Berkeley Lights, Inc.

Good day and thank you for standing by. Welcome to the Berkeley Lights first quarter 2021 earnings conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Carrie Mendeville. Please go ahead. Thank you.

Earlier today, Berkeley Lights released financial results for the quarter ended March 31st, 2021. If you have not received this news release, or if you'd like to be added to the company's distribution list, please send an email to ir.berkeleylights.com. Joining me today from Berkeley Lights are Eric Hobbs, Chief Executive Officer, and Kurt Woods, Chief Financial Officer. 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 risks 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 annual report on Form 10-K filed with the SEC on March 12, 2021, 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 it's accurate only as of the live broadcast, May 11th, 2021. With that, I'd like to turn the call over to Eric.

Thanks Carrie. And thank you everyone for joining us this morning. We started the year off strong and had solid execution across our business during the first quarter. Revenue grew 35% year over year to $18.6 million. I'm very pleased by the performance of our team this quarter and encouraged by the increasing demand and enthusiasm we are receiving from our customers. At Berkeley Lights, we focus on major markets that leverage cells to make products, which include antibody therapeutics, cell therapy, synthetic biology, and most recently, gene therapy. To truly enable the growth of these markets, one needs to rapidly assess the relevant functions hidden in the large numbers of sequences produced daily. Linking the genome to the desired phenotype at scale is at the heart of our technology. This is extremely important to our customers as it increases their probability of success and leads to an accelerated time to market. These functional tests become even more essential as the complexity of the end product increases. Multidimensional tests and parameter optimization. Sequences by themselves have limited value and are not actionable unless a particular sequence in a cell is shown to create a valuable product, such as a cure for a disease, an enzyme, or a food protein. At BriggsLights, we are bringing functionally validated sequences in cells to life at an unprecedented scale, speed, and resolution. Three key tailwinds continue to drive expansion 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, and cell and gene therapies using DNA or mRNA therapeutics, which require precise functional validation. To benefit from these market tailwinds, we are focused on two key areas. First, we are driving our core business in existing and adjacent markets. And second, we are leveraging our technology with partnerships to expand into new addressable markets. Starting with our core business, demand was strong from both new and existing customers in the first quarter. We grew our installed base by 10 platforms to 85 systems, of which eight were direct sales in the quarter and two were attributed to the completion of milestone programs. Five of those went to new customers and five to existing customers. Today, about one-fourth of our installed base is multiple system placements, demonstrating growing technology adoption. CDMO and CRO demand remains strong as Berkeley Light's technology becomes a key offering in this market segment. In the first quarter, approximately one-third of our revenue came from the contract research and development industry and represented the largest contribution to our revenue during the quarter. Part of our technology adoption strategy is to tailor access models to specific customer segments. We do this by offering alternative access models to accommodate customers through a subscription-based approach. Initially, this approach has been focused on financing, essentially providing customers with access to a beacon's full capacity through fixed payments over time. After further market assessment, we're introducing a second subscription model to better meet their specific capacity needs. In this model, customers will subscribe to a given capacity inclusive of all consumables, software, service, and support for their cell line development or antibody discovery campaigns. Pricing is based on campaign capacity, so customers with fewer campaign runs can cost-effectively access our technology. We believe this will increase our served available market broaden our customer base, and drive incremental demand. We're early in the release stage, but are encouraged by the interest we're receiving so far. Kurt will walk you through some of the financial details of our new subscription approach in his remarks. We continue to see opportunities for expansion both in existing and new customers alike, driven by increased use cases enabled by our workflows. In Q1, we announced our next generation antibody discovery workflow, OptoPlasma B Discovery 4.0. which will be the industry's first fully integrated antibody discovery workflow from target identification to functional molecule. The placement of our platform in combination with OptoPlasma B Discovery 4.0 will provide customers with an instant turnkey solution. We expect to release this workflow by the end of Q2. Last month, we made another significant product announcement with the launch of OptoAssure, a series of assays that will provide yield and product quality data at an earlier stage in the cell line development process. enabling better lead candidate selection over a broad set of product and manufacturing parameters. Antibody therapeutics are becoming increasingly complex. Quality issues such as aggregation and highly engineered proteins are becoming a greater challenge, with implications for drug manufacturability and patient safety. Identifying manufacturing cell lines that secrete high titers of quality product is emerging as a critical challenge in cell line development. With OptoAssure, our customers will be able to rapidly select clonal cell lines with favorable manufacturability profiles early in cell line development, leading to faster timelines, decreased costs, and the best downstream products. OptoAssure is an example of our strategy, an inherent value proposition to move quality and yield validation to the earliest possible point in the development and manufacturing process. And most recently, at the end of April, we released Cell Line Development 2.1, which significantly enhances our import capabilities by adding a proprietary on-chip enrichment sort. This allows us to screen up to 20 times more cells compared to our previous Cell Line Development 2.0 workflow and up to 50 times greater throughput than traditional well points. Broader access to relevant biodiversity further increases the probability of finding that rare or best clone that will manufacture the product at the volume and quality our customers need. We are also leveraging our technology to access new markets through business development partnerships. The truly incredible thing about our platform-based technology is its broad applicability into new markets. As we approach new attractive cell-based markets, we look for the biggest problems that our customers are having and engage in business development deals with those partners to develop a solution to the problem. We jointly develop workflows, become the solution of record, and commercialize those workflows in the broader market. We have done this in cell line development with Amgen, where Beacon has become Amgen's standard platform for cell line development. We're doing it with Ginkgo in synthetic biology. And our last earnings call, we announced a $17 million deal with a global leader in gene therapy space to adapt the Berkeley Lights platform to enable the selection and manufacturing of stable viral vector producer cell lines. Viral vector producer cell lines are used across multiple therapeutic modalities, such as gene therapy, cell therapy, and really any therapy using viral transfection. Today, these therapies rely on costly and difficult-to-scale transient re-expression cell lines. This is because quickly generating stable producer lines has not been proven possible with current approaches. We believe that Berkeley Light's technology will make it possible for the first time to execute multi-parameter functional tests, including viral capsid and genomic titers, without losing the live biology. Once developed, this will allow us to select stable clones in one to two weeks that will be used to create stable master cell banks similar to what is being done in cell line development for antibody manufacturing. We believe this will become the new standard for viral vector manufacturing as it significantly reduces cost, enhances manufacturing predictability, and provides a superior approach from the regulatory perspective. This partnership has progressed into the next phase, and we expect these types of partnerships to have a meaningful impact on our growth trajectory over the coming years. Finally, before I turn the call over to Kurt, I'd like to share a brief update on our Board of Directors. Today, we announced that John Cheminski, Chairman and CEO of Catalan, will be joining our Board, effective May 14th. John has led Catalan into a leading CDMO that today supports the introduction of 200 new products and over 70 billion doses each year. He brings deep industry and market experience and shares our passion of continuing to accelerate the discovery and development of cell-based products. The Berkeley Knights board and I couldn't be more thrilled to have John on board. At the same time, Michael Marks will be retiring from our board, and Greg Lussier, who currently serves on our board as a director, will assume the role of chairman. Greg has a wealth of experience growing public companies both organically and through high-growth acquisitions in this space. I look forward to his continued leadership and guidance as our new chairman. With that, I will now turn the call over to Kurt for more detail on our financials.