Berkeley Lights, Inc.

Thank you for standing by, and welcome to the Berkeley Light's fourth quarter 2021 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. As a reminder, today's program may be recorded. I would now like to introduce your host for today's program, Kerry Mandeville, Investor Relations. Please go ahead.

Thank you. Earlier today, Berkeley Lights released financial results for the quarter and year ended December 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 at berkeleylights.com. Joining me today from Berkeley Lights are Eric Hoggs, Chief Executive Officer, and Kurt Wood, 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. For more information, please refer to the risks, uncertainties, and other factors discussed in our SEC filing. Except as required by law, Berkeley Light 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 24, 2022. With that, I'd like to turn the call over to Eric.

Thanks, Carrie, and thank you, everyone, for joining us this morning. On today's call, I will provide details on the continued progress we're making across our business. I will then turn the call over to Kurt to discuss the fourth quarter and full year 2021 results and share our outlook for 2022. During the fourth quarter of 2021, we achieved revenue of $23.2 million, bringing total revenue for 2021 to $85.4 million, above our preannounced range in early January. Key revenue growth drivers were our strategic partnerships and services business, strong sequential recurring revenue, including consumables and direct placements. At Berkeley Lights, our mission is to find the biology that cures disease. To achieve this mission, we have created the most advanced platform to access and understand live primary biology at an unprecedented speed and scale. Underlying our strategy, we will continue to focus on opportunities where our innovative platform can be applied to disrupt the market and unlock significant value. In the early days of Berkeley Lights, our platform was developed to solve high-value problems for customers by providing a significant improvement over existing solutions. As we've continued to develop our platform, we are advancing opportunities where we believe the Berkeley Lights platform provides the only commercially viable solution. We have started to experience increasing levels of demand for these proprietary solutions, allowing for near-term revenue opportunities as well as longer-term participation in downstream economics. such as milestones and royalties. In 2021, we significantly expanded our strategic partnerships and services business, growing revenue more than threefold from $5.8 million in 2020 to $19.9 million in 2021, which included transactions with future downstream revenue participation. Total strategic partnerships and services contract value grew from $200,000 in 2020 to $42 million in 2021. During 2021, we announced two key partnerships with Thermo Fisher Scientific and Bear Crop Science that demonstrated our ability to capture deeper value through our technology. In Q4 2021, we signed two additional partnership agreements with contract values up to $8 million. One was with a top five pharmaceutical company and the other was with Anika Biosciences. which includes potential downstream royalty revenue. In this partnership, ANICO will use our high-throughput functional screening services based on our proprietary cell-free expression technology to rapidly identify and optimize functional antimicrobial peptides capable of killing harmful bacteria, including those that cause outbreaks of foodborne illness. In addition, our platform will be used to find peptides that are toxic to bacteria to create a new antibacterial tag that will then be applied to their bacterial spore-based barn coating technology to protect the food supply chain. An important aspect of these partnerships is a future transition into long-term services, engagements, and revenues. In this business model, we start with an R&D partnership to develop the required workflow and biology, which can span multiple years and is then followed by a distributed service offering at the customer site or internal service in our biofoundry. In 2022, we expect to continue to accelerate growth across our strategic partnerships and services business. In these engagements, our partners are leveraging the capacity of our biofoundry to solve highly complex problems. To serve this rapidly growing part of our business, we recently completed the full build out of our Boston biofoundry, which will provide additional campaign capacity as the business grows. We continue to see expansion opportunities for new and existing customers driven by increased use cases enabled by our workflows. Over the course of 2021, we announced several technology developments with three key standouts. The first was the ability to leverage our proprietary cell-free technology to enable the expression of specific proteins in each nanopen. and then test the function of that expressed protein against live primary cells. We've expressed a variety of proteins from small peptides all the way to full length antibodies and have tested their function to kill particular cell types or bind it to desired targets. This advancement to our technology is the basis for our high throughput functional screening service. The second advancement was developing a scalable way to perform terminal assays without any significant loss of live biology. In addition to cloning and culturing cells in a nanopen, we can now terminally differentiate or even lyse a subset of the cells while ensuring clonality of the surviving subpopulation. This allows us to perform terminal assays or capture internal components of a cell while maintaining the viability of a subset of the clones in the