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spk01: Good day, and thank you for standing by. Welcome to the O-Link Proteomics fourth quarter 2021 and four-year 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. Please be advised that today's conference is being recorded. 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 with Investor Relations. Please go ahead.
spk04: Thanks, Shannon, and good morning, everyone. Thank you all for participating in today's conference call. On the call from O-Link, we have John Hymer, Chief Executive Officer, and Oscar Helm, Chief Financial Officer. Earlier today, O-Link released unaudited financial results for the fourth quarter ended December 31, 2021. A copy of the press release and an updated corporate presentation are available on the company's website. Before we begin, I'd 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 OLINC's business, please refer to the risk factors section of our final prospectus relating to our registration statement on Form F1, file number 333-257842, 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 the remarks or responses to questions, management may mention some non-IFRS financial measures. Reconciliations of adjusted gross profit and and certain other non-IFRS financial measures to the most recently comparable IFRS measures are available in the recent earnings press release available on the company's website. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, February 14, 2022. 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 will turn the call over to John. John.
spk05: Thank you, Jan, and good morning, everyone, and thanks for joining Olli's fourth quarter and full year 2021 earnings call. I will start with a review of our operating results, highlight some key accomplishments and current strategic objectives, and discuss our guidance for 2022. I will then turn the call over to Oskar to provide more details on our financial results and our outlook. 2021 was a transformational year for Olli. including our successful IPO, strong execution of our strategic plan, and the achievement of numerous research and commercial milestones. I would like to thank the entire Ohling team for their dedication and commitment through a period of tremendous growth for the company. Ohling was well positioned exiting 2021, and we are optimistic about the company's prospects in 2022, expecting another year of strong growth in the next-gen proteomics market still in its infancy. First, I'd like to provide a high-level overview of our financial performance in the fourth quarter and also go into the details later in the call. I'm pleased to report that we delivered fourth quarter revenue of $43.7 million, representing growth of 61% compared with the fourth quarter of 2020. Full year 2021, total revenues was $95 million, a 76% increase compared with the full year 2020. During the fourth quarter, which represented 46% of full year revenue in 2021, we experienced some headwinds related to the impact from the COVID uptick across multiple geographies. Despite this initially unexpected impact, I'm pleased that the team was able to manage through and deliver revenue that was above the high end of our guided range. Customers are adopting Owling's platform at a rapid pace, which is very exciting and at the same time poses some challenges. The current seasonality of our revenue base is a function of where we are in our life cycle as a fast grower in a promising market and customer adoption curves, which are fluid. We do believe this current seasonality will remain in the near term, but over time, we expect it to become less pronounced. A few more words on COVID. our business in 2021 and how we are contemplating its potential impact in 2022. The increase in pandemic-induced business friction that we experienced during the third quarter progressed largely as we had anticipated through the fourth quarter. It was with the dedication of Olink's entire organization that our strong execution offset these headwinds during the quarter. As we consider the more recent rise of Omicron and its possible effect on 2022, We've not seen significant additional headwinds arising from it as of now, but continue to monitor developments as others in our industry have discussed. Despite the COVID headwind, we continue to execute on the multiple revenue drivers in 2021, which will continue into 2022. For instance, we see a very strong traction with explore externalizations at next generation sequencing labs, and reached a total of 25 installations by the end of 2021. We recently began delivering Explore 3K. And just as important, we've expanded Explore's reach within existing and Jet Customer installations placed earlier in this year and in 2020. All these factors combined help drive strong Explore utilization during the quarter, which Oscar will detail a bit more later. a new product for us last year represented 69% and 62% of our total revenue in Q4 and full year 2021, respectively. And with this positive performance, total kit revenue growth rebounded strongly in the fourth quarter, up 83% over Q4 2020, while service revenue growth was 37% compared to Q4 2020. We continue to make progress with our shift towards kits, with kits representing 35% and 28% of total revenue in Q4 and full year 2021, respectively. Though Explore pull-through will vary from quarter to quarter, given the size of the Explore install base and seasonal trends, we continue to anticipate additional progress towards increasing our revenue mix towards