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spk08: Good day, and thank you for standing by. Welcome to the 908 Devices Fourth Quarter 2021 Financial Results Conference Call. At this time, all participants are on the listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you'll need to press star 1 on your telephone. Please be advised this call is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your host today, Kelly Gurra. Please go ahead.
spk01: Thank you. This afternoon, 908 Devices released financial results for the quarter and full year ended December 31st, 2021. If you've 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 Co-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 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 908 Devices 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 ended December 31st, 2021, and in its other filings with the Securities and Exchange Commission. Except as required by law, 908 devices 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 7, 2022. With that, I would like to turn the call over to Kevin.
spk05: Thanks, Kelly. Good morning, and thank you for joining our fourth quarter 2021 earnings call. I could not be more pleased with the positive trajectory of our business as we closed out 2021. We ended the fourth quarter with $15.8 million in revenue, bringing our total revenue for 2021 to $42.2 million, up 57% from the prior year. These results are a testament to the strength of our organization, and I thank our employees for their efforts. Before I provide more detail on our fourth quarter and full year results, I'd like to take this opportunity to welcome Tony Hunt, President and CEO of Repligen, to our Board of Directors. Tony has a wealth of knowledge and experience in bioproduction, and his perspective will be an important addition to our board as we broaden our bioanalytics platform. Throughout 2021, we made meaningful progress on the growth objectives we set forth at the start of the year. These objectives included scaling our commercial team, demonstrating traction within our growing customer base, and expanding the capabilities of our existing products and the reach of our technology platform within our core forensics, research, and biopharma applications. Starting with our sales channels and commercial organization, we continue to add top talent throughout the fourth quarter, and we now have reached our goal of 60 commercial employees, doubling from a year ago. As of year end, we have employees in 12 countries, and our handheld and desktop devices are available across six continents in more than 40 countries. We have also expanded our distribution channels to further our global reach. Moving on to customer traction, adoption for existing and new customers across all product lines was strong throughout the year. In the fourth quarter, we added 221 devices and 45 new customers, bringing our installed base to 1,935 devices. With our handhelds, we significantly progressed enterprise-wide adoption of our MX908 with leading agencies, including the Department of Homeland Security, the Drug Enforcement Administration, the Department of Agriculture, and U.S. Defense Forces. The growing opioid crisis continues to be a major driver of customer adoption. According to the CDC, there was an estimated 100,000 drug overdose deaths in the U.S. between May 2020 and April 2021, a staggering 30% increase from the prior year. The CDC also reported that synthetic opioids, mainly fentanyl, were involved in 64% of these overdoses. This is evident in the state of Ohio, which has been one of the highest rates of drug overdose deaths involving opioids. To combat this crisis, the Ohio Attorney General's Office has deployed multiple MX-908 devices within its Bureau of Criminal Investigation. In October, they implemented a pilot program for police departments in three cities where law enforcement officers are using the MX-908 for rapid mobile drug testing. The AG's office considers the MX to be a game changer, and successes continue to be reported in the news. Recently, BCI agents used the MX-908 after a suspect broke open a bag of suspicious substance, and minutes later, agents determined lethal fentanyl was included in the mixture. This is a great example of how high fidelity chemical detection at the point of need can really make an impact in critical-to-life applications. Our goal is for our handheld mass spec to become the standard bearer for global chemical response, and we are making strong progress towards this objective. This includes our partnering with leading trading organizations, including Guardian Center of Georgia and the LSU National Center for Biomedical Research and Training. which collectively train thousands of first responders worldwide each year on the best modern tactics. Turning now to our desktops, we've reached our goal of placing our desktop devices into all 20 of the top 20 pharmaceutical companies. Since the launch of Rebel in November of 2019, we have sold 100 units. Notably, nearly 40% of these devices went to these top 20 pharmaceutical companies, and 15 customers have already purchased multiple Rebel units. As we've previously shared, there's a growing need to measure multiple product critical quality attributes, or CQAs, and to monitor and control the underlying process in order to improve yield and predictability in biotherapeutics. Our desktop devices are well positioned to meet these needs. Last year, Amgen and GSK published papers on the use of Zipchip to measure multiple critical quality attributes simultaneously. These papers noted efficiency gains, including increased throughput by 20x from 200 minutes down to just 10 minutes, with comparable results to conventional LC-MS methods. The process-informing power of the REBEL analyte panel was