Q2 2023 Bionano Genomics Inc Earnings Call
Okay.
Good day and welcome to the bio Nano second quarter 2023 earnings Conference call. Today's conference is being recorded at this time I would like to turn the conference over to David Holmes from Investor Relations. Please go ahead.
Thank you Michelle and good afternoon, everyone welcome to the bio nano second quarter 2023 financial results conference call, leading the call today is Dr. Erik <unk> CEO of bio nano.
And by Chris Stewart CFO of bio nano.
After market close today <unk> issued a press release announcing its financial results for the second quarter of 2023.
Copy of the release can be found on the Investor Relations page.
At the company's website.
I would like to remind everyone that certain statements made during the conference call may be forward looking including statements about bio nano annual and quarterly revenue outlook strategic a commercialization plan.
David benefits or improvements to bio nano products.
Including the Sapphire system, our next clinical software yeah.
Sapphire compute and the timing for release of such products and impact of such products.
Milestones for 2023.
Vantages of the Sapphire system over current technologies.
As anticipated benefits and the timing of those benefits permit the announced reduction in force and other cost savings initiatives.
Yes.
The benefits of recent.
The recent reverse stock split and associated increase in authorized shares available for issuance.
We've made publicly announced 2023 elevate.
Hated milestones.
Advances in obtaining reimbursement although gms.
Nanos expected expectations regarding study results and publications and anticipated benefits of these studies and publications and driving adoption of <unk>.
Such forward looking statements are based upon current vacation and there can be no assurances that the results contemplated in these statements will be realized actual results may differ materially from such statements due to a number of factors and risks.
Some of which are identified in <unk> press release <unk> reported.
<unk> filed with the SEC.
These forward looking statements on information available to bio nano today and.
Any assumes no obligation to update statements as circumstances change.
In addition supplement filed financial results reported in accordance with U S. Generally accepted accounting principles or GAAP. The company is reporting non-GAAP operating expense and non-GAAP gross margin.
These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures should be read in conjunction with the company's consolidated financial statements prepared in accordance with GAAP have no standardized meaning prescribed by GAAP and are not prepared under the comprehensive.
Of accounting rules or principles our.
A description of both non-GAAP operating expense and non-GAAP gross margin and reconciliations of non-GAAP operating expense to GAAP operating expense.
non-GAAP gross margin to GAAP gross margin are included at the end of the company's press release issued earlier today, which has been posted on the Investor Relations page of company's web site.
An audio recording and webcast.
Replay for today's conference call will be available online on the company's Investor Relations page and with that I will turn the call over to Eric.
Okay.
Great. Thank you David and good afternoon, everyone. We are very pleased to pro.
Provide a full report on our Q2 results.
Well as the business overall.
We've had a great second quarter with overall global support for optical genome mapping or <unk> on the rise.
Including important steps forward like recent approvals from the Israel Ministry of health for the use of optical genome mapping and blood cancer research.
And <unk> reimbursement for heme malignancies.
In the Ontario Province in Canada.
We've had several transformational product releases this quarter and more are expected in the second half of the year and we believe that these products will act as an accelerant for our growth.
And start to bring new customers in from the sidelines, who have been waiting on these products, which will catalyze our entry into <unk>.
New segments of the market like the high volume segments.
I think as everybody is aware, we also affected a one for 10 reverse split of the company's common stock.
This step as a part of a process of the bell elevating buying <unk> stock price, which we believe will make it more attractive to institutional investors and will enable us to restore compliance with nasdaq's listing requirements.
Wanted to thank the stockholders for their support of this initiative. The staff was an important one that we believe will provide us with flexibility as we look to extend our cash runway through the management of our expenses consistent with the initiatives, we announced in may of this year and providing us with more choices.
As we consider future financing options.
We will now move forward and let the performance of the business speak for itself.
For the business update revenue for the quarter was $8 $7 million, which exceeded our guidance and represented a 30% year over year increase compared to the same period of 2022.
The Sapphire installed base grew by 22 systems to 281 during the second quarter of 2023, which represents 43% growth over the same period last year.
