Q1 2024 Bionano Genomics Inc Earnings Call
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Operator: Good day, and welcome to the BioNano First Quarter 2024 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to David Holmes from Investor Relations. Please go ahead.
Good day and welcome to the bio Nano first quarter 2024 earnings Conference call Today's conference is being recorded.
Operator: At this time I would like to turn the conference over to David Holmes from Investor Relations. Please go ahead. Thank.
David Holmes: Thank you operator, and good afternoon, everyone welcome to the bio nano first quarter 2024 financial results conference call, leading the call today is Dr. Eric Coleman C E O bio nano.
David Holmes: Thank you, Operator, and good afternoon, everyone. Welcome to the BioNano First Quarter 2024 Financial Results Conference Call. Leading the call today is Dr. Eric Holman, CEO of BioNano, and he is joined by Gulsen Kama, CFO of BioNano. After the market closed today, BioNano issued a press release announcing its financial results for the first quarter of 2024. A copy of the release can be found on the investor relations page of the company's website.
David Holmes: Certain statements made during the conference call may be forward-looking statements, including statements about BioNano's revenue outlook, profitability, cash runway, cost savings initiatives, and commercialization and product plan. Such statements are based on current expectations, and there can be no assurances that the results contemplated in these statements will be realized. Actual results may differ materially from those stated due to a number of factors and risks, some of which are identified in BioNano's press release and in its reports filed with the SEC.
David Holmes: He is joined by Goulston comma CFO of biodiesel.
David Holmes: After market close today bio nano issued a press release announcing its financial results for the first quarter 2024.
David Holmes: Copy of the release can be found on the Investor Relations page of the company's website.
David Holmes: Certain statements made during the conference call maybe forward looking statements, including statements about bio nanos revenue outlook profitability Ashburn.
David Holmes: Cash runway cost savings initiatives and commercialization and product plans.
David Holmes: Payments are based on current expectations and there can be no assurances that the results contemplated in these statements will be realized actual results may differ materially from such statements due to a number of factors and risks some of which are identified in bio Nanos press released and bio Nanos reports filed.
David Holmes: The SEC.
David Holmes: These four forward-looking statements are based on information available to BioNano today, May 8, 2024, and the company assumes no obligation to update statements as circumstances change. Additionally, to supplement its financial results reported in accordance with the U.S. Generally Accepted Accounting Principles, or GAAP, the company reports certain non-GAAP financial measures. A description of these non-GAAP financial measures, as well as the reconciliation to the nearest GAAP financial measures, is included at the end of the company's earnings release issued earlier today, which has been posted on the investor relations page of the company's website.
David Holmes: These forward looking statements are based on information available to bio nano today may eight 2024, and the company assumes no obligation to update statements as circumstances change.
David Holmes: In addition to.
David Holmes: Supplement buyer Nanos financial results reported in accordance with the U S. Generally accepted accounting principles or GAAP. The company report certain non-GAAP financial measures.
David Holmes: A description of these non-GAAP financial measures as well as a reconciliation to the nearest GAAP financial measures are included at the end of the company's earnings release issued earlier today, which has been posted on the Investor Relations page of the company's website.
David Holmes: These non-gap financial measures are not meant to be considered in isolation or as a substitute for comparable gap measures, should be read in conjunction with the company's consolidated financial statements prepared in accordance with GAAP, have no standardized meaning prescribed by GAAP, and are not prepared under any comprehensive set of accounting rules or principles. An audio recording and webcast replay for today's conference call will also be available online on the company's investor relations page. With that, I will turn the call over to Eric.
David Holmes: These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures.
Eric: Should be read in conjunction with the company's consolidated financial statements prepared in accordance with GAAP.
Eric: Have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles.
Eric: An audio recording and webcast replay for today's conference call will also be available online on the company's Investor Relations page.
David Holmes: With that I will turn the call over to Eric.
Robert Erik Holmlin: Thank you, David, and good afternoon, everyone. We accomplished a lot in Q1, and I look forward to discussing the progress in detail. I want to start off today's call, however, by sharing a remarkable story of medical advancement in which optical genome mapping played a significant role. I'm referring to the first successful kidney transplant from a genetically modified pig into a human patient, which was conducted at Massachusetts General Hospital on March 16th. eGenesis, a BioNano customer and OGM user, provided the kidney from a pig donor that was genetically edited using CRISPR-Cas9 technology to remove harmful pig genes and add certain human genes to improve its compatibility with humans.