demonstrated by Johns Hopkins University researchers in a paper published in Biotechnology and Bioengineering in November. Researchers developed a model to facilitate process-controlled mammalian cells, providing a cost-effective method to control nutrient growth and limit undesirable metabolomic byproducts. Our REBL device facilitated development and validation of the model through enabling at-line analysis. The REBL's process-informing power was also demonstrated by Sertoria scientists in their in-silico predictive modeling work, which presented at our first integrated user meeting focused on bioprocess monitoring, counterfeit pharmaceuticals, and high-throughput drug screening and proteomics. Moving to the expansion of our technology platform, During the year, we continued to unlock our platform's capabilities by increasing areas of use for customers and opening addressable markets. To accomplish this, we released analyte panel extensions, new software applications, assay kits, accessory modules, and third-party hardware and software integrations. For our mass spec handheld device, we released an aerosol module accessory to detect and identify aerosolized chemical hazards. and a Bluetooth capability that enables seamless data transfer and accelerate support in the field. We also added 19 new analyte targets, mainly synthetic drug compounds such as cannabinoids, cathinones, and opioids. For our desktops, we partnered with Sartorius to integrate our Rebels analyte stream into their Simca data exploratory tool to allow customers to garner deeper, actionable insights. We released a new assay kit for our Zip Chip device that provides a simple, rapid, and cost-effective method for oligonucleotide analysis. Recently, Protogene, a leading European CRO within protein sciences, noted that our ZipChip Oligos kit provided substantial value for their customers compared with conventional approaches. They said the new workflow gives them the possibility to analyze new sample types without the need of harsh ion pairing agents, and it requires only a small amount of sample, something they already appreciate with all their other ZipChip kits. While we're largely focused on bioanalytics as the primary application for our desktops, there is a breadth of opportunity for our products and technologies beyond bioanalytics, including proteomics and metabolomics. At the annual conference of the American Society for Mass Spectrometry, or ASMS, we presented development in these areas. We updated the scientific community on our microfluidic chip technology advances, highlighting a tenfold improvement in sensitivity, allowing us to capture and measure lower abundance proteins. Also at ASMS, scientists from Dana-Farber Cancer Institute presented their results using our prototype microfluidic chips, which showed a significant time savings, 20 minutes versus 90 minutes with traditional chromatography methods. Importantly, the opportunity for our products is large and rapidly growing. Today, we estimate that the total addressable market for our products is approximately $5 billion across forensics, research, and bioprocessing, reaching customers in pharma, biotech, government, and academia. We have shared that over the coming years, we expect the opportunity to grow to $22 billion for our handhelds and desktops as we extend the QAQC and expand our desktop capabilities in research and bioprocess with the emergence of advanced therapies. We see the biopharmaceutical industry is indeed nearing an inflection point with the increasing pipeline of advanced therapeutics and the critical need for analytics to enable more real-time control for process efficiency and predictability. I want to share a few industry metrics that really underscore this. First, as of Q3 2021, the Alliance for Regenerative Medicine estimates that there are more than 2,200 ongoing clinical trials of regenerative medicine, including cell and gene therapies. Second, the FDA is experiencing significant growth in cell and gene therapy field with original investigational new drug applications growing from approximately 148 in 2006 to approximately 300 in 2021. And finally, this past January, at the Advanced Therapies Week conference, the FDA stated that they expected approximately 10 to 20 new advanced therapy approvals per year through 2025. Given these industry trends, we continue to expect our total addressable market to expand significantly over time as these advanced therapies take hold in the market. Compared to traditional monoclonal antibodies, advanced therapies require a multifold increase in the number of measurements, due to the smaller production batches given the personalized nature of these therapies. Our desktop devices are well positioned to meet this growing need for analytics. Our Rebel device automates the at-line monitoring of process attributes and enables the streaming of 32 analytes critical to cell function and productivity prediction. Our ZipChip device enables the rapid characterization of multiple quality attributes simultaneously, 20x faster than conventional LTE with little to no method developments. We are already making significant progress in penetrating this opportunity with the Rebel device. As of year end, nearly one in every four Rebel placements was for cell and gene therapy applications, double that from a year ago. We also have several significant research collaborations with more than a third of these partnerships, specifically focused on cell and gene therapies. And we are confident this is only the beginning. We continue to believe we have a strong value proposition to offer the biopharma industry as well as other markets. Looking forward to 2022, we are focused on five key areas to drive long-term growth. First, expanding our install base and increasing