kits in 2022. In the fall, we began delivering Signature, and we are pleased with the 28 placements recorded during Q4. Signature has expanded our reach within the low and mid-flex market, and it's interesting to note that some Signature customers are also existing Explore users growing their activity with the O-Link platform beyond HyFlex. We believe this demonstrates the wide range of capabilities our technology and its ability to address multiple use cases at the same customer. It's clear to us that our technology and commercial strategy is resonating with customers across industry, research, and academia, and including our presence further downstream with our partner, OKTE Bioscience, in multiple sclerosis, O-Link's values being realized throughout the entire spectrum of proteomic applications. We feel we have a very solid commercial plan to support our guidance for 2022. We remain very confident in our competitive offerings demand from current and prospective customers, and are enthusiastic about the many opportunities we see arising for Olink to have an impact in both research and clinical applications. Our competitive position is stronger than ever in NGS and QPCR with Explore, 3K, and Signature, and we're confident in our ability to execute and expand in this largely untapped next-generation proteomics market. As market awareness and adoption continues to accelerate, we have invested to support the company's position as the market leader. Spending was higher than planned due to the opportunities that we continue to see developing with customers, most of which will take time to cultivate. We anticipate 2022 will be another year of investment to support our growing leadership position in Proteomics. And given our successes with new investments in the Explore platform, our early results with Signature, and other commercial opportunities we are pursuing, we believe we have a unique ability to drive improved return on investment over time for all of these initiatives. Oscar will get into the details on the financial guidance in a few minutes, but I wanted to be clear that despite this accelerated level of investment, we are well capitalized to deliver on our existing strategic plan and return to profitability. leveraging the strong unit economics, leverable business model, and strong marketing position. The combination of all drivers of our business results in 2022 forecasted revenue to increase between 42 and 53%, achieving a range of $138 to $145 million. We expect continued systemality this year with quarterly trends similar to 2021, And over time, we do see the potential for our seasonality to become less pronounced as our revenue and customer mix continues to expand. This guidance also assumes that the existing pandemic environment and resulting operational friction are roughly similar to what we're experiencing today. Beyond this year and over the long term, we remain optimistic about our competitive position and our ability to drive strong revenue growth still being at the very front end of the billion-dollar opportunities in postgeomics research and diagnostics. Underlying our optimism for 2022 are many of the positive factors that helped drive a strong 2021. Explore continues to gain strong traction in NGS with new prospects and existing customers. Landing and expanding are both proceeding very well. and recently launched EXPLORE 3K is being very well received in its early days. In this context, I would like to add that this represents groundbreaking times in proteomics. In my opinion, this is the first time in the history of proteomics that is both at scale and quality with unparalleled throughput. Looking at 3,000 proteins in parallel with single-plex quality In large cohorts consisting of thousands of samples in just days. We have all the reason to believe that proteins and proteomics represent the most important omic when it comes to tracking the transition from health to disease, measuring disease progression or drug response. We can feel that the research community is very excited that proteomics is finally here. and we see a strong adoption and excitement across both academia and biopharma. As the CEO of O-Link, I am very proud that we have driven the field to this current state. We continue to rapidly expand research opportunities and remain convinced all of this work by us and our customers will have a major impact on how healthcare is executed and drugs developed. Beyond NGS, and Explore 3K, Signature, our newest offering in the low- and mid-plex space, has similarly found a ready customer base we expect will grow strongly in the quarters and years ahead. We think Signature is another strong example of our promise to address the multitude of proteomics research goals within customers' labs. We think the findings of more than 800 studies published today Exploring PEA, we further define our place as the leader in proteomics. We believe this body of knowledge also speaks to the quality of the data the O-Link platform generates, a sentiment shared by many of our customers in their real-world experiences as well. As we've discussed in the past, the UK Biobank project is an immensely important project, and O-Link is proud to be the platform which supports the project. We view this existing project as an investment in scientific discovery, deepening our relationship with the 13 Biopharma Consortium members and the global research community. The project's use of O-LINKs 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. By the end of last