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spk08: Ladies and gentlemen, thank you for standing by and welcome to the Olink Proteomics Q3 2021 earnings 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 will need to press star one on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, John Medina. Thank you. Please go ahead.
spk04: Thank you, Patrice. Good morning, everyone, and thank you all for participating in today's conference call. On the call from O-Link, we have John Hymer, Chief Executive Officer, Oscar Yelm, Chief Financial Officer, and Carl Raymond, Chief Commercial Officer. Earlier today, O-Link released unaudited financial results for the third quarter ended September 30th, 2021. A copy of the press release and an updated corporate presentation are available on the company's website. Before we begin, I'd just like to remind you that management will make statements during this call that include forward-looking statements within the meaning of the U.S. federal securities laws, which are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. For a list and description of the risks and uncertainties associated with O-Link's business, please refer to the risk factors section of our final prospectus relating to our registration statement on form F1, file number 333-257-842, which was declared effective by the U.S. Securities and Exchange Commission on July 14th, 2021, and in our other filings with the SEC. we urge you to consider these factors and you should be aware that these statements should be considered estimates only and are not a guarantee of future performance. Also in their remarks or responses to questions, management may mention some non-GAAP financial measures. Reconciliations of adjusted gross profit and EBITDA and certain other non-GAAP financial measures to the most directly comparable GAAP measures are available in the recent earnings press release available on the company's website. The conference call contains time-sensitive information and is accurate only as of the live broadcast today, November 10th, 2021. O-Link 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, except as required by law. And with that, I'll turn the call over to John. John?
spk02: Thank you, Jan, and good morning, everyone, and thanks for joining O-Link's third quarter earnings call. I will start with a review of our operating results and strategic objectives before turning the call over to Oscar to discuss our financial results and full year guidance. Following that, Carl will provide his perspective on the commercial side. We will then open up the call for questions. First, I would like to personally thank all the talented and driven members of the O-Link team for their hard work and their execution. I look forward to working alongside you as we develop the market leader in proteomics. Our performance during the third quarter of 2021 was strong. We continued to execute on our strategy of expanding the adoption of the O-Link proteomics platform to drive improved understanding of real-time human biology. We remain optimistic about the prospects for O-Link as customer interest, interaction, and enthusiasm continues to be in line with our internal expectations set earlier this year. It's clear to us that our technology and commercial strategy is resonating with customer across industry, research, and academia. We had a robust quarter with total reported revenue of $20 million, representing growth of 82% compared with the third quarter of 2020. This brings our year-to-date revenues for the nine months ending September 30, 2021, to $51.3 million, just ahead of our internal plan for the year. Our total constant currency revenue growth ex-agricera was 79% year-over-year. Keep revenue growth in the third quarter was 14%, while service revenue growth accelerated to 152%, partly due to the delivery and revenue recognition on the UK Biobank project. While this dynamic drove a shift in revenue mix towards services in R3Q, impacting O-Link's overall gross margin, it's important to note that our kicked gross margins were within expectations and very strong. Overall, our Q3 performance was the result of focused and strong execution, despite friction driving more customer activity into and beyond the month of September. and a modest COVID resurgence in the broader supply chain across certain geographies. When considering the supply chain, plastics in particular have been a limiting factor, with some core labs now facing a minimum four-month lead time for plates. Supply chain disruption was also seen in the form of delays with some lab instrumentation and shipment of samples. Irrespective of these factors, we believe the third quarter is one to be proud of and that Oling continues to be well-positioned for continued strong growth. The third quarter was also our second full quarter of Explore kit sales, and we finished the quarter