utilization within accounts. Second, accelerating commercialization. Third, developing and advancing our existing products. Fourth, broadening our bioanalytics platform. And fifth, laying the omics foundation to address emerging opportunities. Starting with our first objective surrounding customer adoption, For our handhelds, we're building a strong foundation of testing, trials, and pilots that we have the potential to evolve into valuable enterprise accounts. As of year end, we now have more than 10 pilot programs of approximately 100 units, more than a double one year ago. We also progressed to 12 enterprise accounts and maintained significant ongoing potential of 700-plus units across those accounts, despite shipping approximately 300 units to these accounts over the last year. We continue to see significant pipeline opportunity for our handhelds and work closely with our customers to identify budget and funding to drive enterprise adoption. For our desktops, we are employing a penetrate and radiate strategy. We are working to penetrate new accounts and importantly radiate across the large number of BioPharm accounts where we now have a foothold. Our sales opportunity pipeline continues to grow and at year end is 50% higher than that of a year ago. Turning to our second objective, accelerating commercialization, we are harnessing the investments from 2021 and plan to further expand our commercial team to 80 by the end of the year. This will position us to continue ramping up our international efforts and geographic investment. We have demonstrated progress with the addition of employees across our key regions, and we expect to build upon this by deepening our footprint in these locations over the course of the year. Turning to our third objective, developing and advancing our product portfolio, today we have a robust product portfolio and we are continuing to build upon the capabilities of the existing products as well as expand the reach of our technology platform. In 2022, we will continue to unlock our platform's capability to increase the areas of use for our customers and further penetrate our addressable market. These new capabilities include the consistent releases of additional analytes, assays, accessories, and data integrations across our handheld and desktop devices over the course of the year. Furthermore, this includes efforts with customers and partners to advance data utilization and process understanding, leading to progressively higher pull-throughs on Rebel over time, which is meaningful today at approximately 40% for active users. At our core, we are a technology-driven company with a broad and differentiated platform for organic growth. Going forward, we anticipate major product releases on a cadence of every 24 to 36 months with the aim of expanding device capabilities and new generations of products and capitalizing on replacement cycles. Turning to our fourth objective, broadening our bioanalytics platform, We are creating a comprehensive bioanalytic platform for biotherapeutic development through production. Our goal is to become an enabler of BioPharma 4.0 with a tech stack of connected process monitoring and critical product quality attribute analysis devices that informs models that support better real-time predictive outcomes. With increasingly advanced therapies, the industry necessitates automated solutions to drive biomanufacturing quality, efficiency, and cost improvements. To achieve production of the desired product, manufacturers need to identify and understand critical process parameters and their impact on critical quality product attributes during process development and the entire biomanufacturing workflow. The need for simple, automated analyzer devices for measuring and monitoring process and product attributes has never been greater. Specialized scientific and engineering personnel are in high demand and workloads are expanding in proportion to growing drug pipelines. And finally, our fifth objective, laying an omics foundation, with the rise of proteomics 2.0 and the broader desire for an understanding of how proteins orchestrate a cell's function, there's significant interest in determining protein abundances, which proteins are present, localization, where they are, and activities, what they're doing, within and around cells. With this interest and demand, we see an emerging need for accelerating mass spec-based workflows to address proteomics and metabolomics opportunities. Mass spec omics workloads are bottlenecked by sample preparation and high performance separation. The latter in particular can take hours with conventional chromatography. Our electronically driven chip technology has the potential to reduce sample preparation requirements and accelerate the separation step from hours to minutes. To that end, Dr. Will Thompson, principal scientist at 908 Devices, presented a poster and lightning talk just last week at the US HUPO conference in Charleston, showcasing serum measurements with atomolar sensitivity using high-resolution separations that could be completed in just minutes. We expect a continued cadence of technology research and publications with KOLs and partners to support future product launches and workflows in the omics domain. We have shown tangible results across these areas throughout 2021, and we are well positioned for continued growth in 2022. I'm confident we've laid a solid foundation and built a strong team that will enable us to execute on these initiatives. We are better positioned than ever to capitalize on the opportunity ahead and continue towards our goal of democratizing laboratory mass spectrometry and bringing it to the point of need. I'll now turn the call over to Joe, who will provide more detail on our financials and discuss our outlook for 2022.
