This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk00: Good day, and welcome to the O-Link Proteomedics Second Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. As a reminder, this call may be recorded. I would like to turn the call over to John Medina, Vice President, IR, and Capital Markets. You may begin.
spk04: Thanks, Michelle, 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, Carl Raymond, Chief Commercial Officer, and Oscar Helm, Chief Financial Officer. Earlier today, O-Link released financial results for the second quarter ended June 30th, 2022. 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 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 Olink's business, please refer to the risk factors section on Form 20F, Commission File Number 001-40277, filed with the U.S. Securities and Exchange Commission on March 17, 2022, 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 our remarks or responses to questions, management may mention some non-IFRS financial measures. Reconciliations of adjusted gross profit and EBITDA, constant currency revenue growth, and certain other non-IFRS financial measures to the most directly 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. August 11, 2022. Olin 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. Good morning, everyone, and thank you for joining Olin's second quarter 2022 earnings call. I'll begin with the quarter's highlights, discuss a few areas where O-Link is driving the science of proteomics. Then I'll wrap things up by discussing our outlook for the remainder of 2022. I will then turn the call over to Carl for more details on our performance during the quarter. It was a very strong 2Q for O-Link, benefiting from our industry-leading execution and building on our very positive start to the year. We remain very confident that we head into the back half of 2022 and are well positioned with customers and prospects within biopharma and academia. The impact of the pandemic environment was largely as we expected, settling into a manageable workflow that remains conducive to strong growth for Olins. Furthermore, as we consider the broad dynamic industry environment and macro crosscurrent, only execution remains strong and our customer base appears healthy with high interest in proteomics and project funding remains solid. We delivered quarterly revenue of 27.5 million US dollars, 56% growth over the second quarter of 2021. Growth from kits and services was both strong and we remain confident in the continued shift of revenue towards kits with our 22 2022 outlook supported by the performance during the first half. In HyFlex, we've been very encouraged by the clear signals of robust customer demand, and we believe that the opportunity with Explore continues to show that it's more sizable than we originally anticipated. All in all, in a very short period of time, driven proteomics to unprecedented scale, quality and throughput, allowing for the first time ever the scientific community to add proteins as a clear strategy to overcome the challenges we face in healthcare and drug development. Protein data is proving to be an immensely valuable addition to the genomic data sets that we have developed over the last couple of decades, driving invaluable insights on novel causal drug targets, clearly defining subgroups of patients more likely to respond to both new and existing drugs. This is defining modern healthcare and opening up new opportunities, both for the industry as well as healthcare providers and patients. Another layer of our confidence is that we continue to expand our reach within the low and mid-plex proteomics markets with Signature, which began deliveries to customers late last year. The ability of Oling's product platform to address multiple use cases within the same customer is increasingly clear, with multiple signature customers also being explored customers. Also toward expanding our customer reach. In June, at the HGVT general meeting, Oling's mission to democratize proteomics and enable explore broadly across the NGS landscape entered a new phase. We announced collaborations with three NGS pioneers, Ultima Genomics, Element Biosciences, and Singular Genomics. All these efforts in MGS are meant to provide customers with as many options as possible in picking the sequencing platform that is optimal for their needs. We expect our efforts with each of these companies to be additive to our existing and very productive relationship with Illumina. Further to addressing our customer needs, we expect to continue to build out our library of antibodies. commensurate with the ambitious goals in clinical and diagnostic research and remain on track to expand to 4,500 protein biomarker targets by year end and further beyond that. Forward advancing the science of proteomics, we're encouraged by the achievements of more than 940 carefully planned and executed research studies involving the use of our PEA technology published in high impact peer reviewed publications today. Publication count continues to accelerate from 2021, and the increase we saw in just the first half of 22 exceeds the increase we saw during all of 2020. Another milestone was the first study published that