Berkeley Lights, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to Berkeley Light's fourth quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. It is now my pleasure to introduce Carrie Mendeville, Investor Relations.

Thank you. Earlier today, Berkeley Lights released financial results for the quarter and year ended December 31st, 2020. If you have not received this news release, or if you'd like to be added to the company's distribution list, please send me an email to ir at berkeleylights.com. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risk, and uncertainties that could cause actual results or events to materially differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section entitled Forward Looking Statements in the press release Berkeley Lights issued today. For a more complete list and description, please see the risk factors section of the company's final prospectus filed with the SEC on November 19, 2020. The company's quarterly report on Form 10-Q for the quarter ended September 30, 2020, and in its other filings with the Securities and Exchange Commission. Except as required by law, Berkeley Lights disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast, February 25th, 2021. With that, I'd like to turn the call over to Eric Hobbs, Berkeley Lights Chief Executive Officer. Eric?

Thanks, Carrie, and thank you, everyone, for joining us this afternoon. Joining me today is Sean Holt, our Chief Financial Officer, and Kurt Wood, our Vice President, Business Development. As we announced in early February, Sean is moving on from Berkeley Lights at the end of April to pursue opportunities with earlier stage companies. On behalf of the Berkeley Lights team, I want to thank Sean for his leadership and his many contributions to the company over the past five years, especially his work taking us public last year. Kurt will officially transition into the role of Chief Financial Officer on March 15th. On the call today, Kurt will provide the financial detail on both the fourth quarter and full year 2020. And then, at the end of the call, Sean will join us for Q&A. There is no doubt 2020 was an incredibly challenging year, but I am so proud of the Berkeley Knights team for their continued efforts, especially in the presence of COVID restrictions, to drive the installations and adoption of our industry-leading platform. We finished the year strong with fourth quarter revenue growing 31% year-over-year to $21.7 million, and ended the year with an installed base of 75 platforms, up 56% from the end of 2019. For those on the call who are new to Berkeley Lights, we are a leading digital cell biology company focused on accelerating the rapid development and commercialization of biotherapeutics and other cell-based products. We envision a future where cells are a scalable and sustainable way to manufacture the products that we need to live a long and healthy life. And the Berkeley Lights platform is key to enabling this by providing precise, rapid discovery, and functional validation of biology. Our goal is to become the industry standard across the cell-based product value chain. Now, the markets that can be addressed by cell-based products are varied and large, and we are initially focusing on three markets, antibiotic therapeutics, cell therapy, and synthetic biology. Collectively, these markets accounted for estimated and market sales of $148 billion in 2019 and are projected to grow to over $250 billion over the next four years. We believe these markets represent an estimated addressable market opportunity of $23 billion to Berkeley Lights. In 2020, we continued to deliver on our commitment to drive innovation by releasing six new workflows, bringing the total number of commercial workflows to eight. This included the most recent Opto Cell Line Development 2.0 workflow that provides even higher access to relevant biodiversity and further enables complex polyfunctional assays. With this new workflow, we were able to start taking a share of the capacity expansion occurring in the CLD CDMO market segment. In the fourth quarter, one of our customers received the first IND approval by the FDA for an antibody therapeutic developed using our opto cell line development workflow on the beacon. What this means is that our highly replicable standardized automated cell line development workflow with the associated automated data capture, including our industry leading monoclonality, received a stamp of approval for the creation of monoclonal cell lines. We believe this will further shorten cycle times in the overall approval process for all customers and drive incremental demand for our OPTO CLD workflow products. During the year, we also released two workflows for antibody discovery, OPTO Plasma B Discovery 2.0 and 3.0, which drove demand across all three geographic segments, especially in Asia, which was the fastest growing region of the year. As we look ahead in 2021, there are three key tailwinds that are driving growth across our markets. First, demand for cell-based products is growing. Second, the complexity of cell-based products is increasing, requiring more precise multifunctional assays with the highest resolution. And third, there are new therapeutic modalities, including multispecific antibodies, cell and gene therapies using DNA or mRNA therapeutics, which require precise functional validation. As a result of these tailwinds, the number of customers is growing, with many smaller biotech companies chasing specific drug targets with even shorter drug development times. This is creating rapid growth in the number of CDMO customers that we serve and provides us with the opportunity to offer different access models for our technology and attract new customers onto the Berkeley Lights platform. Yet while this market grows, it continues to be constrained by the manufacturability of novel therapeutic products and modalities. To alleviate these constraints, we are developing workflows that move the functional validation of manufacturing parameters early into the process, giving customers higher predictability of manufacturing yield and throughput. We are also enabling new manufacturing approaches with much higher throughput. Each and every biologic modality, whether it's antibodies, cell therapies, gene therapies, and every gene sequence discovered or cell line that's engineered requires