Q4 2023 Nautilus Biotechnology Inc Earnings Call

February 28, 2024

Operator: www.nautilus.com Good day, and thank you for standing by. Welcome to Nautilus' Q4 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Okay.

Good day and thank you for standing by welcome to the Nautilus Q4, 2023 earnings Conference call. At this time, all participants are in a listen only mode.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message, "Advisor's hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kerry Mendeville, Investor Relations. Please go ahead.

After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one one on your telephone.

Here, an automated message advisor hand is raised to withdraw your question. Please press star one one again please.

Please be advised that today's conference is being recorded.

I would now like to hand, the conference over to your speaker today carry them individual Investor Relations. Please go ahead.

Thank you.

Kerry Mendeville: Earlier today, Nautilus released financial results for the quarter and full year ended December 31, 2023. If you haven't received this news release, or if you'd like to be added to the company's distribution list, please send an email to investorrelations at nautilus.bio. Joining me today from Nautilus are Sujil Patel, co-founder and CEO, Prag Malik, co-founder and chief scientist, and Anna Mowry, chief financial officer. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking within the meaning of the federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated.

Year to date Nautilus released financial results for the quarter and full year ended December 31, 2023. If you haven't received this news release or if you'd like to be added to the Companys distribution list. Please send an email to investor relations.

Bio.

Joining me today from <unk> <unk> co founder and CEO, Rob <unk> co founder and Chief scientist and Annemarie Chief Financial Officer.

Before we begin I'd like to remind you that management will make statements. During this call that are forward looking within the meaning of the federal Securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated.

Kerry Mendeville: This information regarding use risks and uncertainties appears in the section entitled Forward-Looking Statements in the press release Nautilus issued today. Except as required by law, Nautilus disclaims any intention or obligation to update or revise any financial or product pipeline projections or other forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast, February 28, 2024. With that, I'll turn the call over to you. Thanks, Kerry.

This one information regarding these risks and uncertainties appears in the section entitled forward looking statements in the press release issued today.

That is required by law Nautilus disclaims any intention or obligation to update or revise any financial product pipeline projection or other forward looking statements because of new information future events or otherwise. This conference call contains time sensitive information and is accurate only as of the live broadcast February 28 2024.

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

Thanks, Gary Good morning, and thank you to everyone for joining US today. This morning, we will share our results for the fourth quarter and full year 2023, and provide an update on recent activities.

Sujil Patel: Good morning, and thank you to everyone for joining us. This morning, we'll share our results for the fourth quarter and full year 2023 and provide an update on recent events. But first, I want to thank our employees, our partners, and our investors. Creating a platform capable of enabling researchers to explore the mysteries and the potential of the proteome is very much a team effort. It requires strong alignment up and down the organization, vision, persistence, and an unwavering commitment to our goal of improving health.

But first I want to thank our employees, our partners and our investors, creating a platform capable of enabling researchers to explore the mysteries and the potential of the proteome is very much a team effort. It requires strong alignment up and down the organization vision persistence and in.

Unwavering commitment to our goal of improving human health.

Sujil Patel: I'm grateful for the extraordinary work the entire team did in 2023 and for how they've kicked off 2024 stronger than ever. We recognize that we're tackling a big, hard problem that had never been before, and armed with the learnings of last year and years prior, we now have greater clarity about what remains to be done to deliver what we believe will be a game-changing platform. We enter 2024 more energized than ever, focused on the good that we anticipate our platform can do, and confident in our ability. When I reflect on 2023, I see it as a year of accomplishment and foundational progress.

I am grateful for the extraordinary work the entire team did in 2023.

And for how they've kicked off 2020 for stronger than ever.

We recognize that we're tackling a big hard problem.

Never been successfully addressed.

And armed with the learnings of last year and years. Prior we now have greater clarity about what remains to be done to deliver what we believe will be a game changing platform to the market.

We enter 2024 more energized than ever focused on the goods that we anticipate our platform can do and confident in our ability to get there.

When I reflect on 2023, I feed as a year of accomplishment and the foundational progress progress that we'll continue to build momentum for not less as we move through 2024 and towards the planned launch of our proteome analysis platform in 2025.

Sujil Patel: Progress that will continue to build momentum for Nautilus as we move through 2024 and towards the planned launch of our proteome analysis platform in 2021. You'll hear more details about specific R&D progress from Perag in just a few minutes and more context from me around the revised launch timeframe a little later. But first, I want to reflect on what we continue to hear from potential customers and what I sense as I look across the market. At a high level, I'm encouraged by a growing awareness among researchers about the role that proteomic data can play if it is easily and cost-effectively generated in augmenting other high-value biological data. More specifically, we continue to receive enthusiastic feedback from the researchers and partners with whom we've directly engaged. They recognize the inherent limitations of both traditional analysis methods and of emerging affinity-based and peptide sequences.

Youll hear more details about specific R&D progress from parag in just a few minutes.

And more context for me around the revised launch timeframe a little later.

But first I want to reflect on what we continue to hear from potential customers and what I sense as I look across the market landscape.

At a high level I am encouraged by our growing awareness among researchers about the role that proteomics data can play it easily and cost effectively generated in augmenting other high value biological datasets.

More specifically, we continue to receive enthusiastic feedback from the researchers and partners with whom we've directly engaged they.

They recognize the inherent limitations of both traditional analysis method and of emerging affinity based and peptide sequencing methods.

Sujil Patel: They clearly understand how critically important single-molecule, intact protein analysis, which only Nautilus is designed to deliver, will be to their expanded exploration. We and they envision a day when their ability to explore the entire proteome more thoroughly will net fundamental advances in basic biological research, enabling researchers to make a substantial impact on the efficiency and cost-effectiveness of biomarker discovery. And while the desire on the part of researchers to finally have a breakthrough in the availability and cost of valuable proteomic data is not, What is new is the potential for actually delivering on that is fueling the imagination of researchers to think beyond what has been possible and towards the idea of what could be. This is a truly exciting time to be on the front lines of rodeo.

Clearly understand how critically important single molecule intact protein analysis, which only nautilus is designed to deliver will be to their expanded exploration to the party.

We and they envision a day when their ability to explore the entire proteome more thoroughly will net fundamental advances in basic biological research, enabling researchers to make a substantial impact on the efficiency and cost effectiveness biomarker discovery and drug development.

While the desire on the part of researchers to finally have a breakthrough in the availability and cost of valuable proteomics data is not new what is new is the potential of actually delivering on that dream.

That is fueling the imagination of researchers to think beyond what has been possible and towards the idea of what could be possible. This is a truly exciting time to be on the frontline.

Nation.

Parag: With that, let me now turn the call over to Parag for an update on our progress in the R&D Lab. Thanks, Zijal. Overall, we made solid progress against our core goals in 2020. Our major focus last year was on development activities, i.e., increasing scale, stability, and reproducibility across our entire ecosystem, but especially our; we additionally made significant progress in reducing the cost and complexity of producing our. This progress goes hand-in-hand with advancing the reliability, quality, and customer readiness of our instruments and software. Some examples of this progress include significantly increasing the development pace for our affinity. This increase was a result of optimizing the yield and throughput of our reagent development pipeline. We also transitioned many of those new reagents into common experiments. Additionally, we advanced our fabrication and assembly processes for our nanopattern chip and flow cell.

With that let me now turn the call over to Parag for an update on our progress on the R&D front Brock.

Thanks, John overall, we made solid progress against our core goals in 2023, our major focus last year was on development activities I E increasing scale stability and reproducibility across our entire ecosystem.

But especially our consumables we.

We Additionally made significant progress in reducing the cost and complexity of producing our consumables. This progress goes hand in hand, with advancing the reliability quality and customer readiness of our instruments and software.

Some examples of this progress include Cigna.

Significantly increasing the development pace for our affinity reagents.

This increase was a result of optimizing the yield and throughput of our reagent development pipeline. We also transitioned many of those new reagents into common experimentally use.

We advanced our fabrication and assembly processes for our nano pattern shipping flow cell. This refinement enabled both improvements in scale and reproduce ability. We additionally qualified our external patterning at Assembly partners.

Parag: This refinement enabled both improvements in scale and reproducibility. Additionally, we additionally qualified our external patterning and assembly partners. After refining our nanoparticle scaffolds, we more than 10x the throughput and scale of manufacturing for both our labeled probes and our nanoparticle scaffolds.

After refining our nanoparticle scaffolds were more than 10 X the throughput and scale of manufacturing for both our labeled probes and our nanoparticle scaffolds.

2023 also saw a continued focus on advancing our commercial instrument, especially the integration of the hardware software and wet wear elements taking.

Parag: 2023 also saw a continued focus on advancing our commercial activities, especially the integration of the hardware, software, and wetware elements. Taking an instrument from concept to commercial readiness is complex and requires close coordination between teams across the company. I'm pleased with the progress I saw last year in this regard, with the instrument becoming a true workhorse. The combination of advances in our consumable production scale, reliability, and reproducibility, the increased stability of our multi-cycle assays, and the expansion in the available number of commercial form factor instruments enabled us to successfully perform substantially greater numbers of longer cycle experiments in the past quarter than we did in the prior several years combined, and that work continues to The deluge of data from these more numerous and larger-scale experiments also drove advances in the software and bioinformatics aspects of our plan. In particular, like with the instrument, we have switched over from prototype software tools to integrated and automated pipelines that will be used by our customers. In the past, these analyses might have taken weeks of hands-on time to execute.

Taking an instrument from concepts to commercial readiness is complex and requires close coordination between teams across the company.

I am pleased with the progress that saw last year in this regard with the instrument, becoming a true workhorse.

The combination of advances in our consumable production scale reliability and reproduce ability the increased stability of our multi cycle assays and the expansion and available number of commercial form factor instruments enabled us to successfully perform substantially greater numbers of longer cycle experiments in the past quarter.

Then we did in the prior several years combined.

That work continues to accelerate in 2024.

The deluge of data from these more numerous and larger scale experiments also drove advances in the software and bioinformatics aspects of our platform.

In particular like with the instrument, we have switched over from prototypes software tools to the integrated and automated pipeline that will be used by our customers.

In the past these analyses might take weeks of hands on time to execute and now analysis can be achieved with minutes of hands on time.

As we reported in Q2, the increasing experimental scale NSA robustness has enabled us to increase the set of model proteins that can be successfully Dakota we.

We have diversified our models to include mixes of multiple proteins across a range of concentration and are excited about further increasing the complexity of our model systems.

These efforts are essential to the path towards verification and validation required for launch.