Eric: Thank you David and good afternoon, everyone. We accomplished a lot in Q1 and I look forward to discussing the progress in detail I wanted to start off today's call. However by sharing a remarkable story of medical advancement and whats your optical genome mapping played a significant role I'm, referring to the first successful kidney.
Robert Erik Holmlin: They also used gene editing to inactivate porcine endogenous retroviruses in the pig donor to eliminate any risk of infection. The process of creating the cells that eventually grew into the pig donor followed multiple steps of genetic modification to eventually arrive at the cells that were used to grow the donor. Throughout the process, optical genome mapping was used as part of a regimen to confirm that desired gene edits were in place and that off-target effects were not detected, or those that were detected were not deleterious. Additionally, optical genome mapping was used as an alternative to G-banding karyotype analysis because of its ability to detect genome variation that other methods commonly miss.
Robert Erik Holmlin: Transplant from a genetically modified pig into a human patient, which was conducted at Massachusetts General Hospital on March 16th.
Robert Erik Holmlin: E Genesis in bio nano customer and O G. M user provided the kidney from a pig donor that was genetically edited using CRISPR Cas nine technology to remove harmful pig jeans and add certain human genes to improve its compatibility with humans.
Robert Erik Holmlin: They also use gene editing to inactivate porcine endogenous retroviruses and the pig donor to eliminate any risk of infection in humans.
Robert Erik Holmlin: The process of creating the cells that eventually grew into the take donor followed multiple steps of genetic modification to eventually arrive at the cells that were used to grow the donor.
Robert Erik Holmlin: Without the process optical genome mapping was used as part of a regimen to confirm that desire gene edits where in place and the off target effects were not detected or those that were detected were not deleterious optical genome mapping was used as an alternative to G banding.
Robert Erik Holmlin: Type analysis because of its ability to detect genome variation that other methods commonly miss.
Robert Erik Holmlin: We are seeing growth in our biopharma customer group, and we believe it's because these customers see tremendous value in OGM's utility for the development of safe and innovative therapies. Our focus in 2024 remains on strengthening the company's long-term growth profile. As part of our ongoing evolution, we're continuing to execute cost savings and strategic productivity initiatives that we began in May 2023 and that are intended to allow us to be more agile, to increase efficiency across the company, and to prioritize investing in opportunities where we see the greatest potential to drive adoption and utilization of optical genome mapping across multiple end markets.
Robert Erik Holmlin: We are seeing growth in our Biopharma customer group and we believe it's because these customers see tremendous value and owe gms utility for the development of safe <unk>.
Robert Erik Holmlin: <unk> innovative therapies.
Robert Erik Holmlin: Our focus in 2024 remains on strengthening the company's long term growth profile as part of our ongoing evolution, we're continuing to execute cost savings and strategic productivity initiatives that we began in may of 2023 and that are intended.
Robert Erik Holmlin: To allow us to be more agile to increase efficiency across the company and to prioritize investing in opportunities, where we see the greatest potential to drive adoption and utilization of optical genome mapping across multiple end markets.
Robert Erik Holmlin: Gulsen is going to open our call today by walking you through our financial results for the quarter and explaining how some of the steps in our streamlined operational plan have begun to positively impact our financial performance and cash runway. Gulsen? Thanks, Eric.
Robert Erik Holmlin: Goldstein, who is going to open our call today by walking you through our financial results for the quarter and explaining how some of the steps and our streamlined operational plan have begun to positively impact our financial performance and cash runway glsen.
Gulsen Kama: Thank you, Eric. With that in mind, let me share our results for the first quarter of 2024 with you. Revenue was $8.8 million, representing an 18% year-over-year increase compared to the same period of 2023, excluding $1.4 million in revenues from discontinued clinical services in the first quarter of 2024. Core revenues were $7.3 million, which represents a 21% year-over-year growth over the $6.1 million of core revenues for the same period of 2023. The OGM installed base grew to 347 systems during Q1, which represents an increase of 21 systems during the quarter and 34% growth over the installed base of 259 at the end of Q1 2023. We sold 8,249 flow cells in Q1 2024, which represents a 58% year-over-year increase over the 5,226 flow cells sold in the same period last year.