year, we delivered data on 56,000 samples to the UK Biobank Consortium, a tremendous accomplishment that would not have been possible without the hard work and talent of our employees. And for 2022, we plan to run samples in the expansion phase on the Explore 3072 platform. When data from this research are published, it will be published using Olink's Unit of Protein Expression, NTX, or normalize protein expression. In some ways, O-Link is not only leading the commercial market in next-gen proteomics, but also define its language. Further to defining the language of proteomics, our ambition to expand from 3,000 to 4,500 protein biomarkers in 2022 remains on track. Us is our ambition to expand beyond that. Aside from UK Biobank, Additional consortia that we're part of include Scallop, Coral, and Colibri. The Scallop consortium, led by Anders Malasty, has a goal of identifying novel molecular connections and protein biomarkers causal in certain diseases, such as coronary artery disease, RA, bipolar disease, heart failure, dementia, and metabolic syndromes. Coral Formed and chaired by neuroscience thought leader, Dr. Charlotte Tunison, it's a collaborative community of scientists working on the only platform investigating diverse neurological conditions by studying blood and CSS samples. With a goal to identify biomarkers and biological mechanisms for neurological diseases. Lastly, Colibri is a consortium to define protein biomarkers of inflammatory bowel disease. led by Sabrine Vermeer, Jonas Halvorsson, and Bram Bergstad. As with these consortia, we're exploring more opportunities where the all-win platform can be the underpinning technology for large-scale projects which are grounded in science, specificity, accuracy, and decision-making for customers. In addition to the UK Biobank population proteomics project, we see a lot of interest and excitement across many large and strategic cohorts around the world. need and want to add proteins to the cohorts to complete the multiomics perspective. We're convinced that proteomics is and will continue to be very high on the agenda for all of these worldwide cohorts. We look forward to continuing generating a lot of democratized value in these data sets and particular to do so through our external Explore Lab partners via our kit offering. In summary, We believe we are in early phases of this multi-billion dollar next generation proteomics opportunity. We believe Olink is the most advanced scientifically and commercially, and we are working hard to continue to drive impressive growth at Olink in 2022 and the years to come. I will now turn the call to Oskar to discuss our financial results.
spk06: Thanks, John. Hello, everyone. First, just a quick reminder that we will be presenting at two investor conferences this week. Tomorrow morning, we'll be at the BTIG MedTech Digital Health Life Sciences and Diagnostic Tools Conference. And Friday morning, we'll be at S3B Lering Global Healthcare Conference. Unfortunately, we will once again be interacting virtually instead of in person or on the slopes, but we look forward to catching up with many of you then and in the weeks to come. As we pre-announced on January 10th, our fourth quarter revenue totaled 43.7 million, strong growth of 61% year-over-year. This brought full-year 2021 total revenue to 95 million, up 76%. Revenue growth was driven by strong performance from our Explore platform, and in particular, Explore kits, which represented 40% of total quarterly Explore revenue. Adjusted EBITDA for the fourth quarter of 2021 was negative $1.4 million as compared to positive $10.8 million for Q4 2020. As John indicated, given the benefit of moving quicker, O-Link accelerated investment during the fourth quarter. As of the end of 2021, we had 25 externally placed Explore installations that have generated revenues for us over the last 12 months. and the installed base achieved approximately $750,000 in customer pull-through during the 12 months of 2021, benefiting from both increased customer traction and seasonal Q4 strength. We've made very strong inroads with our export offering during these early quarters on the market, and we continue to expect variability in quarter-to-quarter pull-through, which will be further impacted by our seasonal trend. During our early experience with Explore so far, we've seen an average annual pull-through from our Explore customers ranging from $500,000 to $750,000, with individual spend ranging from less than $100,000 to multimillion-dollar orders. Kids' revenue for the fourth quarter grew strongly, up 83% to 15.3 million, or 35% of total revenue, as compared to $8.3 million for the fourth quarter of 2020 with 31% of total revenue. Drivers of kit revenue included strong export pull-through. Full-year 2021 kit revenue grew 82%, totaling $26.8 million versus $14.8 million during 2020. Analysis services revenue for the quarter was $23.7 million, as compared to 17.3 million for the fourth quarter of 2020. Service growth continued to be driven by Explore across all regions. Boosted by strong deliveries of signature, other revenue was 4.7 million during the quarter as compared to 1.6 million for the fourth quarter of 2020. Q4 2021, other revenue growth was primarily driven by the placement of 28 signature instruments late in the quarter including a small amount of initial reagent sales. Full year 2021, other revenue totaled 8 million versus 4.9 million for 2020. By geography, revenue during the fourth quarter was 20.2 million in North America, 