Coming out of 2023 and into 2024, we remain focused on addressing the foundational elements required to launch our platform ranging from how do we mobilize single protein molecules on our nano pattern flow cell how to detect diverse epitopes within proteins that single molecule resolution the ability to run large scale experiments involving large numbers approach.

Parag: And now, analyses can be achieved with minutes of hands-on time. As we reported in Q2, the increasing experimental scale and assay robustness have enabled us to increase the set of model proteins that can be successfully decoded. We have diversified our models to include mixes of multiple proteins across a range of concentrations and are excited about further increasing the complexity of our models.

Across large numbers of the cycle and an instrument ready to transition into broader use.

In an ongoing demonstration of our commitment to transparency and openness, we continue to reach out to the broader proteomics community with the objective of sharing the scientific underpinnings of our platform.

Parag: These efforts are essential to the path toward verification and validation required for launch. Coming out of 2023 and into 2024, we remain focused on addressing the foundational elements required to launch our platform, ranging from how to immobilize single-protein molecules on our nanopattern flow cell, how to detect diverse epitopes within proteins at single-molecule resolution, the ability to run large-scale experiments involving large numbers of probes across large numbers of cycles, and an instrument ready to transition into broader use. In an ongoing demonstration of our commitment to transparency and openness, we continue to reach out to the broader proteomics community with the objective of sharing the scientific underpinnings of our platform. These conversations frequently lead to suggestions of exciting and creative applications of our platform that we have not previously considered.

These conversations frequently leads suggestions are exciting and creative applications of our platform that we had not previously envisioned.

The next major opportunity for data sharing and application aviation comes in two weeks at the U S. Hugo Conference in Portland, Oregon.

I am incredibly excited by the opportunities we'll have at the event, where we will be publicly presenting on the following topics additional progress on the experimental implementation of prism further detail on our multi affinity pro pipeline and on computational methods to estimate false discovery right.

Overall, we continue to listen to the proteomics community, our future customers to ensure that we're sharing with them ongoing updates on our progress towards specific technical areas.

One of the areas that I'm. Most excited about is the additional data we'll be sharing resulting from the targeted proteoform studies of Tau and Egfr that we've been pursuing in partnership with Genentech Amgen.

All of the advances that we've made towards advancing our platform for broad scale studies has synergistically and simultaneously advanced our platform for targeted Proteoform studies.

Parag: The next major opportunity for data sharing and application ideation comes in two weeks at the U.S. HIPPO Conference in Portland, Oregon. I am incredibly excited by the opportunities we'll have at the event, where we'll be publicly presenting on the following topics, additional progress on the experimental implementation of PRISM, further detail on our multi-affinity probe pipeline, and on computational methods to estimate false discovery rates. Overall, we continue to listen to the proteomics community, our future customers, to ensure that we are sharing with them ongoing updates on our progress towards specific technical areas. One of the areas that I'm most excited about is the additional data we'll be sharing resulting from the targeted proteoform studies of Tau and DGFR that we've been pursuing in partnership with Genentech.

We continue to hear from the community how important pretty forms as defined by combinations of splice variants and post translational modifications Archie.

<unk> disease biology, and the excitement about our platform is uniquely suited to measure the molecular heterogeneity of pretty farms at single molecule resolution.

As <unk> mentioned earlier, we come into this year clear eyed about what work remains to be done and confident that we have a solid foundational understanding of what is required to get our platform into the hands of users where it can have a profound impact.

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

Thanks for the update.

On another hoopoe related note at the event Parag will be honored as the 2024 recipient of the Gilbert.

Computational Proteomics award this prestigious award recognizes Brogues career achievements and long standing leadership role in the development has bounced abatic analyses and the computational methods widely used by the proteomics community.

Needless to say, we are very grateful to have him on our team.

During past calls we've spoken about the well understood reality that shipping. The first version of any truly groundbreaking product can be slower and more challenging than initially anticipated.

Parag: All the advances that we've made towards advancing our platform for broad-scale studies have synergistically and simultaneously advanced our platform for targeted proteoform studies. We continue to hear from the community how important proteoforms, as defined by combinations of splice variants and post-translational modifications, are in Heart and Disease Biology, and the excitement about our platform is uniquely suited to measure the molecular heterogeneity of proteoforms at single molecule resolution.

I was one of our board members is fond of saying these delays are often based on encountering and knocking down one by one what she refers to as IW problems challenges associated with being first in the world.

Investors analysts customers and others with whom we speak acknowledge that building a game changing proteomics analysis platform, especially first of its kind product like ours is hard and simply takes time.

Since we recognize how significant an impact will be created by the data that our platform is expected to produce we are committed to ensuring that our company is fully ready to introduce support and rapidly innovate on what is designed to be an incredibly high quality high value product the world.

Sujil Patel: As Suzal mentioned earlier, we come into this year clear-eyed about what work remains to be done and confident that we have a solid foundational understanding of what is required to get our platform into the hands of people where it can have a profound impact. With that, I'll turn the call back to. Thanks for the update, Parag. On another Hupo-related note, at the event, Perag will be honored as the 2024 recipient of the Gilbert S. Omen Computational Perdiometer. This prestigious award recognizes Pirog's career achievements and long-standing leadership role in the development of bioinformatic analyses and the computational methods widely used by the Party. Needless to say, we are very grateful to have him on our team.

But biology deserves our best and we have set an exceedingly high bar for ourselves.

During recent calls we've shared our thoughts on the experimental and related work that's required to enable us to maintain a 2024 commercial launch timeframe with the <unk> products specification that we believe will be transformative to our market.

Despite strong progress towards these goals and in the name of ensuring that we launch a product that meets our very high bar for quality and performance. We now plan to launch our proteome analysis platform instruments reagents and software in 2025, we.

We remain singularly focused on driving our scientific and development efforts forward in the most efficient cost effective way possible.

I want to emphasize that we are not currently focused on creating short term revenue opportunities.

By choosing to focus intently on our development objectives. We believe we are positioning ourselves to create the best platform possible and make the maximum positive impact on the marketplace biological science and long term shareholder value.

As you'll hear from Ana in just a moment, we continue to operate in a very capital efficient manner, our burn rate and cash balance are significant advantage for us and to strike the right balance between maximizing our cash runway into 2026, while making the investments that are necessary to drive our.

Sujil Patel: During past calls, we've spoken about the well-understood reality that shipping the first version of any truly groundbreaking product can be slower and more challenging than initially thought. One of our board members is fond of saying these delays are often based on encountering and knocking down one by one what she refers to as FIW problems, challenges associated with being first in the investors, analysts, customers, and others with whom we speak acknowledge that building a game Since we recognize how significant an impact will be created by the data that our platform is expected to produce, we are committed to ensuring that our company is fully ready to introduce, support, and rapidly innovate on what is designed to be an incredibly high-quality, high-value product. The world of biology deserves our best, and we have set an exceedingly high bar.

Scientific progress forward.

For more on that and other things, let me hand, the call over to Anna for a look at our Q4 and full year 2023 financials.

Anna.

Thanks Vishal.

Total operating expenses for the fourth quarter of 2023 were $20 1 million up $3 7 million compared to the fourth quarter of 2022, and <unk> $9 million above last quarter.

This modest increase in operating expenses year over year was driven primarily by an increase in head count to support the ongoing development of our products.

Research and development expenses in the fourth quarter of 2023.

$12 5 million compared to $9 6 million in the prior year period.

General and administrative expenses were $7 5 million in the fourth quarter of 2023 compared to $6 7 million in the prior year period.

Overall net loss for the fourth quarter of 2023 was 17.0 million compared to $13 4 million in the prior year period.

Sujil Patel: During recent calls, we've shared our thoughts on the experimental and related work that's required to enable us to maintain a 2024 commercial launch timeframe with the V1 product specifications that we believe will be transformative to our market. Despite strong progress towards these goals and in the name of ensuring that we launch a product that meets our very high bar for quality and performance, we now plan to launch our proteome analysis platform, Instruments, Reagents, and Software, in 2025. We remain singularly focused on driving our scientific and development efforts forward in the most efficient, cost-effective way.

For fiscal year 2023, operating expenses were $76 2 million, an increase of $12 5 million or 20% from $63 6 million in fiscal year 2022. This increase was driven primarily by an increase in head count to support the ongoing development of our products.

Net loss for the full year was $63 7 million compared to $57 9 million in fiscal year 2022, an increase of 10% year over year.

Turning to our balance sheet, we ended the year with approximately $264 million in cash cash equivalents and investments compared to $276 million at the end of last quarter.

Over the past year, we have hired additional leadership talent, particularly in R&D and increased the throughput of our development and production pipeline.

Sujil Patel: I want to emphasize that we are not currently focused on creating short-term revenue opportunities. By choosing to focus intently on our development objectives, we believe we are positioning ourselves to create the best platform possible and make the maximum positive impact on the marketplace, biological science, and long-term shareholders. As you'll hear from Anna in just a moment, we continue to operate in a very capital efficient way; our burn rate and cash balance are a significant advantages for us, and we need to strike the right balance between maximizing our cash runway into 2026 while making the investments that are necessary to drive our scientific progress. For more on that and other things, let me hand the call over to Anna for a look at our Q4 and full year 2023. Thanks, Sujal. Total operating expenses for the fourth quarter of 2023 were $20.0 million, up $3.7 million compared to the fourth quarter of 2022 and $0.9 million above the previous quarter.

Importantly, we have achieved improved efficiencies with operational spend beating our internal expectations.

We entered 2024 with a lower burn rate strong cash balance extending our cash runway into the second half of 2026.

We remain committed to responsible financial stewardship to ensure flexibility ahead of our commercial launch.

Today, we filed a shelf registration statement on form S. Three as well as a prospectus supplement regarding a potential at the market offering of up to $125 million, which has not yet been declared effective we view. This filing is strictly good corporate housekeeping designed to allow us the flexibility to strategically and efficiently.

We raised capital in the future.

In 2024, we expect growth in spend to steadily increase as we continued to prepare for a commercial launch.

This year, we expect our overall operating expenses to grow by approximately 25% from 2023 level. We are confident that we remain well positioned to execute on our strategy to launch transformational platform in proteomics.

With that I'll turn it back to digital.

Thanks, Anna and his report clearly demonstrates our steadfast commitment to responsible financial stewardship of this business as we move towards commercial availability in 2025.

Anna Mowry: This modest increase in operating expenses year-over-year was driven primarily by an increase in headcount to support the ongoing development of our product. Research and development expenses in the fourth quarter of 2023 were $12.5 million compared to $9.6 million in the prior year period. General and administrative expenses were $7.5 million in the fourth quarter of 2020, compared to $6.7 million in the prior year period. Overall net loss for the fourth quarter of 2023 was $17.0 million, compared to $13.4 million in the prior year period.