Gulsen: Thanks, Eric.
Gulsen: Let me share our results for the first quarter of 'twenty 'twenty four.
Gulsen Kama: Revenue was $8 $8 million, representing an 18% year over year increase compared to the same period of 2023.
Gulsen Kama: Excluding $1 $4 million in revenues from discontinued clinical services in the first quarter of 'twenty 'twenty four.
Gulsen Kama: Core revenues were $7 $3 million, which represents a 21% year over year growth over the $6 $1 million of core wrapping is for the same period in 2023.
Gulsen Kama: The ODM installed base grew to 347 systems during Q1, which represents an increase of 21 systems during the quarter and 34% growth over the installed base of 259 at the end of Q1 2023.
Gulsen Kama: We sold 8249 flow fell in Q1, 'twenty 'twenty, four which represents a 58% year over year increase over the 5226 well itself.
Gulsen Kama: In the same period last year.
Gulsen Kama: Gas gross margin for the first quarter was 32%, compared to 28% during Q1 2023, and non-gap growth margin was 34% compared to 30% in the same quarter last year. First quarter 2024 non-GAAP gross margin excludes $128,000 in stock-based compensation and $11,000 of restructuring expense. For the first quarter of 2024, GAAP operating expense was $33.9 million, and non-GAAP operating expense was $24.7 million. Non-GAAP operating expense for the quarter excludes restructuring costs, stock-based compensation, and other adjustments as detailed in the Reconciliation Table accompanying the press release posted on the Investor Relations page of our website. In the same period in 2023, GAAP operating expense was $39.9 million, and non-GAAP operating expense was $33.6 million. Q1 2023 Gap to Non-Gap Reconciliation can be found in the same table.
Gulsen Kama: GAAP gross margin for the first quarter was 32% compared to 28% during Q1, 'twenty 23, and non-GAAP gross margin was 34% compared to 30% in the same quarter last year.
Gulsen Kama: First quarter 2024, non-GAAP gross margin excludes $128000 in stock based compensation and $11000 of restructuring expense.
Gulsen Kama: First quarter 2024, GAAP operating expense was $33 $9 million and non-GAAP operating expense was $24 $7 million.
Gulsen Kama: non-GAAP operating expense in the quarter excludes restructuring cost.
Gulsen Kama: <unk> based compensation and other adjustments as detailed in the reconciliation table accompanying the press release posted on the Investor Relations page of our website.
Gulsen Kama: In the same period in 2023, GAAP operating expense was $39 $9 million and non-GAAP operating expense was $33 $6 million.
Gulsen Kama: Q1, 2023, GAAP to non-GAAP reconciliation can be found in the same table.
Gulsen Kama: Our cash, cash equivalents, and available-for-sale securities as of March 31, 2024 were $53.2 million compared to cash, cash equivalents, and available-for-sale securities of $102.3 million as of December 31, 2023. Additionally, as of March 31, 2024, $24.8 million was subject to certain restrictions compared to $35.5 million as of December 31, 2023. We raised $15.1 million in net proceeds in the first quarter of 2024 through our ATM facility.
Gulsen Kama: Our cash cash equivalents and available for sale Securities as of March 31st 2024 were $53 $2 million compared to cash cash equivalents and available for sale securities of $102 3 million.
Gulsen Kama: As of December 31, 2023.
Gulsen Kama: As of March 31st 2024, $24.8 million was subject to certain restrictions compared to $35 $5 million as of December 31st 2023.
Gulsen Kama: We raised $15 $1 million in net proceeds in the first quarter of 'twenty 'twenty four through our ATM facility.
Gulsen Kama: The change in total cash balance from December 31, 2023 to March 31, 2024 consists of $19 million cash burn from operating activities excluding interest and debt retirement fees, $9 million in interest and debt retirement, $37 million in repaid principal, offset by $15 million in net ATM per month. Now, I want to discuss the steps we have taken to continue to streamline operations, reduce expenses, and extend our cash runway. The non-GAAP operating expenses in the quarter are consistent with our planned reductions announced in October 2023.
Gulsen Kama: The change in total cash balance from December 31st 2023 to March 31 2024.
Gulsen Kama: <unk> of $19 million cash burn from operating activities, excluding interest and debt retirement.
