Q4 2023 Singular Genomics Systems Inc Earnings Call
Good afternoon, everyone and welcome to the singular genomics fourth quarter and full year 2023 earnings call.
Operator: Good afternoon, everyone, and welcome to the Singular Genomics fourth quarter and full year 2023 earnings. At this time, all participants have been placed in a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Philip Taylor. Please observe that the floor is yours.
At this time, all participants have been placed on a listen only mode and we will open the floor for your questions and comments after the presentation.
It is now my pleasure to turn the floor over to your host Philip Taylor, Sir the floor is yours.
Thank you operator, presenting today are singular genomics founder Chairman and Chief Executive Officer drew split into <unk>, and the Companys Chief Financial Officer, Dale and meter earlier today singular genomics released financial results for the three months ended December 31, 2023, a copy of the press release is available on the company's website.
Philip Taylor: Thank you, Operator. Presenting today are Singular Genomics' founder, chair, and chief executive officer Drew Spaventa and the company's Chief Financial Officer Dalen Meeter. Earlier today, Singular Genomics released financial results for the three months ended December 31st, 2023. A copy of the press release is available on the company's website. Before we begin, I would like to inform you that comments and responses to your questions during today's call reflect management's views as of today, Monday, March 18th, 2024 only and will include forward-looking statements and opinion statements, including predictions, estimates, plans, expectations, and other information related to our financial and operating results, plans, and strategies. However, actual results may differ materially from those expressed or implied by these statements as a result of certain risks and These risks and uncertainties are more fully described in our press release issued earlier today and in our filings with the Securities and Exchange Commission, including our most recent Form 10-K filing and the Form 8-K filed with today's press release. Our SEC filings can be found on our website or on the SEC's website.
Before we begin I would like to inform you that comments and responses to your questions. During today's call reflect management's views as of today Monday March 18, 2024, only and will include forward looking statements and opinions statements, including predictions estimates plans expectations and other information related to our financial and operating results.
Lance and strategies.
Actual results may differ materially from those expressed or implied by these statements as a result of certain risks and uncertainties. These risks and uncertainties are more fully described in our press release issued earlier today and in our filings with the Securities and Exchange Commission, including our most recent Form 10-K filing and the form 8-K file.
With today's press release, our SEC filings can be found on our website or on the Sec's website investors are cautioned not to place undue reliance on forward looking statements, we disclaim any obligation to update or revise these forward looking statements.
Philip Taylor: Investors are cautioned not to place undue reliance on forward-looking statements. We disclaim any obligation to update or revise these forward-looking statements. Please note that this conference call will be available for audio replay on our website at investors.singulargenomics.com in the presentations and events section. With that said, I will now turn the call over to CEO Drew Spaventa. Good afternoon, and welcome to Singular Genomics' fourth quarter 2023 earnings call. It was a productive quarter to finish off an important year for the company, and I'm pleased to update you on our progress. We will focus our call on the following areas.
Please note that this conference call will be available for audio replay on our website at investors <unk> singular genomics dot com in the presentations and events section with that I will now turn the call over to CEO drew stood that up.
Good afternoon, and welcome to the singular genomics fourth quarter 2023 earnings call.
It would've been productive quarter to finish off an important year for the company and I'm pleased to update you on our progress.
We'll focus our call on the following areas one business highlights and key accomplishments from 2023, two new data and product announcements and three strategic focus for 2024.
Philip Taylor: One, business highlights and key accomplishments from 2023. Two, new data and product announcements. And three, strategic focus for 2024. Let's start with our fourth quarter results.
Let's start with our fourth quarter results, we shipped atg four instruments during the quarter and generated $1 1 million in revenue our highest quarterly total yet of these shipments three were to academic core labs, and if I were to commercial labs the.
Andrew Spaventa: We shipped 8 G4 instruments during the quarter and generated $1.1 million in revenue, our highest quarterly total yet. Of these shipments, three were to academic core labs and five were to commercial labs. The shipments comprise an equal split between traditional capital purchases and non-capital arrangements, bringing our total GFORCE shipments to 24 as of December 31. In addition to our Q4 revenue performance, we had several other key accomplishments and activities for the year to note. We commercially launched and transitioned the majority of our customers to our F3 flow cells, allowing users to get up to 450 million reads per flow cell, or 1.8 billion reads per run for some of the most widely run applications. We commercially launched max-read flow cell kits to customers for single-cell sequencing, increasing the output of the G4 to 800 million reads per flow cell, or 3.2 billion reads per run, for specific single-cell and spatial sequencing applications.
The shipments comprised an equal split between traditional capital purchases and non capital arrangements, bringing our told you for shipment to 24 as of December 31.
In addition to our Q4 revenue performance, we had several other key accomplishments and activities for the year to note.
We commercially launched <unk> transitioned the majority of our customers to our F three flow cells.
And users to get up to 450 million reads per flow cell or $1 8 billion reads per run for some of the most widely run applications.
We commercially launched <unk> flow cell kits to customers for single cell sequencing, increasing the output of the G. Four to 800 million reads per flow cell or $3 2 billion rides per run for a specific single cell and spatial sequencing applications.