We're excited about and energized by what lies ahead for novel and different we believe our platform can make good biological side.

Our mission to positively impact the health and lives of people around the world remains our guiding light.

And the high standards to which we hold ourselves I'm grateful to our team our investors our strategic partners and our research collaborators for joining us on this journey to revolutionize proteomics and empower the scientific community in ways never thought possible.

We made excellent progress in 2023 and look forward to building on those successes as we move through 2024 on our way to a commercial launch in 2025 and beyond.

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

Operator.

As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Anna Mowry: For fiscal year 2023, operating expenses were $76.2 million, an increase of $12.5 million, or 20%, from $63.6 million in fiscal year 2022. This increase was driven primarily by an increase in headcount to support the ongoing development of our product. Net loss for the full year was $63.7 million compared to $57.9 million in fiscal year 2022, an increase of 10% year-over-year.

Please standby, while we compile the Q&A roster.

Our first question comes from Hey, Josh Savant with Morgan Stanley. Your line is open.

Good morning. This is Hugo on for Jeff. Thank you for taking our questions could you further elaborate on the factors that led to the pushout of the instrument to 2024 or 2025 I. Appreciate the pace of development affinity regions of significantly accelerate accelerated but is that essentially the gating factor to launch at this point.

Anna Mowry: Turning to our balance sheet, we ended the year with approximately $264 million in cash, cash equivalents, and investments, compared to $276 million at the end of last quarter. Over the past year, we have hired additional leadership talent, particularly in R&D, and increased the throughput of our development and production pipeline. Importantly, we have achieved improved efficiencies with operational spend, beating our internal expectations. We entered 2024 with a lower burn rate and a strong cash balance. Sending our cash runway into the second half of, we remain committed to responsible financial stewardship to ensure flexibility ahead of our commercial line. Today, we filed a shelf registration statement on Form S-3, as well as a prospective supplement regarding a potential at-the-market offering of up to $125 million, which has not yet been declared effective.

And then could you also comment on whether you were targeting launch in first half or second half of 2025.

Good morning. Thank you for the question, Rob maybe if you want to take the first half of that question and then I will address the second half.

Sure that sounds great.

Thanks, so much for the question.

Maybe just to start with commenting on the key aspects of the platform overall.

No.

At the foundation of the platform our three core elements the method for depositing single molecule onto a hyper dense nano patterned array.

Two.

Assay, incorporating potentially hundreds of affinity reagents that are iteratively slowed over the array and image and then three the machine learning frameworks, which takes all of those pieces together.

As we've been working through development. The key challenges, we've been facing really have been ones of scale quality reproducibility and stability, which.

Which are critical for our end to end the assay to be as robust as possible.

Additionally, we've been working through.

Marching through.

Increasing the complexity of our model systems from D coding model proteins to mixtures of proteins to increasingly complex model system light data et cetera, and so as we worked through that progression. That's really the driver of ensuring that we marched that progression.

Anna Mowry: We view this filing as strictly good corporate housekeeping designed to allow us the flexibility to strategically and efficiently raise capital. In 2024, we expect growth and spend to steadily increase as we continue to prepare for our commercial launch. This year, we expect our overall operating expenses to grow by approximately 25% from the 2023 level. We are confident that we remain well-positioned to execute on our strategy to launch a transformational platform and protein. With that, I'll turn it back to Sujal.

To have a product that is consistent reliable and performance as possible.

Great. Thanks, probably you could take the second half of your question here.

In addition to what <unk> said.

You asked about further specificity.

And then what we said in our prepared remarks, and I think that at this point. We don't have we don't want to provide any further specificity than 2025, but what I will tell you is that we do expect as we've previously discussed that prior to our full commercial launch, which means instruments reagents and software to for that launch we will have.

Sujil Patel: Thanks, Anna. Anna's report clearly demonstrates our steadfast commitment to responsible financial stewardship of this business as we move towards commercial availability in 2020. We're excited about and energized by what lies ahead for Nautilus and the difference we believe our platform can make in biology. Our mission to positively impact the health and lives of people around the world remains our guiding light and the high standard to which I'm grateful to our team, our investors. Thank you to our strategic partners and our research collaborators for joining us on this journey to revolutionize proteomics and empower the scientific community in ways never thought possible. We made excellent progress in 2023 and look forward to building on those successes as we move through 2024 on our way to a commercial launch in 2025. With that, I'll turn the call back to the. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again.

Our beta period, which means physical instruments being placed at customer sites before that we will have our early access period, which is the period where customers can send us samples, we can analyze them and returned the data to the customer in our own facility and as we get to that early access period launch I do expect that I'll be able.

To provide further specificity on the timeline and narrow it down as well as when we launched the EAP early access program won't be able to talk about our expected.

Once specifications in much more detail as well.

Great. Thank you.

Our next question comes from the line of Brandon Couillard with Jefferies. Your line is open.

Okay.

Matt on for Brandon.

Maybe one for you Ed on the cash runway out to the back half of 2006 I think prior you guys have talked about runway into 2000 and <unk> given a number of 24 launch scenario. So now that you're pointing to the 25 launch but cash into the back half of 2006 was just curious if there's anything that changed or are there. Other areas that you are maybe moderating or sharpening your pencil.

Thanks.

Matt Good morning, Thanks for the question as you've heard US consistently say, we've been very prudent in how we've been managing our investments we continue to be very targeted in 2024 with our expectation of growth in opex around 25%, we expect cash burn to be a little bit higher.

Operator: Please stand by while we compile the Q&A roster. Our first question comes from Tejas Savant with Morgan Stanley. Your line is open. Good morning, this is Yuko on 4KG.

Operator: Thank you for taking our questions, and further elaborate on the factors that led to the push out of 5. I appreciate the pace of development, which is accelerated, but is that essentially the gating factor?

And that as we.

Start to make some capital investments, but overall our <unk>.

Runway doesn't have any.

Real sensitivity to our launch timeline as we have the ability to manage our expenses to go with that timeline.

Okay. Thanks, and then I guess.

Operator: And then, could you also comment on whether you're... www.nautilus.com, Morning, Yuko. Thank you for the question, Prabh. Maybe you want to take the first half of that question, and then I will address it. Sure, that sounds great.

Sticking with that topic on 'twenty four you guided to the 25% increase year over year could you maybe talk about your ability to moderate that up and down last year, given the backdrop, you've moderated down or should we think about 2004 is kind of more locked in at that range given the commercial launch in 'twenty five.

Parag: Thanks so much for the question. Maybe just to start with commenting on the key aspects of the platform overall. So at the foundation of the platform are three core elements: the method for depositing single molecules onto a hyperdense nanopatterned array.

Sure, we always have the ability to moderate up and down 25%. We feel is a very targeted level of investment we're investing in all areas of the business, we're continuing to invest in development as well as SG&A to support our manufacturing production capabilities potentially some commercial.

Parag: Number 2, an assay incorporating potentially hundreds of affinity reagents that are iteratively flowed over the array. And then three, the machine learning framework, which takes all of those pieces together. As we've been working through development, the key challenges we've been facing really have been ones of scale, quality, reproducibility, and stability, which are critical for our end-to-end assay to be as robust as possible. Additionally, we've been working on, marching through increasing the complexity of our model systems, from decoding model proteins to mixtures of proteins to increasingly complex model systems, life state, etc. And so as we work through that progression, that's really the driver of ensuring that we accelerate that progression to have a product that is as consistent, reliable, and performance-oriented as possible. You can take the second half of your question here, in addition to what Prague said.

And there as well to the extent that we need to.

<unk>.

The ability to moderate that as needed.

Thanks, and then just last one quick clarification. The Amgen Genentech data you talked about will that be presented at <unk>.

U S hoopoe here in a couple of weeks or will that be another florida. Thanks.

Yes.

Okay perfect.

I'll take that yes. So we are planning to present that at <unk> there will be.

Poster presentations on that material and we will also discuss it in our lunch seminar.

Thank you Matt.

Just to add just a tiny bit of additional sort of.

Information for you on the cash side, so the cash guidance.

Having a cash runway.

Sujil Patel: So you asked for further specificity than what we said in our prepared remarks, and I think that at this point, we don't want to provide any further specificity beyond 2025. But what I will tell you is that we do expect, as we've previously discussed, that prior to our full commercial launch, which means instruments, reagents, and software, before that launch, we will have a short beta period, which means physical instruments being placed at customer sites. Before that, we'll have our early access period, which is the period where customers can send us samples, we can analyze them, and return the data to the customer at our own facility. And as we get to that early access period launch, I do expect that I'll be able to provide further specificity on the timeline and narrow it down, as well as when we launch the EAP, the Early Access Program, I'll be able to provide further specificity on that. Thank you. Thank you, talk about our expected WANT specifications in much detail. Our next question comes from the line of Brandon Collard with Jeffries. Your line is open. And this is Matt on for Brendan.

Into the second half of 2026 of course, given the launch timeline of 2025 includes the buildup of our commercial organization and includes the launch of a platform in the initial revenue ramp and so all of that is baked into that and so when you talk about flexibility I think the biggest thing to highlight is that we as a company have been very.

Good about managing that Opex as the timeline moves up and down and we expect to continue to do that as well and so at the point that you start to see.

A tick up in that Opex, I think thats indicative of us getting getting closer to that launch.

Thanks, I appreciate it I'll leave it there.

Our next question comes from the line of Matt <unk> with Goldman Sachs. Your line is open.

Hey, good morning, Thanks for taking my questions, maybe just on the.

Push out of the platform to 'twenty five.

Just curious.

We are working with a number of customers today.

On the beta and the other things that Youre doing with Amgen Genentech et cetera in terms of engaging a broader set of customers given the push out to 25, how do you maintain that momentum with broadening out and keeping that excitement about the product just given the delay out to 'twenty five.

Operator: Anyone for you and on the cash runway out to the back half of 26. I think prior, you guys have talked about runway into 26 given a number of 24 launch scenarios. So now that you're pointing to the 25 launch, but cash into the back half of 26. We're just curious if there's anything that changed other than other, you know, areas that you're maybe monitoring or sharpening your pencil on. Thanks.

Good morning, Matt.

Well, maybe I'll tackle this one I think that there are there are two ways that we.

<unk> tend to continue building momentum with the scientific community and with our potential customers.

One is that at each of these major conferences. For example, this year Super Conference, which is coming up in a few weeks, we continue to present, new and novel data about our platform that shows our progress towards the launch and.