nanopen. Once the analysis of the terminally differentiated or lice cells has been completed, we can use our OEP technology to recover the viable subset of live clones. This opens a whole class of solutions for our customers, such as polyfunctional assays, polygene editing, and precious cell interrogation. It is also a core technology enabling the stable viral vector line workflow that is currently under development. The third development was in the application of our T-cell characterization, or killing assay, to apply to patient samples. Our goal is to ensure our customers have access to the most relevant biology. There are a huge number of cell types, in particular primary disease cells and PBMCs that come directly from humans that cannot easily be cultured and leveraged in therapeutic studies today. Access to primary biology can be achieved through speed enabled by nanofluidics and automation. With this capability, customers can discover new antigens and TCRs, answer questions regarding particular disease progressions, and estimate the efficacy of a particular therapeutic solution. At Berkeley Lights, we are committed to continuing to develop and deliver capabilities that were not previously thought possible through our technology and workflow advancements. As we look ahead into 2022, we are focused on three key areas to drive growth across our business. First, growing our strategic partnerships and services business to enable downstream economics to our differentiated offerings. Second, continuing to release high-value workflows in our core antibody therapeutics market. And third, ramping up our high-throughput functional screening service workflows. In terms of CapEx sales, we are experiencing cash conservation around large capital purchases where those customers are accessing our platform through CROs and CDMOs and postponing or eliminating CapEx purchases. We believe this is in part driven by the current macroeconomic environment and a shift towards conservative capital allocation. While this pressure may cause some delays in the near term, we're confident that our differentiated access models, including tech access and strategic partnership and services, which are designed to better serve our customers' needs in this environment, will continue to see increased demand as we move into 2022. Further, in 2022, we will continue to drive innovation and expand into new market opportunities. Starting with antibody therapeutics, we will continue to deliver and advance our core workflows in both antibody discovery and in cell line development. In antibody discovery, we will continue to expand the diversity of antibodies customers can evaluate on the Berkeley Light's platform. This year, we plan to release a rabbit memory B-cell workflow and a human memory B cell workflow. In addition to these new species, we will also continue to drive assays that help our customers find the highest quality product. Additionally, we plan to release the ability to understand and rank affinity on chip during the discovery process. Adding additional access to diverse antibody solutions and incorporating deeper understanding of how the antibodies will perform will further increase the probability of success that our customers will find treatments and cures against more challenging targets. In cell line development, our customers face challenges manufacturing bispecific and multispecific antibodies. In these modalities, cells are edited to make the bispecific, but the cells also produce unwanted variants, leading to additional costs and timelines during manufacturing. Late last year, we presented data from a collaboration with a major pharma partner. showing we can measure the quality of bite specifics being manufactured by the cells at the time of clonal selection. In 2022, we plan to provide turnkey reagent kits so our customers can include this level of understanding and characterization in our cell line development workflow. Turning to our opportunity in cell therapy, we will springboard off the great work completed by our internal teams to accelerate the manufacturing and quality control of cell therapies. Additionally, we will continue to enable access and understanding of complex cancers by onboarding additional primary tumor types, which will further the understanding of the killing or inhibitory mechanisms using the Bergdahlite cell killing assay. In gene therapy, we expect to deliver our stable viral vector clone selection workflow to Thermo Fisher Scientific as part of our collaboration agreement and wrap up additional commercialization efforts with other partners. Related to synthetic biology, we anticipate releasing certain workflows to Ginkgo over the next couple of quarters to increase their production efforts. Over the course of the year, we plan to also accelerate our high-throughput functional screening capacity and move beyond ag bio. We expect to see additional deal flow here in 2022. As we shared at the beginning of this year, I will be transitioning from my role as CEO to president of the antibody therapeutics business. The Berkeley Knights Board of Directors has initiated a search for a new CEO that is progressing well. Before I hand the call over to Kurt, I'd like to again thank our team for their hard work and dedication towards making our vision a reality. We are at the forefront of something profoundly important, and we continue to push the envelope every day on what is possible through the cutting edge fusion of biology and technology. As we have advanced the platform's capabilities, We increasingly hear from customers how our technology is enabling them to solve complex problems that were previously thought to be unsolvable. I will now turn the call over to Kurt for more details on our financials. Kurt?