Nothing that stood out in the quarter was the consumables volume.
<unk> 7060, <unk> flow cell sold in the second quarter of 2023 and that represents a 100 and 108% year over year increase card to the second quarter of 2022.
We announced two important products that we have.
<unk> been investing in and developing for some time now we believe.
They will play a significant role in accelerating the adoption of <unk> on a global basis and in particularly for labs that run medium to high volumes of samples. The first is stratus.
<unk> is a powerful new mapping system designed to provide.
Four times, the throughput of SaaS fire when its first release and we expect that to increase.
Okay.
And staff Stratus systems that will be in the field as part of an early access program over the course of the second half of 2023 and will ramp to full scale commercial avail.
Availability in the first quarter of 2024.
The second product is via <unk>.
Which stands for Varian intelligence applications.
<unk> replaces nx clinical by including optical mapping data alongside next generation sequencing data and microarray data and now includes a powerful workflow for heme malignancies.
The address this serious bottlenecks in.
In the application of optical genome mapping to <unk>.
Various.
Applications in hematologic malignancies, with a simple and integrated workflow that drives visualization and interpretation and reporting.
Multiple data types, including optical genome mapping microarray and next generation sequencing.
We also released new kits for the Ionic purification systems, which feature new chemistry for nucleic acid extraction.
P/e.
And tumor tissue now these kits are designed to provide samples that will be sequence and we are still working on developing the optical genome mapping compatible chips for ionic and we expect to have those in the field later this year.
This quarter was a tremendous quarter also for publications on <unk> applications in human clinical research. There was 30 tier publications validating the utility of optical genome mapping for applications in clinical Cytogenetics research. We also submitted.
Second.
Constitutional post needle study manuscript that is.
Developed through our clinical trials for peer review and we expect that to be published soon overall publications featuring optical genome mapping are up 57% year over year.
Finally, we announced the 2023 winter bio nano innovator research program, which we established if youre not fuel novel research using optical genome mapping the three winners from Stanford University Hospital for sick children sick children in Toronto, and Duke University.
We'll receive a sapphire system and optical mapping reagents to continue their projects, which we believe will open new areas of utility for optical genome mapping and be a big part of driving future adoption and growth.
Before discussing key milestones for the remainder of the year I would like to turn the call over to Chris Stewart, our CFO for an overview of the.
Second quarter financials, Chris.
Thanks, Eric diving, a little deeper into the numbers revenue in the second quarter of 2023 was $8 $7 million, reflecting an increase of $2 million or 30% over the second quarter of 2022 and exceeding our prior guidance of seven eight to $8 3 million for the quarter.
<unk> due mainly to increased demand for AGM instruments and consumables.
GAAP gross margin for the second quarter came in at 27% compared to 22% in Q2 of 2022 and.
And non-GAAP gross margin was 29% compared again to 22% in the second quarter of 2022.
Second quarter 2023, non-GAAP gross margin excludes $200000 in stock based compensation.
Second quarter 2023, GAAP operating expense was $41 5 million compared to $33 6 million in the second quarter of 2022.
non-GAAP operating expense was $34 6 million compared to $26 3 million in the second quarter of 2022.
The increase was mainly driven by increases to head count R&D expense related to our upcoming product launches and marketing expense.
While we have implemented cost savings initiatives, including a reduction in head count that we expect to save approximately $20 million as we discussed on our Q1 call. We expect to start to see the effect of those initiatives and our operating expenses in the second half of this year and going forward into the first half of 2024.
Second quarter, 2023, non-GAAP operating expense excludes $3 $7 million in <unk>.
Stock based compensation $1 8 million in intangible amortization of intangibles and $1 $4 million increase in the estimated fair value of contingent consideration primarily related to our acquisition of <unk>.
Our cash cash equivalents and available for sale Securities as of June 32023 was $77 1 million, we have been and will continue to be proactive in identifying the best best path to raising the capital we need in Q2, we raised net proceeds of approximately <unk> <unk>.