Andrew Spaventa: We improved sequencing quality on the G4, recently increasing the specifications to 85% bases greater than or equal to Q30. Lastly, we narrowed our priorities across the R&D roadmap to focus resources on the highest impact activities and projects for new innovations while reducing our cash burn and extending runway. Turning to new data and product announcements, we recently showcased our near-term product pipeline at the AGBT conference in Orlando, Florida. At the conference, we unveiled the G4x Spatial Sequencer, a high-throughput in-situ spatial sequencing platform. The G4X is designed to offer novel capabilities, such as stackable Data Streams and unprecedented throughput for spatial profiling of tissue.
We improved sequencing quality on the G. Four recently increasingly specifications to 85% basis greater than or equal to Q30.
Lastly, we narrowed our priorities across the R&D roadmap to focus resources on the highest impact activities and projects for new innovations, while reducing our cash burn and extending runway.
Turning to new data and product announcements, we recently showcased our near term product pipeline at the <unk> conference in Orlando, Florida at.
At the conference we unveiled the <unk> spatial sequencer, a high throughput into two special sequencing platform.
The <unk> is designed to offer novel capabilities stackable data streams and unprecedented throughput for spatial profiling of tissue.
Andrew Spaventa: Its novel capabilities will include DirectSeq, which is the sequencing of RNA in situ and has the potential to open new areas of scientific discovery. In addition, G4X will offer readouts of targeted transcripts, targeted proteins, and a fluorescent H&E stain, all in the same tissue section. This combination of readout modalities will be offered at an unprecedented scale. With 40 square centimeters of flexible imaging area and single-day run times, the G4x system will enable labs to process 20 times more samples per week than existing technology. At the conference, our CSO and co-founder, Eli Glaser, presented to a standing-room-only audience, sharing the performance data and technical specifications of the G4x system. In addition, we hosted a successful customer and KOL event, including lab directors and scientific leaders in the spatial community. The event provided an opportunity to develop relationships.
Its novel capabilities will include direct seek which is the sequencing of RNA in situ and has the potential to open new areas of scientific discovery.
In addition, the <unk> will offer readouts of targeted transcripts targeted proteins and a fluorescent <unk> all on the same tissue section.
This combination of readout modalities will be offered at an unprecedented scale with 40 square centimeters of flexible imaging area and single day run times. The <unk> system will enable labs or process 20 times more samples per week than existing technologies.
At the conference our CFO and co founder you like leather presented to a standing room only audience sharing the performance data and technical specifications of the G. Four X system in.
In addition, we hosted a successful customer and Kols.
Including lab directors and scientific leaders in the spatial community.
<unk> provide an opportunity to develop relationships solicit feedback on the system and discuss opportunities for collaborating and working together to bring the G Forex forward.
Andrew Spaventa: Solicit feedback on the system and discuss opportunities for collaborating and working together to bring G4X forward. We presented internal and external data at the conference. Internal data included transcripts, proteins, and direct sequencing of RNA.
We presented an internal and external data at the conference internal data included transcripts proteins and direct sequencing of RNA external data came from two technology access program or tap partners.
Andrew Spaventa: External data came from two technology access programs, or TAP, partners. Early collaborators included Catherine Wu from the Dana-Farber Cancer Institute, who noted that the high sample throughput and excellent data quality that has been generated on the G4X with our bone marrow samples, notoriously a very difficult tissue type, have been impressive and have allowed us to envision much larger studies that have not been previously possible. The scale provided by G4X promises to have a tremendous impact on expanding our understanding of the tumor microenvironment in acute myelogenous leukemia, AML, and beyond.
Early collaborators included Katherine <unk> from the Dana Farber Cancer Institute, who noted the high sample throughput and excellent data quality, that's been generated on the G. Forex with our bone marrow samples the tourists that very difficult tissue type had been impressive and have allowed us to envision much larger studies that have not been previously possible. The scale provided by the <unk> promises to have.
Tremendous impact on expanding our understanding of the tumor microenvironment and acute myelogenous leukemia AML and beyond.
In addition, I am.
Andrew Spaventa: In addition... Ioannis Flachos from Harvard's Beth Israel Deaconess Medical Center noted, as the spatial biology field matures, high-throughput spatial platforms such as the G4X will empower more researchers to incorporate spatial tissue profiling into their work, as well as enable us to answer bigger questions and perform increasingly larger studies. We are encouraged by the feedback from early collaborators and interest from potential users coming out of AGBT. The conference generated more than 200 qualified marketing leads, and now we have a growing pipeline of near-term service projects on the G4X and a funnel of potential sales opportunities for early adopters of the platform. We intend to initially offer kits in the G4X that will support transcripts, proteins, and offer fluorescent H&E stains. The system is designed to accommodate a large number of samples and will have the capability to read out hundreds of gene targets and dozens of proteins in the same tissue section.
This slide shows from Harvard Beth Israel Deaconess Medical Center noted as the spatial biology field matures high throughput spatial platforms, such as the G. Forex will empower more researches to incorporate spatial tissue profiling into their work as well as enable us to answer bigger questions and to perform increasingly larger studies.
We are encouraged by the feedback from early collaborators and interest from potential users coming out of <unk>. The conference generated more than 200 qualified marketing leads and now we have a growing pipeline of near term service projects on the G Forex and a funnel of potential sales opportunities for early adopters of the platform.