cited the use of O-link target 48 cytokines for research in COVID-19. As a reminder, target 48 has pushed proteomics in the mid-plex space to new levels using unparalleled multiplexing and providing the highest data quality with absolute quantification. This is critical for studies in clinical settings generating more protein data points from the same sample and for informing additional patient insights such as efficacy prediction, stratification, or safety assessment. All these efforts represent activities by thousands of researchers across the globe covering every major therapeutic category, from research and discovery to the downstream clinical settings. I'd like to focus on a couple recent high-impact publications that highlight the differentiated value of the Olin product platform. In June, the UK Biobank Pharma Proteomics Project published early results from its groundbreaking proteomics research to the BioRxiv preprint server. Underpinned by more than 54,000 participants, the data are an open-access, population-scale resource of unprecedented breadth and depth to help inform biological mechanisms underlying genetic discoveries. The study also highlights the strength of O-Link's EXPLORE assay for PKTL detection and downstream biological discovery. With a high proportion, 82% of the proteins tested have cis-associations, evidence of O-Link's highly specific assays that measure their intended proteins. Measuring thousands of proteins at population scale can accelerate the development of novel biomarkers and therapeutics. And we are extraordinarily grateful that O-Link's Explore platform can be part of this tremendous journey. We eagerly await the full data release to the scientific community, expected by the end of this year. It will be published using O-Link's unit of protein expression, NPX, or normalized protein expression, providing a unique opportunity to shape the language of next-generation proteomics. These data will also be available to researchers around the world for downloads, where we expect them to catalyze new thinking on proteogenomics, determining the role of new drug targets, and exploring causality. defining more homogeneous patient populations for clinical use, predicting the likelihood of disease progression, and identifying more relevant safety biomarkers. As a reminder, the data published this year are from Explore 1536, and in 2022, we began running the expansion phase on the Explore 3072 platform. In inflammatory bowel disease, a team led by Dr. Andre Lorenzo Hurtado, Vice President Translational Research and IBD Ventures at the Crohn's and Colitis Foundation, recently ran a study to find prognostic markers to determine if children with Crohn's disease develop serious complications like fibrosis or fistulas, and to find predictive markers that determine whether they are likely to respond to more aggressive anti-TNF therapy. Using machine learning, the team was able to identify a plasma protein signature that can predict at diagnosis the likelihood of a child with Crohn's disease to develop complications within five years. Beyond UK Biobank, Olink is part of additional consortia exploring the role of protein biomarkers. These include Scallop for disorders like coronary artery disease, rheumatoid arthritis, bipolar disease, heart failure, dementia, or metabolic syndrome. Also, CORAL for neurological conditions and COLIBRI for inflammatory bowel disease. We believe that these efforts will be important contributors to the field of proteomics and provide meaningful new data points for drug discovery and development efforts. Our considerable progress anchored in strong execution across our platform, including multiple product launches, our robust revenue growth, new collaborations in NGS, our partnership with Octave in MS, and advancing the science of proteomics would be impossible without the talent and dedication of the entire O-Link team. We remain steadfast in our goal to strengthen this already broad and deep talent pool and to further improve our lead in the proteomics team. We started the second quarter with 465 employees and reached 516 upon entering the third, including 186 full-time employees in the commercial team. Turning to our expectations, we are reiterating our 2022 revenue guidance range of 138 to 145 million. As we previously discussed, Given the procurement and budgeting cycles of many of our customers, the majority of O-Link's revenues occurred during the second half of the calendar year. We expect this trend to continue over the near term, with the heaviest weighting towards the fourth quarter. We expect our seasonality to become less pronounced over time as we continue to broaden our customer activity. We also expect continued progress this year toward our goal of increasing our sales mix towards kits. Overall, all links to business broadly across our product platform, high to low click, and customer base remain very strong as we enter the second half of 2022. Beyond this year, we remain optimistic about our strategic and financial outlooks, our path to return to profitability, and prospects for continued strong growth. I will now turn the call over to Carl to provide a few more details on the quarter. Carl?