Gulsen Kama: $9 million in interest and debt retirement Keith.
Gulsen Kama: $37 million in repaid principal offset by $15 million and net ATM proceeds.
Gulsen Kama: Now I want to discuss the steps we have taken to continue to streamline operations reduce expenses and to extend our cash runway.
Gulsen Kama: The non-GAAP operating expenses in the quarter are consistent with our planned reductions announced in October 2023.
Gulsen Kama: In March, we extended those initiatives to include further reductions in the force and reductions to discretionary spending unrelated to headcount. Overall, since May 2023 through Q2 of 2024, we plan to have reduced that count by over 200 people. Compared to the annualized non-GAAP operating expense for the first quarter of 2023, these initiatives are expected to reduce annualized non-GAAP operating expenses by about $65-75 million by Q1 of 2025. We also announced a registered direct offering priced at the market under NASDAQ rules in April 2024 with gross proceeds to the company of approximately $10 million before deducting the placement agent's fees and other offering expenses payable by the company. We believe these activities will allow us to remain committed to our customers and partners and to be able to continue expanding the opportunity and availability of OGM.
Gulsen Kama: In March we expanded those initiatives to include further reduction in force and reductions to discretionary spending unrelated to head count.
Gulsen Kama: Overall since May 2023 through Q2 of 'twenty 'twenty four we plan to have reduced head count by over 200 people.
Gulsen Kama: Compared to the annualized non-GAAP operating expense for the first quarter of 2023. These initiatives are expected to reduce annualized non-GAAP operating expenses by about $65 million to $75 million by Q1 of 2025.
Gulsen Kama: We also announced a registered direct offering priced at the market under NASDAQ rules in April 'twenty 'twenty four with gross proceeds to the company of approximately $10 million before deducting the placement agent fees and other offering expenses payable by the company.
Gulsen Kama: We believe these activities will allow us to remain committed to our customers and partners and to be able to continue expanding the opportunity and availability of O G M.
Eric: Back to you Eric.
Speaker Change: Thanks Scott.
Gulsen Kama: Our strategy moving forward is straightforward. We need to continue to accelerate revenue growth, operate efficiently, and raise capital that will allow us to extend our cash runway on a path to profit. Key updates to our product portfolio, which we believe will drive this growth, include the Stratus system, which is now fully commercially available, and early feedback by adopters has been positive. We're shipping commercial production units now, and we have the capacity to meet the expected demand.
Gulsen Kama: Our strategy moving forward is straightforward, we need to continue to accelerate revenue growth.
Gulsen Kama: Operate efficiently and raised capital that will allow us to extend our cash runway on a path to profitability.
Gulsen Kama: Key updates to our product portfolio, which we believe will drive. This growth include the Stratus system, which is now fully commercially available in early feedback by adopters has been positive we're shipping commercial production units now and we have the capacity to meet the expected demand.
Gulsen Kama: Yes.
Gulsen Kama: We expect to announce later this week a series of major advancements to our entire suite of comprehensive analysis software tools for cancer, including version 7.1 of our VIA software, which has AI-enhanced capabilities for cancer research. In the second half of the year, we plan to release improvements to the data analysis processing time on the Stratus Compute, which is a high-performance workstation developed in collaboration with NVIDIA. We are addressing the DNA isolation bottleneck with isotachyphoresis technology on the ionic system, which was acquired in our acquisition of Purigen Biosystems.
Gulsen Kama: We expect to announce later this week a series of major advancements to our entire suite of comprehensive analysis software tools for cancer <unk>.
Gulsen Kama: Including version 7.1 of our via software, which has AI enhanced capabilities for cancer research.
Gulsen Kama: In the second half of the year, we plan to release improvements to the data analysis processing time on the Stratus compute which is a high performance workstation developed in collaboration with Nvidia.
Gulsen Kama: We are addressing the DNA isolation bottleneck with ISO tacker Pheresis technology on the biotic system, which was acquired.
Gulsen Kama: In our acquisition, a peerage and biosystems, we placed a pre commercial system in the field for optical genome mapping on the ion X system using a newly developed.