$17 8 million on our ATM facility, selling 25 5 million shares at an average price of <unk> 72 per share, which on a split adjusted basis is $2 5 million shares at an average price of $7 15 per share.
This capital is useful as it offsets a portion of our cash burn and extends our runway.
We are maintaining our full year 2023 revenue guidance in the range of 35% to $38 million and we expect Q3 revenue to be in the range of $8 eight to $9 2 million.
Now I'll turn it back to Eric to wrap up.
Eric.
Thank you Chris.
I wanted to look ahead strategic milestones that we've outlined for the second half of 2023.
We remain on track to meet our goal of installing 325 Sapphire systems by the end of 2023.
And we are pleased to share that <unk> laboratories recently received its cap accreditation, which validates the strict quality control standards for our lab and opens the door for collaboration with.
Companies like pharmaceutical companies that require this level of quality system. We also completed enrollment of our pre <unk> study, which is on track and progressing successfully we have a few major product advanced plan that we believe are keys to continuing and potentially.
Accelerating revenue growth and adoption the first product, which will initially be available to select customers in the field with full release in 2024.
Yes.
The ion X system, which will be compatible with.
Isolation of ultra high molecular weight DNA for ogn offering an automated protocol using ISO jackup for research.
Okay.
And that will clear a significant bottleneck in the current workflow.
The second is the high throughput Sapphire compute to go with the.
Stratus system, which is high throughput itself, it's been developed in collaboration with Nvidia.
And finally, we will release a version of via software that will include an analytical workflow for constitutional genetic disorders.
Continuing in 2023, we will focus on advancing our clinical studies in support of changing medical practice and clearing the path to reimbursement of <unk> through clinical research and seeking FDA clearance to market optical genome mapping.
With clinical use claims.
Overall, bringing our focus on cost controls together with commercial execution and data generation.
Further evidence development and growing publications through our elevate strategy. We believe we can succeed in delivering innovative genome analysis solutions to our customers, while continuing sustainable long term value for stockholders.
With that Michelle we are ready to take questions.
Thank you if you have a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment, while we compile our Q&A roster.
Okay.
Okay.
Our first question is going to come from the line of Jason Mccarthy with Maxim Group. Your line is open. Please go ahead.
Hi, guys. Thanks for taking the questions Eric when it get right to it from a financial aspect can you talk a little bit about.
The cost saving measures are kind of business streamlining that youre expecting the dimension that it should be kicking in fact relatively soon and combined with the cash balance and any use of the ATM.
In the current quarter, and where that cash runway gets here.
Yes, yes, thanks, Jason let me talk a little bit about the.
The initiatives overall, and I'll ask Chris Stewart to comment on the cash and cash runway, but.
I think that the company is certainly aware.
Some of the shifts in capital markets environment towards.
We're focused on.
Cash burn cash runway and certainly emphasizing the need for companies to be more cash conservative and as a result, we implemented a series of cost reductions and cost savings programs in may and we expect those to play out over.
The future of five quarters, including including.
Q3, starting with starting with Q3.
And.
That will save us about $20 million, but.
We see that as basically a beginning we have to operate much more carefully and strive to extend the cash runway as much as possible and remain opportunistic about sources of financing, including equity financing, but also non dilutive financing.
<unk> as well and so we are actively evaluating those and pursuing them.
Chris talked about where the.
$77 million on the balance sheet as of the end of Q2 and any additional financing activity. So far in Q3, where that takes us Chris.
Sure, Yes, as Eric said, we ended Q2 with $77 million in cash.
During Q3, we can.
To leverage the ATM, which is.
Great asset for us are trading volume allows us to participate and raise money without any discount through the ATM in Q in Q3. So far we've raised just shy of $13 million about $12 7 million and that gives us runway well into Q2 of 2024. So we're.
Leveraging the ATM.
We intend to no we need to raise additional capital, but the ATM is giving us some flexibility in terms of choosing our window and the timing of that of that raise.
Got it.
And Eric.
Maybe if you could talk a little bit about.
How the company remains committed and on track with timelines.
Development and commercial strategy that was outlined at your Investor day.
Over the winter.
I think it was this year earlier this year.