spk04: Thanks, Kevin. Revenue for the fourth quarter of 2021 was $15.8 million, compared to $12.5 million in the third quarter and $5.7 million in the prior year period. Total revenue for the full year 2021 was $42.2 million, up 57% from $26.9 million in 2020. Product and service revenue for the fourth quarter 2021 was $15.6 million, compared to $5.9 million in the prior year period, representing growth of 163%. The increase was primarily driven by our handheld devices, where we shipped 140 more devices in the fourth quarter of 2021 compared to the prior year period. Total product and service revenue for the full year 2021 was $41.1 million, up 66% from $24.8 million in 2020. Handheld revenue from our MX908 product for the fourth quarter of 2021 was $11.3 million, an increase of $8.2 million compared to $3.1 million in the prior year period. The increase was primarily driven by our pacing of shipments to the U.S. Army. For the full year 2021, we have recognized approximately 50% of the revenue from the existing purchase commitments in place with the U.S. Army. Throughout 2021, we added to the initial opportunity and further see additional potential in our enterprise account pipeline. Desktop revenue from our Rebel and Zipchip products for the fourth quarter 2021 was $4.3 million compared to $2.8 million in the prior year period, representing growth of 53%. This was primarily due to an increase in device placements, five each for Rebel and Zipchip, as well as an increase in recurring revenues. Recurring revenues consisting of consumables, accessories, and service revenue for the fourth quarter 2021 was $2.4 million compared to $1.4 million in the prior year period, representing growth of 73%. The increase was primarily driven by service revenue, as well as an increase in consumable revenue related to Rebel kit sales. Licensing contract revenue for the fourth quarter 2021 was approximately $300,000 and $1.1 million for the full year of 2021, down 49% over the full year 2020. As previously stated, we do not expect our license and contract revenues to be a significant contributor of revenue on a go-forward basis. Our installed base grew to 1,935 units, with 221 devices shipped during the fourth quarter. We shipped 191 MX-908 handheld devices, 20 Rebel desktop devices, and 10 Zip Chip interface desktop devices during the quarter. Gross profit was 9.1 million for the fourth quarter of 2021 compared to 2.6 million for the prior year period. The increased gross profit of 6.6 million was primarily driven by a 6.1 million increase in product and service gross profit resulting from higher device sales across our products. Gross margin was 58% for the fourth quarter 2021 as compared to 45% for the prior year period. Gross margin was 55% for the full year 2021 in line with the prior year period. Total operating expenses for the fourth quarter of 2021 were $12.7 million compared to $6.5 million in the prior year period. The increase was driven primarily by headcount expansion across our business, as well as expenses related to marketing activities, consulting, and travel. Net loss for the fourth quarter of 2021 was $3.5 million compared to $10.2 million in the prior year period. Net loss for the full year 2021 was $22.2 million compared to $12.9 million in the prior year period. We ended the fourth quarter of 2021 with approximately $224 million in cash and cash equivalent. This includes approximately $94 million of net proceeds from our follow-on offering completed in November 2021. In addition, we had $15 million of debt outstanding. We are well capitalized to execute on our current strategic priorities At 908, we have always had a culture of disciplined capital allocation. In 2022, we will continue to prioritize our operational expenditures to achieve our long-term growth objectives. Looking ahead for 2022, we expect revenue to be in the range of $52 to $55 million, representing growth of 23 to 30% over full year 2021. This range contemplates some remaining macro uncertainties of COVID-19 supply chain constraints, and the delay of the full year 2022 U.S. federal government budget as operational risks. Even with this lingering impact, we believe we were well-positioned to achieve our stated objectives and deliver strong growth for 2022. This year, we expect seasonality to be consistent with prior years, reflecting the impacts of the U.S. government year-end purchasing cycle of September 30th and typical year-end pharma and biotech spending in the fourth quarter. As a result, we expect revenue for 2022 to be similar to our cadence of 2021, with approximately two-thirds of revenue to be recognized in the second half of the year. At this point, I would like to turn the call back to Kevin for closing comments.