We intend to initially offer kits and the <unk> that will support transcripts proteins and offer for us in <unk>.
The system is designed to accommodate a large number of samples and will have the capability to read out hundreds of gene targets and dozens of proteins in the same tissue section.
Andrew Spaventa: Content will be available in fixed panels or customizable for the customer. Future kits in the G4X will also support DirectSeq, which is designed to directly read regions of RNA, such as cancer hotspot mutations, guide RNAs in CRISPR screens, or B and T cell receptor sequences. The capability to perform direct sequencing of RNA within cells and tissues is expected to bring a powerful new readout modality for in-situ mole
Content will be available on fixed panels or customizable for the customer future.
Future kits. The G. Forex will also support direct seek which is designed to directly read regions of RNA such as cancer hotspot mutations.
<unk> and crisper screens, or B and T cell receptor sequences.
The capability to perform direct sequencing of RNA within cells and tissues is expected to bring a powerful new readout modality for institute molecular pathology.
Andrew Spaventa: DirectSeq will be initially available as a service with plans for broader release shortly thereafter. The G4X upgrades are expected to be available to G4 customers by the end of this year as part of a G4X early access program. Initially available will be an immune oncology panel of approximately 300 gene transcripts.
Direct sequel will be initially available as a service with plans for broader release shortly thereafter.
The <unk> upgrades are expected to be available to G for customers by the end of this year as part of a <unk> early access program.
Initially available will be an immuno oncology panel of approximately 300 gene transcripts.
Andrew Spaventa: 10 to 15 proteins, and the ability to customize content. DirectSeq and additional panels are expected to be released at a later date. We also plan to provide G4x technology access services starting in the second quarter. Turning to our views and strategic focus for 2024, we are encouraged by the level of interest and engagement around the G4 Act.
10 to 15 proteins and the ability to customize content direct seeking additional panels are expected to be released at a later date.
We also plan to provide <unk> technology access services, starting in the second quarter.
Turning to our views and strategic focus in 2024.
We are encouraged by the level of interest and engagement around the G. Forex, we are seeing strong interest from early collaborators, especially as it relates to our technology access services offering.
Andrew Spaventa: We are seeing strong interest from early collaborators, especially as it relates to our technology access services offering. Based on early feedback and interest in G4X, we intend to focus more heavily on spatial sequencing and multiomics moving forward.
Based on early feedback and interest in the <unk>, we intend to focus more heavily on spatial sequencing and multi <unk> moving forward.
Andrew Spaventa: We believe this is an area where we can offer novel and differentiated solutions with compelling business economics. The setup for G4X has multiple compelling aspects driving this shift in focus. First, the strength of the value proposition. The G4X value proposition is expected to provide unique capabilities that customers are asking for. This can be categorized into novel data output modalities, and high throughput.
We believe this is an area, where we can offer novel and differentiated solutions with compelling business economics.
The setup for the G. Forex has multiple compelling aspects driving this shift in focus.
<unk> strength of the value proposition.
The <unk> value proposition is expected to provide unique capabilities that customers are asking for this can be categorized into novel data output modalities and high throughput the.
Andrew Spaventa: G4X is designed to be highly differentiated from any other current offering while directly addressing customer pain points. Additionally, the business economics are attractive. ASPs on both the G4X instrument and consumables are expected to be higher than the current G4 business. The ability to offer high throughput in the form of 10 to 40 tissue samples on a single flow cell translates to expected ASPs and margin dollars to be materially higher than current kits and significantly higher potential for consumable pull-through per G4X instrument. Third, market dynamics and growth. The spatial profiling and multi-omics space is in the early stages and is expected to grow rapidly. The current market is largely comprised of academic labs, CROs, and reference labs. These labs need higher throughput and lower cost per sample, but current tools are limited.
<unk> is designed to be highly differentiated from any other current offering while directly addressing customer pain points.
Second the business economics are attractive.
Asps on both the <unk> instrument and consumables are expected to be higher than the current G. Four business the ability to offer high throughput in the form of 10% to 40 tissue samples on a single flow cell translates to expected Asps and.
And margin dollars to be materially higher than current kits and significantly higher potential for consumable pull through per G. Forex instrument.
Third market dynamics and growth the spatial profiling and multi omics spaces in the early stages and is expected to grow rapidly. The current market is largely comprised of academic labs.
Crows and reference labs, these labs need higher throughput and lower cost per sample current tools are limited, we believe that <unk> will be uniquely able to serve these customers and accelerate growth within this space.
Andrew Spaventa: We believe that G4X will be uniquely able to serve these customers and accelerate growth within this space. We see a strong set up for G4X to be a highly successful product, and we are making the necessary tradeoffs and decisions to invest in and bring this product to market as fast as possible. We also recognize the need to manage our cash and resources prudently and have continued to identify and implement actions to drive additional cost savings.
We see a strong setup for the <unk> to be a highly successful product and we are making the necessary tradeoffs and decisions to invest and bring this product to market as fast as possible.
We also recognize the need to manage our cash and resources prudently and have continued to identify and implement actions to drive additional cost savings.