Operator: Matt, good morning; thanks for the question. As you've heard us consistently say, we've been very prudent in how we've been managing our investment. We continue to be very targeted in 2024 with our expectation of growth in OPEX around 25%. We expect cash burn to be a little bit higher than that as we start to make some capital investments. But overall, our runway doesn't have any... real sensitivity to our launch timeline as we have the ability to manage our expenses to go with it. Okay, thanks. And then I guess, kind of sticking with that topic on 24. You got into the 25% increase year over year. Just maybe talk about your ability to moderate that up and down. You know, last year, given the backdrop, you moderated it down, or should we think about 24 is kind of more locked in at that range, given the commercial launch in 25. We always have the ability to moderate up and down. 25%, we feel, is a very targeted level of investment.

If you think about the core elements of our platform building a single protein molecule array, that's uniform and dense being able to decode proteins using our prism method.

And you think about the bioinformatics that are tied into our system. All of these are incredibly unique.

In the scientific community. This is a method, which has never been attempted before and so that data to the scientific community of our potential customers is incredibly exciting.

<unk>.

Sure that data.

In the past and as you move through this year, we continue to see a lot of excitement from potential customers from kols and from others in the scientific community around our platform. So that's one primary method.

Number two is that the work that we're doing on talent Egfr with Genentech and Amgen as well as our other collaborators is incredibly exciting for our collaborators and for the scientific community. Our platform has a very unique capability being the only platform in the world.

Fully elucidate the Proteoform landscape.

Proteins of interest because it analyzes intact protein molecules and it can probe this molecule over and over again to gather more and more information that is incredibly important because these modifications could be indicative of therapeutic response, it could be biomarkers that could be drug targets and with that.

Operator: We're investing in all areas. Question sent to Steve Bennett from Nautilus. We continue to invest in development as well as SGA to support our manufacturing and production capabilities and potentially some commercial activities in there as well to the extent that we need to, we have, Moderator, and just last one quick clarification: the Amgen Genentech data you talked about will that be presented at USHPO here in a couple weeks or will that be in another forum? Thanks.

That data because its biologic insight that's never been seen before it's really important to the scientific community and our potential customers. So thats getting that data out into the world of showing what our platform's capabilities. The second way that we are going to build excitement in the community about the platform now when you think about that kind of data and the <unk>.

Parag: I'll take that, yes, so we are planning to present that at U.S. HIPPO, and there will be poster presentations on that material, and we will also discuss it at our lunch seminar. Thank you. And Matt, just to add just a tiny bit of additional information for you on the cash side.

Fact that we are generating that type of Proteoform data head of broad scale proteomics data you might ask the question and many have asked are we going to put more emphasis behind that would we go just launched pretty forms first and what I would tell you on that front as we continue to really love the momentum that we have on the Proteoform side.

Sujil Patel: So the cash guidance of having a cash runway into the second half of 2026, of course, given the launch timeline of 2025, includes the buildup of our commercial organization and includes the launch of the platform and the initial revenue ramp. And so all of that is baked into that. And so when you talk about flexibility, I think the biggest thing to highlight is that we as a company have been very good about managing that OPEX as the timeline moves up and down, and we expect to continue to do that as well. And so at the point that you start to see a tick up in that OPEX, I think that's indicative of us getting closer. I appreciate it. I'll leave it there.

We really like the customer traction we're seeing in the excitement I will continue to consider those types of collaboration and work to expand that Proteoform work that we have been doing with our existing collaborators as we work through this year and we start getting into next year.

Got it and I think you might have answered part of my second question with what you just said, but in terms of you had originally talked about sort of targeting a certain percentage of the overall proteome.

Launch that came down a little bit in order to launch it in 'twenty four as we look at 25.

Does that coverage or however, you want to classify it go back up again or are you still sort of targeting what you had said before in terms of what youre going to be able to have available in 25.

Operator: Our next question comes from the line of Matt Sykes with Goldman Sachs. Your line is open. Hey, good morning.

Operator: Thanks for taking my questions. Maybe just on the push out of the platform to 25, I'm just curious; obviously, you're working with a number of customers today on the beta and the other things that you're doing with Amgen, Genentech, etc. In terms of engaging a broader set of customers, given the pushout to 25, how do you maintain that momentum with broadening out and keeping that excitement about the product, just given the delay out to 25? Good morning, Matt. This is Sujil.

Yeah, So I think that.

Yes.

As I said in response to one of the questions earlier I think we will have more specificity on our launch specifications as we are.

<unk> launched our early access program for the platform and so more specificity is coming in the in the quarters to come but what I would say is that the comment you just made about us talking about bringing in the initial specification is down a little bit was made on our on our Q3 conference call and we.

We have no intention of lowering our specifications any further in fact, given the additional time that we have in our schedule, we may make up a little bit of routing some of the areas. So just as a reminder of those areas are the percentage of the protium that we can cover the dynamic range of the system the limit of detection and quantification.

Sujil Patel: Maybe I'll tackle this one. I think that there are two ways that we intend to continue building momentum with the scientific community and with our. One is that at each of these major competitions, for example, this U.S. HIPAA conference which is coming up in a few weeks, we continue to present new and novel data about our platform that shows our progress towards a launch. If you think about the core elements of our platform, building a single protein-molecule array that's uniform and dense, being able to decode proteins using our PRISM map, and you think about the bioinformatics that are tied into our system, all of these are incredibly unique in the scientific community. This is a method that has never been attempted before, and so that data for the scientific community and our potential customers is incredibly exciting, and as Carewells and, from others, platform. So that's one primary.

Sure.

Those types of things and so.

Let's get a couple of quarters that note I will give you give you some more specificity as we get closer, but I think that the additional time.

Is it potentially helpful to us.

Got it.

And then just one more if I may just.

Pardon me if sort of the.

The issues or challenges that you are having related to supplier.

Issues, our manufacturing capabilities, I know <unk> talked about scale quality and reproducibility of sort of some of the factors that youre looking at but just want to make sure that it seems like some of the supply issues are long gone. So I'm, assuming it's not really a supplier to share manufacturing issue. It's more just the overall technology and the platform wanted to make sure you get it right. When you when you launch it.

Yes, Matt absolutely.

The additional time needed is not related to supplier issues at all in fact, our operations and manufacturing organization has done a spectacular job here on the instrument side, making sure that all of our lead longer lead time parts are available in sufficient supply building supplier relationships.

Sujil Patel: Number two is that the work that we're doing on Tau and EGFR with Genentech and Amgen, as well as our other collaborators, is incredibly exciting for our collaborators and for the scientific community. Our platform has the very unique capability of being the only platform in the world that can fully elucidate. Proteoform Landscape of Proteins of Interest because it analyzes intact protein molecules, and it can probe those molecules over and over again to gather more and more. That is incredibly important because these modifications could be indicative of therapeutic response. They could be biomarkers, drug targets, and with that, that data, because it's biological insight that's never been seen before, is really important.

To focus on our launch and longer term and then on the reagent side the manufacturing.

Organization has done a great job really building.

The partner base that helps build those reagents, but as well as pronged described in his.

Prepared remarks, they've done a really exceptional job with the yield and scale of our reagent production in house and we're really excited with that and so supply chain is not an issue for us.

Got it thank you very much.

Our next question comes from the line of.

Dan Brennan with PD Cowen Your line is open.

Good morning, Thanks for thanks for taking the questions maybe.

Sujil Patel: So that's the, getting that data out into the world and showing what our platform's capable of is the second way that we are going to build excitement in the community. Now, when you think about that kind of data and the fact that we are generating that type of proteoform data ahead of broad-scale proteomic data, you might ask the question, and many have asked, are we going to put more emphasis on that? Would we go ahead and just launch proteoforms first?

Maybe the first one just go back to the first question would you mind, just going back to the factors that led to the decision to push it out.

Maybe could you just give us some more concrete aspects of what you expect it to have done by now.

Or what's the late I know you talked about scalability reproducibility consistency, so I guess it's.

All encompassed in that but if there are any more maybe granular metrics you can give us on that front.

Sujil Patel: And what I would tell you on that front is we continue to really love the momentum that we have on the proteoform side. We really like the customer attraction that we're seeing and the excitement, and we'll continue to consider those types of collaborations and work to expand the proteoform work that we have been doing with our existing collaborators through this year.

And then b kind of related to that when we think about the new timelines is there like a checklist if you will.

So you can provide about.

Any of the performance features any of the reproducibility of anything that we should be monitoring so that as we get.

Two Q2, and Q3 and Q4 like we can kind of say where are you on the checklist that gives people kind of a pathway. If you will.

Towards confidence towards the launch.

Yes.

Once again why don't you.

Take the first half of that question then once we get to sort of check list of things to look for milestones on the journey I will take that out of the question.

Sujil Patel: And I think you might have answered part of my second question with what you just said. But in terms of, you had originally talked about sort of targeting a certain percentage of the overall proteome launch, but that came down a little bit in order to launch it in 24.

Sure absolutely so I think one of the key.

When you asked the question about what are we looking at.

Among the key areas that we've been focused has been those items that I mentioned before.

And in particular, the integration of all of those items together and as we came into the back half of last year, we saw tremendous progress.

Sujil Patel: As we look at 25... Is that coverage, or however you want to classify it, going to go back up again, or are you still sort of targeting what you had said before in terms of what you're going to be able to have available in 2025? Yeah, so I think that, as I said in response to one of the questions earlier, I think we will have more specificity on our launch specifications as we launch our early access program for the platform. And so more specificity is coming in the quarters to come. But what I would say is that the comment you just made about us talking about bringing the initial specifications down a little bit was made on our Q3 conference call. And we have no intention of lowering our specifications any further.

Particularly on the integration and.

And noticing that.

It allowed us to really do experiments at a larger scale than we had before as we work through those experiments we look at.

The specific elements I talked before like are we able to just make sufficient reagents of sufficient quality and consistently consistency is.

Not just reagents, but also flow cells are we able to ensure that the flow cells have the stability that we want.

So these are very much factors that ensure that when the product is in the hands of your customers.

As a reliable robust measurement instrument and that's really been the driver of our decision making has been.

Sujil Patel: In fact, given the additional time that we have on our schedule, we may make up a little bit around here. Thank you. So just as a, you know, reminder, those areas are the percentage of the proteome that we can cover, the dynamic range of the system, the limit of detection and quantification, those types of things. And so, let's get a couple quarters in, and I'll give you some more specific videos. I think that the additional time is potentially very useful. Got it.

That ability to scale the platform.

To be able to measure a.

A gain.