Gulsen Kama: We placed a pre-commercial system in the field for optical genome mapping on the ionic system using a newly developed ITP cartridge for the isolation of ultra-high molecular weight DNA in the fourth quarter of 2023, and we have recently added two more customer sites. We are on track for a full commercial release of the product in the third quarter of 2024. Now, the objective in assembling this combination of solutions, high-throughput data collection with Stratis, Streamline Analysis and Reporting with VIA, and Automated DNA Isolation with Ionic, is to enable optical genome mapping at scale for routine use.
Gulsen Kama: P cartridge for the isolation of ultra high molecular weight DNA in the fourth quarter of 2023, and we have recently added two more customer sites. We are on track for a full commercial release of the product in the third quarter of 2024.
Gulsen Kama: Now the objective in assembly and this combination of solutions high throughput data collection with Stratus Star.
Gulsen Kama: Streamline analysis and reporting with via an automated DNA isolation with ionic is to enable optical genome mapping at scale for routine use.
Gulsen Kama: We're pleased to announce and congratulate Dr. Alexander Huysen and his team at Radboud University Medical Center in the Netherlands on their award by the Research and Innovation Board at Radboud UMC of a grant of 900,000 euros for the translation of optical genome mapping to routine use in an academic medical center, where they will focus on leukemias, solid tumors, and constitutional genetic diseases. This work will leverage our high-throughput, On progress in market development, the first quarter of 2024 saw the highest number of optical genome mapping publications in any quarter in our history, 97 total publications, which is up 83% compared to the number of publications in the first quarter of 2020.
Gulsen Kama: We're pleased to announce.
Gulsen Kama: And congratulate Doctor Alexandra Hoi Shing and his team at Radboud University Medical Center in the Netherlands on their award by the research and innovation Board at Radboud UMC of a grant of 900000 euros for the translation of optical genome mapping to reach.
Gulsen Kama: <unk> news.
Gulsen Kama: In an academic medical center, where they will focus on leukemias.
Gulsen Kama: Solid tumors and constitutional genetic diseases.
Gulsen Kama: This work will leverage our high throughput end to end workflow.
Gulsen Kama: On progress in market development, the first quarter in 2024 saw the highest number of optical genome mapping publications in any quarter in our history.
Gulsen Kama: 97, total publications, which is up 83% compared to the number of publications in the first quarter of 2023.
Robert Erik Holmlin: Growth in publications has an influence on how all stakeholders view optical genome mapping, from prospective customers to third-party payers and medical societies, so this growth is really outstanding. Our clinical studies are now streamlined based on our cost savings initiatives, and they are focused primarily on advancing the HEIM trial while publishing more pre- and post-natal study data from the constitutional trials. Finally, I'd like to comment briefly on an application that has been submitted to the American Medical Association for a Category 1 CPT code covering optical genome mapping.
Gulsen Kama: Growth in publications has an influence on how all stakeholders view optical genome mapping from prospective customers to third party payers and medical societies. So this growth is really outstanding.
Robert Erik Holmlin: Our clinical studies are now streamlined based on our cost savings initiatives and they are focused primarily on advancing the heme trial, while publishing more pre and post NATO study data from the constitutional trials.
Robert Erik Holmlin: We understand that the application may be reviewed at the CPT editorial panel meeting, which starts tomorrow, May 9th, at 9 a.m. Eastern Time. This application is the third one that's been submitted for optical genome mapping, but in the previous two cycles, it was withdrawn prior to the editorial panel meeting. We view the fact that it will go before that panel as a sign of progress, and we are eagerly awaiting the outcome, which will be published publicly on or before June 6.
Robert Erik Holmlin: Finally, I'd like to comment briefly on an application that has been submitted to the American Medical Association for a category one CPT code covering optical genome mapping.
Robert Erik Holmlin: We understand that the application may be reviewed at the CPT editorial panel meeting, which starts tomorrow may 9th at nine a M eastern time.
Robert Erik Holmlin: This application is the third one that's been submitted for optical genome mapping, but in the previous two cycles. It was withdrawn.
Robert Erik Holmlin: Fire to the editorial panel meeting we view the fact that it will go now in front of that panel as a sign of progress and we are eagerly awaiting the outcome, which will be published publicly on or before June six.