Andrew Spaventa: To this end, we recently made the difficult decision to reduce our head count by approximately 20 percent, and we reduced our spending plans to decrease cash burn and focus resources more heavily on our spatial sequencing product roadmap. This reduction was incremental to the cost savings taken in October of 2023 and discussed in our last earnings call. We believe these actions will extend our cash runway into late 2026 while still supporting our current G4 customers and focusing our development work to bring the G4X to market as fast as possible. We will provide additional color and updates on our outlook for 2024 on our Q1 earnings call. Now, I'll turn it over to Dalen to go through the details of our fourth quarter financial results. Thank you, Drew.
To this end, we recently made the difficult decision to reduce our head count by approximately 20% and we reduced our spending plans to decrease cash burn and focused resource more heavily on our spatial sequencing product roadmap.
This reduction was incremental to the cost savings taken in October of 2023 and discussed in our last earnings call.
We believe these actions will extend our cash runway into late 2026, while still supporting our current G four customers and focusing our development work to bring the <unk> to market as fast as possible.
We will provide additional color and update on our outlook for 2024 on our Q1 earnings call.
Now I'll turn it over to <unk> to go through the details of our fourth quarter financial results.
Thank you drew I'll start with financial results for Q4, 2023 and talk briefly about 2024.
Dalen Meeter: I'll start with financial results for Q4 2023 and talk briefly about 2024. As previously discussed, we shipped eight G4 instruments in the fourth quarter of 2023. Revenue for the fourth quarter was $1.1 million, predominantly made up of $0.9 million from revenue recognized on four capital purchase instrument placements, and Consumables pull-through of $0.2 million.
As previously discussed we shipped atg four instruments in the fourth quarter of 2023.
Revenue for the fourth quarter was $1 1 million predominantly made up of $9 million from revenue recognized on for capital purchase instrument placements and consumables pull through of <unk> $2 million.
Dalen Meeter: We expect revenue from the remaining four instrument shipments to be recognized over time as these customers purchase consumables. Gross profit was negative $0.5 million in the fourth quarter of 2023, compared to approximately flat in the fourth quarter of 2022. Our gross margin was negative because of both additional discounts we provided to certain customers, as well as higher costs associated with the installation, training, and support of our system placement. Operating expenses in the fourth quarter of 2023 totaled $24.8 million compared to $22.5 million in the fourth quarter of 2022. These totals included non-cash stock-based compensation expense of $2.7 million in Q4 2023 and $3.1 million in Q4 2022. The year-over-year increase was primarily driven by the timing of expenses related to certain compensation and benefits and severance costs.
We expect revenue from the remaining four instruments shipments to be recognized over time as these customers purchase consumables.
Gross profit was negative $5 million in the fourth quarter of 2023 compared to approximately flat in the fourth quarter of 2022, our gross margin was negative because of both additional discounts we provided to certain customers as well as higher costs associated with the installation training and support of our system placements.
Operating expenses in the fourth quarter of 2023 totaled $24 8 million compared to $22 5 million in the fourth quarter of 2022.
Totals included noncash stock based compensation expense of $2 $7 million in Q4, 2023, and $3 1 million in Q4 2022.
The year over year increase was primarily driven by the timing of expenses related to certain compensation and benefits and severance costs.
Net loss in the fourth quarter of 2023 was $23 $2 million or <unk> 32 per share compared to $21 1 million or 29 per share in the fourth quarter of 2022.
Dalen Meeter: The net loss in the fourth quarter of 2023 was $23.2 million, or $0.32 per share, compared to $21.1 million, or $0.29 per share, in the fourth quarter of 2022. The weighted average share count for the fourth quarter of 2023 used to calculate net loss per share was approximately $73.6 million. Ending cash, cash equivalents, and short-term investments, excluding restricted cash, totaled $173.9 million.
The weighted average share count for the fourth quarter of 2023 used to calculate net loss per share was approximately $73 6 million.
Ending cash cash equivalents and short term investments, excluding restricted cash totaled $173 $9 million.
Dalen Meeter: Turning to 2024, as Drew discussed, we recently implemented a reduction in force of approximately 20% of our workforce. We have also taken actions to reduce our non-personnel related operating expenses in 2024 to further decrease our cash burns. These actions were incremental to the cost savings initiatives implemented in October of 2023 and discussed in our last earnings call. In total, we estimate the combined savings from these actions will reduce annualized operating expenses by approximately $20 million and extend our cash runway to late 2026. While these actions were not easy, we believe right-sizing the cost base of the organization was a necessary step to position us for success in the long term. Back to you, Drew.
Turning to 2024 drew discussed we recently implemented a reduction in force of approximately 20% of our workforce.
We have also taken actions to reduce our non personnel related operating expenses in 2024 to further decrease our cash burn.
These actions were incremental to the cost savings initiatives implemented in October of 2023 and discussed on our last earnings call.
In total we estimate the combined savings from these actions will reduce annualized operating expenses by approximately $20 million and extend our cash runway until late 2026.
While these actions were not easy we believe right sizing the cost base of the organization was a necessary step to position us for success in the long term.
Back to you drew.
Thank you Dylan.
Andrew Spaventa: Thank you, Dalen. I'm excited as we look ahead to 2024. This will be a pivotal phase for singular genomics.
I am excited as we look ahead to 2024 this will be a pivotal phase for singular genomics.