Game changing number of proteins at a sensitivity that we're targeting.

So.

The second half of that question really is is what.

What are the milestones that we should be looking at I think.

As youll see in.

What we put out at Usu bow here coming up in a couple of weeks, we continue to work with model proteins.

Evolving.

The scale of the assets that were running meaning more probes more cycles decoding more proteins out of simple mixtures those that work as we get through the first half of this year and into next year, we will start to evolve into actually decoding proteins out of biological samples that are complex like salt life site.

Sujil Patel: And then just one more, if I may, what are any sort of issues or challenges that you're having related to supplier issues or manufacturing capabilities? I know Parag talked about scale, quality, and reproducibility as sort of some of the factors that you're looking at, but just want to make sure that some of the supply issues are long gone. So I'm assuming it's not really a supplier issue or manufacturing issue.

And as we've talked about in the past at some point, we will have a significant number of proteins that are decoded out of life, whether it's 501000 2000 2500 doesn't matter any significant number of proteins that have liked it means that all of the aspects of our system have come together are single molecule hyper dense array.

Sujil Patel: It's more just the overall technology in the platform. You want to make sure you get it right when you launch. Yeah, Matt, absolutely. The additional time needed is not related to supplier issues at all.

Our multi cycling assay, we have sufficient reagents and because the system works and computational matter by the time, we get to that point, we have a significant number of regions more than half of the way towards a product launch and so for us that that milestone is a critical milestone that will be.

Sujil Patel: In fact, our operations and manufacturing organization has done a spectacular job here on the instrument side, making sure that all of our lead time and longer lead time parts are available and in sufficient supply, building supplier relationships to focus on our launch and the longer term. And then on the reagent side, the manufacturing and organization have done a great job building the partner base that helps build those reagents, but as Parag described in his prepared remarks, they've done a really exceptional job with the yield and scale of our reagent production in-house, and we're really excited about that. So the supply chain is not an issue.

Pretty close to when we launch an early access program and begin taking customer orders for early access samples it'll be about the point that we update wall Street on timelines and launch specifications.

And when I talk to analysts and investors. Both that's the key milestone that I make sure that everyone is looking for and.

We're not at that point, yet, but looking at the progress that's been made particularly the progress made here in the beginning of this year I think that.

I'm really enthusiastic and excited about what I'm seeing and we'll be back to update you on that as we move through this year and closer to our anticipated 2025 launch.

Got it and.

Operator: Got it. Thank you very much. Our next question comes from the line of Dan Brennan with TD Cowen. Your line is open. Good morning.

So youre basically, saying, it's 500 or 1002 thousand just a fact you do 500 consistency consistently reproducibility you hit the metrics you want that'll be like a clear bar like yes.

Operator: Thanks for taking the questions. Maybe the first one, just go back to the first question. Would you mind just going back to the factors that led to the decision to push it out? Maybe, could you just give us some more concrete aspects of, you know, what you expected to have done by now, kind of what's delayed? I know Pragya talked about scalability, reproducibility, and consistency, so I guess it's all encompassed in that, but are there any more, you know, maybe granular metrics you can give us on that front?

That was one of the follow up questions like where are you on this progress to validate the threshold of 501000 2000, so just kind of within that context I guess.

The number of protein isn't as critical or just getting to 500 is what's important.

So.

If you think about what we have done kind of in the last.

Few years here that we've been public and updating wall Street. We've spent lot of time refining our affinity reagent development qualification and screening processes as well as scaling those up and just in the last.

Parag: And then B, kind of related to that, when we think about the new timelines, is there like a checklist, if you will, that you could provide about any of the performance features, any of the reproducibility, anything that we should be monitoring so that as we get to Q2 and Q3 and Q4, we can kind of say, you know where you are on this checklist, that gives people kind of a pathway, if you will, towards confidence toward Rob, once again, why don't you take the first half of that question, and then once we get to the sort of checklist and things to look for, and milestones on the journey, I'll turn it over to you. Sure, absolutely. So I think one of the key elements, when you ask the question about what we're looking at, among the key areas that we've been focused on, have been those items that I mentioned before, and in particular, the integration of all of those items together.

Four five quarters, we've doubled the top of funnel of our capabilities with respect to each region development twice. So we entered the year with a significant amount of bandwidth to be able to build affinity reagents and we continue to scale up the qualification and screening side of things and so as all of that.

Stuff is <unk>.

Becoming qualified getting into our assay going through testing, we are going through the process of understanding exactly what those affinity agents bind to and how they perform in our assay, we're getting rid of the one.

That arent qualified for our platform as that process happens, we start to we'll start to see an increasing number of proteins coming out of a D code of a complex sample like salt life now.

Now by the time that we're showing you 500, theres going to be up big pipeline of more reagents behind it that are going to go and take that number from 500 to 750 to 1000 to 5000, and so forth and if youll recall, we've always shown it a chunk and then theres an updated one.

Which is an hour.

Slide deck that is on our Investor relations part of our website.

Parag: And as we came into the back half of last year, we saw tremendous progress, particularly in integration and noticing that, you know, allowed us to really do experiments at a larger scale than we had before. As we work through those experiments, we look at the specific elements I talked about before. Like, are we able to just make sufficient reagents of sufficient quality and consistency? Not just reagents but also flow cells. Are we able to ensure that the flow cells have the stability that we want?

Please turn to chart that shows that there is an exponential relationship between the number of probes that we have and the number of <unk>.

Proteins that we can.

Detached and quantified in a complex biological sample and so unlike a traditional assay, where I have five antibodies anti <unk> antibody 10 things for us by the time that I come to you with 500. The majority the vast majority of the work in the assay has been done and most of the affinity regions have been built.

Got it and then maybe final one so the early access would be so 24.

Parag: And so these are very much factors that ensure that when the product is in the hands of your customers, it's a reliable, robust measurement. And that's really been the driver of our decision making has been the ability to scale the platform to be able to measure a game-changing number of proteins at a sensitivity that we're targeting. So, the second half of that question really is, what are the milestones that we should be looking at? As you'll see in... what we put out at USHUPO here in a couple of weeks. We continue to work with model proteins, evolving the scale of the assays that we're running, meaning more probes, more cycles, and decoding more proteins out of simple mixtures.

There will be early access I'm, sorry, I know you talked to us in the prepared remarks, but just in terms of can you just clarify I was just kind of reiterate kind of a timeline of the <unk>.

Commercial launch, but we should expect thank you.

So we have not so what we said in our prepared remarks and responses to questions. Here. This morning, We've said that we anticipate our full commercial launch in 2025 that means shipping our instrument reagents and software.

Prior to that ship date call. It approximately 678 months will be a early access period and that early access period will be a model, where we are analyzing customer samples in our facility, we're sending them the results.

Parag: That work, as we get through the first half of this year and into next year, will start to evolve into actually decoding proteins out of biological samples that are complex, like cell lysate. And as we've talked about in the past, at some point, we will have a significant number of proteins that are decoded out of lysate. Whether it's 500, 1,000, 2,000, 2,500, it doesn't matter.

<unk> there are not just to generate data that we can publish we can show to the scientific community to build momentum but.

Just as importantly to start to focus on the early pipeline building activities and sales activities that get preorders still for the platform. When it comes out in 2025, we don't currently have any more specificity on the date of the start of that early access program.

But but but.

Based on the launch timeline, you kind of back up from that 678 months and that's when we'll be running the early access program and the launch of that program, meaning when we tell customers were ready to start taking orders for early access.

Sujil Patel: Any significant number of proteins out of lysate means that all of the aspects of our system have come together, our single molecule hyperdense array, our multi-cycling assay, we have sufficient reagents, and because the system works in a computational way, by the time we get to that point, we have a significant number of reagents, more than half of the way toward a product launch. And so for us, that milestone is a critical milestone that will be pretty close to when we launch an Early Access program and begin taking customer orders for Early Access samples. It will be about the point that we update Wall Street timelines and launch specifications. And when I talk to analysts and investors both, that's the key milestone I make sure that everyone is up to, and we're not at that point yet, but looking at the progress that's been made, particularly the progress made here at the beginning of this year, I think that I'm really enthusiastic and excited about what I'm seeing. I'll be back to update you on that as we move through this year and closer to our expectations. I got it.

<unk> that by a few months.

Terrific. Thanks, a lot.

And I'm showing no further questions at this time. This concludes today's conference call. Thank you for participating you may now disconnect.

[music].

Yes.

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Sujil Patel: And so you're basically saying if it's 500 or 1000 to 2000, just the fact that you do 500 consistently, consistently reproducibility, you hit the metrics you want, that'll be like a clear bar, like, yeah, because that was one of the follow-up questions, like, where are you on this progress to validate the threshold of it's, you know, 500, 1000, 2000. So just kind of within that context, it's, it's, I guess, the number of proteins isn't as critical as just getting to 500. What's important is that we get to 500. That's right. So, if you think about what we have done kind of in the last few years here that we've been public and been updating Wall Street, we've spent a lot of time refining our affinity reagent development, qualification, and screening processes, as well as scaling those up. And just in the last.

Okay.

[music].

Okay.

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Yes.

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Yes.

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Sujil Patel: 4-5 quarters, we doubled the top of the funnel of our capabilities with respect to reagent development twice. So we entered the year with a significant amount of bandwidth to be able to build affinity reagents, and we continue to scale up the qualification. And so, like all of that stuff, becoming qualified, getting into our assay, going through testing. We are going through the process of understanding exactly what those affinity reagents bind to and how they perform in our assay. We're getting rid of the ones that aren't qualified for our platform.

Yes.

Okay.

[music].

Okay.

[music].

Sujil Patel: As that process happens, we start to see an increasing number of proteins coming out, a decoding of a complex sample like... Now, by the time that we're showing you 500, there's going to be a big pipeline of more reagents behind it that are going to go and take that number from 500 to 750 to 1000 to 5000. And if you'll recall, we've always shown it on a chart, and there's an updated one, which is in our slide deck that is on the investor relations part of our website. We've always shown a chart that shows that there's an exponential relationship between the number of probes that we have and the number of... proteins that we detect and quantify in complex biology.

Yes.

Okay.

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Okay.

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Thank you.

Okay.

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Sujil Patel: And so unlike a traditional assay where I have five antibodies, I see five things, I have ten antibodies, I see ten things, for us, by the time that I come to you with 500, the majority, the vast majority of the work in the assay has been done, and most of the affinity reading has been done. Got it. And then maybe the final one.

Okay.

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Sujil Patel: So the early access would be, so, 24... There will be early access. I'm sorry, I know you talked to us in the prepared remarks, but just in terms of, can you just clarify or just kind of reiterate kind of a timeline ahead of the actual commercial launch, what we should expect? Thank you.

