Q3 2024 Nautilus Biotechnology Inc Earnings Call
The End
Speaker Change: Be advised that today's conference is being recorded now I will pass the call over to you know Ani with Investor Relations. Please go ahead.
Speaker Change: Thank you.
Speaker Change: Earlier today Nautilus released financial results for the quarter ended September 32024.
Speaker Change: If you haven't received this news release or if you'd like to be added to the company's distribution list. Please send an email to investor relations at Nautilus stockpile.
Speaker Change: Joining me today from Nautilus are Suzhou Patel, co founder and CEO Parag Malik co founder and Chief scientist and Annemarie Chief Financial Officer.
Speaker Change: Before we begin I would like to remind you that management will make statements. During this call that are forward looking within the meaning of the federal securities laws.
Speaker Change: These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated.
Speaker Change: Additional information regarding these risks and uncertainties appears in the section entitled forward looking statements in the press release Nautilus issued today.
Speaker Change: Except as required by law Nautilus disclaims any intention or obligation to update or revise any financial or product pipeline projections or other forward looking statements, whether because of new information.
Speaker Change: Or events or otherwise.
Speaker Change: This conference call contains time sensitive information and is accurate only as of the live broadcast October 29 2024.
Speaker Change: With that I will.
Speaker Change: I'll turn the call over to Susan.
Susan: Thanks, John and welcome to everyone. Joining our Q3 2024 earnings call. It is an exciting time to be innovating in the proteomics space from the recent Nobel Prize announcements to advances in the relationship between proteomics and artificial intelligence. We are seeing an increasing recognition of the role that proteomics analysis will play in shaping the future of biomedical.
Susan: Research and human though our team energized by both external momentum and the opportunity to impact one of the last great Frontier isn't biology is performing at a very high level.
Susan: I have been very pleased to see the teams execution quality and output expand in an environment, where all of Nautilus as resources are being managed very tightly that ability to do more with less is a testament to the scrapping and grit of our entire team and I want to thank them for their efforts and for the significant progress.
Susan: We made in Q3.
Susan: I'm excited about the expanding opportunity IC for proteomics and I'm generally pleased with the progress, we're making as a business.
Susan: We continue to envision powerful research uses for our platform and consistently receive positive feedback from those researchers around the world with whom we've engaged.
Tell us their desire to explore the protium more deeply and more broadly.
Susan: And of the significant limitations of what's currently available.
Susan: It's becoming ever more apparent that they understand how important single molecule intact protein analysis will be to their explorations of the party.
Susan: To help educate the market and bring potential buyers along as.
Susan: Part of the Proteomics Revolution I'm excited to welcome Kansas are the key to not lift as our first chief marketing Officer Ken.
Susan: <unk> joins us after a 25 year career at absolute technologies, most recently, serving as vice President and general manager of agile as mass spectrometry Division.
Susan: <unk> is a well known and highly respected member of the mass spec community and is intimately familiar with the people and organizations, we view as target customers.
Susan: His insight into these audiences will be instrumental in shaping our product and the go to market plan that create high value selling opportunities and drive the revenue.
Speaker Change: We have a number of important updates for you this morning.
Speaker Change: But before we dive in I want to take just a minute to provide a bit of context will.
Speaker Change: We will be discussing the status of our overall platform development initiatives and share detail on our progress against each of the platforms modalities broad scale discovery, which aims to comprehensively quantify the proteome and targeted quantification, which is currently focused on proteoform detection.
Speaker Change: While both modalities share the same core platform each has its own development path that we'll be updating you on today.
Speaker Change: To start I'm pleased to report that our core platform development and readiness efforts continue to proceed well in the first half of 2024, we demonstrated.
Speaker Change: One a scalable and reliable process for building flow cell phone chips consistent single molecule protein library preparation that can begin with as little as 150, nanograms material and robust single molecule deposition.
Speaker Change: Two we also demonstrated an instrument and assay capable of iteratively striking cycling affinity reagents over many cycles and observing affinity reagent binding events at the single molecule level.
Speaker Change: And three we demonstrated software capable of processing instrument data and algorithm macleay turning that into biological insight.
Speaker Change: Direct evidence of our platform readiness is the new and very exciting part of your firm data that parag will present shortly its creation demonstrates that all aspects of the assay and platform have been integrated and are functioning as intended.
Speaker Change: Some work remains to optimize those proteoform related platform components ahead of any commercial availability, we remain confident in the progress we're making across these development activities.
Speaker Change: When you were at the frontier of scientific innovation and building an incredibly complex products such as what Nautilus has undertaken the passes windy and always different than what you initially imagined.
Speaker Change: As pleased as we are on the Proteoform front and with the core platform overall, we're behind on our internal milestones with respect our next major broad scale coal to be able to quantify a significant number of proteins 501000, 2000 from a complex sample like salt life on the road to measuring the comprehensive proteome.