generating kit revenue from 21 Explore installations. It's important to remember that there is some time and training required on each installation before customers are pulling through consumables and there is further incremental time until they are put into routine use. We remain confident in the high level of interest from potential Explore Kit users based on active conversations and customer feedback. As of September 30th, we had 21 Explore installations compared with 16 on June 30th, representing 31% sequential growth. Despite more installations occurring later in the quarter than planned, The last 12 months' consumables pool remained at very attractive levels of about $550,000 over the last 12 months. Given the current stage of customer adoption and expected seasonality of customer utilization, individual kit orders can significantly impact the average pull-through metric, and quarter-to-quarter variability can be expected going forward. Looking into the remainder of the year, we're also pleased to see the fourth quarter Explore business off to a strong start with installations consistent with our annual forecast. The Explore pipeline remains robust and supports the plan that we have set out for the year and a good starting position for 2022. We're also encouraged by the fact that we see a good representation of both Biopharma and Academia customers in that pipeline. We remain on track to hit our annual revenue guidance of 90 to 92 million for 2021, although we continue to monitor potential impact from the COVID pandemic. From a regional perspective, we saw positive quarterly revenue growth and solid penetration of Explore in all regions. We continue to ramp up investments into our organization, and we're excited about the strong team that we are continuing to expand globally. I don't think we continue to find success and strong traction in all three of our product lines, Explore, Target, and Focus. Explore represented 63% of our total revenue in the third quarter of 2021, as compared to 53% in the previous quarter. And year to date, the Explore platform represented 57% of our total revenue. As you'll recall, We announced the expansion of Explore with the introduction of the O-Link Explore 3072 in June. We started taking orders in the second quarter and deliveries are expected to begin in the fourth quarter of 2021. Carl will provide additional color during his prepared remarks. We know our customers are very excited about the expansion of our protein biomarker targets, and our ambition to expand to 4,500 protein biomarker targets in 2022 remains on track. And moving to our target and focus products, interest in Signature Q100 has been strong thus far, and we are on track with the deliveries in the fourth quarter. In addition, in the third quarter, we reached an exciting milestone with the first major data delivery on the UK Biobank Pharma Proteomics Project, one of the world's largest studies of blood protein biomarkers conducted to date. The project's use of O-Link's PA technology aims to significantly enhance the field of proteomics, enabling a better understanding of disease biology and supporting innovative drug development for project participants. We are in the process of running 56,000 samples on the first 1,500 proteins expected to finish this year and plan to run the expansion of the Explore 3K platform on these samples in 2022. We view this exciting research project as an investment in scientific discovery, deepening our relationship with the 13 BioPharma Consortium members and the broader scientific community. A key part of our strategy is to work closely with thought and key opinion leaders to drive the focus and content of our library, new product development, validation strategies, and enhanced data analysis. We see a strong trend amongst market participants to collaborate and share data. Olink has been selected to work with various consortia, including the UK Biobank and the Scallop Group, previously discussed on the second quarter call. In the third quarter, we announced the O-Link partnered CORAL Consortium was formed, chaired by neuroscience thought leader, Dr. Charlotte Tooneson. CORAL is a new collaborative community of scientists working on the O-Link platform to investigate diverse neurological conditions by studying blood and CSF fluid in an effort to identify novel biomarkers and biological mechanisms for neurological diseases. The large quantity of proteins measured in neurological disease research demands analysis of multiple biologically relevant proteins simultaneously, and this opens opportunities to smoothly translate findings into clinically useful biomarker tests. We are proud that O-Link's proximity extension assay technology is being used in this important collaborative research on neurological health. Looking forward, Olink remains focused on investing in the business to accelerate