spk05: Thanks, Joe. We ended the year strong as we steadily executed on our commercial strategy while providing value to our customers through our mass spec devices. I'm confident that the foundation we have laid for 2022 will support our long-term sustainable growth. We're just scratching the surface of what is possible with their technology, and we look forward to updating you on our progress across our different focus areas throughout the year. With that, we'll now open it up for questions.
spk08: And thank you. As a reminder to ask a question, you'll need to press star 1 on your telephone. To withdraw your question, press the pound key. We do ask that you limit yourself to one question and one follow-up. Please stand by. We compile the Q&A roster. And our first question. comes from Brian Weinstein from Blair. Your line is now open.
spk07: Hey, guys. This is Dustin. I'm for Brian. You know, in relation to what's going on in the macro environment right now and all the uncertainty, we're kind of wondering what you guys are seeing from customers right now. What's the appetite on bringing new technologies? And what's the overall awareness of your product, especially on the desktop side?
spk05: Yeah, hi, Dustin. This is Kevin. Yeah, I think today we're really addressing what we think is critical-to-life applications. So, as you know, we're really working to accelerate biotherapeutic development, and then we're also working to make a dent and impact in the opioid crisis. So we have continued to see throughout the last, really, 24 months that we've considered to see customers keeping our technology up a priority because they have these real and measurable impacts on those important.
spk07: Great, thank you. And then I know you gave some color on the U.S. Army contract, said about 50% was realized, but how should we think that falls through through the rest of 2020?
spk04: Sure, absolutely, Justin. So due to competitive dynamics, as well as some of our customer sensitivities. We won't be disclosing the exact amounts, as you're probably aware, but the U.S. Army is baked into our 2022 guidance and the visibility that we have into this revenue. Their adoption of large enterprise customers really gives us that full enterprise customers' confidence as others come into play. We're excited to be partnered with the U.S. Army and continue to see shipments. We have them in Q3, Q4. and fulfill the rest of the devices over the first nine months of 2022. We feel we've made progress with enterprise accounts, which are forecasted to grow in 2022, and are contemplating our guidance. But happy to address any other questions that you have. Super excited by that opportunity.
spk07: Sure. And lastly, maybe just wondering what you're seeing on the broader sales cycle. Is that improving? over time as you're making the incremental commercial investments in your sales team? I know you mentioned bringing that up this year, but just wondering how that is tracking.
spk05: Yeah, I mean, we are expecting the investments to be made in sales and marketing in 2021 to help drive growth here in 2022. And they're contributing in maybe three different ways, I would say. The funnel progression with the marketing team, increasing the lead gen, and then Driving the application support for the pre- and post-sales, which is so important to get customers and driving the referrals. And then direct reps have been out prospecting in these new territories and expanding territories. So many of our reps are – our new reps are really focused on the desktop area, as we see as a big priority for us. So we expect our desktop revenues to have good growth overall for 2022. And as they come up, that productivity perks up. By mid-year, yeah, we really expect these reps to be pretty productive, and that's going to help get us to our goals here in the back half.