Speaker Change: This is the last piece of the platform puzzle.
Speaker Change: Youll recall that our unique method of identifying proteins protein identification by short epitope mapping or prison for short involved the development and integration of hundreds of proprietary multi affinity probes, which interrogate single protein molecules.
Speaker Change: Over the last three years, we've spent substantial time and energy building and optimizing our affinity reagent pipeline and building thousands of probe candidates.
Speaker Change: In parallel we've been doing the hard development work to optimize and increase the robustness of the fluorescent labeled use within our platform and the chemistry used attach probes to these labels.
Internally, we defined metrics for transitioning probe candidates to platform ready probes. We additionally examined how diverse label types and labeling approaches impacted these metrics on a pro by pro basis.
Speaker Change: As we enter 2020 for many of these probes candidates did not meet the performance targets desired of platform ready probes.
Speaker Change: Armed with that information in Q2, and Q3, we embarked upon an initiative to examine these probe candidates in a very detailed way.
Speaker Change: We used multiple techniques, including bio layer in for arbitrary Liza Western blots peptide arrays and single molecule kinetic analysis to fully understand the binding properties of these probes.
Speaker Change: Through that very detailed analysis, we can confidently say that our affinity reagent pipeline does indeed produce probes with the characteristics necessary to implement prism.
Speaker Change: We have always expected that there'll be some fallout between probe candidate and platform ready probe, but currently that fallout rate is too high.
Speaker Change: Through Q3 and over the next few months, we will continue to focus on a number of development work streams that we're confident will enable approximately a third of our product candidates to become platform ready.
Speaker Change: From there we're working on a number of enhancements that have the potential to further improve that yield.
Speaker Change: While we're disappointed that we're behind on delivering our next major broad scale milestone of being able to decode proteins from a complex sample. We are tremendously encouraged by the fact that the probes that we've been developing do successfully bind to short epitopes and are capable of successfully implementing prism to comprehensively unlock the proteome.
Speaker Change: We're fresh off significant participation in the World, who spoke Congress in Dresden, Germany concluded just last week as you'll hear from parag in just a few moments we continue to educate and build trust with the proteomics community shared some new and very exciting proteoform data.
Speaker Change: And heard a number of high value use cases from researchers that have fueled our imaginations, even further as to what may be possible. When we reach our commercial rollout next year.
Speaker Change: For a more detailed update on <unk> and our R&D efforts in general let me now turn the call over to <unk>.
Speaker Change: Rob.
Speaker Change: Thanks, and good morning all.
Rob: Institutional mentioned World Cooper was a terrific event for US again, this year and provided a great opportunity to introduce a significant number of researchers to our platform.
Rob: We use this opportunity to communicate how our single molecule proteome analysis platform is a unique and powerful tool that we believe will be a critical driver of biological insight.
Rob: We also emphasized how our core platform is designed to enable two complementary and valuable use cases high resolution targeted proteoform quantification using site specific <unk> targets specific probes more on that in a moment.
Rob: And broad scale discovery, using our proprietary multi affinity probes.
Rob: By advancing biology across both of these dimensions, we aim to make a full scale and complexity of the protium accessible to all researchers.
Rob: Notably at this hoopoe, we transitioned from primarily sharing aspects of how the platform works and.
Rob: Towards sharing early demonstrations of the platform being used to ask and answer important biological questions.
Rob: This transition beyond platform development and towards platform application has been really exciting throughout the company and was clearly recognized by the community as an important marker of a transition towards commercial readiness.
Rob: And hoopoe, we briefed many hundreds of attendees at our booth and dug into the scientific underpinnings of the platform more fully through our three poster presentations to seminar presentations and a special luncheon seminar.
Rob: In conversations throughout the event, we found that the community was most interested in hearing about and discussing.
Rob: Our single molecule library preparation process its ease of use its applicability to diverse sample types and its ability to access diverse components of the protium without clear and obvious biases or limitations as compared to existing approaches.
Rob: The sensitivity and dynamic range of the platform and how the unique scale of measurement in the billions of protein molecules enables its projected dynamic range.
Rob: The applicability of the platform to diverse biological questions ranging from the analysis of cancer development and progression to neurological disorders and to questions in plant science and microbial biology.
Rob: And the rigorous approach we have developed to correct for errors and estimate false discovery rate in order to increase confidence in our single molecule protein identifications.
Rob: And our luncheon seminar I was excited to present the latest data from the team to a packed house of nearly 200 attendees.
Rob: I shared continued advancements to our core platform and to our broad scale assay. In addition, I highlighted our recent demonstration of a new assay for the quantitative measurement of up to 2048 pretty forums of the protein Tau.