20.1 million in EMA, and 3.3 million in China and the rest of the world. By geography, revenue during the full year of 2021 was 42.3 million in North America, 45.4 million in India, and 7.2 million in China and the rest of the world. Turning to expenses, Q4 2021 consolidated cost of goods sold was 18.4 million, resulting in a gross profit of 25.3 million. This compares to Q4 2020 cost of goods sold and gross profit of 8.4 and 18.8 million, respectively. Consolidated adjusted gross margin during the quarter was 60.7% versus 72% for the fourth quarter of 2020. By segment, adjusted gross profit margin for kits was 85% for the fourth quarter of 2021 as compared to 90% for the fourth quarter of 2020. The decrease in the fourth quarter kit margin is related to year-end adjustments related to our target product. Full year 2021 adjusted gross profit margin for kits was 86% versus 84% for 2020. Q4 adjusted gross margin for analysis service was 50% compared to 68% in Q4 2020. The decline in AS margin was primarily driven by UK Biobank. And once we delivered the UK Biobank project, we expect service margins to revert to normalized levels that we observed historically. In addition, the AS margin was impacted by our investment into capacity in order to deliver out the UK Biobank margin. But this investment has also built unique institutional knowledge that will further enrich our support to customers as we externalize Explore. Full year 2021 adjusted gross profit margin for analysis services was 57% versus 69% for 2020. As we consider total quotes, We continue to believe that our strategy to increase kit revenues as a percent of total revenues will have a positive impact on gross margin over the long term and quarter-to-quarter variation ought to be expected given the seasonality of our business and the early stage of our product introductions. Further, the introduction of Explore 1372 should provide support for margin expansion over time, leveraging internally built antibody library. Adjusted gross profit margin for other was 34% as compared to 23% for the fourth quarter of 2020. Q4 2021, other adjusted gross profit margin was impacted by signature sales during the fourth quarter. Full year 2021, adjusted gross profit margin for other was 45% versus 47% for 2020. Total operating expenses for the fourth quarter of 2021 were 33.1 million as compared to 13.8 million for the fourth quarter of 2020. The increase was largely due to continued and accelerated investment in Olin's commercial organization and research and development and driven by additional costs of the public company as well. For the year 2021, total operating expenses were 102.9 million as compared to 42 million for 2020. In keeping with the very large proteomics opportunity in front of us, we expect to continue to invest according to our strategic plan and grow all parts of the business in 2022. Operating expenses are broken out as follows. Selling expenses for Q4 2021 were 12 million versus 4.3 million for Q4 2020. Administrative expenses for Q4 2021 were 11.8 million versus 7.9 million for Q4 2020. And R&D totaled 8.7 million and 2.2 million for Q4 2021 and Q4 2020 respectively. Other operating loss was 600,000 in the quarter as compared to other operating income of positive 600,000 in Q4 of 2020. Net loss for the fourth quarter was as compared to a net profit of $6.5 million for the fourth quarter of 2020. Full year net loss totaled $38.3 million as compared to $6.8 million for 2020. Net loss per share for the fourth quarter was $0.07 based on a weighted average number of outstanding shares of 119,007,062. as compared to a net profit share of $0.13 in the fourth quarter of 2020 based on a weighted average number of outstanding shares of $23,190,461. Full year 2021 net loss per share totaled $0.43 versus $1.10 per share in 2020. We ended the year with a strong cash balance of $108.1 million in cash and cash equivalents, and with a large networking capital release typically observed during the first quarter due to seasonality in our revenues. And as John mentioned earlier, even as we have accelerated our investment, O-Link remains sufficiently capitalized to achieve our return to profitability and to fund our existing strategic plan. And we believe we have a unique ability to drive strong and improved return on investment over time for O-Link with these investments. In addition to our product-focused efforts, To capitalize on the many opportunities over the next couple of years, we need to invest in the right people. We entered 2021 with 214 employees, and we are entering 2022 with 416 employees, including 150 full-time employees in our commercial team. We grew our head company nearly 100% in 2021 to continue building a strong foundation for 2022, but more importantly for 2023 and beyond. Our commercial team entering 2022 is the largest amongst our peers, and today we have over 750 customers, well diversified among biopharma and academia. Moving to our outlook for 2022, as John discussed, we expect another strong year with total revenue to be in the range of 138 to 145 million, representing growth of 45 to 53% over the full year of 2021. In addition, we expect seasonality of our business will progress similar to the seasonality in 2021 and COVID friction to approximate what we experienced in Q4 and 2022 thus far. So as we consider 2022 and the years to follow, we remain very optimistic and consider ourselves very well positioned for strong growth. I'll now turn the call over to John for his concluding remarks.