Robert Erik Holmlin: We do understand that the meeting taking place will be public, and it's possible that anyone who registers may be able to attend. A link to register for this meeting is listed on the AMA Association website. Looking ahead, we remain on track to meet our goal of installing 381 to 401 OGM systems by the end of 2024, which reflects some anticipated SAFIRE to STRATOS upgrades. We expect Q2 revenue guidance to be in the range of $7.8 to $8.2 million, and we are maintaining our full year 2024 revenue guidance of $37 to $41 million.
Robert Erik Holmlin: Although we do understand that the meeting taking place will be public and it's possible that anyone who registers, maybe able to attend a link to register for this meeting is listed on the a M. A association website.
Robert Erik Holmlin: Looking ahead, we remain on track to meet our goal of installing 381 to 401 O G. M systems by the end of 'twenty 'twenty, four which reflects some anticipated sapphire to stratus upgrades.
Robert Erik Holmlin: We expect Q2 revenue guidance to be in the range of seven eight to $8 $2 million and we are maintaining our full year 2020 for revenue guidance of $37 million to $41 million keep in mind that both of these ranges take into account the financial impact.
Robert Erik Holmlin: Keep in mind that both of these ranges take into account the financial impact of discontinuing certain clinical services products as part of our cost reduction initiative. In closing, I'm excited about the progress we have made in 2024. We acknowledge challenges we are facing due to the current state of capital markets, and we need to continue the great momentum we have built. I am confident in Optical Genome Mapping's ability to transform the field of cytogenetics. And with that, Operator, please go ahead and open the line for questions. Ladies and gentlemen, we will now...
Robert Erik Holmlin: Discontinuing certain clinical services products as part of our cost reduction initiatives.
Robert Erik Holmlin: In closing I am excited about the progress we have made in 2024, we acknowledge challenges we are facing due to the current state of capital markets.
Robert Erik Holmlin: And we need to continue the great momentum we have built.
Robert Erik Holmlin: I am confident and optical Gino mappings ability.
Robert Erik Holmlin: To transform the field of cytogenetics.
Robert Erik Holmlin: And with that operator. Please go ahead and open the line for questions.
Speaker Change: Thank you.
Operator: Ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star, then 2. Again, press star, then 1 to ask a question. At this time, we will pause momentarily to assemble our roster. And the first question will be from Sungji Nam from Scotiabank. Please go ahead.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two again press Star then one.
Sung Ji Nam: To ask a question.
Sung Ji Nam: At this time, we will pause momentarily to assemble our roster.
Sung Ji Nam: And the first question will be from sung <unk> Nam from Scotiabank. Please go ahead.
Sung Ji Nam: Hi, thanks for taking the question. Um, I was curious if there were any, um, uh... Stratus Placements in the First Quarter or Upgrades from SAFIRE to Stratus in the First Quarter. And then, Eric, you talked about capital spending constraints. If you're seeing kind of the split between instrument sales versus reagent rentals, if you see that ticking up, you know, towards the reagent rental side in the current environment, yeah.
Sung Ji Nam: Hi, Thanks for taking the question I was curious if there when you place any.
Sung Ji Nam: <unk> placements in the first quarter or upgrades from Sapphire Q got it in the first quarter and then Eric you talked about the capital spending constraints and you know if you're seeing kind of the.
Sung Ji Nam: The split between instrument sales forces region right now I think you'll see that ticking up on you know towards the BHL reagent rental side.
Sung Ji Nam: In the current environment.
Robert Erik Holmlin: Yeah. Thanks, Sanjeev.
Sung Ji Nam: Yeah.
Speaker Change: Thanks Angie.
Robert Erik Holmlin:
Robert Erik Holmlin: So, I think all of us in the space are feeling constraints around available funding. In our quarter, reagent rentals edged out capital sales, but I think that that's just kind of within the normal ranges of what we would expect. It is slightly elevated.
Robert Erik Holmlin: So.
Robert Erik Holmlin: I think all of us in this space are feeling constraints around available funding in our quarter reagent rentals edged out.
Eric: Capital sales, but I think that that's just kind of within the normal ranges of what we would expect it is it is slightly elevated.
Robert Erik Holmlin: That's a very attractive vehicle to bring a system in, and, you know, it's something that we're paying attention to going forward. But I don't think we've felt that pressure, and the reason is that optical genome mapping is something that is really new and unique, and the deals that are getting done, for example, in that first quarter and now in this second quarter have been in the works for a while, and so we might see something creeping in perhaps later in the year as a result of that current We're being mindful of it, and we recognize that our peers are definitely seeing it
Robert Erik Holmlin: That's a very attractive vehicle to bring our system in.