Rob: A protein closely associated with Alzheimer's disease.
Rob: Efforts towards developing this assay were initiated as part of our partnership with Genentech and represent a general template for what we envision will become a wide class a targeted proteoform analysis assays.
Rob: Such assays enabled the examination of proteins functional farms at a resolution and scale never previously possible with existing methods.
Rob: Throughout hoopoe, we discussed the first illustration of potential biological studies that investigate the interplay between proteoform and the progression of Alzheimer's disease.
Rob: Interactions between <unk> <unk> mutations in tow or related proteins and also how the Tau proteoform landscape varies across model systems with higher resolution and scale than previously possible.
Rob: This first of their kind pilot experiments.
Rob: Our first step in examining how the pretty firm landscapes of Alzheimer's and Frontotemporal dementia.
Rob: May be impacted by exogenous perturbations, where changes in the abundance of key molecules.
Rob: In one demonstration we used Ips derived organoid models from patients containing normal and abnormal forms of Tau.
Rob: Whom detailed neurological.
Rob: Imaging and neuro pathological data are available.
Rob: When looking at model systems, researchers most commonly look at phenotypic measures such as cell death, Mortara aggregation. Our studies enabled going well beyond these gross measures to investigate the molecular details that impact the timing and process of progression.
Rob: [noise] organize were treated with several doses of a beta 42, a fragment of a beta at multiple time points across millions of single molecule measurements, we observed biological variation in Tau protein forms potentially associated with 80 progression.
Rob: Such studies when expanded to larger cohorts and more detailed time courses may have significant implications in drug development.
Rob: In addition, we also performed pilot studies to examine the variation in the tow pretty firm landscape across stem cell derived organize my brain organize and mouse models and see extensive variation in the <unk> landscape.
Rob: Both the Organoid treatment and model system comparisons are relevant biological questions that we anticipate researchers wanting to ask.
Our platform is designed to ask and answer those questions with an unprecedented resolution and scale that we believe will enable unique insight.
Rob: In summary, the first ever high value data that leverage our platform single molecule quantification using Tao epitope specific detection of antibodies are encouraging and reveal a complex landscape of Freddie forms in model systems of neuro degeneration.
Rob: With the additional validation of larger study sizes matched to effect sizes. These data may result in greater insight for researchers seeking to better understand the progression of Alzheimer's <unk> other neurologic diseases.
Rob: As I conclude I want to remind you that advances made to our core platform accrue value to both our targeted pretty firm detection and broad scale discovery capabilities.
Rob: Most of the platform rely upon a unique single molecule library preparation nano pattern chips either.
Rob: Probing a individual molecules with fluorescently labeled affinity reagents and machine learning software to infer protein identities in quantities.
Rob: We remain focused on increasing scale stability and reproducibility across our consumables assay and platform and continue to see meaningful gains along those unrelated areas.
Rob: In particular Q3 saw the successful execution of the largest scale of experimentation we performed to date.
Rob: This progress is being made in conjunction with enhancing the reliability quality and customer readiness of our instruments and software.
Rob: I remain confident that our development activities are focused on the areas of the platform that will enable us to launch a product that will be a dramatic advancement in proteomics research.
Rob: With that I'll turn the call back to schedule.
Sched: Thanks for the update Parag I share progress enthusiasm for our tremendous progress in detecting proteoform and substantial impact we could have initially with Tau on biomarker discovery and drug development and also in other neurodegenerative diseases.
Sched: This progress represents a perfect example of our platforms unique ability to enable both targeted proteoform analysis and broad scale discovery proteomics.
Sched: Understanding of our platform's dual value a shared by others.
Sched: Aside from the Kols feedback project shared recent preliminary partnership related conversations with several large pharma companies indicate interest in targeted pretty firm analysis for use in drug targeting and drug discovery efforts, we look forward to continuing and formalizing those relationships.
Sched: With the significant progress we've experienced on the Protium <unk> front, we envision the first half of 2025 being dedicated to proving out what we believe to be a massive proteoform business opportunity.
Sched: As part of this we will accelerate our engagements with large pharma partners and key academic collaborators using Tao as our first biomarker.
Sched: Aside from serving to get our platform into the hands of researchers we expect that these engagements will also prove out the value of our unique single molecule methodology for more comprehensive pretty a form analysis.
They will also serve to harden our platform capabilities for both Proteoform and broad scale applications.
Sched: We believe this hardening of our platform will enable us to shorten the timeframe required to move from one to coding a significant number of proteins from <unk> eight to two the launch of our early access program.
Sched: Three.
Sched: The launch of our broad scale commercial product.
Sched: Based on that thinking we continue to anticipate a commercial launch of our broad scale product in late 2025.
Sched: Pleased as I am with the progress we've made in our development efforts I am equally proud of the way that our entire team has recognized the importance of managing the business efficiently to maximize our cash runway.