spk08: Great. Thank you. And thank you. And our next question comes from Puneet Sudha from SBB Learing. Your line is now open.
spk02: Yeah. Hi, Kevin. Thanks for taking the question. So first one on the guide. You know, it appears you're bracketing the street number and essentially in line with that. But as we look at the business, you had 20 Rebel placements, which was ahead of us. You have solid momentum with the Army orders and MX-908. I mean, Rebel has been on the market for two years and getting into cell and gene therapy, and now you're expanding your Salesforce, which correct me if I'm wrong, it expanded from six to 60 and now you're expanding it to 80. So on the commercial side, so with all that momentum, maybe could you just talk to us about sort of what is driving you to be having some conservatism in the guide for the full year?
spk04: Absolutely. You know, as we think about, you know, the guide and the opportunity there, You know, we set our initial guidance based upon the knowledge, you know, at this time and considering certain market factors and expectations on our investments that we made, as you highlighted here in 2021. You know, with those investment activities, as we move into the first half, we believe we're laying that strong foundation for growth for 2022 and beyond. So as we think about that range and some of the levers and the opportunities, I think on the maybe downside is on COVID-19. may not enable some of the international activities to open up until maybe late Q2 and H2, which could limit growth opportunities for both our handhelds and our desktops. The U.S., if they don't pass a budget, we're forced to live within the continuing resolutions where we are today. If not resolved by early Q2, this could put pressure on our ability to realize some of the handheld sales that are within the guide from our existing and new accounts. We do see upsides with our handheld customers if we're able to secure funding and progress more rapidly through those pilots and the adoption of our technology across a broader user base. And also, if we're successful in our ability to radiate and penetrate Rebel, as you mentioned, we had a strong Q4 on those Rebel customer counts to expand our install base and our drive higher active utilization among our install base. It's a quite balanced approach.
spk02: Got it. Okay, no, that's fair. And then, Kevin, you know, it's great to see Tony Hunt on the board. As you look at the bioprocessing capabilities that you have, the rebel capabilities, I think you highlighted a couple of points. I just want to make sure, I mean, what are the priorities for that platform this year and in expansion in terms of maybe the analytes and overall capabilities? features and capabilities that you would want to add? Obviously, it's great to see the progress that you're doing in cell and gene therapy accounts.
spk05: Yeah, thank you. Yeah, we really, as previous mentioned in the script there, but we really do see that the biopharma industry nearing that inflection point and just really demanding these analytics like that we can provide with our desktops, Revlon and Zipchip and The pipeline, as you said there, on the advanced therapeutics that we've been getting some traction in really drives that critical need and to enable more of the real-time control, if you will, for process efficiency and predictability. So I think we're quite pleased with our progress there. I think as you look forward into 2022, there's two real areas. One is that what we like to coin is that penetrate and radiate. We got to those top 20, but we're really just seeding. the beginning of an account that we believe can have significant capacity within. And so we're working to radiate across that. And then in parallel, really working as we build those placements to continue our recurring revenue, our consumable stream there. So one of the priorities that you're going to see and continue to see here is on the consumable pull-through related to their utilization in terms of measurements that we call it that informing power on the rebel and and we highlighted that we have worked with Johns Hopkins, put a beautiful paper out there that showed that the analyte power of what Rebel provides is very informing of their next steps of these predictive models, and Sartorius as well showcased an in silico model that, again, analytes like the Rebel provides are very informative. So you're going to see us prioritizing continuing the placement of new boxes into those accounts and radiating across that. and then continue to work on the utilization.
spk02: Okay, super. And then just last one for me. In terms of the proteomics, thanks for the update there. When should we expect that new product to reach the market? Thank you.
spk05: Yeah, we're very excited about the proteomics work. Today it is an R&D project, and we really do commit to keeping the scientific community updated. And as you know, we created a great SAB panel with some wonderful proteomics leaders that are helping advise us, and we did just have a very nice talk with some really game-changing performance last week down at HUPO. But today it really remains an R&D project. It is based on our ZipChip platform, as you know, adding a solid-phase extraction bed to that. So if you look forward to it through 2022, we don't have a – we consider it an R&D project, and we don't have a contribution for this work in our guidance for 2022. So it will take some time, but stay tuned, and we'll keep everybody abreast through the community of scientific progress.