spk05: Thank you, Oscar. So in summary, 2021 was another year of strong execution and strong growth, confirming our leadership position in the next-gen proteomics field. We saw and continue to see increasing traction and robust adoption across our entire portfolio of products and services, selling into a broad and diversified growing customer base. And new products like Signature and Explore 3K are being well received. It's with strong optimism that we embark on the remainder of 2022 and look forward to the months, quarters, and years ahead. And at this point, we'll open up the call for questions. Operator?
spk01: Thank you. As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from Matt Sykes with Goldman Sachs. Your line is open.
spk07: Hi, good morning. Thanks for taking my questions and congrats on the quarter. Maybe if we just start with the guide. We'd love to kind of hear how kind of your embedded expectations for the mix of kits versus service as we kind of go through the course of the year. And then within kits, what Explore could represent and how that's factored into your guidance.
spk06: Yeah, thanks Matt. So great question. So when we look at sort of the kit mix and service mix over the year, I mean, we continue to expect sort of good progression and driving our external assessment strategy and driving up the kit mix over the year. But as John mentioned, you know, we have the UK Biobank project delivered out during the first half of the year. So we expected the kit mix to sort of improve over the quarters of the year. And clearly, that will be, you know, driven by the Explore Kit offering. But I think it's also important to bear in mind that we delivered 28 signature boxes ahead of our internal plan very late in Q4. So we do expect sort of that to impact 2022 positively and also, you know, reflected in our guidance.
spk07: Great. And then maybe just on UK Biobank, I know, Oscar, you said that 21 was kind of around 10%, and I know it's front half loaded for this year. Could you just give us an idea of what the contribution from UK Biobank was in the fourth quarter and then what it would be for either the first half or the full year 22. Yeah.
spk05: So Oscar, you need to help me. What portion of the UK Biobank was in the fourth quarter from last year?
spk06: So probably roughly half of what we had for 2021 was in the fourth quarter.
spk05: Okay. So what we said was roughly 10% right of the business in 2021 and roughly half of that in the fourth quarter, Matt. And looking ahead on 2022, it is significantly less portion of the business. And as you know, we cannot disclose the financial details of the deal. But it's more part of the overall business in 2022.
spk07: Great. And just one last one from me. I know it's a small line, the other segment, but just given the strength that you saw in the signature placements in the fourth quarter, Even with that, assuming a certain ASP, it seems like there was some additional revenue that came in for other. Just remind us kind of what else outside of signature is within the other, and was there anything that showed some stronger trends than you had expected?
spk06: No, I mean, clearly sort of the real growth by a driver is sort of the placement of signature boxes. But then we also saw, you know, good performance of like Resera. So, you know, that they are not only an internal sort of provider of antibodies, so they have external revenues of plant-based antibodies that they sell. And in that line, we also see sort of some sort of sample prep cell sort of service related to our labs, and then also ships and flow cells.
spk07: Great. Thanks very much.
spk06: Thank you.
spk01: Our next question from Puneet Suda with SVB Levering. Your line is open.