In February sure.
I think that so we have been.
These product releases, which were announced this quarter via in Stratus are major milestones for the company because we're introducing new capabilities for optical genome mapping in the market.
Open the capacity of optical genome mapping for high volume analysis.
That's really the key I think that the consumable is the highest margin component.
The AGM workflow and so being able to enable labs to run higher volumes of it is financially beneficial both on the top line and certainly supportive of the cash runway and so these product launches we announced were very important.
Looking ahead, when we look at the.
Capabilities for isolating ultra high molecular weight using ISO tatro Pheresis, which is the proprietary technology, we acquired through <unk> and that team is developing so or will run on the ion X system. That's another key.
Component of opening up the workflow for ODM to higher volumes and greater levels of utilization and so we expect to have something in the field running in customer sites.
Towards the end of this year and can be commercializing. It early next year and again. The reason that's important is that what we see is that labs are developing assays for optical genome mapping in their labs, and they're building full menus and so the <unk>.
Capacity that they need is increasing and we're happy to be able to support it with the tools.
And technology and so we remain on track for these milestones.
And what we see is that the growth that we're experiencing has the potential to even accelerate as these new capabilities are online. Similarly, the publications the clinical trials are progressing.
And this wave of publications that are going to come out.
What's really going to make these other barriers to adoption such as reimbursement really come down.
Great. Thank you.
Thank you Jason.
Thank you.
Okay.
Sure.
One moment for our next question. Our next question is going to come from the line of Mark Massaro with <unk>. Your line is open. Please go ahead.
Hey, guys. Thank you very much further questions.
<unk> been a strong quarter.
I would love to ask about how the stratus is going now.
I believe you guys soft launched it.
I'm curious if you have initiated the full rollout yet.
Can you share any initial feedback.
And perhaps how many.
Stratus systems have gone out.
And.
I would also be curious to know if you expect any near term change in flow cells as a result of it.
Yes, yes.
Thanks, Mark and what I would say is that the response to stratus is very positive and.
In many respects is validating our expectation that the market was seeking something which was capable of a higher throughput and then.
I think we can say that it also the response is exceeding our expectations.
It's very enthusiastic.
What we are doing in this initial period, which is between.
Roughly now through the end of the year.
Getting about 10 system into the market.
And the reason that it's around 10 is that theres a bit of a supply constraint. So we will be ramping manufacturing up during this second half of the year.
Yes.
What I can tell you is that.
Immediately upon announcement.
Almost all of the 10 were spoken for and so we don't see any problem in having those come online and we expect to have a waiting list as the year progresses.
And so we're super enthusiastic about it and.
The other thing I want to point out is that the demand is.
As global so we are seeing European sites.
North American sites in the United States, and Canada, as well as China.
Reaching for Stratus.
With regard to the second part of your question, whether we expect that to.
Have kind of a meaningful impact on the flow cells I think that the patterns that we're seeing so far.
<unk> continued to.
To repeat so.
I wouldn't expect that curve to accelerate upwards yet.
Only because it's a few systems getting into the field.
Yes.
Okay.
<unk> brings a system in and takes it through an evaluation and validation process, which which is relatively limited in terms of its volume but.
We do in the next few quarters expect flow cells.
Hold to increase as a result of labs, having a higher capacity and that will play out over the remaining quarters in the future.
That's great My second question is.
The flow cell number really exceeded our expectations and obviously triple digit growth year over year, but the 35% sequential it's quite surprising.
Maybe do you have visibility as to what these flow cells are being used on like which projects and are there any particular disease state areas that you could call out.
Yes, so so.
First of all I wanted to sort of acknowledge and validate that that was a very strong quarter and.
We've got to be mindful that debt.
There can be.
Peaks.
Maybe lower peaks high peaks and lower peaks as this growth curve unfolds.
But an outstanding quarter based on optical genome mapping demand on.
On a global basis and.
We expect it to generally continue.
This rate or similar.
With regard to visibility into utilization, we don't have perfect visibility.