spk07: Great. Thank you, John. It was a strong second quarter for Olink and I'd like to thank the entire commercial team for their incredible work during the first half of the year. Overall growth was driven by buying activity across our customer base. Each revenue segment performed quite well and within our plan, setting up a healthy trajectory for the second half of the year. Second quarter 2022 revenue grew 56% on a yearly basis to $27.5 million led by our services business, which was largely in line with our expectations given deliveries to the UK BPP. Revenue was comprised of $7.1 million in kits revenue, $17.9 million in analysis services revenue, and $2.5 million in other Q2 kit mix improved sequentially, reaching 26% of total revenue and growing 42% year over year, while analysis services revenue grew 51%. Other revenue tripled on a yearly basis, largely due to signature sales. Looking at Explore, total Explore revenue of 18.5 million was 67% of our total revenue in Q2. 2022 versus 53% in the year prior. And on a trailing 12-month basis, Explore represented 68% of total revenue. We expect Explore to continue performing strongly, benefiting from robust pull-through at existing sites and a significant expansion of externalization in the second half. On Explore externalizations, cumulative installations during the second quarter reached 29 for a total sample volume potential of roughly 640,000 samples per year. Total sample volume potential is a metric we've discussed in the past and is defined as the number of samples our entire installed base of Explore sites numbering 29 as of the end of Q2 could theoretically run over the course of a year. Explore pull-through at external sites has surpassed initial expectations from last year, and we believe this metric better represents the market that O-Link could serve with its cumulative Explore externalization, as well as the tremendous headroom for growth that remains. We also delivered 14 signature instruments to customers for a total of 51 by the end of Q2. We are really encouraged by the adoption of signature, our strength in the mid and low-plex segments, and uptake by new and existing customers. We believe our execution with Signature really speaks to our ability to identify and successfully address a new opportunity with a new product and to do so in a relatively short period of time. Looking broadly, from Olink's perspective, customer buying behavior remains strong across our major geographies and from high to low Plex. With continued appetite for proteomics projects from new and existing customers, Recent data featuring the O-Link platform are being well received by the community, driving more interest to our products and strengthening our competitive position. The drive for new insights to improve human health is stronger than ever. And we believe modern proteomics and O-Link NPX data specifically will be one of the key enabling technologies to unleash a new era of biological understanding. I'll now turn the call over to Oscar to provide additional financial details.
spk02: Thanks, Carl, and hello, everyone. Second quarter revenue continues to grow very well, up 56% on a yearly basis, even with FX headwinds. Driven by continued investment in alignment with our strategic plan, adjusted EBITDA was negative 7.9 million for the second quarter, as compared to negative 6.3 million for the second quarter of 2021. As Carl mentioned, at the end of Q2, we had 29 externally placed revenue-generating Explore installations. This installed base achieved about $700,000 in average customer pull-through during the 12 months ended June 30th, 2022. During our early experience with Explore, we've seen average annual pull-through range from $500,000 to $750,000, with individual spend ranging from less than $100,000 to multimillion-dollar orders. We continue to expect variability in quarter-to-quarter pull-through, which would be further impacted by our customer spending seasonality, but overall expect a continued strong growth. Kids revenue for the second quarter of 2022 grew 42% to 7.1 million as compared to 5 million for the second quarter of 2021. Target was a bigger contributor to kids revenue growth during Q2, and we are really excited about the strength of the midplex segment. Analysis services revenue in Q2 grew 51% to 17.9 million as compared to 11.8 million for Q2 of 2021. The mix of kits versus analysis services revenue improved sequentially and was in line with our expectations. Olin continues to expect progress throughout the remainder of 2022 and beyond in increasing the mix towards kits. With growth driven primarily by Signature Q100 instruments, other revenue was 2.5 million for the second quarter of 2022, as compared to 0.8 million for the second quarter of 2021. By geography, revenue during the second quarter of 2022 was 12.5 million in Americas, 12.6 million in EMEA, and 2.4 million in China and the rest of the world. Consolidated adjusted gross profit was 17.90 million or 65% of revenue in the second quarter of 2022 versus 12.5 million or 71% in the second quarter of 2021. Adjusted gross profit for kits was 91% in Q2 of 2022 as compared to 90% in Q2 of 2021. Q2 2022 adjusted gross profit margin for analysis services was 58% as compared to 64% in Q2 of 2021. The