research and development, as well as to expand our commercial infrastructure to drive revenue growth. We ended 2020 with 214 employees and continue to deliver on a strategic plan to build out our organization. And at the end of September 2021, we had 379 employees. These efforts to expand our presence have proven beneficial. and we expect continued aggressive investment during Q4 and into 2022. The people and technologies driving O-Link are helping us drive the proteomics conversation with more than 750 peer-reviewed publications to date featuring the use of our platforms. This number is growing significantly, and we consider it a tremendous source of validation and differentiation for our industry-leading platform our go-to-market capabilities, and the real-world applications we are enabling today. For instance, this summer, a paper published in the Annals of Oncology by authors Dr. Johan Loreau, Antoine Italiano et al. explored protein biomarkers and their relationship with immune checkpoint blockade resistance. This study leveraged O-Link Explore, first, to cast a broad net of biomarkers and found strong evidence for the role of one biomarker Leukemia Inhibitor Factor, LIF, as a potential suppressor of anti-tumor immunity. As a follow-up on this very exciting finding, they ran the O-Link Target 96 inflammation panel, which also includes LIF, in a different cohort and verified and confirmed their initial findings. A great example of why and how we built our product portfolio for various use cases and stages of experiments and how customers use them as a first discovery step with Explore, followed by verification of preliminary findings with Target. Furthermore, LIFT is not only a new potential response prediction biomarker, it also provided additional important information to the currently clinically established biomarkers PD-1 and PD-L1. While the field of oncology has made tremendous strides in recent decades, we expect additional progress like this and identifying more reliable predictors of response is needed. And we believe next generation proteomics is likewise needed to get at this relevant information. Scalable technologies such as ours will allow efficient discovery, verification, and clinical validation of tomorrow's improved biomarkers. Another recent example was featured in the Journal of the American College of Cardiology just last month by Matthias Unterhuber et al. This study explored O-link-enabled proteomics and machine learning with the goal of improving prediction of cardiovascular mortality in at-risk populations. It included a discovery cohort of almost 2,000 individuals and a verification cohort of 772 subjects using PNL. utilizing the O-Link Cardiovascular 2 panel consisting of 92 preselected and relevant protein biomarker targets. In our opinion, the data generated represent the remarkable early example of applying machine learning to large datasets to better estimate the risk of mortality. In this study, the combination of machine learning and protein biomarker-based prediction significantly outperformed classical risk score for all-cause mortality. Classical risk scores, such as the Framingham risk score, are based on only a few biomarkers, for example, BMI, blood pressure, smoking, and blood cholesterol, and have an accuracy of just over 60%. However, this protein biomarker machine learning approach provided a striking improvement in risk prediction of over 90%. We think these are impressive results and representative of the type of projects our customers are conducting on our platforms. It's also very encouraging to see how this strategy could pay off with potentially great and important results for human health. In an effort to help the investment community learn more about O-Link and how our customers are using proteomics to understand human biology to make more informed research and clinical decisions, we're hosting our inaugural investor day on November 15th. We plan to provide an overview of how some key opinion leaders in the field of proteomics, including Rob Garstein, Arna Mehta, Emma Gutman, Ferhan Qureshi, and Chris Wheeling, are using the O-Link product portfolio spanning across explore, target, and focus in their work. They will share views on how our technology helps in their research, as well as how proteomics is evolving. We've decided to host this event in a virtual format. However, it's our intention to meet many of you in person in 2022. As of today, we're planning to be in San Francisco in early January when many of you are likely to be there as well attending an investor conference. In summary, we are pleased with our third quarter performance. We are confident we have the framework in place to continue executing on our investment and strategic plans and drive meaningful growth for the years to come. I will now turn the call over to Oskar to discuss our financial results. Oskar?