Robert Erik Holmlin: And it's something that we're paying attention to going forward, but I don't think we've felt that pressure and the reason is that optical genome mapping is something which is really new and unique and the deals that are getting done for example in that first quarter and now.
Robert Erik Holmlin: Now in this second quarter.
Robert Erik Holmlin: Have been in the works for a while.
Robert Erik Holmlin: And so we might see something creeping in perhaps later in the year as a result of that current.
Robert Erik Holmlin: Environment, but we're being mindful of it and we recognize that you know our peers are definitely seeing it with regard to stratus uptake during the quarter, Yes, we had several.
Robert Erik Holmlin: With regard to Stratus uptake during the quarter, yes, we had several additional people who had successful programs that involved Stratis, and for the time being, we're not really breaking out Stratis from the overall total number of growth of OGM systems in the space, and we'll see how important it is to do that going forward, but, you know, for right now, we're not breaking it out, but the progress continues to be solid, There are several of them that are in discussions.
Robert Erik Holmlin: Successful.
Robert Erik Holmlin: Programs that involved stratus and for the time being we're not really breaking out.
Robert Erik Holmlin: Stratus from the overall total number of growth of O. G. M systems in this space and we'll see how important it is to do that going forward, but for right now we're not breaking it out but the progress continues to be solid and.
Robert Erik Holmlin:
Robert Erik Holmlin: Anecdotally I don't think we've seen a conversion yet there are several of them that are in.
Robert Erik Holmlin: Discussions.
Robert Erik Holmlin: Hum you know so we expect that to probably be something that would.
Robert Erik Holmlin: You know, so we expect that to probably be something that would, you know, drive some of the numbers and the dynamics of the install-based growth going forward, but anecdotally, I don't think we've seen a conversion yet. It's all been an incremental addition of stratus either to an existing customer or to a new one.
Speaker Change: Yeah drew.
Robert Erik Holmlin: Drive some of the the numbers and the dynamics of the installed base growth going forward, but anecdotally I don't think we've seen a conversion yet it's all been incremental addition of stratus either to an existing customer or to a new customer.
Robert Erik Holmlin: And then just the Ionic purification system, great to see nice traction there from the early access sites. Just curious, how should we think about the potential ramp of that platform? Do you expect the early adopters to be kind of the stratus, the customer's purchasing stratus systems as well? Or do you anticipate a significant portion of your existing SAFIRE customers to also adopt it? And also, could this be used outside of OGM applications?
Speaker Change: Gotcha. That's helpful. And then just the I I'm the ionic purification system, great to see a nice traction there from the early access site I'm just curious how should we think about the potential ramp of that platform do you expect that to go to do you expect the early adopters to be kind of this.
Speaker Change: Got it okay.
Robert Erik Holmlin: Our customer is purchasing stride is.
Robert Erik Holmlin: Well, where do you anticipate a significant portion of out of your existing.
Robert Erik Holmlin: Sat Fi customers to also adopt and also could this be used outside of ODM application.
Robert Erik Holmlin: Yeah, let me take the last question first. So, the ionic system has been available for a couple of years now, and we've actually, even during the time that we've had that technology in-house after the acquisition of Purigen Biosystems, gone through a kind of upgrade cycle, not of the instrument, but of the reagents and consumables that are used. The applications are for nucleic acid isolation, DNA, and RNA from a variety of sample types, but the majority of uptake and utilization is for formalin-fixed, paraffin-embedded, or FFPE samples.
Speaker Change: Yes, let me take the last question first so the ion X system has been available for.
Robert Erik Holmlin: A couple of years now and we've actually even during the time that we've had that technology in house. After the acquisition of pure gym biosystems have gone through a kind of an upgrade cycle, none of the instrument, but of the reagents and consumables that are used and the applications are for.
Robert Erik Holmlin: Or nucleic acid isolation, DNA and RNA from a variety of sample types, but the majority of uptake and utilization is for formula and fixed paraffin embedded or F. F. P E samples and.