decline in analysis service margin was primarily driven by deliveries to the UK biobank and our continued build-out of lab capacity. We continue to expect service margins to revert to normalized levels we've observed historically in the second half of this year. As we consider total coax, we expect our strategy of increasing kits revenue as a percent of total revenue will have a positive impact on gross margin over the long term. And quarter to quarter variations should be expected given the systemality of our business and our ongoing product launches. Furthermore, the continued adoption of Explore 3072 should provide support for modern expansion over time, leveraging our internally built antibody library. Adjusted gross profit margin for other was 45% in Q2 of 2022 as compared to 44% for Q2 of 2021. Total operating expenses for the second quarter of 2022 were 31.7 million as compared to 23.3 million for the second quarter of 2021. The increase was largely due to continued and accelerated investment into Olin's commercial organization, research and development, and driven by costs of the public company as well. Operating expenses are broken out as follows. Selling expenses for Q2 of 2021 were 10.6 million versus 7 million for Q2 of 2021. Administrative expenses for Q2 2022 were 14 million versus 12.2 million for Q2 of 2021. And R&D totaled 7.3 million and 5 million for Q2 2022 and Q2 2021 respectively. Other operating income was $239,000 in the quarter as compared to 868,000 in Q2 of 2021. Net loss for the second quarter of 2022 was 4.8 million, as compared to a net loss of 10.6 million for the second quarter of 2021. Net loss per share for the second quarter of 2022 was 4 cents, based on an average number of outstanding shares of 119,101,120 shares, as compared to a net loss per share of 9 cents in the second quarter of 2021, based on an average number of outstanding shares of 119 million, 7,062 shares. We ended the quarter with a strong balance of 100 million in cash and cash equivalents with a strong cash position shows our ability to responsibly balance investment needs with efficient use of capital. And consequently, we believe O-Link remains sufficiently capitalized to achieve our return to profitability and to fund our existing strategic plan. Moving to our outlook for 2022. Oling's strong performance to date has continued according to plan, offsetting FX headwinds successfully. So we're retracing our yearly revenue guidance of 138 to 145 million and anticipated fourth quarter seasonality in 2022 to be slightly improved over Q4 of 2021 when considering the midpoint of the range. This guidance also anticipates the pandemic environment similar to what we've experienced to date, and the impact of the geopolitical environment remains non-material overall. As we consider 2023, we believe we remain very well positioned for return to profitability and continued strong growth as well. I'll now turn the call back to John for his concluding remarks.
spk05: Great. Thank you, Oskar, and thank you, Carl. It was a great first half of 2022 for OLE. Our leadership position in proteomics is seeing even greater recognition and the companies benefiting from robust adoption across our entire portfolio products and services, selling into a broad, diversified, and growing customer base across multiple proteomics use cases. At this point, we'll open up the call for questions. Operator?
spk00: As a reminder, to ask a question, please press star 1-1. Our first question comes from Matt Sykes with Goldman Sachs. Your line is open.
spk03: Hi. Good morning, John, Carl, and Oscar. Thanks for taking my questions. Maybe my first question, just given the back half of the year and you expect to see improvement there, just wondering if you can help us maybe with any additional color on Q3, just given the biobank revenues rolling off, maybe some view as to what implied growth or kind of some of the metrics for Q3 might look like so we can help with modeling.
spk05: Yeah, good morning and thanks, Matt. Yeah, no, super excited, of course, coming out of the first half very strongly, as you probably see and realize from the narrative here that proteomics is increasingly getting higher and higher on the strategic agenda on the global research community. And in particular, holding proteomics and PEA is becoming a very important tool for all of this research and adding to the genomics data sets that we have generated over the past few decades. On top of that, as you also realize that or recognize with how we designed our product portfolio, covering all the various use cases from high to mid to low plex with explored targets and of course the signature platform. So with all that said, Olink is sort of in a sweet spot on where the research community is focusing their attention at this point in time. So as we look into the second half and with our externalization strategy, which is being very well received, we see a very healthy pipeline looking into Q3 and beyond that. So yeah, in my years as CEO, since we started company, I actually haven't seen us being in a better situation. So we are super excited leaving the first half of the year, moving into the second half and look very healthy. to everything what we've communicated over the past few quarters.