spk01: Thanks, John. Hello, everyone. As John mentioned earlier, total revenue for the third quarter of 2021 was 20 million as compared to 11 million in the third quarter of 2020. Revenue growth was driven by the continued momentum in the expansion of our Explore platform, in particular, Explore service revenues, which grew more than 12-fold year-over-year. Q3 2021 represented the second full quarter of sales activity for our Explore kit offering, and variability in overall Explore product mix during the initial quarter of customer adoption can be expected. Our Explore service revenues are driven by a broad spectrum of customers across the Americas, EMEA, and rest of the world. As at the end of the quarter, we had 21 externally placed Explore installations that we've generated revenues from in 2020 and the first nine months of 2021. 2020 kit revenues relate to early access customers and primarily occurred in the fourth quarter. We've seen an average pull through on these customers of some $500,000 to $600,000, with individual customer spend ranging from less than $100,000 to $1 million orders. As John indicated in his opening remarks, we expect customer demand to follow a seasonal pattern. More specifically, we anticipate demand would likely be higher in the fourth quarter and likely lower in other quarters. Analysis services revenues for the third quarter of 2021 was $15.1 million, as compared to $6 million for the third quarter of 2020. The service growth continues to be driven by Explore across all regions. Kit revenue for the third quarter of 2021 was 3.7 million as compared to 3.2 million for the third quarter of 2020. Explore Kit revenues accounted for 15% of Explore revenues in the quarter. As previously disclosed, the majority of Explore Kit revenue in second quarter 2021 was attributable to one order. Other revenue was 1.2 million for the third quarter of 2021 as compared to 1.8 million for the third quarter of 2020. Looking at revenue by geography, revenue in North America was 6.9 million as compared to 5.8 million for the third quarter of 2020. In EMEA, revenue was 11.8 million as compared to 4.4 million in Q3 2020. Revenue in China, Japan, and rest of the world was 1.3 million as compared to 0.8 million in the third quarter of 2020. Cost of goods sold. was $7.6 million in the third quarter of 2021, resulting in a gross profit of $12.4 million in the third quarter of 2021, as compared to cost of goods sold of $3.2 million in the third quarter of 2020, which resulted in a gross profit of $7.8 million in the third quarter of 2020. Adjusted gross margin decreased to 65.6 percent compared to 74.1 percent for the third quarter of last year. This decrease was due primarily to a shift in overall product mix toward lower margin service revenue, as well as a reduction in service cross-margin itself as we continue to invest in capacity. We also delivered the UK Biobank project at very strategic pricing and experienced lower operational efficiency in the labs than anticipated. Kit cross-margin is generally in line with our expectations by segment adjusted Gross profit margin for analysis service was 59% for the third quarter of 2021 compared to 75% for the third quarter of 2020. The decrease in adjusted gross profit percentage was primarily related to the reduced operational efficiency associated with new product offerings and an increase in personnel cost as we have increased our lab capacity. Further, we delivered UK biobank revenues in the quarter, and they were priced at very strategic levels. We continue to believe that our strategy to increase KIT revenues as a percentage of total revenues will have a positive impact on MIX over the longer term, though our quarter-to-quarter variations are to be expected. Adjusted gross profit margin for KITs was 91% for the third quarter of 2021, as compared to 83% for the third quarter of 2020. KIT gross margin remains largely in line with our expectations, and we believe it represents an underlying gross margin level for our kids' business. Adjusted gross profit margin for other was 74% in the quarter of 2021 as compared to 54% for the third quarter of 2020. Total operating expenses for the third quarter of 2021 were 24.1 million as compared to 8.6 million for the third quarter of 2020. We continue to invest and build out our global commercial team, invest in our R&D team, and growing our library of assets. The increase was further driven by costs associated with being a public company. Commensurate with the opportunity in front of Olink, we expect to continue to invest according to our strategic plan and aggressively grow all parts of our business. Operating expenses are broken out as follows. Selling expenses for the third quarter were 9 million as compared to 2.8 million for the third quarter of 2020. Administrative expenses for the third quarter of 2021 were $11 million as compared to $4.4 million for the third quarter of 2020. Research and development expenses were $4.2 million for the third quarter of 2021 as compared to $1.3 million for the same period in the prior year. Other operating income was $0.3 million in the third quarter of 2021 as compared to a loss of $0.1 million in the third quarter of 2020. Net loss for the third quarter of 2021 was 5.5 million as compared to 0.1 million for the third quarter of 2020. Net loss per share for the third quarter of 2021 was 5 cents as compared to 20 cents for the third quarter of 2020. Adjusted EBITDA for the third quarter of 2021 was 7.9 million as compared to a profit of 2.9 million for the third quarter of 2020. We ended the third quarter with 140 million of cash in cash equivalents. Moving to our outlook for the rest of the year. And while the pandemic resurgence has introduced additional uncertainty in various areas of our business, we maintain our full year 2021 revenue guidance of 90 to 92 million, representing 66 to 70% growth over 2020. I'll now turn the call over to Carl Raymond, our Chief Commercial Officer to provide a bit more detail on customer behavior during the recent quarters and product initiatives we're looking forward to. Carl?