Sched: Each part of the organization has focused both head count and expenditures in a way that has driven our scientific development forward, while delivering an exceptional balance of progress and cash usage for.
Speaker Change: For more on that let me hand, the call over to <unk>.
Speaker Change: Thanks Nigel.
Speaker Change: Total operating expenses for the third quarter of 2024 were $19 $1 million roughly equal to the third quarter of 2023, and $1 7 million below last quarter.
Speaker Change: Research and development expenses in the third quarter of 2024 were $12 3 million compared to 12.0 a million dollars in the prior year period.
Speaker Change: General and administrative expenses were $6 8 million in the third quarter of 2024 compared to $7 $1 million in the prior year period, and $1 $5 million below last quarter.
Speaker Change: Overall net loss for the third quarter of 2024 was $16 4 million compared to $15 $9 million in the prior year period.
Speaker Change: The slight year over year operating expenses and large decrease quarter over quarter was driven primarily by a one time adjustment to our personnel costs as we updated our estimate of incentive compensation attainment for the year.
Speaker Change: Aside from the one time adjustment our Q3 results reflect tight spend management. We ended Q3 with 161 head count roughly flat compared to our 160 ending head count in Q3 of last year.
Speaker Change: At the same time, the Nautilus team has significantly increased our experimental capacity and output across both broad scale and targeted applications.
Speaker Change: I'm extremely pleased with the team's ability to fund today's business needs through prioritization cost optimization and innovation that allows the business to thrive without adding significant incremental spend.
Speaker Change: Turning to our balance sheet, we ended the quarter with approximately $221 2 million in cash cash equivalents and investments compared to $232 $9 million at the end of last quarter.
Our cash burn of $11 $7 million benefited from a $1 3 million shipped in unrealized losses last quarter to an unrealized gain position this quarter.
Speaker Change: While we work to finish our development, we remain committed to tightly managing our spend and expect that to continue into the quarters, leading up to our commercial launch.
Speaker Change: We anticipate our total operating expense growth for the full year 2024 to land at roughly 10%.
Speaker Change: Better than our previous guidance of 15% to 20%.
Speaker Change: As a result, we enter 2025 with a lower burn rate and a higher cash balance than previously anticipated sending.
Sending our cash runway into 2027.
Speaker Change: With that I'll turn it back to digital.
Digital: Thanks Anna.
Digital: The entire team's commitment to tight financial management reflects our driven scrappy mentality.
Digital: That mentality is demonstrated by our ongoing ability to focus our people and our financial resources on the highest value initiatives that will drive us through these final stages of platform development.
Digital: Well, it's no secret that getting our product to market is taking us longer than we initially anticipated I am confident that our efforts and spend our focus on the appropriate development areas and that our short medium and long term goals directly align with the best interest of our shareholders.
Digital: To wrap things up we continue to make solid progress against our development and business goals and for that I want to again, thank the entire Nautilus team.
Digital: We are excited about what's to come and we look forward to providing additional updates on our next call.
Digital: With that I'm happy to open the call up for questions.
Digital: Operator, thank you.
Speaker Change: To ask a question.
Speaker Change: Please press star one on your telephone and wait for your name to be announced.
Speaker Change: To withdraw your question simply press Star one again.
Speaker Change: For our first question.
Speaker Change: And he comes from the line of you called <unk> with Morgan Stanley. Please proceed.
Speaker Change: Hello, Thank you for taking my questions.
Speaker Change: So could you elaborate on the reasons that you are seeing higher than expected fallout.
Speaker Change: Pro candidates and what are some of the ways you are addressing these issues to improve that rate.
Speaker Change: Good morning, guys and thanks. Good question, maybe probably do you want to take a first stab at this and then I'll add some color on top.
Speaker Change: Sure happy to.
Speaker Change: So I think the.
Speaker Change: Okay.
Speaker Change: It's a great question about and really comes down to the incredibly extensive amount of characterization that we do with every single probe as soon as al noted that.
Speaker Change: Every single probe go through a wide battery of tests examining the kinetic properties the binding to.
Speaker Change: Diversity and also.
Speaker Change: Things like nonspecific binding and manufacture ability and so as we've been working through the development chain in characterizing each of these aspects.
We've.
Speaker Change: We've discovered the extent to which some probes are really amenable to being labeled other probes. There kinetics are impacted some probes have fast kinetics in circuit kinetics. So we anticipated a wide distribution and are observing a wide distribution, but at the same time. We're also observing some really fantastic things were.
Speaker Change: Observing that their diversity of what.
Speaker Change: What epitopes that are able to target is extensive and.
Speaker Change: That's really we.
Speaker Change: We're thrilled to see that result, because that means that any given probe can touch a wide percentage of the protium, but theres always a balance with any given by our molecule youre going to have a number of dimensions and as we continue to advance.