Somewhere around 25% to 30% of our business is in pharma and we know that those applications are generally cell and gene therapy, where they are using optical genome mapping as an alternative to carrier typing for.
For for analysis.
Target effects looking for off target effects in gene editing and also for assessing genomic <unk> yen.
Cell therapy manufacturing batches of cells therapeutic cells, but we don't know in detail what theyre doing.
But when we look across the cytogenetics labs that are adopting.
I would say that utilization is probably.
Two to one in favor of blood cancers, So leukemias lymphomas.
ALLL.
Paul AML.
And the list of.
Critical.
The hematologic malignancies, where the traditional methods that are use include carrier typing fluorescence in situ hybridization some arrays to look at large structural rearrangements and what all of these labs tell us that.
They use next generation sequencing to look at sequence variant side no.
No sequencing method comes close to optical genome mapping for looking at these large events and when they put it to work in their labs they find that.
Somewhere in the neighborhood of <unk>.
20% or so.
Research subjects that would be evaluated for example by looking at their risks.
Prognostic risk score that it's somewhere around 25%, 20% of those research subjects have their prognostic risk reclassified went optical geomapping is used and so that's why we see so much utilization in hematologic malignancies.
Excellent last question for me.
I know earlier this year you withdrew your category one CPT code application.
In order to kind of pursue an LCD from Palmetto <unk> I'd just be curious if you've had a chance since our last call.
If you've had any interactions with Palmetto, if you have any sense for timing and my thinking is maybe year end 2004 at the earliest but I would just be curious if you have any updates there.
Sure I think that process is definitely progressing and.
It's really a nationwide program working with multiple of the Max but just because of the significant role that <unk> and Palmetto play they are kind of the chip and the spirit. So we're interacting with them frequently and we will have some more formal discussions.
With them later in the year and I would say that we're enthusiastic about the prospects for getting these determinations in place, but it's probably a little bit early to peg the timing back.
Your expectation is in line with what is kind of just the.
The timeline for these types of projects.
I also want to say that there is quite a bit of progress happening.
Around labs getting reimbursement codes.
We are aware of other labs that are now talking about going after the category one CPT code.
It's.
<unk> believed to be a simpler process for a lab to seek the category one code.
A manufacturer because the.
Labs really know the volumes utilization.
And.
So that process continues and we remain bullish about there being a category one CPT code covering optical genome mapping and.
We're excited to see all the progress that individual labs are.
Getting and we know several labs that have TLA codes, and there being routinely reimburse or optical genome mapping assays.
Thank you one moment for our next question.
Okay.
Our next question comes from the line of sung <unk> Nam with Scotiabank. Your line is open. Please go ahead.
Hi, Thanks for taking the question just one quick housekeeping. If you will question for you guys could you remind us again kind of your exposure to the Biopharma end market and also in China. Obviously, those two are kind of have been significant.
Significant headwinds for your larger peers. This quarter. So just kind of curious what you guys. Thank you.
Yes, I think it's a good question.
Okay.
We have certainly seen certain projects and cell therapy cell and gene.
Therapy.
Being impacted by.
Programs that are slowing down and so it's something that we're mindful of but.
We reiterate our guidance.
For the full year.
Our exposure to these projects I don't want to say, it's limited because we have good adoption by pharma now and biotech.
But what we see is that these are really critical high value projects that tend to get.
The investment needed to advance them.
And.
Optical genome mapping is really being used as a better alternative to work that they would be doing anyhow. So I think that we have some insulation there with regard to China.
Again.
China has made important contributions to the progress that we've made so far this year and was also.
Important last year and.
The applications of optical genome mapping that we're seeing in China.
Are related to.
Yes.
Uses for the same sorts of applications in the United States, namely hematologic malignancies, leukemias and lymphomas.
And genetic diseases within genetic diseases.
<unk> and China is very strongly.
And maternal fetal medicine and fertility applications.
<unk>.
Those markets are are very strong I think where some of the headwinds are coming in China are more related to.
Basic research.
We're more in the applied translational research side of it and certainly commercial.
Services that are being provided and so.