Andrew Spaventa: Singular has spent the last seven years developing incredible technology. We have invested approximately $300 million and, in doing so, created a powerful sequencing platform with significant moats around our system, our chemistries and methods, our IP, and our products. Over the last few years, we have increasingly focused on leveraging our NGS technology and foundation to address the spatial and multiomics market. Our NGS foundation and continued innovation have resulted in a unique and powerful on-ramp to spatial sequencing. Our many years of investment in both NGS and spatial sequencing now position Singular to enter these high-growth markets with a highly differentiated product.
<unk> spent the last seven years developing incredible technology, we have invested approximately $300 million and in doing so created a powerful sequencing platform with significant moats around our system, our chemistries and methods, our IP and our products.
Over the last few years, we have increasingly focused on leveraging our <unk> technology and foundation to address the spatial and multi omics markets.
Our NGL Foundation and continued innovation has resulted in a unique and powerful on ramp to spatial sequencing. Our many years of investment both Ngls and spatial sequencing now positioned singular to enter these high growth markets with a highly differentiated product. The recent restructuring of our business will provide extended runway.
Andrew Spaventa: The recent restructuring of our business will provide an extended runway, give us time to get this product to market, and scale commercially. The synergies and footprint of our current NGS business and customer base will allow us to onboard existing customers and leverage our current commercial operations. Now, let's open it up to questions, operator. Everyone at this time will be conducting a question and answer session. We do ask that while you're posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Again, if you have any questions or comments, please press star 1 on your phone. Please hold while we poll for questions. Your first question is coming from Dan Brennan from TD Cal. Your line is live.
Give us time to get this product to market and scale commercially.
The synergies and footprint of our current NGL business and customer base will allow us to onboard existing customers and leverage our current commercial operations now.
Now, let's open it up to questions operator.
Certainly everyone. At this time, we'll be conducting a question and answer session. If you have any questions or comments. Please press star one on your phone at this time.
We do ask that while posing a question. Please pickup your handset if you're listening on speaker phone to provide optimum sound quality.
Once again, if you have any questions or comments. Please press star one on your phone.
Hold while we poll for questions.
Your first question is coming from Dan Brennan from TD Cowen Your line is live.
Daniel Gregory Brennan: Great, thank you. Thanks for the questions, guys. Congratulations on the quarter and on the G4x. Yeah, so sounds like we're going to get more color at 1Q, but could you unpack a little bit the strategic shift from the sequencing side to the G4x? And can you just give us some sense of what that entails? Like, are you still selling?
Great. Thank you. Thanks for the questions guys, congrats on the quarter and on.
The Forex, yes, so it.
It sounds like we're going to get more color at <unk>, but could you unpack a little bit.
The strategic shift from the sequencing side to the <unk> Forex and can you just give us some sense of what that entails like are you still selling are you still going to be charging ahead on the <unk>.
Andrew Spaventa: Are you still going to be charging ahead on the G4x? Impact of this shift and kind of what it means. Hey, Dan. Thanks for the question. This is Drew.
In fact that.
This shift in kind of what it means.
Hey, Dan Thanks for the question this is drew.
Andrew Spaventa: We lost you at the end there, but I think I understood most of the question. In terms of the strategic shift, it's really a confluence of factors that's driving the shift. It's really best understood by kind of looking at three different aspects of the setup. We talked about it on the call.
We lost you at the end there, but I think I understood. The most of it most of the question.
In terms of the strategic shift.
It's really a confluence of factors.
That's driving the shift it's really best understood kind of looking at three different aspects to the setup, we talked about on the call. The first is the value proposition of the G. Forex and I think there's two ways to think about it the value proposition of the system relative to other options out there in the customers eyes and the value proposition.
Andrew Spaventa: The first is the value proposition of the G4X, and I think there are two ways to think about it. The value proposition of the system relative to other options out there in the customer's eyes, and the value proposition relative to the current G4. And what we see with the X is, you know, it's really resonated with customers. It's the novel ability to use sequencing in situ and do things like direct seek, and it's also the high throughput and lower cost that our large imaging area will deliver. And that combination is really responding, and it's just a very strong value proposition. The second is the business economics on X. We expect to see, you know, higher ASPs for the instruments, and we also expect to see a very different pulse-through profile. For sequencing, our kits range from, you know, around $600 to about $1,200.
Relative to the current G four and what we see with Dx is it's really resonate with customers. It's the novel ability to use sequencing Institute and do things like direct seek and it's also the high throughput lower cost that are large imaging area will will deliver and that combination is really resonating and it's just a very strong value proposition there.
Second is the business economics on X.
We expect to see higher asps for the instruments and we also expect to see a very different pulse through profile on sequencing our kits range from around 600 to about $1200.
On spatial.
Andrew Spaventa: On spatial, you know, the cost per sample and the ability to get, you know, anywhere from, you know, five to 40 samples on a single kit gives us the ability to potentially have ASPs that are many, many times higher on the same kit, on the same system, with much higher margin dollars. So, the amount of time someone has to press go to have a healthy pull-through system with significant margin dollar contribution to the bottom line is just, you know, it's about five to ten times less. So, it's just a very different, you know, setup between those two.
Cost per sample and the ability to get you know anywhere from.
Five to 40 samples on a single kit gives us the ability to potentially have asps that are many many times higher on the same kit on the same system.