Robert Erik Holmlin: Customers are using that for nucleic acid isolation prior to sequencing, and they like isotachyphoresis because it produces really pure samples, much cleaner than they get from typical column-based methods. So this is something that we see as a very interesting product for us and a source of revenues going forward. We're not able, just in the current cost-constrained environment, to really put, you know, direct dedicated sales people on it, but we do offer it independently of OGM as part of what our sales reps are offering to customers.
Robert Erik Holmlin: Our customers are using that.
Robert Erik Holmlin: For nucleic acid isolation prior to sequencing and they like I used to attack a pheresis because it produces really pure sample much cleaner than they get off of typical.
Robert Erik Holmlin: [noise] column based method. So this is something that we see as a very interesting.
Robert Erik Holmlin: Product for us and a source of revenues going forward, where we're not able just in the current cost constrained environment to really put.
Robert Erik Holmlin: Direct dedicated salespeople on it.
Robert Erik Holmlin: But we do offer it.
Robert Erik Holmlin: Independently of O. G. M is part of what our sales reps are offering to customers now.
Robert Erik Holmlin: With regard to the adoption that we're expecting around optical genome mapping, generally speaking, we expect to see adoption by higher volume routine users, and those would include SAFIRE existing sites. We have quite a number of sites that are running, you know, hundreds of samples per year, and so they would benefit from integrating the ionic system into their workflows, but we also expect Stratus users to be the more obvious adopters of isotachyphoresis.
Robert Erik Holmlin: With regard to the adoption that we're expecting around optical Juno mapping generally speaking, we expect to see adoption by the higher volume routine users and those would include sapphire existing sites, we have quite a number of sites.
Robert Erik Holmlin: That are running.
Robert Erik Holmlin:
Robert Erik Holmlin: Hundreds of samples per year.
Robert Erik Holmlin: And so they would benefit from integrating the ion X system into their workflows, but we also expect stratus users to be the more obvious adopters of isotach or freezes and some of the reasons are that in one cartridge with.
Robert Erik Holmlin: And some of the reasons are that in one cartridge with isotachyphoresis, we expect you'll be able to run, you know, eight samples for ultra-high molecular weight DNA isolation in a matter of hours. Now, it takes overnight for the nucleic acid to be ready to be labeled and then imaged, but the actual isotachyphoresis process itself is incredibly rapid. And so I think what you're going to see is that the higher volume users are going to adopt it. And, you know, those are the ones that are driving consumables purchases now and will in the future.
Robert Erik Holmlin: I used to attack a pheresis, we expect you'll be able to run <unk>.
Robert Erik Holmlin: <unk> samples for ultra high molecular weight, DNA isolation and the process itself right.
Robert Erik Holmlin: Is completed in a matter of hours now it takes overnight for the nucleic acid to be ready to be labeled in an image.
Robert Erik Holmlin: But the actual ISO chacko pheresis process itself is incredibly rapid and so I think what youre going to see is that the higher volume users are going to adopt it.
Robert Erik Holmlin: And and you know those are the ones that are driving consumables purchases now and will be the future.
Sung Ji Nam: Great, thank you. We'll get back into the queue.
Speaker Change: Great. Thank you, we'll get back into queue.
Speaker Change: Thanks Angie.
Operator: Thank you. Again, if you would like to ask a question, please press star, then 1. Again, pressing star, then 1 will allow you to ask a question. Ladies and gentlemen, if there are no further questions, this concludes our question and answer session. I will turn the conference back over to Dr. Eric Holmlin for any closing remarks.
Speaker Change: Thank you again, if you would like to ask a question. Please press Star then one.
Operator: Yeah.
Operator: Again pressing star then one would like to ask a question.
Speaker Change: Ladies and gentlemen, showing no further questions. This concludes our question and answer session.
Speaker Change: I will turn the conference back over to Dr. Eric Homerun for any closing remarks.
Robert Erik Holmlin: Thank you very much, Operator. I want to thank everybody for joining us, and we're looking forward to updating you on our progress during our Q2 call.
Robert Erik Holmlin: Oh, Thank you very much operator, I want to thank everybody for joining and we are looking forward to updating you on our progress on our Q2 call have a great day.
Operator: Thank you very much. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: Have a great day. Thank you very much. The conference has now concluded. Thank you for attending.
Speaker Change: Thank you very much the conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Operator: Yeah.
Operator: Okay.
Operator: BF-WATCH TV 2021
Operator: [music].