spk06: Great. Thank you, Oscar. So we made significant progress during the third quarter and remain very well positioned as a leader in the market. I'd like to thank all the hardworking and talented members of our commercial organization for the strong results. As John and Oscar indicated, year-over-year revenue growth was robust with strong expansion of Explore. We executed positively despite several factors affecting the quarter. First, kit sales and timing were impacted by quarter-to-quarter variability that was more significant during Q3, pushing some revenue into the fourth quarter. O-Link also saw more significant demand for Explore service, which impacted product mix and consequently overall gross margin. Additional dynamics, including supply chain-related friction for O-Link and the industry more broadly, were also present We believe some factors are being driven in part by the resurgence of COVID-19, while others are more characteristic of a rapidly developing and large commercial market opportunity. We also experienced some of our customers taking a longer summer vacation with people arriving back for work later in Q3 than we've typically observed and planned for. In our opinion, none significantly impairs the promise of the proteomics opportunity that lies in front of us. O-Link products explore targets, focus, and now Signature all resonate with current and prospective customers, and we're strongly executing according to plan. Of the 379 employees we ended the quarter with, more than 140 are in the commercial team, and we're just getting started. Interest in Signature Q100 has been strong thus far with several orders in hand from North America, Europe, China, and other parts of Asia Pacific. This positive response from our customers is reassuring, and we're on track with deliveries in the fourth quarter as we had expected. Through our collaboration with early adopters, Celcarta, we will bring the signature Q100 platform into Celcarta's CAP-CLIA laboratories to address the need for proteomic biomarkers in clinical trials and support multi-omics analysis with its cell engine software. Cellcard is global footprint with sites in the US, Canada, Belgium, Australia, and China will allow for rapid deployment of the platform and support clients in their global clinical programs. Moving back to Explore, as you'll recall, we announced the expansion of Explore with the introduction of Olink Explore 3072 in June. We have started to take orders with deliveries expected to begin in the fourth quarter of 2021. We continue to see good traction on Explore externalization to date in Q4, and we're optimistic that we will end the year with the number of installations that we had planned for at the outset of the year, setting us up for further growth in FY22. Beyond 3000, we remain committed to expanding our protein library while investing in tools, software, and capabilities to help our customers. We know our customers are very excited about the expansion of our protein biomarker targets, and our ambition to expand to 4,500 protein biomarker targets in 2022 remains on track. And with that, I'll turn it back over to our CEO, John Hymer.
spk02: Thank you, Oscar. Thank you, Carl. In summary, the third quarter of 2021 was another quarter of continued execution and growth. We are pleased with the growing traction and robust adoption across our entire portfolio of products and services. We are particularly pleased to see the continued revenue momentum towards our revenue guidance, continued progression of our platform, and in particular, the strong momentum and delivery on our Explore Kit externalization strategy. We look forward to providing future updates on the investments we're making in our business and our strong operational and financial results. At this point, we'll open up the call for questions. Operator?
spk08: Thank you. At this time, if you'd like to ask a question, press star then the number one on your telephone keypad. Puneet, your line is open.
spk05: Yeah, hi. Thanks for taking my questions. John, I think given the quarter, just the first question, rightfully so, is on supply chains. What are you seeing today versus, let's say, in September? I think the main question among investors is that, is it worsening? And More importantly, how do you see Olink's products are tied to the supply chain, meaning that in terms of is it the plastic, is it instrumentation? Obviously, you're a consumables company, so I just want to understand, is it the plate plastics that you mentioned? Is it the robotics or the liquid handling installations that are happening ahead of the Explorer pickup? Just help us parse out what's happening exactly on the supply chain and, you know, the trend line, what you're seeing in the field.