With much higher margin dollar so the amount of time someone has depressed go to have a healthy pull through system with significant margin dollar contribution to the bottom line is just it's about 5% to 10 times less so it's just a very different setup on those two and then I think the last thing is that the market is growing very fast and when you have high growth you have areas.
Andrew Spaventa: And then I think the last thing is that the market is growing very fast, and when you have high growth, you have areas that you can kind of find a foothold and differentiate yourself, and it's just much easier to launch and grow a business when growth is abundant. Whereas sequencing, in a lot of ways, in the academic and in the segments we're currently selling in, it's not really growing as fast. That wallet share is starting to shift towards spatial and single cell and protein and all the things that G4X directly addresses. On the clinical side, there's still absolutely going to be, you know, growth in sequencing, but that's reimbursement driven. It's the decentralization of sequencing, and it's going to require much longer time frames.
That you can kind of find a foothill hold and differentiate yourself.
And it's just much easier to launch and grow a business when when growth is abundant whereas sequencing in a lot of ways in the academic and in the segments. We're currently selling in.
It's not really growing as fast that wallet share starting to shift towards spatial and single cell in protein and all the things that the <unk> directly addresses.
On the clinical side, there is still absolutely going to be growth in sequencing, but thats reimbursement driven it's decentralization of sequencing and its agreement to acquire much longer timeframes, we're still very interested in pursuing that market and ideally advancing that through partnership over time, but the G. Forex. We think has the setup to be a much different profile of business in the short term when.
Andrew Spaventa: We're still very interested in pursuing that market and, you know, ideally, advancing that through partnership over time. But the G4X, we think, has the potential to be a much different profile of business in the short term when we're measuring, you know, over the next, you know, quarters and years.
We're measuring over the next quarters and years.
Got it and then in terms of just.
Andrew Spaventa: And then in terms of just, so you will still be pushing ahead then, I guess, in terms of the clinical market, maybe not research, just wondering from a, from like an operational commercial basis, as we go through 24, is it, you know, I think the street probably has somewhere in the midst of, I don't know, 30 or so placements on the G4. Sounds like any color how do we think about, like, the director of the business in 24 as you ship this business model? Yeah, we're still working through a lot of that. I mean, I want to be clear, we are shifting our focus, and we are, you know, putting all of our resources towards getting X developed and out. And that does require, you know, difficult and challenging trade-offs.
So you will still be pushing ahead, then I guess in terms of the clinical market, maybe not research just wondering from a.
From like an operational commercial basis as we go through 'twenty four.
Sure.
Is it.
I think the street, probably saw somewhere in the midst of I don't know 30, or so placements of the <unk>.
It sounds like any color on how we think about like the trajectory the business in 'twenty four as you ship this business model.
Yeah, we're still working through a lot of that I mean, I want to be clear we are shifting our focus and we are putting all of our resources towards getting X developed and out.
And that does require difficult and challenging tradeoffs.
Andrew Spaventa: You know, we will have more color in the next quarter's call. But right now, we are not, you know, pounding the pavement on, you know, putting additional, you know, dollars to go drive, you know, G4 right now. We are focusing resources on G4X. We're 100% committed to supporting our existing customers, and we, you know, are also interested in advancing G4 through partnership. And we do have efforts that are ongoing in outreach. But our focus, again, we're trying to really hone in on what's the highest value, you know, best return on the dollars and resources we have. And that, to us, is very clear at this point.
We will have more color on the next quarter's call, but right now we are not pounding the pavement on.
Putting additional.
To go drive G for right now we are focusing the resources on <unk>.
We're 100% committed to supporting our existing customers and we are also interested in advancing the G. Four through partnership and we do have efforts that are ongoing in outreach, but our focus again, we're trying to really hone in on what's the highest value.
Best return on the dollars and resources, we have and that to US is very clear at this point its acts and Thats, where the majority of our attention is going.
Andrew Spaventa: It's X, and that's where the majority of our attention is going. And maybe last one, just on the G4x end, what are the key milestones this year that we could be watching for in terms of some of the early access customers, like when will we see publications, just kind of give us a sense of what are the guideposts we can watch throughout 24 that'll give us confidence that you guys are on the right trajectory there. Thank you. Thanks, Dan.
Maybe last one just on <unk>, what's the key milestones this year that we can be watching for in terms of.
Some of the early access customers like when will we see publications just kind of give us a sense of what are the what are the guideposts. We can watch throughout 'twenty four that'll give us confidence you guys are on the right trajectory there. Thank you.
Thanks, Dan Yes, so so we're expanding our technology access program now.
Andrew Spaventa: Yeah, so we're expanding our technology access program now. Early on, a lot of these are collaborations where you do work to submit grants, or you do evaluations to demonstrate the technology to potential early adopters. We'll move into kind of a paid-for-services arrangement kind of in Q2, really probably taking more effect in Q3 because there's always onboarding and there's work to get people onboarded, but that'd be something to look out for services and kind of uptake in Q3, and then we're targeting early access placements with just a few select customers. Again, the idea here is these are very high-volume customers in [inaudible] Great.
Early on a lot of these are collaborations where youre doing work to submit grants.
Or are you doing evaluations.
To demonstrate the technology to potentially early adopters will move into kind of a paid for services arrangement.