spk02: Okay, great. Thanks, guys. Good to see the progress. Thanks.
spk08: Thanks, Vinny. Okay, thank you. And our next question comes from Dan Arias from Stiefel. Your line is now open.
spk03: Good afternoon, guys. Thanks for the questions. Kevin or maybe Joe, can you just expand on the comments on rebel usage and maybe talk to pull through for 2022? I mean, I know that calculation is gets impacted by the new users that come in as the denominator and they come in as low contributors. But if you just sort of look at the existing customers and, Kevin, to your idea of expanding utilization as one of your goals, what kind of growth do you think you might see amongst those that have Rebels today and are up and using them?
spk04: Just maybe I'll start off, Dan, and then Kevin can chime in too. You know, we have seen, you know, some broad range of customer. Use cases, you know, over the last year and really two years since we started, you know, we have some customers that are more on that two to three, but a lot just getting out of the gate. And we are seeing more as customers utilize the device more and more, they get more comfortable and take more measurements. So today the active users, you know, at approximately that one kit a month, we see that likely continuing, you know, in 2022. And now we've looked at it within our program. our guidance range that we put out there. You know, we are focused on driving higher utilization and are seeing paths for that and seeing some customers start to consider purchasing multiple units, you know, largely for convenience. So increasing utilization within accounts, but lowering the run rate within each unit. So I think you were touching on. So as far as accelerating rubble pull-through, there are multiple factors we feel in play, including the ramp time, as alluded to, and The focus on placements in 2020 and here in 2022, I think we'll have a lot of focus on additional placements getting out there to build that install base. And that will affect the overall average of one kid a month for those individuals.
spk03: Okay, helpful. And then, Kevin, can I just maybe ask about, you know, your expectations today versus where they were initially when you guys went public? I mean, the IPO took place basically mid-COVID, so obviously you found yourself – in an operating position that was different at that time than it was a year earlier. As we enter 2022 here, how do you feel about the commercial team relative to those initial expectations just in terms of infrastructure, the ability to reach customers geographically? You mentioned hires. I'm just curious how that's going to play out just from a global perspective. And then just overall, I'm trying to recalibrate where we are just on the selling side. you know, just as we approach what is hopefully going to be a more accommodative environment.
spk05: Yeah, yeah, I think in general, if you look back to the IPO point in December of 2020, I mean, we feel really good about the progress that we've had since that date, and we've got some real products out there, and they're really changing the paradigm of chemical and biochemical detection, and Customers want and need this analysis, and they can't really wait on a supercomputer in all cases, and they need these laptops and tablets, and we see that ultimately as a pretty large opportunity. We did just hit our 10-year anniversary last month, and I think we've come quite far and a lot to do. From a commercial team side, we had about 30 people on the commercial side at the time of the IPO, and And we just passed 60, and we'll keep investing over this year to around 80 for the year. I think we've had great progress. I don't think we see ourselves on short of opportunity. It is a massive addressable market there that's really in front of us, and we've got a highly differentiated industry. technology product to get after it. I do see that the world is opening up a little bit more. Obviously, as Joe mentioned, there's always a concern that a new variant comes by. And for us, that probably is more impactful on the international side of our business. But historically, that's been a small percent, and we're really looking at it as an opportunity to grow. So, yeah, I hope that gives you some color.
spk03: It does, and I could just sort of finish the thought there. What percentage of normal would you say you are right now in terms of, you know, reaching global customers? So someone in London wants you to come over and demo a machine or just talk to them. How much of a capability at this point, given where we are with COVID, do you have?