Speaker Change: We expect that.
Speaker Change: Probes have varying kinetics will be applicable on the platform. It's.
Speaker Change: Yes, just some will some will be applicable earlier, and some will take a little bit more effort.
Speaker Change: Got it thanks for that color.
Speaker Change: Thank you very much.
Speaker Change: Alright, okay.
Speaker Change: Yoko I'm Gonna bring you back to the stage.
Yoko: Yes continue with your second question. Please.
Yoko: Why are you just talked about falling behind on your broad scale discovery milestones could you provide an update on how the progress of developmental proteoform capabilities are towards launch and do you anticipate both of these capabilities to be available to early access customers.
Yoko: Yeah.
Speaker Change: Yes. This is a great question and let me try to expand a little bit on the remarks that I made during the prepared remarks. So we've always envisioned that our platform would have to use cases, one use case is what we refer to as broad scale, which is to identify all.
Speaker Change: Proteins within the sample comprehensively and the other mode is a more targeted mode, which we initially are targeted towards Proteoform analysis.
Speaker Change: And as we've said on past calls different while we had anticipated we would release broad scale before pretty forms different parts of our platform have matured at different rates and through some of the early work that we did with genentech over the last few years and continued work with other partners what we realized is that.
Speaker Change: <unk> had a significant interest in performing the types of Proteoform studies that our platform is capable of because there are no other methods to map the proteoform landscape in as much detail as our platform can do at the single molecule level and so over the course of Q.
Speaker Change: Q3, and and also a bit from Q2 as well we've spent time significantly maturing our proteoform capabilities and in particular decided on an initial focus on tau as an important biomarker and neuro degenerative diseases, and we've started to discuss the capabilities of <unk>.
Speaker Change: Pretty firm analysis with a number of potential pharma customers and a number of key academic and nonprofit.
Speaker Change: Research types of organizations and Kols and so when we jump into next year, we envision using the first half of that year or two.
Speaker Change: Really prove out the prettiest from opportunity using Tau as a as a litmus test for the market and for the capabilities of our platform.
Speaker Change: And we intend to use those engagements in the first half to demonstrate what's possible with our platform, but as well inform us on our future roadmap.
Speaker Change: And pricing strategies, and so forth with respect to that offering.
Speaker Change: In the second half of the year, we expect to launch our early access program and that early access program is really focused on the broad scale.
Speaker Change: Pretty proteomics analysis, and we expect that to look very similar to what we've described earlier, but it probably will compress that program a little bit because of the fact that the proteoform work that will start in the first half of the year and working with customers really helps us to harden the base.
Speaker Change: One because the base platform is common between both use cases and that hardening will help us hopefully shrink the timeline a little bit for our early access program.
Speaker Change: Just from a nomenclature perspective, the work that we're doing with party forms in the first time, we don't refer to that as early access we're really focused on collaborations and partnerships that help us to one show the world what is possible and to help us to inform what we're going to do with that capability over the course of the coming quarters.
Speaker Change: Got it thank you.
Speaker Change: Thank you one moment for our next question. Please.
Speaker Change: And he is from the line of <unk> with Guggenheim Securities. Please proceed.
Speaker Change: Hey, guys. Thank you for taking my question.
Speaker Change: Investors are increasingly focused on 25 heading into the year. Recognizing 2025 is the year you move from development to commercial stage.
Speaker Change: What metrics would you expect to share to help us better understand your corporate goals and this next stage and for us to better be able to assess progress towards these goals.
Speaker Change: 500000, 2000 proteins whatever it might be.
Speaker Change: A critical milestone for us that will likely mark the start of our early access program.
Speaker Change: And then in addition to that it's an important milestone because at that point more than half the probes the platform ready on platform running Dakota proteins and from there we anticipate that the timeline remaining and the work remaining will be relatively.
Speaker Change: Estimate able and and we'll be we'll be finite in nature.
And if you want to talk about the key spend areas as we head into 2025.
Speaker Change: Sure I can speak to that.
Speaker Change: We as you've heard us say repeatedly we're continuing to be I'm very focused on tight spend management. That's something that will continue into 2025, we will be trying to hold our spend but do more without spend particularly in the areas of development and launching our.
Product as we get closer to launch we'll make very targeted investments in our commercial teams. So that should add some level of spending in terms of pulling back our.
Speaker Change: As you've heard us talk about where you're spending in developing both broad scale and targeted applications, which is one way that we're doing more without increasing our spend so at some point we can make.
Speaker Change: Prioritization decisions and.
Speaker Change: Be more targeted in how we spend our time and that development that gives us an opportunity to pull back but I think as of right. Now we feel really good that the level of <unk> and rehab gets us to the cash runway, we need to support our both our product milestones in our commercial launch.