Sujil Patel: Yeah, so what we have not, what we said in our prepared remarks and the responses to questions here this morning, we said that we anticipate our full commercial launch in 2025. That means shipping our instrument, reagents, and software. Um, prior to that ship date, call it approximately 6, 7, 8 months, will be an early access period, and that early access period will be a model where we're analyzing customer samples in our facility. We're sending them the results now. The goals there are not just to generate data that we can publish, and we can show to the scientific community to build momentum, but just as importantly, to start to focus on the early pipeline building activities and sales activities that get pre-orders built for the platform when it comes. We don't currently have any more specificity on the date of the start of that early access.

Okay.

Thanks.

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Operator: But I will, but, but, you know, based on the launch timeline, you kind of back up from that 6, 7, 8 months. And that's when we'll be running the early access program and the launch of that program. Meaning when we tell customers we're ready to start taking orders for early access, we'll proceed. Terrific. Thanks a lot. And I'm showing no further questions at this time.

Great.

Yes.

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Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Okay.

Operator: This video was made in Cooperation with the U.S. Department of Agriculture and the U.S. Department of Land and Forestry. The video was made in Cooperation with the U.S. Department of Agriculture and the U.S. Department of Land and Forestry. This video was made in Cooperation with the U.S. Department of Agriculture and the U.S. Department of Land and Forestry. This video was made in Cooperation with the U.S. Department of Land and Forestry. Thank you for watching and have a nice day. ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Good day and thank you for standing by.

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Thanks.

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Operator: Welcome to Nautilus Q4 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message, "Advisor's hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Carrie Mendeville, Investor Relations. Please go ahead.

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Kerry Mendeville: Thank you. Earlier today, Nautilus released financial results for the quarter and full year ended December 31st, 2023. If you haven't received this news release, or if you'd like to be added to the company's distribution list, please send an email to investorrelations at nautilus.bio. Joining me today from Nautilus are Sujil Patel, co-founder and CEO, Prag Malik, co-founder and chief scientist, and Anna Mowry, chief financial officer. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking within the meaning of the federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated.

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Kerry Mendeville: Visual information regarding use risks and uncertainties appears in the section entitled Forward-Looking Statements in the press release Nautilus issued today. Except as required by law, Nautilus disclaims any intention or obligation to update or revise any financial or product pipeline projections or other forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast, February 28, 2024. With that, I'll turn the call over to you. Thanks, Kerry.

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Sujil Patel: Good morning, and thank you to everyone for joining us. This morning, we'll share our results for the fourth quarter and full year 2023 and provide an update on recent, But first, I want to thank our employees, our partners, and our investors. Creating a platform capable of enabling researchers to explore the mysteries and the potential of the proteome is very much a team effort. It requires strong alignment up and down the organization, vision, persistence, and an unwavering commitment to our goal of improving health.

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Sujil Patel: I'm grateful for the extraordinary work the entire team did in 2023 and for how they've kicked off 2024 stronger than ever. We recognize that we're tackling a big, hard problem that has never been solved before, and armed with the learnings of last year and years prior, we now have greater clarity about what remains to be done to deliver what we believe will be a game-changing platform. We enter 2024 more energized than ever, focused on the good that we anticipate our platform can do, and confident in our ability. When I reflect on 2023, I see it as a year of accomplishment and foundational progress.

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Good day and thank you for standing by welcome to Nautilus Q4, 2023 earnings Conference call. At this time, all participants are in a listen only mode.

After the speaker's presentation, there will be a question and answer session.

To ask a question during the session you will need to press star one one on your telephone you are inherent automated message advisor hand is raised to withdraw your question. Please press star one again.

Sujil Patel: Progress that will continue to build momentum for Nautilus as we move through 2024 and towards the planned launch of our proteome analysis platform in 2021. You'll hear more details about specific R&D progress from Perag in just a few minutes, and more context from me around the revised launch timeframe a little bit later. But first, I want to reflect on what we continue to hear from potential customers and what I sense as I look across the market. At a high level, I'm encouraged by a growing awareness among researchers about the role that proteomic data can play if it is easily and cost-effectively generated in augmenting other high-value biological data. More specifically, we continue to receive enthusiastic feedback from the researchers and partners with whom we've directly engaged. They recognize the inherent limitations of both traditional analysis methods and of emerging affinity-based and peptide sequences.

Please be advised that today's conference is being recorded.

I would now like to hand, the conference over to your Speaker today, Carrie Mendivil Investor Relations. Please go ahead.

Thank you.

Earlier today <unk> released financial results for the quarter and full year ended December 31 2023.

Haven't received this news release or if you'd like to be added to the Companys distribution list. Please send an email to investor relations at <unk> bio.

Joining me today from <unk> <unk> co founder and CEO, <unk> Malik co founder and Chief scientist and Annemarie Chief Financial Officer.

Sujil Patel: They clearly understand how critically important single-molecule, intact protein analysis, which only Nautilus is designed to deliver, will be to their expanded exploration. We, and they, envision a day when their ability to explore the entire proteome more thoroughly will net fundamental advances in basic biological research, enabling researchers to make a substantial impact on the efficiency and cost-effectiveness of biomarker discovery. And while the desire on the part of researchers to finally have a breakthrough in the availability and cost of valuable proteomic data is not, What is new is the potential for actually delivering on that is fueling the imagination of researchers to think beyond what has been possible and towards the idea of what could be. This is a truly exciting time to be on the front lines of rodeo.

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

Except as required by law Nautilus disclaims any intention or obligation to update or revise any financial product pipeline projections or other forward looking statements because of new information future events or otherwise. This conference call contains time sensitive information and is accurate only as of the live broadcast February 28 2024.

I will turn the call over to Joe.

Parag: With that, let me now turn the call over to Parag for an update on our progress in the R&D lab. Thanks, Zijal. Overall, we made solid progress against our core goals in 2020. Our major focus last year was on development activities, i.e. Increasing scale, stability, and reproducibility across our entire ecosystem, but especially our affinity; we additionally made significant progress in reducing the cost and complexity of producing. This progress goes hand in hand with advancing the reliability, quality, and customer readiness of our instruments and software. Some examples of this progress include significantly increasing the development pace for our affinity. This increase was a result of optimizing the yield and throughput of our reagent development pipeline. We also transitioned many of those new reagents into common experiments. We have advanced our fabrication and assembly processes for our nanopattern chip and flow cell.

But first I want to thank our employees, our partners and our investors, creating a platform capable of enabling researchers to explore the mysteries and the potential of the protium is very much a team effort. It requires strong alignment up and down the organization vision persistence and in other.

<unk> commitment to our goal of improving human health.

I am grateful for the extraordinary work the entire team did in 2023.

And for how they've kicked off 2020 for stronger than ever.

We recognize that we're tackling a big heart problems that had never been successfully addressed.

And armed with the learnings of last year and years. Prior we now have greater clarity about what remains to be done to deliver what we believe will be a game changing platform to the market.

We enter 2024 more energized than ever focused on the good that we anticipate our platform can do and confident in our ability to get there.

When I reflect on 2023 feet of a year of accomplishment and a foundational progress progress that we'll continue to build momentum for Nautilus as we move through 2024 and towards the planned launch of our proteome analysis platform in 2025.

Parag: This refinement enabled both improvements in scale and reproducibility. Additionally, we additionally qualified our external patterning and assembly partners. After refining our nanoparticle scaffolds, we more than 10x-ed the throughput and scale of manufacturing for both our labeled probes and our nanoparticle scaffolds.

Youll hear more details about specific R&D progress from parag in just a few minutes.

And more context for me around the revised launch timeframe a little later.

But first I want to reflect on what we continue to hear from potential customers and what I sense as I look across the market landscape.

Parag: 2023 also saw a continued focus on advancing our commercial activities, especially the integration of the hardware, software, and wetware elements. Taking an instrument from concept to commercial readiness is complex and requires close coordination between teams across the company. I'm pleased with the progress I saw last year in this regard, with the instrument becoming a true workhorse. The combination of advances in our consumable production scale reliability and reproducibility, the increased stability of our multi-cycle assays, and the expansion and available number of commercial form factor instruments enabled us to successfully perform substantially greater numbers of longer cycle experiments in the past quarter than we did in the prior several years combined. That work continues to accelerate in 2024 The deluge of data from these more numerous and larger-scale experiments also drove advances in the software and bioinformatics aspects of our platform. In particular, like with the instrument, we have switched over from prototype software tools to integrated and automated pipelines that will be used by our customers. In the past, these analyses might have taken weeks of hands-on time to execute.

More specifically, we continue to receive enthusiastic feedback from the researchers and partners with whom we have directly engaged.

They recognize the inherent limitations of both traditional analysis methods and of emerging affinity based and peptide sequencing methods. They clearly understand how critically important single molecule intact protein analysis, which only nautilus is designed to deliver will be to their expanded exploration.

The party.

While the desire on the part of researchers to finally have a breakthrough in the availability and cost of valuable proteomics data not new what is new is the potential of actually delivering on that dream.

That is fueling the imagination of researchers to think beyond what has been possible and towards the idea of what could be possible. This is a truly exciting time to be on the frontline authority I think innovation.

With that let me now turn the call over to Parag for an update on our progress on the R&D front parag.

Parag: And now, analyses can be achieved with minutes of hands-on data. As we reported in Q2, the increasing experimental scale and assay robustness have enabled us to increase the set of model proteins that can be successfully decoded. We have diversified our models to include mixes of multiple proteins across a range of concentrations and are excited about further increasing the complexity of our model. These efforts are essential to the path toward verification and validation required for long-term care. Coming out of 2023 and into 2024, we remain focused on addressing the foundational elements required to launch our platform, ranging from how to immobilize single-protein molecules on our nanopattern flow cell, how to detect diverse epitopes within proteins at single-molecule resolution, the ability to run large-scale experiments involving large numbers of probes across large numbers of cycles, and an instrument ready to transition into broader use.

Overall, we made solid progress against our core goals in 2023, our major focus last year was on development activities I E increasing scale stability and reproduce ability across our entire ecosystem.

But especially our consumables we.

Some examples of this progress include Cigna.

Significantly increasing the development pace for our affinity reagents. This.

This increase was a result of optimizing the yield and throughput of our reagent development pipeline. We also transitioned many of those new reagents into common experimental use.

We advance our fabrication and assembly processes for our nano pattern shipping flow cell. This refinement enabled both improvements in scale and reproduce ability. We additionally qualified our external patterning at Assembly partners.

