908 Devices Inc.

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.

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.

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.