Speaker Change: Thank you guys Super helpful.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And it's from the line of Mac Sykes with Goldman Sachs. Please proceed.
Speaker Change: Hi, This is Anthony on for Matt Thanks for taking my questions.
Anthony: There are some of the targeted opportunities like your collaboration with Genentech and conversations Youre, having with potential customers are you seeing more interest on the discovery side given your historic focus in that area or have you had interest in the targeted side as well and then how can we think about sizing of potential opportunities on each end of the spectrum.
Speaker Change: Good morning, <unk>, So, let's talk a little bit about.
Speaker Change: Broad scale first and dress that part of your question I think the broad scale is something that we have been talking about with potential customers, whether they'd be pharma dx or academic customers, we've been talking about that with customers for many years.
Speaker Change: And I think that what we continue to see is an incredible amount of excitement for broad scale proteomics from everyone. We talk to and so that is a is a given and it's been going on for for a long time.
Speaker Change: I'm, a pretty a form side youll recall that the work that we have been doing with Genentech has been for over three years now and so we've been talking about pretty Forbes with customers for a long time as well and well our original plans didn't have us going and focusing on party of forms first really it's our customers who have been.
Speaker Change: Pushing us to do more on the party a forefront in particular with Tao.
Speaker Change: And so that's worked out.
Speaker Change: Gained a little bit of natural momentum through the engagements that we've had with customers and they're incredibly excited about it.
Speaker Change: It actually hasn't though new platforms.
Speaker Change: New iterations of platforms have been emerging the general structure of the market hasn't actually changed very much you really still continue to have.
Speaker Change: Really two dominant player types of players in the market.
Speaker Change: The mass spectrometry.
Speaker Change: Layers and then you have the targeted players the links and standard bio tools and and then you have this emerging class of new.
Speaker Change: New technologies like us.
Speaker Change: I think when we look at things like the Astral the latest version of the Tims Tav et cetera.
Speaker Change: What they're really great at is.
Speaker Change: Is moving very very very quickly. So they can they can collect a very large number of spectra in a short amount of time.
Speaker Change: On the other hand.
Speaker Change: Some of the fundamental challenges that exist in this space things like ease of use things like dynamic range.
Speaker Change: The ability to sample effectively low abundance proteins.
Speaker Change: The speed on the backend isn't substantially contributing to helping with those challenges on the other hand in a single molecule universe. The identify ability of our protein the detectability quantify ability are not directly correlated to the concentration in.
Speaker Change: The way that they are in a mass spectrometer and.
Speaker Change: So when we when we talk to folks with they're very excited about a couple of things that get to the core of our thesis one they are really excited about the sensitivity of our platform we demonstrated <unk> sensitivity.
Speaker Change: It's something that is orders of magnitude beyond what has been seen with other existing platforms.
Speaker Change: They are excited about the dynamic range, which of course comes from the scale that we are describing in terms of measuring billions of molecules.
Speaker Change: The majority of even emerging platforms are looking at peptides not proteins and they are certainly not looking at the scale of billions of molecules and so that's very exciting to folks.
Speaker Change: Also the ability to.
Speaker Change: To really be a platform for the biologist.
Speaker Change: Mass spectrometers are amazing and powerful instruments. However, they.
Speaker Change: They arent generally accessible to your average bench scientist and so that accessibility that ease of use for the broader biologic community continues to be an important differentiator for us.
Speaker Change: And then as we've talked about on this call Theres simply does not exist in a way to measure protein forms at the level of resolution and scale that we are able to with our platform and so this represents an entirely new measurement in the world and that's pretty exciting to be bringing that kind of resolution and scale to the world.
Speaker Change: As Sudhakar mentioned before when we've seen these kinds of advances we saw them with the.
Speaker Change: The transition from a X-ray diffraction spectra too.
Speaker Change: <unk> actual sub angstrom crystal structures at scale, we saw them with the transition from bulk to single cell and then again from single cell. The spatial these increases in resolution have been transformative to biology, and Thats really what our goal is is that level of transformation.
Speaker Change: Matt.
Speaker Change:
Speaker Change: Alright, one moment for our next question. Please.
Speaker Change: And it comes from the line of Matt Stanton with Jefferies. Please proceed.
Speaker Change: Yes, Hi, this is Jack on for Matt. Thanks for taking our call I guess first wanted to touch on pricing over the past 12 months to 18 months, we've seen high end mass spec systems, such as Astral continue to get decent pricing despite pressures elsewhere in portfolios sort of less price sensitive.
Speaker Change: At the leading edge of tech how.
Speaker Change: How are you guys interpreting price.
Speaker Change: Plasticity among your target customers today and have you changed your thinking on the pricing model you might pursue upon launch be it outright instrument sale or rental reagent.