After refining our nanoparticle scaffolds were more than 10 X the throughput and scale of manufacturing for both our labeled probes and our nanoparticle scaffolds.

Parag: In an ongoing demonstration of our commitment to transparency and openness, we continue to reach out to the broader proteomics community with the objective of sharing the scientific underpinnings of our platform. These conversations frequently lead to suggestions of exciting and creative applications of our platform that we have not previously considered. The next major opportunity for data sharing and application ideation comes in two weeks at the U.S. HIPPO Conference in Portland, Oregon.

2023 also saw a continued focus on advancing our commercial instrument, especially the integration of the hardware software and <unk> elements.

Taking an instrument from concept to commercial readiness is complex and requires close coordination between teams across the company.

I am pleased with the progress I saw last year in this regard with the instrument, becoming a true workhorse.

Parag: I am incredibly excited by the opportunities we'll have at the event, where we'll be publicly presenting on the following topics, additional progress on the experimental implementation of PRISM, further detail on our multi-affinity probe pipeline, and on computational methods to estimate false discovery rates. Overall, we continue to listen to the proteomics community, our future customers, to ensure that we are sharing with them ongoing updates on our progress towards specific technical areas. One of the areas that I'm most excited about is the additional data we'll be sharing resulting from the targeted proteoform studies of Tau and DGFR that we've been pursuing in partnership with Genentech and NHGRI. All the advances that we've made towards advancing our platform for broad-scale studies have synergistically and simultaneously advanced our platform for targeted proteoform studies. We continue to hear from the community how important proteoforms, as defined by combinations of splice variants and post-translational modifications, are in Heart and Disease Biology, and the excitement about our platform is uniquely suited to measure the molecular heterogeneity of proteoforms at single molecule resolution.

Then we did in the prior several years combined.

Work continues to accelerate in 2024.

The deluge of data from these more numerous and larger scale experiments also drove advances in the software and bioinformatics aspects of our platform in.

In particular like with the instrument, we have switched over from prototype software tools to the integrated and automated pipeline that will be used by our customers in.

In the past these analyses might take weeks of hands on time to execute and now analyses can be achieved with minutes of hands on time.

As we reported in Q2, the increasing experimental scale and assay robustness has enabled us to increase the set of model proteins that can be successfully Dakota.

We have diversified our models to include mixes of multiple proteins across a range of concentration and are excited about further increasing the complexity of our model systems.

Efforts are essential to the path towards verification and validation required for launch.

Coming out of 2023 and into 2024, we remain focused on addressing the foundational elements required to launch our platform ranging from how do we mobilize single protein molecules on our nano pattern flow cell how did the tech diverse epitopes within proteins that single molecule resolution the ability to run large scale experiments involving large numbers approach.

Parag: As Sujil mentioned earlier, we come into this year clear-eyed about what work remains to be done and confident that we have a solid foundational understanding of what is required to get our platform into the hands of the masses, where it can have profound. With that, I'll turn the call back to. Thanks for the update, Parag. On another HUPO-related note, at the event, Pirog will be honored as the 2024 recipient of the Gilbert S. Omen Computational Perdium. This prestigious award recognizes Pirog's career achievements and long-standing leadership role in the development of bioinformatic analyses and the computational methods widely used by the party. Needless to say, we are very grateful to have him on our team.

Across large numbers of cycle and an instrument ready to transition into broader use.

These conversations frequently lead suggestions are exciting and creative applications of our platform that we had not previously envisioned.

The next major opportunity for data sharing and application aviation comes in two weeks at the Usu Bow conference in Portland, Oregon.

I am incredibly excited by the opportunities we'll have at the event, where we will be publicly presenting on the following topics additional progress on the experimental implementation of prism further detail on our multifamily pro pipeline and on computational methods to estimate false discovery right.

Overall, we continue to listen to the proteomics community our future customers to ensure that we are sharing with them ongoing updates on our progress towards specific technical areas.

All of the advances that we've made towards advancing our platform for broad scale studies has synergistically and simultaneously advanced our platform for targeted Proteoform studies.

We continue to hear from the community how important protein forms as defined by combinations of splice variance in post translational modifications Archie.

<unk> disease biology, and the excitement about our platform is uniquely suited to measure the molecular heterogeneity of pretty farms at single molecule resolution.

Sujil Patel: During recent calls, we've shared our thoughts on the experimental and related work that's required to enable us to maintain a 2024 commercial launch timeframe with the V1 product specifications that we believe will be transformative to our market. Despite strong progress towards these goals and in the name of ensuring that we launch a product that meets our very high bar for quality and performance, we now plan to launch our proteome analysis platform, Instruments, Reagents, and Software, in 2021. We remain singularly focused on driving our scientific and development efforts forward in the most efficient, cost-effective way.

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

Thanks for the update parag.

On another hoopoe related note at the event Parag will be honored as the 2024 recipient of the Gilbert as omen.

<unk> Proteomics award this prestigious award recognizes <unk> career achievements and long standing leadership role in the development of balance dramatic analyses and the computational methods widely used by the proteomics community.

Sujil Patel: I want to emphasize that we are not currently focused on creating short-term revenue opportunities. By choosing to focus intently on our development objectives, we believe we are positioning ourselves to create the best platform possible and make the maximum positive impact on the marketplace, biological science, and long-term shareholders. As you'll hear from Anna in just a moment, we continue to operate in a very capital efficient way, our burn rate and cash balance are a significant advantage for us, and we need to strike the right balance between maximizing our cash runway into 2026 while making the investments that are necessary to drive our scientific progress. For more on that and other things, let me hand the call over to Anna for a look at our Q4 and full year 2023.

Needless to say, we are very grateful to have him on our team.

During past calls we have spoken about the well understood reality, that's shipping the first version of any truly groundbreaking product can be slower and more challenging than initially anticipated.

I was one of our board members is fond of saying these delays are often based on encountering and knocking down one by one what she refers to as <unk> challenges associated with being first in the world.

Since we recognize how significant an impact will be created by the data that our platform is expected to produce we are committed to ensuring that our company fully ready to introduce support and rapidly innovate on what is designed to be an incredibly high quality high value product the world.

Of biology deserves our best and we have set an exceedingly high bar for ourselves.

Sujil Patel: Thanks, Sejal. Total operating expenses for the fourth quarter of 2023 were $20.0 million, up $3.7 million compared to the fourth quarter of 2022 and $0.9 million above the previous quarter. This modest increase in operating expenses year over year was driven primarily by an increase in headcount to support the ongoing development of our product. Research and development expenses in the fourth quarter of 2023 were $12.5 million compared to $9.6 million in the prior year period. General and administrative expenses were $7.5 million in the fourth quarter of 2020, compared to $6.7 million in the prior year period. Overall net loss for the fourth quarter of 2023 was $17.0 million, compared to $13.4 million in the prior year period.

During recent calls we've shared our thoughts on the experimental and related work that's required to enable us to maintain a 2024 commercial launch timeframe with the D. One products specification that we believe will be transformative to our market.

Main senior really focused on driving our scientific and development efforts forward in the most efficient cost effective way possible.

I want to emphasize that we're not currently focused on creating short term revenue opportunities.

Terrific progress forward.

For more on that and other things, let me hand, the call over to Anna for a look at our Q4 and full year 2023 financials.

Anna.

Thanks Vishal.

Total operating expenses for the fourth quarter of 2023 were $20 1 million up $3 $7 million compared to the fourth quarter of 2022, and <unk> $9 million above last quarter.

This modest increase in operating expenses year over year was driven primarily by an increase in head count to support the ongoing development of our products.

Research and development expenses in the fourth quarter of 2023.

$12 5 million compared to $9 $6 million in the prior year period.

General and administrative expenses were $7 5 million in the fourth quarter of 2023 compared to $6 7 million in the prior year period.

Overall net loss for the fourth quarter of 2023 was 17 point, there are $1 million compared to $13 4 million in the prior year period.

For fiscal year 2023, operating expenses were $76 2 million, an increase of $12 5 million or 20%.

Anna Mowry: Turning to our balance sheet, we ended the year with approximately $264 million in cash, cash equivalents, and investments, compared to $276 million at the end of last quarter. Over the past year, we have hired additional leadership talent, particularly in R&D, and increased the throughput of our development and production pipeline. Importantly, we have achieved improved efficiencies with operational spend, beating our internal expectations. We entered 2024 with a lower burn rate and a strong cash balance, extending our cash runway into the second half. We remain committed to responsible financial stewardship to ensure flexibility ahead of our commercial line. Today, we filed a shelf registration statement on Form S-3, as well as a prospective supplement regarding a potential at-the-market offering of up to $125 million, which has not yet been declared effective.

<unk> from $63 6 million in fiscal year 2022. This increase was driven primarily by an increase in head count to support the ongoing development of our products.

Net loss for the full year was $63 7 million compared to $57 9 million in fiscal year 2022, an increase of 10% year over year.

Turning to our balance sheet, we ended the year with approximately $264 million in cash cash equivalents and investments compared to $276 million at the end of last quarter.

Over the past year, we have hired additional leadership talent, particularly in R&D and increased the throughput of our development and production pipeline importantly, we have achieved improved efficiencies with operational spend beating our internal expectations.

We entered 2024 with a lower burn rate strong cash balance.

Attending our cash runway into the second half of 2026.

We remain committed to responsible financial stewardship to ensure flexibility ahead of our commercial launch.

Anna Mowry: We view this filing as strictly good corporate housekeeping designed to allow us the flexibility to strategically and efficiently raise capital. In 2024, we expect growth and spend to steadily increase as we continue to prepare for our commercial launch. This year, we expect our overall operating expenses to grow by approximately 25% from 2023 levels. We are confident that we remain well-positioned to execute on our strategy to launch a transformational platform in proteomics. With that, I'll turn it back to Sujil.

View this filing is strictly good corporate housekeeping designed to allow us the flexibility to strategically and efficiently raise capital in the future.

In 2024, we expect growth in spend to steadily increase as we continued to prepare for our commercial launch. This year, we expect our overall operating expenses to grow by approximately 25% from 2023 level. We are confident that we remain well positioned to execute on our strategy to launch transformational platform in proteomics.

With that I'll turn it back to digital.

Sujil Patel: Thanks, Anna. Anna's report clearly demonstrates our steadfast commitment to responsible financial stewardship of this business as we move towards commercial availability in 2020. We're excited about and energized by what lies ahead for Nautilus and the difference we believe our platform can make in biology. Our mission to positively impact the health and lives of people around the world remains our guiding light and the high standard to which I'm grateful to our team, our investors. Thank you to our strategic partners and our research collaborators for joining us on this journey to revolutionize proteomics and empower the scientific community in ways never thought possible. We made excellent progress in 2023 and look forward to building on those successes as we move through 2024 on our way to a commercial launch in 2025. With that, I'll turn the call back to you, Brennan. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again.

