908 Devices Inc.

Ladies and gentlemen, thank you for standing by and welcome to the 908 Devices 4th Quarter 2020 Financial Results 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 need to press star 1 on your telephone. If you require any further assistance, please press star then 0. I would now like to do sales for this conference call. Ms. Carrie Mendenhall, you may begin.

Thank you. This morning, 908 Devices released financial results for the quarter and full year ended December 31, 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 an email to ir at 908devices.com. Joining me today from 908 is Kevin Knopp, Chief Executive Officer and Founder, and Joe Griffith, 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 meeting 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 908 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 for the year into December 31, 2020, and its other filings with the Securities and Exchange Commission. Except as required by law, 908 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 March 30, 2021. For that, I'd like to turn the call over to Kevin.

Thanks, Keri, and thank you all for joining us this morning. I'm very pleased to welcome you to our first earnings call as a public company to review our results for the fourth quarter and the full year of 2020. 2020 was an extraordinarily difficult year on many levels, but despite all the macro challenges, we made important progress across our business. Over the course of the year, we grew revenue 50% and ended the year with $27 million in revenue. We placed 390 devices during 2020, bringing our installed base to 1,361 units. These new placements included 33 Rebel units placed during its first full year of commercialization. Our devices are now in use across 34 countries, and we have devices placed at 19 of the top 20 pharmaceutical companies. And at the end of 2020, we completed our initial public offering in December, raising approximately $150 million in gross proceeds. I'd like to take a moment and express my sincere thanks to our amazing team for their hard work and dedication. All of the incredible progress we've made is truly a testament to their collective efforts. I would also like to thank our longstanding investors for their continued support and welcome our new investors. We really look forward to develop meaningful long-term relationships and working with you to grow the company together. I want to start our call today by giving you a sense of the vision that is driving us at 908 Devices Inc. History has shown us that making technology accessible to broader audiences opens doors for new users and applications, which in turn grows markets and even creates new market opportunities. At 908, our goal is to do exactly that with the analytical capabilities of mass spectrometry. We're using our broad technology platform to break mass spec out of the confines of a centralized laboratory and bring it to the point of need. Today, MassSpec is the gold standard of measurement in labs and serves customers in nearly all markets. It's highly regarded for its ability to provide an exquisite amount of detail across a wide variety of samples, from small molecules to large complex proteins. And while it's an extremely powerful analytical tool, conventional MassSpec instruments are large, expensive, and highly complex. At 908, we're seeking to reimagine where mass spec technology can be used if it's sufficiently small in size, low in cost, and simple to operate. We see a world where the mass spec market really undergoes a transformation similar to what we've all seen happen in the computer industry, from computing power transitioning from the larger centralized supercomputers to distributed desktops, laptops, and even the mobile devices. By democratizing mass spec technology to the point of need, We believe that we'll be able to dramatically accelerate workflows and create new classes of users and applications. We're extending access from the single centralized specialist to the broadest set of customers, those with the samples and the questions that want the answers faster. We have three devices in the market today that are driving us towards this future. Zip Chip was our first microfluidic separations-based product we released in 2016. This solution is a plug-and-play, high-resolution separation platform that optimizes mass spec sample analysis. We designed this technology to be compatible with third-party mass spec instruments. In 2017, we launched MX908. It's become our flagship product and is really the world's first commercial handheld mass spec. It's a truly remarkable device with its size and end-to-end simplicity and battery operation. It's designed for on-scene, high-performance identification of a variety of chemicals, such as drugs and explosives. The device has extraordinary sensitivity and is able to detect and identify these materials at trace amounts well below their hazard levels. In 2019, we launched our latest device, Rebel. Rebel is a desktop device designed for its initial use in bioprocessing. It's a first of its kind, combining microfluidics and our microscale MOSFET technology. Rebel was specifically designed to characterize the extracellular environment across more than 30 different chemical species and do it fast enough to enable near real-time monitoring and control. We estimate that the total addressable market for our product today is approximately $5 billion across forensics, research, and bioprocessing, reaching customers in pharma, biotech, and government and academia. Our first established market is in forensics. It's sizable and rapidly growing. and our technology is now becoming an enabler for bioprocessing where we enable the monitoring control of a cell's environment, which is so critical to keeping them alive and happy. In all our use cases, we're really transforming the time to action, meaning we're working to get an answer faster to the person that has the question when and where they need it. Over the next five years, we see this opportunity growing to $22 billion for our handhelds and desktops, as we extend into QA, QC, and expand our desktop capabilities in research and bio process with the emergence of cell therapies. Looking ahead, increased commercial traction will be driven by four key factors. First, growing our sales force. Second, increasing the number of new customers. Third, driving expansion within existing customers. And finally, continuing to innovate across our platform. Starting with our sales force, We have direct sales staff in the U.S. and international distribution partners covering over 34 countries. In February, we're excited to announce the addition of Steve Davenport as our new Vice President of Commercial Sales. Steve is a truly industry veteran with more than 30 years of experience scaling global sales organizations at multiple life science companies. Prior to joining 908, Steve led sales at Sitorius to record levels for the Life Science Research Division, where he's responsible for global organization. Over the course of his career, Steve has developed and managed multiple high-performing global commercial organizations and has had multiple successful market introductions of innovative drug discovery, protein, cell, and genetic analysis technologies. We're really excited to have him on board as we work to build a