In Q2, really probably taking more effect in Q3, because theres always onboarding and theres work to get people onboard it.
But that would be something.
Look out for our services and kind of uptake.
In Q3, and then we're targeting early access placements with just a few select customers again. The ideas here. These are very high volume customers in places, where youre going to have a tremendous amount of demand. So the hand selected early access customers end of the year and then moving into a full commercial launch first half of next year.
Sure.
Great great. Thank you.
Thank you. Your next question is coming from Jon <unk> from UBS. Your line is live.
John Newton Sourbeer: Thank you. Your next question is coming from John Sourbeer from UBS. Your line is live. Hi guys, this is Lucas on behalf of John Sourbeer at UBS.
Hi, guys. This is Lucas on for John <unk> at UBS.
Andrew Spaventa: Is there any commentary you could provide on the sales funnel mix between the G4 and the G4X right now? Thanks.
Is there any commentary you could provide on the sales funnel mix between the <unk> and the G. Four X right now thank you.
Yes, yes. Thanks, it's still early to look at the sales funnel for both and comment apples to apples, what we're seeing on axis. We have a growing list of dozen plus potential service. Our collaborators that are in the funnel and that's growing very quickly.
Andrew Spaventa: You know, it's still early to look at the sales funnel for both and compare apples to apples. What we're seeing on X is we have a growing list, a dozen plus potential service collaborators that are in the funnel, and that's growing very quickly. Coming out of AGBT, you know, we had, you know, 100 plus interactions.
Coming out of <unk>, we had.
100 plus interactions.
Andrew Spaventa: And, you know, it does take time to follow up with all those interested parties, and we're doing it in a very formal way where we're trying to identify specific projects where they could utilize G4X. And a lot of that is working through to understand the details of the project to make sure it's a fit for the current capabilities of where we are. We still have a ways to go to develop the full set of capabilities in the platform. But that funnel on the services side is really starting to take shape nicely, and, you know, we're executing on those now.
And it does take time to follow up with all of those interested parties.
And we're doing it in a very formal way, where we're trying to identify specific projects, where they could utilize the G. Four acts in a lot of that is working through to understand the details of the project to make sure. It's a fit for the current capabilities of where we are we still have a ways to go to develop kind of a full set of capabilities in the platform.
But that funnel on the services side is really starting to take shape nicely.
We're executing on those now on the.
Andrew Spaventa: On the, you know, funnel for instrument placement side of things, that's going to take some time. Like I said, we're only talking about early access placements later this year with commercial launch at the beginning of next year. And people are going to want to see publications and services, and, you know, we still have a lot of work to do to kind of, you know, launch this product the right way, which we, you know, are affording ourselves the time to do. On the sequencing side, there remains demand, but we are not ready to comment specifically on the funnel number. It's not something we've talked about before.
Funnel for instrument placements side of things Thats going to take some time like I said, we're only talking about early access placements later this year with commercial launch in the beginning of next year and people are going to want to see publications and services and.
We still have a lot of work to do to kind of launched this product the right way, which we are affording ourselves the time to do.
On the sequencing side.
There remains demand, but not not ready to comment specifically on the final numbers not seen we've talked about before but again our focus at this point is really identifying where are their G for X customers and if those customers are interested in taking a G for now as part of a package to step into X.
Andrew Spaventa: But again, our focus at this point is really identifying, you know, where are their G4X customers? And if those customers are interested in taking a G4 now as part of a package to step into X, those would be opportunities we would move through the funnel. But right now, we are not actively seeking G4 opportunities only. We are focusing our attention on G4X opportunities or combination opportunities. Thanks, that's all really good color.
Those would be opportunities, we would move through the funnel, but right now we are not actively.
<unk> G. Four only opportunities we are focusing our attention on G. Four X opportunities our combination opportunities.
So it's all really good color and then is there.
Andrew Spaventa: And then, is there any commentary you could provide on revenue and, you know, just kind of the general cadence of how things could track throughout the year? It's still very early for us. We're working through this now. A lot of this reorganization and shift has been work that we've done over the last couple months. I think we'll have more information as we work through this on the next quarterly call. Okay, not a problem. And then lastly, on the PX, should we consider that product as still being in development, or given the rollout of the G4X? You know, is that kind of a replacement for the PI? Yeah, it's a good question.
Any commentary you could provide on.
Revenue in.
Kind of the general cadence of how things could track throughout the year.
It's still very early for US we're working through this now a lot of this reorganization and shift has been.
Work that we've done over the last couple of months.
I think we will we'll have more information as we work through this kind of at the next quarter call.
Okay, not a problem and then lastly.
And the pdx.
Should we consider that product is still being in development or given the rollout of the <unk>.
Is that kind of a replacement for the PX.
Yes, it's a good question I wouldn't consider that the.
Andrew Spaventa: I would consider that, you know, G4X is our spatial sequencing platform we're bringing to market, and it's all hands on deck to focus on getting that platform out. The PX platforms, you know, we have six beta platforms that we may revisit at some point, but right now, they're on hold. Again, our work, you know, our mindset right now is very much focus, focus, focus on getting the G4X out. Okay, thank you. That's all I have.
<unk> is our spatial <unk>.
Sequencing platform, we're bringing to market and it's all hands on deck to focus on getting that platform out the PFS platforms, we have a six beta platforms.