spk08: Yeah, hi, John, Oscar. Thanks for taking my question. So first one, really on the guide, I mean, it's 138, 145, fairly wide range. Maybe just can you walk us through sort of puts and takes to that? I suppose some of the supply chain concerns that you had, the plastics that you talked about, if any of that is in there. It seems like UK Biobank is, you know, a large portion of that is already through. So Maybe just talk to us sort of how do you, what are some of the puts and takes that get you to the lower end of the guidance range versus, you know, sort of the higher end of the guidance range? And then I have a few follow-ups.
spk05: Sure. Yeah, sure, Puneet. Thank you. I don't think the range is That broad, to be honest, we're growing very rapidly, right? So it's just a $7 million range. So how we're thinking about it is mainly around timing, really. I mean, we're not planning for the bottom end of the range, so sort of a conservative estimate or risk-adjusted. And on the higher end of the range, maybe a few things we didn't plan for will happen. So to me, we're growing very rapidly. It's really just a few projects that have come one part of the year or not. So to me, it's actually a quite tight range considering how rapidly we grow. And I would say that timing of things is the most thing that is difficult to be precise and predict on.
spk08: Okay, got it. Excellent. And then, you know, a question on pull through. Oscar mentioned $500,000 to $750,000. I mean, given the timing of the Explorer launch, that is pretty impressive. And especially considering the $3,000 launch that you had. Maybe just talk to us, how do you see that number trending through the year and maybe, you know, longer term? Because you talked about, you know, a couple of your customers are in millions. So maybe just walk us through what are some of the things that you see that need to happen in order for those customers to go into those higher ranges? And maybe just walk us through that.
spk05: Yeah, yeah. Thanks, Bonita. We agree. I mean, we're impressed as well, you know, on the investments that people are doing on the Olin platform. Obviously, we contribute that to the value it provides to their research. We try to be as clear as possible with you all here, representing the ranges that we've seen across quarters. As you know as well as us, that the product hasn't been on the market for that long is really three quarters, really, right? So it's, and what we try to say all the time, that we probably need more time to dial in and be more precise. So, and how we see that customers are thinking about this, that, as I said in my part of the script, that we have all reasons to believe that proteins will be likely, or proteomics be the most important omnicare. You know, providing a lot of very insightful data to drive research and development. So what we see then is that proteomics, and especially, as I also commented on my script, as being at scale and quality. Now I think personally that this is the first time in history where we can look at 3,000 proteins with single-plex quality in blood. Hence, we're seeing this trend shift that customers are starting using proteomics as a strategy in their R&D. Hence, that is represented by those multi-million dollar orders. But there are also people that are starting dipping their toes, as you saw in the lower end of the range. So it's really hard, Puneet, honestly, to be super precise on this, and I honestly think that we need to follow more quarters ahead and maybe to be more precise. But yeah, it's obviously encouraging all of it, right? So all good stuff.
spk08: No, I appreciate it. It's impressive given the early days of this product. And this last one, if I could ask about You know, obviously, Illumina invested into one of your peers in HyPlex Proteomics on one end that obviously validates this space, but just wanted to get your view as to how do you see, you know, even with the kits launching in 2024, how do you see the competition in the market right now? And just wanted to get your thoughts on that overall. Thank you.
spk05: Thanks, Vinicius. Yeah, no, we continue to have a very strong relationship with Illumina. And we don't believe that the SOMA will have an impact on our market opportunity we see ahead. And we continue to view the Illumina installed base as a very attractive market that we are definitely going after. So nothing has really changed in our perspective on that.
spk08: Got it. Thank you. Thanks, guys. Thanks.
spk01: Our next question comes from Savant with Morgan Stanley. Your line is open.
spk03: Hey, guys. Good morning. John, maybe to kick things off, just a point of clarification really in terms of FX. It sounds like it was a 3% tailwind in the third quarter, but a much larger 16% or so here in the fourth quarter. Can you just walk us through that dynamic? And, Oscar, maybe outline what exactly are you embedding in your 22 top-line guide for FX? Sure.
