IsoPlexis Corporation

Thank you for standing by and welcome to ISOFLEX's first quarter 2022 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. Please be advised that today's call may be recorded. Should you require any further assistance, please press star 0. I would now like to hand the call over to Carrie Mendeville, Investor Relations.

Thank you. Earlier today, Isoplexis released financial results for the quarter and did March 31, 2022. 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 investors at isoplexis.com. Joining me today from IsoPlexus is Sean McKay, Chief Executive Officer, and John Straley, 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 IsoPlexus issue today. For a more complete list and description, please see the risk factors section of the company's quarterly report on Form 10-K, held on March 30, 2022, and in the company's other filings with the Securities and Exchange Commission. Except as required by law, ISO Plexus 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 It's accurate only as of the live broadcast May 11, 2022. With that, I'd like to turn the call over to Sean.

Thanks, Carrie. Good morning, and thank you, everyone, for joining us. I'm pleased to welcome you to our first quarter 2022 earnings call. On today's call, I will start by providing an update on our commercial progress and operational improvements designed to drive future growth. Then I will turn the call over to John for a closer look at our financial results and outlook for 2022. We started the year strong with revenue for the first quarter growing 52% to $4.9 million, coming in at the high end of the revenue range we preannounced in mid-April. Our team made significant progress supporting our customers who are providing critical immune data in the highest impact disease areas across blood and solid tumors, autoimmune and inflammation, and infectious disease. Our strategy is focused on a set of key themes that will drive our growth and lay the foundation for long-term success. These areas include scaling customer adoption by expanding our installed base and instruments, as well as driving increased utilization within each customer account, focusing on a leaner, more highly integrated organizational structure to increase commercial and operational productivity, demonstrating discipline around cash conservation through strategic use of resources and operational and supply chain management excellence. Continuing expansion of our first product family, single-cell proteomic applications, through the superhuman cell library. Increasing the number of high-impact, clinically relevant publications, demonstrating differentiated utility of our single-cell proteomics technology in large end markets. And executing our innovative product roadmap to get our second and third product families to market, including our breakthrough duomic system, targeting uniquely clinically relevant multiomics, as well as CodePlex, our revolutionary solution for targeted proteomics. Starting with customer adoption, we sold 25 instruments in the first quarter, bringing our cumulative instruments sold to 234. Almost two-thirds of the instruments in our installed base are used for immune monitoring, and just over a third of these instruments are used for cell and gene therapy applications. Importantly, approximately one-fourth of the instruments placed this quarter were to repeat customers, demonstrating the value of our single-cell proteomic technology. This is evidence of our continued ability to execute on our land and expand strategy. Our pipeline remains strong across both our academic and biopharma customers. On the academic side, we've made strong progress with 73% of U.S. comprehensive cancer centers now using isoplexis technology. On the biopharma side, as mentioned previously, we have instruments placed in all top 15 pharma companies, and multiple of these pharma companies bought additional systems in Q1. As our user base expands and our customers continue generating fantastic data using our technology, a growing number of researchers will be exposed to the capabilities which will in turn increase adoption of our technology. We are continuing to demonstrate commercial and operational excellence, focusing on increasing productivity while conserving cash burn. After thoughtful analysis and scenario planning for the next few years, in mid-April, we announced a new strategic initiative to enable a leaner structure to integrate our commercial team more tightly with our customers, as well as our development teams with our operational teams. This integrated model serves to strengthen engagement with our customers while continuing to generate strong top-line revenue growth, deliver innovative solutions, and expand gross margins. We made changes to our FTE count, 20 percent less than the end of Q4 last year, which can represent our new FTE run rate. We focused on conservation of critical materials in our testing and R&D, and we eliminated consultants and software licenses. This has the benefit of conserving significant cash moving forward, which is critical at this moment in the history of the capital markets, and to enable us to meet our critical 2022 to 2024 upcoming goals with our current resources on hand. As we continue our Land and Expand strategy, we will now provide a streamlined single point of customer contact with regional support for the full suite of products on our wider test menu. This is intended to reduce the number of total support staff needed, while simultaneously strengthening relationships with our customers and increasing the productivity of our approximately 140-person commercial team. Local teams are more tightly integrated with the customer and each other aimed at producing scalable and productive growth. Additionally, as we move to launch our Duomix services, as well as our CodePlex targeted proteomics platform, we will further integrate operations, and development to ensure the timely launch of a quality set of scalable consumable products. As we continue to deliver a wider test menu of consumables to the market, our focus on integration is intended to streamline design for manufacturing, which we believe will result in gross margin improvement across all consumable product lines. We're already seeing the benefits and efficiencies of this redistribution of resources. We now have a more tightly integrated 200-person development and operational team that is energized and excited, fueled by our growing closeness with our customers. In line with this lean mentality, we are pleased to welcome Eric Stewart to the IsoPlexus team as our Chief Commercial Officer. Eric has the ability to leverage his experience with Danaher and other life sciences tools organizations to capitalize on our lean, more tightly integrated commercial force. His experience and alignment with our focus on productivity will be critical moving forward. We feel our current 140-person commercial team is well equipped to execute against the productivity goals we've laid out. Last, our