spk03: Got it. Thank you. And then maybe a higher level question. You've shown it's probably stronger than expected growth, at least in our view, in terms of low and midplex, particularly midplex with Target. Could you just maybe help us out a little bit with customer behavior, customer activity, In mid and low plex relative to high plex, just given what our expectations were, I think mid and low has grown a lot faster than we expected. High plex is maybe not growing from an installation standpoint as fast as we expected. So maybe help us out in terms of what your customers are saying and the level of activity in each of those areas to kind of help us understand that dynamic.
spk05: Sure thing. No, thanks for taking that up, Matt. And yeah, so we work together now for roughly 18 months, I guess. And I guess you also sort of start to recognize the strength and value of the technology and also all links capacity to sort of understand customer workflow and how these processes development processes are executed. So the Hyplex is, you know, per our script, you heard that it represents 67% of the business, which is quite remarkable. It's only sort of 18 months we've had explore, you know, as a product on the market. But you, these, all these researchers, they scale their research. You start off sort of casting that broad net and sort of an unbiased or hypothesis, unhypothesis driven. And then everyone's hoping for a golden biomarker. We often see that you find rather a signature of proteins. And then you want to advance your research with those. Here, our technology is truly unique with its scalability. But we've been honestly sort of hampered on the mid to low flex market based on the readout. That's why we were so excited. We invested in the signature product or readout platform. And as we launched that last year, now you're starting to see that it's not only in the high flex that the research market is becoming to appreciate and value the uniqueness of PEA in unparalleled multiplexing with unparalleled high quality where you can trust every data point. This is now similar into the mid flex segment as well with a very competitive cost effective signature readout. A bit of a long-winded answer, perhaps, but I wanted to give you the full sort of scope. And it's very early days for signature. You're seeing good progress there. And this is just our starting point. So we are super excited. As we mentioned, progress there. And this is just our starting point. So we are super excited, as we mentioned, across high, mid, and low play.
spk03: Got it. And maybe one last follow-up, if I can. I'll get back in the queue. Oscar, I know you said in the past that the target and focus relative to Xplore, the margins are relatively similar. I just want to make sure that if we continue to see strong growth in mid and low Plex, that the margin up list that we could see from that mix shift going more into kits is still intact. Those are sort of the mid and low Plex are some of the drivers of the kit growth.
spk02: Yeah, that's a really good question. Jone Peter Reistadler, That that's sort of correctly sort of summarize that if we look at for sort of at a high level across explore and target kids. Jone Peter Reistadler, The margin profile is it's very similar so sort of either either product going sort of you know, up and down in sort of relative contribution is not going to sort of material impact across margins.
spk08: Thank you.
spk00: Our next question comes from Tejas Savant with Morgan Stanley. Your line is open.
spk01: Hey, guys. Good morning, and thanks for the time here. John and Oscar, maybe to kick things off on the analysis services piece, pick it up on an earlier question here. Outside of UK Biobank, it sounds like growth was essentially flourished quarter over quarter. And so what I'm wondering is, as you think about the overall business, you've talked about kits being an increasingly important part of the mix on a go-forward basis. So is that makeshift something you're envisioning sort of really kicks into high gear here in the second half? And is there a risk here that service revenue might sort of stale off a little bit? And then I have a couple of follow-ups as well.
spk05: Sure. Good morning, Tekar, and thanks for the question. Well, as I sort of alluded to, proteomics is getting higher and higher on the strategic agenda. Proteomics is for the first time ever at scale and quality driven by OLK. And we are getting a lot of new customers as well. Our analysis service is a great sort of first step and opening the door to new customers. That's also why we see a lot of new activity, new customers, and it's a great onboarding. It's the first step for them to get acquainted to Proteomics, to our technology, to the MTX data, et cetera. And I could actually kick this question also over to Carl. And he maybe can elaborate a bit on what we see a very healthy pipeline in terms of the kit business in the second half of the year. And I actually believe that we already in Q3 have more externalizations than we did in the second quarter. So I don't know, Carl, if you want to elaborate.