spk06: Yeah, so, yeah, as we saw, we saw sort of, you know, I mean, greater tailwinds during the fourth quarter for FX. And I think clearly sort of we saw, you know, a greater shift looking at sort of, you know, in particular between the USD to the SEC and also, you know, the USD to euros and to the sterling to some extent. And so that is really sort of what's driving the FX tailwinds. So then we'll see, you know, we're looking at sort of 2022 I think we've sort of been factoring some sort of more stable levels, but I think similar rates that we observed during the fourth quarter
spk03: Got it. So just to clarify that, Oscar, I mean, so off that 45% to 53% of reported revenue growth, what does the constant currency revenue growth look like for you embedded in the guide? Is it sort of, you know, a 10% FX tailwind that you're making in here for 22?
spk06: No, no, it's much more than that, Tesha. I see.
spk03: So it's a single-digit. Got it. Fair enough. And then on the OPEX, I know you mentioned sort of accelerating investments to support your growth here, but how are you thinking about sort of that $33 million in terms of using that as a baseline going forward? And was there an FX component in that line as well, given what we just spoke about? And then if you think about the cadence through the year in terms of your OPEX increases, anything you can share on that, please?
spk06: Yes, I think, I mean... As we mentioned, you know, we expect to invest sort of, you know, I mean, at similar pace during 2022. And I think sort of, you know, continuing to incurring sort of, you know, similar levels that we did in 2021. And I think sort of a relatively sort of gradual buildup during the year, if that's helpful.
spk03: Got it. Fair enough. And then on the seasonality piece, I believe you mentioned in your prepared remarks that you expect similar seasonality as in 21. But you did see a, you know, I think it was about a $9 million UK biobank benefit in the back half of 21. And I think, John, you mentioned a more modest benefit here in the first half of the year because of the expansion phase of the project. So I'm just trying to sort of like juxtapose those comments with, you know, the seasonality, right? Because you should expect perhaps a less back-end loaded this year, just given the shifts of that $9 million that won't happen in the back half of 2022. Yeah.
spk05: Yeah, no, we don't think so. If we rather look at the duration of the lifespan of the company, as we talked about in our past, right, that we've seen the seasonality, And now the business has scaled quite drastically, right? So even despite UK Biobank was a big project, it was still representing a very small percentage of our sales. So honestly, we expect 2022 to look pretty similar as 2021 in terms of seasonality. And despite also your comment, which you are correct on, that we delivered UK Biobank in the first half of this year, likely, and hence, you know, but still, it's a smaller part or a smaller portion of the business for sure. So, yeah, hopefully we're answering your question. And the bottom line is that we expect it to be that we've seen from the start of the company and similar to 2021.
spk03: Got it. And one final one for me, John, sort of following up on Puneet's question there on the Illumina news here with one of your competitors. As you've had sort of time to digest it and perhaps so have some of your customers, can you share any sort of early feedback from them? And what, if anything, can you do proactively to make sure that your growth trajectory here continues as they launch their co-branded product at some point in the future? Sure.
spk05: Yeah, sure. I mean, we continue to see, first of all, a very strong, positive relationship with Illumina. We are a very important part of growing their business. Their reps on the streets, I mean, their customers are looking to add protein to the mix today, and hence they are being quite active together with us. So we continue to see a very positive, fruitful relationship with Illumina. On my customer base, I honestly don't think it's changed at all. We've been compared to the Somalogic technology over and over since we started the company. We know we have superior performance, in particular on specificity, which is truly crucial to get data that you truly can trust. It's going to help projects a lot downstream instead of having to validate your data with secondary technologies, etc. So it's you know, very, very strong, clear USP we have, and that's, you know, tremendously important to research. And on the last part of your question, I think, you know, the scene is bleeding, right? Maybe something will come in a few years, but I think the research interest remains here now. We are obviously a frontrunner, and the NGS strategy we have is very much appreciated. The customers can get to all omics, basically, on the same underlying instrument they already have. So we don't change our outlook whatsoever on this. So we remain very positive.
spk03: Got it. Thank you so much, guys.
spk05: Thank you.
spk01: As a reminder, to ask a question at this time, please press star 1. Our next question comes from Sungji Nam with BTIG. Your line is open.
spk02: Hi. Thanks for taking the questions. Maybe one on 2022 outlook. As we look at the growth margins for the year, you know, could you maybe kind of go through the puts and takes, just trying to figure out net-net if you expect growth margins to continue to improve versus last year?