spk05: Yeah, so obviously we're more U.S.-centric, but we do have employees now in 12 different countries. As you know, our commercial leader is for our life science, all our desktops is based out of the U.K. So that particular example, we've really been growing up teams across the U.K. and Europe. I think we're getting stronger by the day there to reach customers in Boston. We're calling you, find me without any masks. They just lifted the mask mandate here in Boston, so all employees are at the office without. So I think that's all continuing to open up. I'd say Asia is probably our more challenging area across APAC. really more limited, especially as a small team. So traveling from one country to another in the APAC region is challenging, and that's probably the last thing to open up.
spk04: As far as percent of normal, we're probably at the higher percent, maybe specific as you look at our business, where greater than 80% are North America-based revenues. We do see our business a bit more insulated than others maybe in our space. We grew at a healthy rate during the pandemic and believe these critical-to-life devices have remained a priority for our customers. So I don't know if I can put a specific percent on it, but it's probably greater than 80, greater than 90% in our case. Okay. Helpful, guys. Thank you.
spk08: And thank you. And our next question comes from Max Masucci from Cowan. Your line is now open.
spk06: Hi, Kevin and Joe. Congrats, man. Nice finish to the year, and happy 10 years at Nano8, Kevin. Yes, so we attended the Advanced Therapy Week. I think leaving that conference, you know, we admittedly were a bit shocked at how clear-cut the demand was for at-line analyzers. You know, but the awareness of the available solutions that exist in the market was, you know, still somewhat challenged. So, you know, any time you have a disruptive technology, you know, it requires a solid outbound strategy. Would just be curious for Rebel, you know, with the sales force that's doubled over the past year, you know, if you had to break out, you know, how your, you know, number one, ability to drive new customer wins and number two, ability to drive existing customer growth has changed, you know, with the expanded sales force, that would be great.
spk05: Yeah, yeah, that conference was straight down the fairway. The results that you and others published out of there and certainly the needs that were discussed at that conference very much aligned to the needs that we're driving to serve with our bioanalytics platform across Rebel and Zipchip. You're right, it's more than just feet on the street and prospecting. You definitely have to raise the bullhorn a little bit, right, and we're a small company and you're trying to do so, so As we talk about the 30 that became 60, there is a fraction of those that are on the marketing side, and that's across product management, the outbound marketing side, everyone responsible for all stages of the funnel from the demand generation through the marketing qualified leads and inside sales. They're also quite efficient in getting the word out and We've also been really ramping up over last year just the number of things we're doing with external parties and key opinion leaders, and we'll continue to do that in 2022. So I think there is a thirst for new analyzers. I think there is a demand for new insights as you look at these advanced therapies. And the analytics we really view as key and are going to keep working to make sure we're heard.
spk06: That's great. And... Just to follow up here, and then I'll save my questions for our discussion tomorrow, but my assumptions of the messaging to the sales force for 2022 is we're going to continue to prioritize placements, just given a lot of these opportunities are advancing, but still nascent. But I would just be curious to hear how you are targeting consumable sales, like if You have, you know, rebel-focused reps that are driving both placement and consumables or if you're splitting up those duties.
spk04: Yeah, great question. And I think about and tie it to your last question, too, and the growth and the execution on our sales channel. On the desktop side, you know, we are expecting, you know, growth to approach approximately two times the growth rate overall. That's really where a lot of excitement and opportunity is. And part of it is with the sales team not only gone off to the devices But but the consumables and you know we have a handful of inside sales But we do have our sales team in their bag both the device upfront device as well as the consumables So their quarters include both and we think that's important to keep them tied to the customer and the customer relationship as they buy hopefully that second and even more devices and and buying that upfront commitment on its initial six months of consumables or kits or coming back, you know, at renewal to get additional as they ramp up their utilization rates. So we do keep it all in one bag, supplemented by inside sales.
spk06: Great. Well, I appreciate it, Tyler, and talk to you tomorrow. All right. Thanks, Max.
spk08: Thank you. And I am showing no further questions. I would now like to turn the call back over to Kevin Knopp for closing remarks.
spk05: Yeah, thank you very much. Thanks, everyone, for joining our call this afternoon. And I look forward to seeing some of you at the Calend conference this week. And have a great day.
spk08: This concludes today's conference call. Thank you for participating. You may now disconnect.
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