functional validation, which we believe can be optimally performed on the Berkeley Lights platform. Our customers are looking to accelerate their capability to discover, develop, and to manufacture cell-based products. And we believe to do this, all roads ultimately lead to Berkeley Lights. To benefit from these market tailwinds, we continue to focus our growth strategy on two key areas. First, we are driving the core business in existing and adjacent markets. And second, we are leveraging our technology to expand into new addressable markets. Starting with the core business, we recently announced a next generation antibody discovery workflow, Opto Plasma B Discovery 4.0, which will be the industry's first fully integrated antibody discovery workflow from target to functional molecule. Today, the big challenge in antibody discovery is finding rare antibodies against difficult targets such as GPCRs and ion channels. GPCRs constitute the largest family of proteins targeted by FDA-approved drugs, resulting in nearly $200 billion in annual sales. Antibodies against GPCR targets have great therapeutic potential in a variety of diseases, including cancer, inflammatory disorders, neurological, and metabolic diseases, but they have been extremely hard to hit targets, which is why there is only one FDA-approved antibody to date. The challenge here is finding a rare antibody, which is like searching for a needle in a haystack. In this regard, the Opto Plasma B Discovery 4.0 is a game changer. It further increases access to biodiversity and screens against multiple, highly sensitive cell-based assays, thereby increasing the probability of success in finding rare antibodies effective against these hard-to-hit targets. So effectively, we are helping customers find that needle in the haystack. In fact, in a comparative campaign between Hyperdome and Beacon, one customer was able to increase their yields by a factor of 10. The more difficult the target, the more distinct the gain that was achieved. We are excited about the potential value this workflow will provide to customers and expect to launch it by the middle of 2021. We are also executing on our strategy to enter the rapidly growing cell therapy manufacturing market and expect a meaningful amount of R&D investment towards the development of a cell therapy manufacturing system. CTMS is designed to be the first fully integrated, closed-loop, GMP-in-a-box manufacturing solution which integrates unit operations of manufacturing as well as embedded analytics for in-process and final QC to streamline development. When our characterization capabilities are combined in a manufacturing platform, we will provide the industry with the greatest opportunity to dramatically accelerate the deployment of cellular therapies. In the fourth quarter, we reached an important milestone and completed the development of the first alpha unit. We've successfully demonstrated assays on Beacon that are ready to transfer onto the alpha units. The CTMS platform will support both centralized and distributed manufacturing models. We also continue to leverage our technology to access new markets through business development partnerships, and we are excited to announce that we just signed a collaboration agreement with a global leader in the CDMO space to make stable cell lines for viral vector manufacturing in the rapidly growing cell and gene therapy markets. Generating stable cell lines is hard. This is because the stable integration of the DNA required to produce these viral vectors is a very rare event. Today, conventional screening processes are limited to tens of cell lines and typically require at least six months to complete. As a result, the industry has been utilizing transient cell lines to make these viral vectors. This process requires cell lines to be constantly developed, making viral vector manufacturing very expensive and less predictable as compared to stable cell lines used for antibody therapeutics. Through this new partnership, our goal is to make stable cell lines for viral vector manufacturing as accessible to the world as they currently are for antibody therapeutics. In this collaboration, we will leverage the capabilities of our platform and existing cell line development workflow to rapidly validate multifunctional parameter spaces have very high throughput. So rather than tens of cell lines over six months, we will be screening thousands of cell lines in less than a week. We expect this partnership, and more like it, to have a meaningful impact on our growth trajectory over the coming years. This non-exclusive collaboration has a multi-year revenue opportunity of up to $17 million, expands our total addressable market, and perhaps even most importantly, adds a new viral vector workflow, which we hope will become the standard to make stable viral vector cell lines in the future. We are seeing many of these new opportunities. and our ability to execute on these partnerships and generate new workflows is enabled by our biofoundry. Therefore, we are expanding the biofoundry and business development teams to capture these new opportunities. We are also expanding our biofoundry capabilities into the APAC and EMEA regions. In the fourth quarter, we launched the first lab in APAC and are planning to go live with the second lab in the EMEA by the end of the second quarter. These labs are essentially mini biofoundries and will enable us to demonstrate our technology to future customers, accelerate customer training, and engage in these new market opportunities globally. To execute on our ambitious vision, we are scaling the organization to achieve our growth objectives. In early February, we announced the expansion of our senior leadership team, with Pete Letty joining as Chief Human Resource Officer, Mimi Healy joining in a newly created customer-facing role of Chief Product Officer, and Kurt, who is transitioning to CFO in March. Their collective experience and track record in high-growth organizations will be invaluable as we continue to advance our strategic objectives. We're executing aggressively to accelerate the use of cell-based products, and I'm confident that, with these key additions, the executive team is well-positioned to lead Berkeley Lights into the next chapter of growth and success. With that, I will now turn the call over to Kurt for more detail on our financials.