spk02: Yeah, sure. Thanks, Puneet. Yeah, so as we exactly said in the prepared remarks, right, so in particular, it's down to nitty-gritty stuff like, you know, pipette tips and plates, and For core labs that are adopting the Xplore platform, as we communicated, it could be more than four months of lead times to get those simple plastics. But on top of that, there's also some delays in the automation upstream ahead of the Xplore instrumentation. So we've seen delays in supply to our core labs on that front as well. And then on top of that as well, as I'm sure you see as well, right, I mean, shipping of products across the world, you know, are strained, and hence we see delays sometimes in shipment of samples and so forth as well. I call you can fill in, but I wouldn't say that we see that it's worsening, but it's rather continued at roughly the same pace. We are super happy that we internally have been very forward-looking and stocked up to our needs. We also try to help our customers, you know, to supplying them with some of these simple plastics, but we can't help everyone. So that's when we sometimes see, you know, some of the delays, unfortunately. So I don't know, Carl, if you want to add anything to that.
spk06: Yeah, without being redundant, I think you nailed it there, John. I think, agreed, we don't necessarily see worsening, but a continuation of those supply chain strains on our customers. And I think that covers actually many classes of instrumentation from third-party companies as well as, again, all the various plastics and so on. And as John noted, I think we've implemented some sort of clever mitigating strategies where we can, but of course we don't control supply chain across the industry. So I think we're going to continue to see some of that, but we feel like it's manageable challenges.
spk05: Got it. And then, John, on the fourth quarter guide, implied fourth quarter guide, I think the biggest question is, given the supply chain and the timing issues that you're seeing here, What gives you confidence in the fourth quarter? I suspect part of that is the UK Biobank, but correct me if I'm wrong on that. Fourth quarter represents a meaningful step up for you based on our math. I mean, obviously, this is fourth quarter seasonality. You pointed that out before, and we're fully aware of that. But just wanting to parse out how should we think about the pickup in the fourth quarter because it represents 90% or so sequential growth versus sort of the 13% sequential growth that you just delivered in the quarter. And just given the supply chains, UK Biobank and the Explore kits and what you're hearing from the customers, could you help us just frame the fourth quarter dynamic that you're implying in the guide?
spk02: Right. Thanks, Puneet. So obviously we've been, this is her first year being a public company as well, and we try to be super careful here in what we say and how we execute. And we feed very good, actually, on where we're at in terms of customer interest and demand. So we certainly believe that we have lined up the opportunities to be able to meet the guidance that we are communicating today again. So carefully vetted our pipeline, customers, projects, both from service and kits, et cetera. So it's obviously still a few weeks left, right? So we're not across the bridge yet. You know, obviously keeping very close eye on shipment of the samples that needs to be done, the kits that needs to be shipped, and so forth. So we're not out of the woods yet. But with very careful consideration of all the details we can look at in customer demand and interest and concrete business opportunities that are on the table, we remain confident and continue sharing our current guidance.
spk08: Your next question comes from Tejas Savan of Morgan Stanley.
spk00: Hey, guys. Good morning. So I want to follow up on some of the earlier themes you just addressed there, John. Can you be a little bit more explicit in terms of that sort of $40 million 4Q implied guide? What are you baking in for COVID impact? I'm just trying to gauge how much sort of insurance, if you will, is baked into the numbers here if COVID trends don't get better in the back half of November and into December. Sure.
spk02: Yeah, no. So when we did our internal analysis, we've taken into account the current COVID situation we see. So here we need to be on our front foot, right? We need to be very proactive in terms of planning of shipments and detailed execution of these opportunities, perhaps in a higher level than what you usually in normal circumstances are. So, yeah, no, we've been trying to be extremely proactive there. And, Carl, please fill in here as well from your perspective running the commercial side on the thoughts and steps and the considerations that we've done.
spk06: Yeah, no, agreed. I think it's a fairly intense level of detailed planning, I think, as John noted, with the continued friction from the supply chain issues. But as noted, yes, we don't have rose-colored glasses on and expect that that's going to clear up in the fourth quarter, or I'd say even carrying probably into 2022. So, yeah, so we've considered that, I think, in the context of our business. But I think the underlying momentum in our business, in the interest in proteomics, we see customer budgets are remaining intact. So I think we're sort of optimistic on the business overall, but certainly being cognizant that the COVID-19 drag will continue for some time.