That we may revisit at some point, but right now they are on hold again.
Our mindset right now is very much focus focus focus on getting the <unk> out.
Okay. Thank you that's all I had.
Thank you. Your next question is coming from Matthew <unk> from Goldman Sachs. Your line is live.
Andrew Spaventa: Thank you. Your next question is coming from Matthew Sykes from Goldman Sachs. Your line is live. Hi, this is Jake Allen on behalf of Matt.
Hi, This is Jake Allen on for Matt. Thank you for taking my question first for the anticipated G. Forex launch do you expect a similar go to market strategy offering both reagent rental and outright instrument purchases.
Matthew Carlisle Sykes: Thank you for taking my question. First, for the anticipated G4X launch, do you expect a similar go-to-market strategy offering both reagent rental and outright instrument purchase? I think we have a somewhat different strategy. I think we're going to lean into services a lot more. And I expect that we'll be more discerning on alternative methods versus capital sales. Again, the demand profile at this point seems different. And We learned a lot from the G4 launch.
I think we envision a somewhat different strategy I think we're going to lean into services a lot more.
I expect that will be more discerning.
On alternative methods versus capital sales again, the demand profile at this point seems different and we learned a lot from the <unk> launch.
Andrew Spaventa: So it's still early to say a year from now, when we're selling units, and we're commercial, what we expect that mix to look like. But I think one thing that we have learned is that services can be a really nice on-ramp. There's a lot of demand there, so I think the other thing that we're planning is a few early access placements but really partnering with those early access customers and making sure that they're at places where there's very high pull through. And that's something that this system is uniquely suited to address at it. Thanks, that's really helpful. And then lastly, so as you continue to cut headcount to reduce costs, can you just talk about what you were thinking about in terms of the level of investment into the business to support the G4X launch? Yeah, the reductions are very difficult. And we've been, you know, a lean operating company to the extent possible from the onset. The thought process behind, you know, reducing and focusing was really to try and eliminate anything, activities, and priorities that weren't critical to, you know, kind of the revised focus.
So it's still early to say.
A year from now when we're selling units and where commercial what we expect that mix to look like but I think one thing that we have learned is the service can be a really nice onramp. There's a lot of demand there. So I think the other thing that we are planning is.
A few early access placements, but really partnering with those early access customers and making sure Theyre at places, where there's very high high pull through and Thats something that uniquely this system is suited to address.
Got it. Thanks, that's really helpful. And then lastly, so as you continue to cut.
Head count to reduce costs can you just talk about what you were thinking about in terms of level of investment into the business to support the G. Four X launch.
Yes.
Reductions are very difficult and we've been you know.
A lean operating company to the extent possible from onset.
The thought process behind reducing and focusing was really to try and eliminate anything.
Activities and priorities that were critical to kind of the revised focus and that focus is supporting existing customers and the existing sequencing business and then putting all R&D and product resources on G. Four acts.
Andrew Spaventa: And that focus is supporting existing customers in the existing sequencing business and then putting all R&D and product resources on G4X. A lot goes into developing these systems. It's multidisciplinary teams. These are complex systems and reagents.
A lot goes into developing these systems.
It's multi disciplinary teams. These are complex systems the reagents so.
Andrew Spaventa: So, you know, you can get to a point where you have really nice proof of concept or really nice data, but productizing that and getting it out robustly is something that, you know, we know it does take resources to do that. So, you know, we've gone as lean as we can with the more narrow focus on G4X and supporting existing customers, and we're going to try and advance as quickly as we can in that lean nature. Jake, this is Dalen.
You can get to a point, where you have really nice proof of concept of really nice data, but product ties that and getting it out robustly, that's something that we know it does take resources to do that so.
We've gone as lean as we can with the more narrow focus on <unk>, Forex and supporting existing customers and we're going to try and advance as quickly as we can in that lean nature Jacobs.
Jake This is Dale and I'll, maybe just add one thing in the savings estimates that we talked about in the prepared remarks and the <unk>.
Dalen Meeter: I'll maybe just add one thing. In the savings estimates that we talked about and the prepared remarks and the statement about extending our runway out to the end of 2026, we are contemplating internally some modest investment for some of the infrastructure that we think will need to stand up to support the go-to-market strategy, such as services, right? So we are contemplating some reinvestment to get this product to market.
The statement about extending our runway out to the end of 2026, we are contemplating internally some.
Just kind of modest investment for some of the infrastructure that we think will need to stand up to support the go to market strategy such as services right. So we are contemplating some reinvestment to get this product to market.
Got it. Thank you that's that's it for me.
Dalen Meeter: Got it. Thank you. That's it for me.
Thank you that concludes our Q&A session I will now hand, the conference back to our host for closing remarks. Please go ahead.
Operator: Thank you. That concludes our Q&A session. I'll now hand the conference back to our host for closing remarks. Please go ahead. Thank you everyone for joining the call today. I look forward to updating you on our progress as we progress this year. Thank you, everyone. This concludes today's event. Death This Time, and have a wonderful day.
Thank you everyone for joining the call today look forward is update you on our progress as we progress this year.
Thank you everyone. This concludes today's event you may disconnect at this time and have a wonderful day. Thank you for your participation.
Yes.