operational management team has been successful at forecasting supply chain issues, building up inventory for critical components and providing a clear path for us to fulfill customer demand well into 2023 with our systems. Moving on to our single-cell proteomic applications and superhuman cell library, we've continued to demonstrate our ability to measure and monitor high-resolution immune response and health. We continue to leverage our unique ability to unleash the function of each cell to improve insights and decision-making for cancer immunology, infectious disease, and immune cell therapy researchers. Looking at our recent publication in Cell, We have now demonstrated that there are multiple functional immune cell types uniquely identifiable on our platform that are contributory to long COVID. Taking this with a slew of recent publications in cancer immunology, we begin to understand that functionality defining all of our immune cells will play a bigger role in developing better biomarkers across cancers and infectious disease. Turning to publications and data. An interesting evolution of our data sets is our new ability to include single-cell multiomics, which connects our unique functional proteomic readouts with the sequence and or gene expression of each cell for the first time. To illustrate this, last month at the American Association for Cancer Research, or AACR, we presented data generated on our duomic platform It demonstrates the ability to connect T-cell receptor or TCR diversity to the most functionally potent single cells. This enables a wide variety of applications for tumor infiltrating lymphocytes, personalized neoantigen TCRs, and cancer immunology in terms of understanding antigen specificity as well as T-cell potency. Importantly, the combination of the varying classes of the analytes that are being profiled and identified at the single-cell level provides a key new modality for tracking the most potent and powerful single-cell subsets of highly functional superhero cells. These cells are critical to driving longer-term response in cell and immune therapies via functional proteins. Additionally, our customers had multiple poster presentations at AACR from institutions including Brown University and UCLA that highlighted novel applications in chemotherapy-induced senescent fibroblasts, adoptive cell therapy, and next-generation CAR T therapies. We look forward to continuing to update on new data being generated, both proprietary and from our customers, as our innovative technology is being leveraged to unlock deeper insights. And lastly, turning to our product pipeline, we have three key areas of focus for product pipeline, single-cell proteomics, single-cell multiomics, and targeted bulk proteomics. Today, our revenue is almost all single-cell proteomics, but our differentiated product pipeline is getting closer to launch both the products in single-cell multi-omics as a service in targeted bulk proteomics. The midsize to large end markets for these two products are highly visible as well, with a few incumbents in recognized unmet need by researchers within the markets. Looking more closely at our pipeline, we are really excited about the progress with our Duomic platform. We recently reached a major milestone as we have completed the full workflow with the delivery of proven in situ DNA sequencing capability. We can now in situ sequence each bead in a highly parallelized manner on our proprietary DNA sequencer and leverage a large body of sequencing IP and products. With the ability to clearly sequence each bead in situ, within its own chamber, we now have the ability to generate unique cellular identifier for mRNA sequencing and our proprietary proteomic barcode from the same cell. This enables us to manufacture our highly parallelized duomic chamber system at a greater scale. We are the first and only company able to connect this critical functional proteomic biology with genetics. This is exciting for a wide range of biologists and sequencing researchers to view single-cell multi-omic as currently having critical gaps, but also view it as the next frontier. Importantly, Duomic has the proven capability to meet three of the largest unmet single-cell multi-omic needs, utilizing the combination of sequencing and proteomic architecture that only our chip has. These applications include immune expression in proteomics, tumor expression in proteomics, and T-cell receptor expression in proteomics. As a reminder, we are offering the Duomix platform via early access to the service in the second half of the year and are on track with full product launch in mid-2023. We are also very excited about our uniquely targeted proteomics platform, CodePlex, which addresses a large unmet need in clinical research for sample and answer out automated benchtop proteomics solutions. Walk-away workflows and proteomics are going to be what wins the market in the mid-term and long-term. The state-of-the-art today for most labs at the largest part of the market, then multiplex, requires 20 laborious workflow steps for trained technical lab members. In an era where it's difficult to recruit, train, and retain technical talent, coupled with the increasingly virtual environment, workflow automation on the bench is critical. Our CodePlex workflow combines multiple benches worth of instrumentation onto a single chip. We reduce over 20 steps into just one in an automated walkaway workflow with between 8 and 30 functional proteins per sample detected, which fills a core need in the market. We are seeing meaningful interest as clinical researchers have already published early studies in journals such as JCI Insight. CodePlex is an exciting next step for our industry and our company and will be a fully featured product and offer for early access in early 2023. We continue to build one of the largest bodies of IP in the proteomics and multi-omic space and now have over 165 foundational patents issued and filed across proteomic sequencing and system patents. Our investment in our IP enables us to be well positioned for the opportunity ahead. Overall, I am incredibly proud of our team for their work these past few months and excited about the opportunity we have ahead. We look forward to increasing our ability to service our growing list of customers with a more highly integrated commercial, operational, and development team. We are seeing early signs that our plan for continued cash conservation will be successful. We look forward to delivering to market our two highly anticipated novel suites of innovative products, which will provide deeper insights towards the development of more curative therapies in a large and highly visible end market. I am confident that by adapting to this next stage of the company's growth and our customers' needs, we will be able to further drive success for our customers who are leading the charge to solve the critical challenges of human health. I will now turn the call over to John for more detail on our financials.