spk00: Got it. And then a quick follow-up for me. Of that 4 million kit revenue in the quarter, how much of that was from decode? And then on the UK biobank, how are you thinking about sort of contributions in the first half of 22? And any color on follow-on population scale work that you've had since would be great as well.
spk01: Yeah, thanks, Saesh. It's Oscar here. So I can address the first two questions and then on the Population studies, I can defer to Carl, but I think, you know, the decode project we delivered in Q2, so nothing from decode in the third quarter. And then in terms of the UK Biobank and how we see that impact in 2022, I mean, we see, you know, the pricing has been, you know, relatively competitive and sort of, you know, strategic from our perspective. So, you know, it's a building block for, you know, to get to our internal targets for 2022, but it's not, um, you know, it's, it's a relatively smaller contributor than, than the, uh, the project in, in 2021.
spk06: Great. And on the population, um, biology piece, I can speak to that. Um, yeah, we're continuing to see more, um, interest in having more conversations in sort of large scale biology, um, proteomics, which is very exciting. Nothing we can speak to in any specific detail at this point, but certainly more information will be forthcoming as we develop those opportunities further.
spk00: Got it. Thanks, guys.
spk06: Thank you.
spk08: Your next question comes from Mac Seitz of Goldman Sachs.
spk03: Hey, everybody. Good morning, and thanks for taking my questions. Maybe if we just dig into the kit revenue a little bit more, if you could just kind of parse out kind of what was the COVID-related supply chain impact versus, you know, demand uptake for the Explore Kit product specifically. Just trying to figure out the cadence sequentially of the Explore Kit growth and what's driving that.
spk02: Yeah, good morning, Matt. Good question. It was rather that we had to push a few of the Xplore installations from the third quarter into the fourth quarter with some delays of the instrumentation or the plastic that goes with the training and certification. So that unfortunately pushed some of those Xplore installations out a bit in time. They have been performed now, but we didn't make them in the third quarter. So that is obviously also then sort of pushed out any keep revenues that there is no use for the customer to buy the rating kits when they're not up and running on the platform, if that makes sense.
spk03: Got it. You know, that's helpful. And then just looking at the mix between analysis service and kits, you guys have been kind of beating our numbers on analysis service and coming in light on kits, and I'm just wondering, Um, as that mix shift happens, as we kind of head into 22, um, is it a supply chain availability issue that people are more comfortable doing some of the Explorer work with analysis services? And so it's driving more growth in that area relative to standalone kits. And if so, or if not, like, how are you thinking about 22? I know it's, it's, it's early to talk about that, but just trying to think of that mix shift, um, that we'd anticipated more towards kits. I'm just wondering if analysis services stays kind of higher for longer as we kind of deal with some of these issues in the supply chain or maybe some other issues that are in the market.
spk02: Sure. Well, first of all, we are super excited by the excitement and interest and demand for Xplore. We think that's the first great stepping stone, right? And then we're not out of the woods of this year yet. So let's close the books on where we are at for the externalization and kit strategy for 2021 when we see the full year. So I would not jump to conclusions yet. And from prior experience in the business, a lot of things tend to happen in our fourth quarter, as you're well aware of. So looking into 2022, As we hope that we will be on target on our strategic plans for Explore in total for the year, we think that gives us a fantastic springboard jumping into 2022. And obviously starting 2022 from a completely different situation in terms of Explore external users than when we started this year. And then with the excitement and interest and the pipeline we're building for further expansion and externalization of this platform, we continue to believe that 2020 to-do will be a very exciting year for O-Link as well.
spk06: And I would just add one comment to that. As we launch the Q100, you know, we'll also start to see sort of acceleration of interest and externalization on our target platform as well. So that'll be another factor playing into that mix over time that will be a positive.
spk03: Well, yeah, thanks for taking the questions.
spk08: Thanks, Matt. Thanks, Matt. Your final question comes from Sanjeev Nam of BTIG.
