we're not 100% sure that it's got to meet expectations.

One of those areas is the <unk> flow cell, we want to get the <unk> flow cell broadly available and a lot of customers are interested in having that and that's something that's coming available beyond early access very shortly so I don't think we have much more color to provide other than we're learning applying those improvements.

Right, where we want to be looking at the final on looking at our ability to kind of scale up through the first half of this year and really hitting stride in the second half.

Alright. Thank you for that and then just back to the PX quickly any I guess any incremental color updates you can give on key milestones or kind of like the timeline, we should be looking out for updates regarding that thank you.

Yes, so like we.

We answered the question with Dan what we've signed our first technology access partner, we plan to do one or two more of those this year and to kind of had have different types of experiments demonstrated with each.

We still don't have a product release date, it will take additional resources to develop that product and we're still really focused on the <unk>. We have additional kits coming out in the <unk> for later this year, we have upgrades.

Throughout the year planned.

So I think at this point you don't have much more color. We are building a large fleet of beta as we've talked about that we should have close to a dozen betas by the end of this year up and running so we really have throughput too.

<unk> external samples potentially place a beta next year or two if we if we want to.

So I think we'll probably have more color on that towards the second half of this year as we kind of get the G. Four scaled and successful in market and start to shift a little bit to product development and timing for the PX.

Okay. That's helpful. Thank you.

Thank you.

There are no further questions in queue. This does conclude today's conference call.

You may disconnect your lines at this time and have a wonderful day, we thank you for your participation.

Okay.