Speaker Change: Yes.
Maybe I'll take a first step this year I think that.
Speaker Change: I think what we are seeing in the marketplace exactly what you just described which is that the new instruments coming out of the leading mass spectrometry vendors has been received well and.
Speaker Change: In the case of the Astral at a significant price point.
Speaker Change: Well over $1 million for the asteroid installation and so we look at that as number one significant validation of the importance of proteomics at proteomics research to all of the potential customers that we're talking to and that are out there in the scientific community.
Speaker Change: And second we look at that look at it as an indication that that even with some choppiness in capital spend there is still significant spend available for projects that are related to proteomics and so.
Speaker Change: From my standpoint, that's very supportive of the roughly million dollars initial deal size that we expect to watch with now as we get into next year and we get closer to launch we do intend to walk through our final pricing with wall Street, with the analysts and with our investors and as well.
Speaker Change: Walk through what that exact business model looks like and I think that if there are any tweaks I think that the tweaks might even be a little bit.
Speaker Change: Higher in terms of the price initially because the market has proved out that those price points are acceptable to customers and our product. That's brunch described in his <unk>.
Speaker Change: Answer to the last question our product is incredibly disruptive both with its broad scale use case, given the sensitivity and coverage and dynamic range of our product and with the targeted use cases first with being able to provide 2000 up to 2000 different protein forms of Tau, but then in the long run focused on other buyer.
Speaker Change: Mark there as well.
Speaker Change: Yeah.
Speaker Change: Okay, great Yeah that was super helpful.
And I guess following up on that.
Speaker Change: You mentioned pharma, but it'd be great. If you could provide an update on sort of the academic gov funding landscape sort of that side, particularly for proteomics.
Speaker Change: NIH data show, maybe flattish growth this year, whereas other categories might be growing a little bit more healthily I guess do you sense any sort of change in the overall appetite for proteomics research and then a quick follow up there I guess based on your engagements today, how should we think about the mix split of customers pharma versus academic following commercial launch.
Speaker Change: Yeah, so in terms of.
Speaker Change: What we're seeing in the academic and nonprofit research space and in particular, the government funded research I think.
Speaker Change: What I would say is that we're seeing that in marketplace echoes. What you just described which is that at a macro perspective.
Speaker Change: Funding might be flattish year over year, and I think that for platforms that aren't super disruptive or don't have a huge value proposition I think that that sort of environment can create some difficulties in the conversations we have with the academic type of customer there's a broad recognition that our.
Speaker Change: Platform has the potential to be incredibly.
Speaker Change: <unk> on both the broad scale side and on the targeted scale side and with that there's a great desire for customers to get our hands to get their hands on the platform and see the data that they generate and experienced that firsthand and so with that I.
Speaker Change: <unk>.
Speaker Change: Whether we're talking about an academic customer we're talking about a pharma customer I think that any choppiness in the capital spend market will certainly manifest itself in terms of potentially lengthening sales cycle here or there or increasing the friction in our sales cycle, but I think that fundamentally our value proposition will hold up very well.
Speaker Change: Even in a tighter capital spending environment I think that.
Speaker Change: Both with academics, which you're asking about but as well on the pharma side of things and on the Dx side of things, which you could consider that more commercial end of the spectrum of our customer base in terms of mix.
Speaker Change: I think.
Speaker Change: We will discover and our first.
Speaker Change: In our first year or two selling what that mix actually looks like but I think we continue to expect that.
Speaker Change: The first year's worth of customers that adopt our platform that there'll be a mixture I am perhaps close to even have both academic and nonprofit research customers as well as more commercially oriented customers like pharma.
Speaker Change: I appreciate it thank you.
Speaker Change: Thank you and I'm, Sorry reminder, to ask a question simply press Star one one on your telephone.
Speaker Change: Our last question comes from the line of Dan Brennan with TD Cowen. Please proceed.
Dan Brennan: Great. Thank you thanks for the questions.
Dan Brennan: Maybe the first one just on hitting that milestone of the 500 to 2000 proteins and <unk>.
Dan Brennan: I assume you expect to have that completed and published by U S. <unk>.
Dan Brennan: And could you spell out specifically I know you addressed them early on in the prepared remarks, but just kind of walk through.
Dan Brennan: What are the key tech hurdles that you need to achieve in order to enable this result at that timeframe.
Speaker Change: Thanks for the question, Dan and good morning to you.
Speaker Change: So let me I'll try to answer your question as directly into the apparently as I can.
Speaker Change: That key that milestone that you described being able to see 501000 2000 proteins in cell assay anywhere any complex sample that is the critical milestone for broad scale at that point every piece of our platform has come together there are enough platform ready probes to be able to show.