spk07: Hi, thanks for taking the questions. Maybe starting out with a clarification question. You know, obviously you guys saw an increase in the cumulative number of external kit customers in the quarter, sequentially, but from an incremental new external kit customer addition, you know, it was just five compared to last quarter, which was 16, and I'm assuming there was some early access customers baked into that as well. But all in all, you're seeing, you know, there was a decline, a meaningful decline in terms of new customers added, and I was just wondering, Is the main driver of that largely the supply chain constraints you're talking about? Or I'm, you know, also curious if there is also kind of a shift in terms of gaining new customers, you know, through installation of new Explorer systems versus leveraging the existing install base of sequencers that are out there. I don't know if that makes sense.
spk01: Yeah, so I mean, we, you know, we grew our installed base in the quarter, you know, over Q2. So not sure I get the comment sort of with the loss of customers or the reduction in the customer base. So perhaps if you can clarify that.
spk07: Oh, in terms of the incremental customer, new customers that you added in a quarter versus relative to last quarter, for example.
spk01: Yeah, but okay, then I get it. Yeah, I think it's, you know, I mean, looking at the business and I think sort of all these sort of, you know, the discussion we've had this morning around sort of, you know, various sort of, you know, I mean, supply chain issues on the customer side and getting the instrumentation. And then I think sort of, you know, Q3 in general being, you know, a month where a lot of the world is sort of away on, you know, on holiday, you know, for a good part of the quarter. So looking at the sequential growth, Q3 over Q2 might not be completely representative. So I think where we get comfort in the traction on the Explore externalization is looking at the conversations and discussions we have with customers, the pipeline of customers and installations for Q4, ending the year, as Carl alluded to, where we would expect it to be at the start of the year and setting us up for 2022.
spk07: Okay, gotcha. And then just for the Q100, you're seeing strong demand there. I was curious if you were seeing, you know, if the demand is largely coming from the existing target and focus customers or if, you know, if there's a significant increase interest coming from not, you know, new to O-Link or new to PEA technology customers? And if so, then what's kind of driving the demand? You know, what kind of, where, you know, which segments in the market you're seeing the greatest demand coming from?
spk06: Yeah, we're seeing... Yeah, sorry. Yeah, so we're seeing... Very balanced demand, actually, which is fantastic to see from customers who are either current users or have been prior service users, and then a large number of new customers as well. And so demand is coming from – it's actually incredibly diverse as well, which I think is encouraging. So for customers looking to bring some of their programs in-house from companies and suppliers, service providers like Salcarta, you know, who offer CRO-type services, and, you know, then straight into, you know, sort of academic centers and core labs. So a great diversity of interest in the platform, which is what we expected to see and we think is a great statement for the flexibility of the technology in sort of various outlets. And NetNet, all great for our end users because this opens up the capabilities that, you know, Olink, we think we do a terrific job with our services. But, of course, someone like Selcarza, who has CLIA CAP labs and other labs who have other unique capabilities, I think just opens up a world of opportunity for our end users. So we're very excited about that.
spk07: Gotcha. Great. And then if I could squeeze one more in, great to see the first major data delivery to the UK Biobank. I was wondering kind of what's the what's the timeline in terms of when we can first expect to see data presentation coming out of the proteomic data set?
spk02: Yeah. Yeah. We are excited about that too. Yeah. So we, the first 1500 proteins, we plan to deliver the data this year. And UK Biobank has a known internal QC process. And then the data will be shared with the 13 biopharma companies then towards the end of this year. They have a nine-month exclusivity looking at the data. And after that, it will be published publicly. So you should expect that, I guess, then towards the beginning of the fourth quarter next year. And when we expand to the 3K, it will be a very similar process when we delivered the last data set. the nine-month clock starts again and before those data get published in the public domain as well.
spk07: Great. Thank you so much.
spk08: At this time, there are no further questions.
spk02: Okay. Thanks, operator, and thank everyone for joining us today and for your interest in OLIG. We look very much forward to keeping you updated on our progress advancing proteomics while also enhancing shareholder value and are very excited to speak with you again at our investor days in a few days. So have a great day, everyone, and thanks for attending.
spk08: Thank you for participating in today's conference call. You may now disconnect.
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