spk06: Yeah, that's a great question, Sunny. So if we sort of break down 2022 and look sort of first half versus second half. So first half clearly sort of delivering out the UK Biobank project, and we will continue to see somewhat depressed levels of gross margins, similar to what we saw during the fourth quarter, due to the UK Biobank project. And once that is delivered out, we expect margins to improve, and also benefiting from the continued shift towards the kit side of the business, if that's helpful.
spk02: Okay, gotcha. For the signature platform, obviously, you know, greater than, better than expected demand out of the gate there. And you mentioned that some of them are actually going to existing Explorer customers, which I think is very interesting. But just curious in general, for the customers that are adopting the signature system, whether they were using something else before for these multiplex proteomics?
spk05: applications or if they're kind of getting into it um for the first time just kind of curious what the customer mix looks like yeah thanks indeed great question really good one and yeah so uh it's actually a mix i think uh in many proteomics labs that we target they obviously have done proteomics in the past and where we're likely replacing and older technologies with the next gen one delivering across all key performance criteria. But interestingly enough, as I commented on in my script as well, is that we see many explore customers adding signature. And that could be more of a genomics-focused lab in the past, right, which now are excited to be able to add proteins to the mix and also realizing that you don't always want to count that broad net. But also sometimes when you're more targeted, certain pathways of interest, for example, look at more targeted panels which signature represents. So that speaks greatly, in my mind, to how we designed our portfolio products to meet the use cases and application areas from customers, as we talked about, you know, casting that coordinate, naming it down into pathways and so forth. So I think it's really a strong data point and testament that we thought about that in the right way, and customers are already responding to it. So a bit of a mix on your question, but, yeah.
spk02: Great, thank you. And then lastly from me, the Borringer-Ingelheim partnership, the Emperor study, obviously, you know, the largest of its kind. I think you have a couple or at least a few studies like that underway. Just trying to get a sense of, obviously, you know, they would probably need to look at the results from such a study, but curious how the partnership could evolve over time in terms of, you know, what are what do you think, what's the pivotal, I guess, kind of the point for O-Link in terms of taking this to the next level, right? Just from getting involved in kind of the biomarker study to maybe potential partnership for as companion diagnostic or whatnot. Just trying to get a sense of how this could evolve over time.
spk05: Yeah, great question again. I think it's fantastic to tee that one up because I'm really excited myself, right, with seeing now Major biopharma are adding proteomics to these studies. And as I said a couple of times already today, right, I think it's truly driven by scale and quality and throughput. That, you know, it has never been there in the past, and now it for sure is. And to me, as an old biotech biopharma guy, I love to see how they're using it. So how they can use proteomics for repositioning. For example, then looking at potential new indications for an already existing drug, which is a tremendous return on investment, obviously, from the biopharma company's perspective. They have a drug, and now they can use proteomics to identify new areas of application. So that's definitely part of what you just talked about, so super exciting. But we also see many of those quite sizable projects in bioforma in later stages. So looking at understanding mode of action, understanding safety in more detail, and efficacy. So I see this as a very strong trend, yes, early right, but that they're realizing that proteomics is here at scale and they can now use it to really support their strategy and business. So I am super happy to see this happening and happening quite fast as well. So super exciting. And obviously, you know, to your question as well, that this is not the one off in my mind, that it's rather the start and how they can take the initial data, you know, going into more targeted questions and then maybe using them as targets in development or on the market as well. So still early in links, right, but tremendously, you know, that it's going in this direction and quite fast as well. So very encouraging for all involved, I think. Thank you.
spk02: Great. Thank you so much.
spk05: Thank you.
spk02: Thank you.
spk01: Thank you. And I'm sure no further questions at this time. I'd like to turn the call back over to John Heimer for closing remarks.
spk05: Okay, so thank you, everyone, for joining us today and for your interest in O-Link. We look very much forward to keeping you updated on and hope to connect with many of you this week. So have a great day, everyone, and thanks very much for attending. Goodbye.
spk01: This concludes today's conference call. Thank you for participating. You may now disconnect.
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