best-in-class sales organization under his leadership. Steve is based in the UK, which we see is particularly valuable as we continue to expand our sales efforts internationally, especially in Europe. Last week in Europe, we participated in a key industry event, Bioprocessing Summit. We contributed to the Gene Therapy Process Development Session with our talk on smart data and improved media analytics using our Rebel Desktop. In addition, one of our customers and collaborators, Florine Fusel, a scientist at the National Institute for Bioprocessing Research and Training, gave a talk on how Zip2 can be used for the rapid and in-depth characterization of charge variants for a highly heterogeneous and complex antibody used for the treatment of cancer. The charge variant profile of an antibody therapeutic is a critical quality attribute because of the profound effect these variants have on the therapeutic efficacy, potency, stability, and regulatory clearance. We finished the year with 30 employees across sales and marketing. During our IPO, we shared our goal to more than double our sales and marketing organization over the next 12 to 18 months. as we broaden and deepen our footprint. As of today, this number has already grown to 40 employees, and we are confident we'll be able to reach our goal of 60 employees by Q1 2022. Turning to customer traction, in 2020, we made strong inroads with our handheld products, and we generated some exciting momentum with our desktops. As we continue to drive adoption of our devices, we see two key tailwinds driving growth in our addressable markets. Thank you for joining us. for the point-of-need analysis that our MX-908 provides. One of our customers in Ohio is the Ohio Attorney General Bureau of Criminal Investigations and Organized Crime Investigation Commission. Their executive director shared that even just a speck of fentanyl can cause an overdose or death, and equipping his task force officers with a device that can safely field tests to identify deadly narcotics is a lifesaver. The MX-908 device is doing just that and allowing its task force officers to stay one step ahead of the bad guys as they work to keep drugs out of their communities. The second tailwind we see is the shifting biologic therapeutic pipeline from traditional MABs to more complex therapeutic modalities, including bi, tri, multispecifics, or cell or gene therapies. This is driving an increase in needed characterization capabilities and an increase in the number of tests as global bioprocessing capacity expands to accommodate. Our desktop devices are used extensively in bioprocess development and biotherapeutic characterization. We are proud that Regeneron used our Zip Chip devices as part of their MAB characterization in the rapidly development of their antibody cocktail therapy for COVID-19. Zipchip offers customers the ability to radically reduce the required method development and analysis time. Overall, we are very encouraged by the level of new interest we're seeing across our products and platform as we expect these market tailwinds to continue to drive adoption of our products. Turning to the expansion within our existing customers, we focus on the building upon our track record of leveraging our customers' success in testing, trials, and pilots into enterprise-wide adoption of both devices and consumables, For our handheld device, it's typical for a government organization to conduct a one-week or longer trial prior to purchase to test our technology in their real-world setting. A trial generally results in budgeting for a pilot that can range in size from 10 to more than 50 units. During the pilot, we support our customers closely to ensure their success. Data is compiled throughout to assist our customer in making a larger enterprise-wide justification, purchase and deployments. It's our belief that investment pre- and post-sales with prospects that have the potential for enterprise adoption creates a predictable pipeline of opportunity for our devices and enables their entrenchment as they become the organizational standard for our customers. Enterprise customers can be large government organizations with full fielding potential of more than 1,000 handheld devices. Today, we have approximately four accounts and 50 units in active pilot and an additional 11 accounts representing 700-plus units Thank you for joining us. Under this purchase order, we will supply more than 350 additional MX-908 devices over the next two years. Our technology will provide these users the ability to conduct chemical detection and identification quickly and safely at the point of need. We're excited to be selected by such a large enterprise program focused on next-gen technology and look forward to enabling users to safely accomplish their mission. With our Rebel desktop, we're starting to see the flywheel begin to turn with customers coming back to buy additional units. Today, more than six organizations have purchased multiple units, with the largest of these accounts having six. Approximately 25% of the Rebel installed base is outside North America. We expect such adoption trend to continue, units across multiple sites, multiple units within a site, and more units internationally. and finally we're also focused on continuing to innovate across our product portfolio. Our goal is to build market leading products that are easy to operate and our team is constantly working to make things even simpler for our customers. Over the next 12 to 18 months we expect to see a continued cadence of new capabilities including analyte panel extensions, new software apps, additional assay kits, accessory modules, third party hardware and software integrations and other scientific demonstrations of the ultimate reach of the platform. Looking ahead in 2021, we expect full-year 2021 revenue to be in the range of $38 million to $40 million, representing 41% to 49% growth over full-year 2020. As we ramp our revenue over the course of the year, we're also focused in continuing to build out our incredible team at 908. People and culture are absolutely the core to innovation, and in addition of Steve Davenport as Vice President of Commercial Sales, we're really delighted to welcome Maura Fitzpatrick as Vice President of Product Management and Marketing, formerly with Waters Corp., and Mike Turner as Vice President and General Counsel, formerly with Goodwin Proctor. In the fall of 2020, we were thrilled to announce the appointment of Kevin Rosovsky as our Board Chairman. Kevin is currently the CEO of Quanterix and has served on our board since 2013. His experience as a biotech entrepreneur and healthcare visionary has been invaluable to us over the past eight years. More recently, we also added Jeff George and Fenel Elroyo to our board of directors. I'm excited by the excellent industry leaders we are bringing around the table and look forward to their continued guidance and partnership. Over the coming months, we're committed to adding additional board candidates to further strengthen their board and add increased diversity. Overall, I'm really encouraged by the adoption we're seeing from customers, the talent we're adding to our team, and the progress we're making to realize our vision. With that, I'll now turn the call over to Joe for more details of our financials and more details of our financial outlook.