That's been strong for us and the degree to which China is factored into the guidance that we put out. This year, we are reiterating that guidance of 35% to $38 million for the full year.
Okay.
Okay.
Yes.
Thank you.
One moment for our next question.
Our next question comes from the line of Ryan Swab Bristow place with Oppenheimer. Your line is open. Please go ahead.
Hi, This is Dan on for Frank Congrats on the progress this quarter and thanks for taking our questions.
Firstly could you talk about the criteria you're using in choosing these early sites, where the 10 Stratus systems would be deployed.
Wondering what the criteria are there any color.
Yes sure.
Our focus is really on.
Selecting sites, which will benefit from the higher.
Throughput that the Stratus systems offer.
Dan.
I think that that's kind of the primary focus and then we certainly want to see them working in areas like hematologic malignancies, and genetic diseases as oppose to basic research applications and so that's where we're seeing the interest.
And the demand and.
That's who the product has been designed for.
Great. Thanks for that and a quick one from me.
Regard to the strength of the peer reviewed publications so far across indications.
Feel like Youre getting closer to reaching that critical mass of data to start conversations with guideline bodies to make ODM first here.
Yes, we are.
Where is it going to start to see.
What I would call consensus statements coming out into the field where.
Groups thought leaders have come together.
Evaluated existing published research discussed did within groups.
International group's international consortium.
And theyre going to start writing these consensus statements, where it's really make.
Preliminary recommendations and then.
Guidelines.
Agencies will.
See those and.
Begin their own evaluation and development of their own consensus statements and.
What I know is that these.
After its are underway and have been making great progress.
We still have some time before we see those consensus statements out in print, but theyre coming I would say that the work is done so your point about their peer reviewed publications to date.
Very very good progress which has gotten.
A lot of data out.
And.
It is enabling these statements to be put together and so I think I think we're making great progress and I am very happy with everything that has unfolded and we're starting to really turn the page towards.
No.
In addition to chatter data generation and publication Theres a synthesis of these consensus statements, which is the next key step the other thing is that the.
We can.
Consortia that have come together to evaluate these data include members of key guideline setting agencies right. So.
There is there is already involvement from these key agencies and so the progress is outstanding and it will continue having said that we still have enrolment goals in our <unk>.
Hematologic malignancy trial, and we want to meet those goals this year and continue that progress and continue publishing those data.
Yes.
Alright, thanks for the color there and a final one from me are you still expecting the to have the dossier submitted florilegium courage Medicare in the second half.
Yes, that's part of what.
Mark Massaro was asking about our.
Applications.
Work around local coverage determinations and.
And we're progressing and on.
On track for that.
Great. Thanks for taking my questions and congrats again.
Thank you. Thank you.
Thank you I will now as a reminder, if you have a question at this time. Please press star one on your telephone.
Our next question comes from the line of Michael <unk> with Maxim Group. Your line is open. Please go ahead.
Eric Thank you for taking my questions and congratulations on the progress this quarter.
Thanks, Michael.
So I guess I guess to start off I'd, just like to follow up on <unk>.
<unk> question and see if you could talk a little bit about the nature of Stratus customers are you expecting stratus to appeal to customers, who already use ODM.
Sapphires or would you anticipate that there is appeals to account.
Yes.
No.
Have avoided it because SaaS fire doesn't meet their needs in terms of throughput.
So I do expect there to be kind of a yes, and a yes, but I really do want to emphasize the higher volume users too.
In some cases already do have a sapphire, but it's for kind of evaluation says as they really intend to bring the higher volume system on site Sapphire will continue to be available in the field and I think represent a key.
Kind of like entry level.
<unk> platform that sites can use for low to medium volumes and get outstanding incredible results and really transform their workflows and stratus just increases the capabilities.
By several fold.
And so what we see already is that labs.
That are coming onboard and raising their hand.
Labs that are running.
Literally thousands of samples.
Per year end.
That's the kind of that's the kind of business that I think we want to really see driving adoption and utilization.
<unk>.
<unk>.
It simply wouldn't be really practical to have that many sapphire systems installed in the lab, so strategist bridging that gap and it's it's bringing in folks who have been following all of the progress the advancement around the data that's in the field and the proof.