Speaker Change: You have a significant number of proteins from a sample and because prism is based on sort of an exponential curve of how many proteins you can see versus how many platform ready probes. We have it means that we're substantially through all the development and we'll be able to provide some specificity on the remaining development. So it is incredibly important to us.
Speaker Change: In the interest of just being transparent we wish we were there by the end of the year and frankly it on his prepared remarks. He saw that she had said that.
Speaker Change: We had some accrual changes.
Speaker Change: Related to annual bonuses and that was frankly, because we intended to be there and we're not you can expect that we are working very very hard to be able to get to a broad scale milestone by U S. Soup out timing is not working for us U S. It was very early this year.
Speaker Change: In February and so on.
I'm not committing to being able to get there, we certainly would like to but as parag mentioned in his prepared remarks and gave them a little bit of color. During Q&A. The key thing for us to get through here is to have enough platform ready probes on our plant that are that are functioning well in our platform to be able to get to that milestone and that's a function of.
Speaker Change: Some improvements that we're making on our labeling strategy and our label in chemistry, and some improvements that we're making to try to improve the diversity of probes that assumption very well on our platform and that work is continuing well and progressing nicely. The company is super focused on it but I.
Speaker Change: Just don't have an exact answer that lets me go and say, yes, we're going to have it done by USA, but.
Speaker Change: We're working really hard on.
Speaker Change: Got it and then I think last quarter.
Speaker Change: You did talk about the probes and you talked about the probes aren't attaching at a high enough rate and you talked about moving away from using a DNA contract to another undisclosed material just how has that progressed like obviously it sounds like with the central part of kind of what youre doing underneath the hood, but I don't know if it's possible to expand a little bit on that and the confidence in that shift.
Speaker Change: Yeah. So.
Speaker Change: One of the.
Speaker Change: So when I talk about adjusting our labeling strategies that is really trying to evolve our construct that work.
<unk> is progressing very well and.
Speaker Change: And so I think that.
Speaker Change: It's moving along just fine.
Speaker Change: Where we are with respect to having that work at our labeling chemistry far enough along that we are getting our platform ready probes up to that target initial target yield or the third that I had mentioned in the bread Mark Sprint I don't know I can't give you an exact specifics behind of where we are but the but that particular <unk>.
Speaker Change: Struct evolution is something that we have completed at this point, but we continue to work on the optimization of the chemistry and the specifics of how to how to get that to improve the yield of our probes on platform.
Speaker Change: And then.
Speaker Change: If I can just layer on a little bit on that Dan.
Speaker Change: When we think about about development just in general.
Speaker Change: Really throughout the entire ecosystem, we're focused on on quality, where we're focused on scale. We're focused on things like guard banding and so we have we are constantly in a state of evaluating every single component of our system and tweaking and tuning and optimizing.
Speaker Change: And improving and so.
Speaker Change: Well, it's it's tempting to focus on this and say Oh. This is this is a big thing.
Speaker Change: We have probably evolved our label 100 times in the course of the last couple of quarters.
Speaker Change: And that's a natural unexpected part of development is to continue to refine and optimize towards the commercial targets and so.
Speaker Change: So it is an important thing but it is it's also an expected part of development is that you are going to refine your reagents youre going to refine the manufacturer of those reagents youre going to refine your specifications for all of those regions.
Speaker Change: And then maybe final one it sounds like in the press release and I think in the prepared remarks, you talked about the commercial launch is still kind of plan for the back half of 'twenty five seven I think consistent.
Speaker Change: With what you said at Q2, so maybe why not pushed to 'twenty six to give yourself more room.
Speaker Change: Just any color on that thank you.
Speaker Change: Yeah.
Speaker Change: And I think that.
Speaker Change: Our philosophy on this front is to just try to be.
Speaker Change: Open width with Wall Street and to tell you how we're planning and we continue to plan for a late 2025 launch we continue to look at where we are from a development perspective, and don't feel like we need to update that timeline to 2026 at this point.
Speaker Change: Is it possible that something could push out and it could be 'twenty six certainly it's possible.
You will also see that in our.
Speaker Change: P&L that we're managing our spend an incredibly tight way to make sure that we have the resources to complete our development, even if it were a push but we do continue to target 25, we think that late 2025 still represents a achievable target. We continue to be pleased with the progress that we're making on the broad scale side.
Speaker Change: And continue to end.
Speaker Change: Honestly I'm incredibly proud of our team for being able to do that on a broad scale side at the same time that we have something along the lines of a 12% of our head count and resources on the Proteoform side of the business. We're doing all of that within a really tight spend envelope and we still we still feel like it's the right timing.
Speaker Change: Great. Thank you.
Speaker Change: Yes.
Speaker Change: And thank you and with that ladies and gentlemen, we conclude our Q&A session and conference for today. Thank you all for participating and you may now disconnect.
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