Thanks, Anna and his report clearly demonstrates our steadfast commitment to responsible financial stewardship of this business as we move towards commercial availability in 2025.

We're excited about and energized by what lies ahead for Natera and different we believe our platform can make good biological facts.

Our mission to positively impact the health and lives of people around the world remains our guiding light and the high standards to which we hold ourselves I'm grateful to our team our investors our strategic partners and our research collaborators for joining us on this journey to revolutionize proteomics and empower the scientific community.

Maybe in ways never thought possible we.

We made excellent progress in 2023 and look forward to building on those successes as we move through 2024 on our way to a commercial launch in 2025 and beyond.

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

Operator.

As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Operator: Please stand by while we compile the Q&A roster. Our first question comes from Tejas Savant with Morgan Stanley. Your line is open. Good morning, this is Yuko from 4KG. Thank you for taking our questions. Can you further elaborate on the factors that led to the push out of... 5. I appreciate the pace of development, which is accelerated, but is that essentially the gating factor? And then, could you also comment on whether you're... www. Nautilus.com, Morning, Yuko.

These standby, we compile the Q&A roster.

Our first question comes from Josh Savant with Morgan Stanley. Your line is open.

Good morning. This is Hugo on Forte, Jeff. Thank you for taking our questions could you further elaborate on the factors that led to the pushout of the instrument to 2024 or 2025 I. Appreciate the peso development affinity regions of significantly accelerate accelerated but is that essentially the gating factor to launch at this point.

And then could you also comment on whether you are targeting launch in first half or second half of 2025.

Good morning. Thank you for the question, Rob maybe if you want to take the first half of that question and then I will address the second half.

Operator: Thank you for the question, Prabh. Maybe you want to take the first half of that question, and then I will address it. Sure, that sounds great.

Sure that sounds great.

Thanks, so much for the question.

Maybe just to start with commenting on the key aspects of the platform overall.

No.

At the foundation of the platform.

Our three core elements.

Method for depositing single molecule onto a hyper dense nano pattern array.

Number two.

And assay incorporating potentially hundreds of affinity reagents that are iteratively slowed over the array and image and in three of the machine learning frameworks, which takes all of those pieces together.

As we have been working through development.

Key challenges, we've been facing really have been ones of scale quality reproducibility and stability.

Which are critical for our end to end the assay to be as robust as possible.

Additionally, we've been working through.

<unk> through.

To have a product that is consistent reliable and performance as possible.

Great. Thanks, Brian you can take the second half of your question here.

In addition to web proxy.

Sujil Patel: So you asked for further specificity than what we said in our prepared remarks, and I think that at this point, we don't want to provide any further specificity beyond 2025. But what I will tell you is that, as we've previously discussed, prior to our full commercial launch, which means instruments, reagents, and software, before that launch, we will have a short beta period, which means physical instruments being placed at customer sites. Before that, we'll have our early access period, which is the period where customers can send us samples, we can analyze them, and return the data to the customer at our own facility. And as we get to that early access period launch, I do expect that I'll be able to provide further specificity on the timeline and narrow it down, as well as when we launch the EAP, the Early Access Program, I'll be able to provide more specificity on that.

You asked about further specificity.

Then what we said in our prepared remarks, and I think that at this point, we don't we don't want to provide any further specificity than 2025, but what I will tell you is that we do expect as we've previously discussed that prior to our full commercial launch, which means instruments reagents and software before that launch we will have.

Alright, beta period, which means physical instruments being placed at customer sites before that we'll have our early access period, which is the period where customers can send us samples, we can analyze them and return the data to the customer in our own facility and as we get to that early access period launch I do expect that.

We will be able to provide further specificity on the timeline and narrow it down as well as when we launched the EAP early access program will be able to talk about our expected.

Sujil Patel: Thank you. Thank you. Thank you. Thank you. Thank you. Thank you, talk about our expected WANT specifications in much detail. Our next question comes from the line of Brandon Collard with Jeffries. Your line is open, and this is Matt on behalf of Brendan.

Once specifications in much more detail as well.

Yes.

Great. Thank you.

Our next question comes from the line of Brandon Couillard with Jefferies. Your line is open.

Hey, Thanks, This is Matt on for Brandon.

Operator: Anyone for you and on the cash runway out to the back half of 26. I think prior, you guys have talked about runway into 26 given a number of 24 launch scenarios. So now that you're pointing to the 25 launch, but cash into the back half of 26. We're just curious if there's anything that changed in other areas that you're maybe monitoring or sharpening your pencil on.

Maybe one for you Ed on the cash runway out to the back half of 2006 I think prior you guys had talked about runway into 2000 <unk> given a number of 24 launch scenarios. So now that you're pointing to the 25 launch but cash into the back half of 2000 <unk>. So just curious if there's anything that changed or are there. Other areas that you are maybe moderating or sharpening your pencil.

Operator: Thanks. Matt, good morning, thanks for the question. As you've heard us consistently say, we've been very prudent in how we've been managing our investment. We continue to be very targeted in 2024 with our expectation of growth in OPEX around 25%. We expect cash burn to be a little bit higher than that as we start to make some capital investments. But overall, our runway doesn't have any real sensitivity to our launch timeline if we have the ability to manage our expenses to go with it. Okay, thanks.

Thanks.

And that as we.

Start to make some capital investments, but overall our.

Runway doesn't have any.

Real sensitivity to our launch timeline as we have the ability to manage our expenses to go with that timeline.

Yeah.

Operator: And then I guess, kind of sticking with that topic on 24, you guys have a 25% increase year over year. Just maybe talk about your ability to moderate that up and down, you know, last year, given the backdrop, you moderated it down, or should we think about 24 is kind of more locked in at that range, given the commercial launch in 25. Sure. We always have the ability to moderate it up and down.

Okay. Thanks, and then I guess.

Sticking with that topic on 'twenty four you guided to the 25% increase year over year could you maybe talk about your ability to moderate that up and down in the last year given the backdrop, you moderated down or should we think about 2004 is kind of more locked in at that range given the commercial launch in 'twenty five.

Operator: 25% we feel is a very targeted level of investment. We're investing in all areas, continuing to invest in development, as well as SG&A to support our manufacturing and production capabilities, potentially some commercial in there as well, to the extent that we need to. Modern, and just last one quick clarification: the Amgen Genentech data you talked about, will that be presented at USHPO here in a couple weeks, or will that be in another forum? Thanks. I'll take that, yes, so we are planning to present that at USHPO, and there will be poster presentations on that material, and we will also discuss it at our lunch seminar. Thank you.

All in there as well to the extent that we need to.

<unk>.

The ability to moderate that as needed.

Okay. Thanks, and then just last one quick clarification, the Amgen Genentech data you've talked about will that be presented at.

U S hoopoe here in a couple of weeks or will that be another form.

Yes.

Perfect.

I'll take that yes, so we are planning to present that at <unk>.

Poster presentations on that material and we will also discuss it in our lunch seminar.

Thank you Matt.

Sujil Patel: And Matt, just to add just a tiny bit of additional information for you on the cash side. So the cash guidance of having a cash runway into the second half of 2026, of course, given the launch timeline of 2025, includes the buildup of our commercial organization and includes the launch of the platform and the initial revenue ramp. And so when you talk about flexibility, I think the biggest thing to highlight is that we as a company have been very good about managing that OPEX as the timeline moves up and down. And we expect to continue to do that as well. And so at the point that you start to see a tick up in that OPEX, I think that's indicative of us getting closer. Appreciate it; I'll leave it there.

And Matt just to add just a tiny bit of additional sort of.

Information for you on the cash side the cash guidance.

Having a cash runway.

Into the second half of 2026 of course, given the launch timeline of 2025 includes the buildup of our commercial organization and include the launch of the platform and the initial revenue ramp and so all of that is baked into that and so when you. When you talk about flexibility I think the biggest thing to highlight is that we as a company have been very.

Good about managing that Opex as the timeline moves up and down and we expect to continue to do that as well until at the point that you start to see.

A tick up in that Opex, I think thats indicative of us getting getting closer to that launch.

Thanks, I appreciate it I'll leave it there.

Sujil Patel: Our next question comes from the line of Matt Sykes with Goldman Sachs. Your line is open. Hey, good morning. Thanks for taking my questions. Maybe just on the push out of the platform to 25, I'm just curious. Obviously, you're working with a number of customers today on the beta and the other things that you're doing with Amgen, Genentech, et cetera. In terms of engaging a broader set of customers, given the pushout to 25, how do you maintain that momentum with broadening out and keeping that excitement about the product, just given the delay out to 25? Good morning, Matt. This is Sujil. Maybe I'll tackle this one first.

Our next question comes from the line of Matt <unk> with Goldman Sachs. Your line is open.

Hey, good morning, Thanks for taking my questions maybe.

And maybe just on the.

Push out of the platform to 'twenty five.

Just curious.

We are working with a number of customers today on the on the beta and the other things that youre doing with Amgen Genentech et cetera in terms of engaging a broader set of customers given the push out to 'twenty five how do you maintain that momentum with broadening out and keeping that excitement about the <unk>.

Just given the delay out to 'twenty five.

Good morning, Matt This decision maybe I'll tackle this one I think that there are there are two ways that we.

Sujil Patel: I think that there are two ways that we intend to continue building momentum with the scientific community and with our partners. One is that at each of these major competitions, for example, this USHIPO conference which is coming up in a few weeks, we continue to present new and novel data about our platform that shows our progress towards a launch. If you think about the core elements of our platform, building a single protein-molecule array that's uniform and dense, being able to decode proteins using our PRISM map, and you think about the bioinformatics that are tied into our system, all of these are incredibly unique. In the scientific community, this is a method that has never been attempted before. And so that data for the scientific community and our potential customers is incredibly exciting.

We intend to continue building momentum with the scientific community and with our potential customers. One is that at each of these major comprehensive for example, this year's Super Conference, which is coming up in a few weeks, we continue to present, new and novel data about our platform that shows our progress.

Towards the launch and.

If you think about the core elements of our platform building a single protein molecule array, that's uniform and dense being able to decode proteins using our prism method.

And you think about the bioinformatics that are tied into our system. All of these are incredibly unique.

And the scientific community. This is a method, which has never been attempted before and so that data to the scientific community of our potential customers is incredibly exciting.

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