And saying well we want to have these value propositions playing out for our community.
The only way to do that is to be able to offer something that's higher volume and so thats really our principal target and Thats of course, who we see.
Bringing the system onboard.
Alright, Thank you for that and I would like to follow up just on.
What steps do you really need to take in order to bring status to that 13 fold jadid data generation rate that youre targeting.
Well.
Okay.
To get there.
It's a system and it's modular right so.
<unk> will be able to adopt the stratus, which is about a four fold increase in throughput over what the sapphire workflow deliver.
<unk> delivers and there are other ways.
It's sort of a tradeoff between what is the bottleneck is the DNA isolation, while we're going to automate that what <unk>, an ionic right. So.
Which sort of platform is the bottleneck.
In the system, but the degree to which somebody adopt stratus theyre going to get about a fourfold increase in at least their data generation throughput and our strategy to really increase their capabilities is to leverage.
Mechanical systems that allow you to link multiple instruments together.
And have them operate modular Lee so that the collective number of systems increases throughput and what's exciting about that is that the development that we need to do is really.
Working on the robotic system not on the instrument so the instrument.
Is developed and I'm sure. We will continue to upgrade components to drive the manufacturing cost down over time, we've done that with Sapphire.
To enhance throughput by bringing in new components over time, but.
But we don't have a lot of real.
Invention required to achieve these higher levels of throughput its really.
Mechanical process of integrating multiple systems together using mechanical robotic systems, and so we see that as being relatively low risk.
And <unk>.
Critical for continuing to enable the growth of optical genome mapping utilization.
Alright. Thank you one more from me and I'll hop back into the queue.
I would like to see if you could talk a little bit about the complexity of applying via to different applications and then how does the workflow differ for something like <unk> versus genetic disease when talking about the via software.
Yes, that's a very good question.
And I think at some level.
Yes. It is.
<unk> in that.
It can really be applied to.
Any analysis of any genome varian and what's so exciting and powerful about it is that extends from.
Sequence variant single nucleotide variance there we'd be detected by Ngls, all the way up through large chromosomal rearrangement and structural variance that only optical genome mapping is reliable it picking up.
And so why is it that.
These releases are application specific that that comes into the interpretation. So if you detective area, what do you do with it.
Via.
Through its intelligence applications allows you to in an automated fashion query the available.
Data on that particular variant.
It's available in different knowledge bases databases publication databases, and so forth and that allows you to really accelerate your interpretation. So what we're doing what we did first as we really optimize that process for hematologic malignancies.
And we're now doing that for constitutional genetic disorders, and this process kind of illustrates something about structural variation analysis that people don't really.
I would say are not that familiar with when it comes to sequence variance because sequencing has been around and.
Just for discovery for a long time next generation sequencing spin out and available for well over a decade now and so the databases around sequence variance are well populated it's easy to query.
<unk> calls in these databases, but when it comes to the structural variants. The databases are not nearly as far along and so it requires some development and customization. The other piece. That's critical is the reporting and the right out of the gate provides incredibly customizable reports that laboratory <unk>.
Well integrated into their validated workflows, but now it's done in a way that it is really.
Specific to the guidelines that are out there such as those for national.
Comprehensive cancer network World Health organization and others.
And those are the sort of frameworks that these hematologic malignancy researchers will use to evaluate samples and so we needed to integrate that capability into the.
And similarly.
Constitutional genetic disorders has its own unique nuances around reporting and what.
Laboratories are accustomed to delivering and so there is some application customization when it comes to interpretation.
And reporting.
Alright, Thank you very much.
Thank you and I'm showing no further questions at this time and I'd like to hand, the conference back over to Eric Conlon for any further remarks.
Thank you Michel and I want to thank everybody for joining today and I want to emphasize that we are tremendously excited about the future of bio nano and optical genome mapping.
And we look forward to updating you on our Q3 call, which will be upcoming soon so thank you and speak to you shortly.
This does conclude today's program. Thank you for participating you may now disconnect.
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