spk07: Yeah, sure. Thanks, John. Yeah, for sure. I think we're seeing actually sort of broad success across the portfolio from, you know, as you mentioned earlier, from Explore all the way down to the mid and low plex. And I alluded to this in my comments. We have a strong pipeline for Explore externalization in the second half. So I think reiterating, you know, guidance we provided earlier, we can continue to shift the mix more toward kits, certainly in the second half of the year. And as you saw, they were having good success with the signature instrument, so in the mid and low-plex space as well. As Matt was asking about as well, you can see we're doing quite well on the kit revenue there. where we feel like we're executing our strategy exceptionally well at this point to sort of push the technology out into the world. And as John said, to continue to support our customers who rely on the service part of our business as well. So we'll continue to meet that demand, but the mix will continue to shift as projected.
spk01: Got it. That's helpful, Kalakal. And actually, that's a great segue into my follow-up here. So Kalakal, Are you sensing any sort of delays or longer decision timelines as far as these kit externalizations go? Two units was a little bit below where we were. And then, Carl, is it still entirely NovaSeqs, or are you seeing NextSeqs get activated as well? I'm curious as to any commentary on any early traction with customers using non-alumina instruments at this stage.
spk07: Yeah, sure. Yeah, the externalization has been going well. It's nonlinear is a good way to describe it. So it's sort of in line with our expectations. And that metric I mentioned around total market capacity we think is an awfully good way to look at it. That 640,000 sample capacity that I mentioned would sort of exceed the capacity needed to sort of meet our our targets for now. So we feel good about that. And as I mentioned, again, we have a very strong pipeline in the second half for externalization. So we expect that trend to continue in a very positive way. As John mentioned in the second half, we're already sort of exceeding that early here. As far as NovaSeq, NextSeq mix, yeah, we're continuing to see NovaSeq being the dominant platform. although we do have some NextSeq customers as well. So there's a mix there, but it is definitely predominantly NovaSeq. And then for the non-Illumina sequencers, as John mentioned, we're still collaborating, and it's still to be determined in terms of what future volumes and throughput, et cetera, will come from. these next-gen sequencing platforms. So that is to be determined, but again, we're quite optimistic about that potential and, again, sort of reaching our customers no matter which platform they choose to use.
spk01: Got it. That's very helpful, Kyle. And one final follow-up for Oscar here. It looks like you burned about $20 million in cash in the second quarter here. And obviously cash burn is on everyone's radars given the market environment. Can you just walk us through any internal plans here for extending out your cash runway a little bit and how you're thinking about sort of investments at this stage?
spk02: Yeah, great question, Teshas. Thank you. So I think sort of first of all, as we've alluded now for a couple of quarters, I mean, sort of we are really sort of reverting back to profitability and we see sort of 2023 as being a key year And it was not that long ago that we ran a high-margin cash-generative business. So I think in terms of cash runway, we're comfortable that the cash we have at hand today will take us through this plan as we return to profitability next year and cash flow break even after that. Clearly, we are prioritizing investments, but I think we've always been responsible in how we spend our cash, where we invest, But I think as we've also heard sort of today from both Carl and from John, that the sort of the opportunity here in front of us is big.
spk01: Got it. Appreciate the time, guys. Thank you.
spk08: Thank you. Thank you.
spk00: Our next question comes from Puneet Suda with SVB Securities. Your line is open.
spk06: Yeah, hi, guys. John, Oscar, Carl, thanks for taking the question. So first one, just want to clarify the contribution in the quarter for UK Biobank and what's left to go at this point, just to be clear, what sort of contribution we should be expecting there in the third quarter. Obviously, a big project for you and an important one in terms of publication and significance-wise. So also wondering if that benefited you in sort of new customer additions or folks researchers who you know looked at the impact of those of this publication.
spk05: Thanks Puneet and good morning. Yeah I love to lead with the science right so I'll start by answering the question there and it's amazing the feedback that we're receiving on the proteogenomic approach and in particular by the value of O-Link and NPX and The root of that is basically that you, our customers here, that participants in this fantastic project in the UK Biobank, is now being able to either confirm hits from genomics or actually rule out targets. So it's crucial information providing, you know, immensely valuable and increasing interest in what we do. So fantastic. to go into more tactics. First of all, I can take this opportunity to congratulate our team at the Analysis Service who actually just past week delivered the last QC data from the running of the complete expansion part of the project. So we have now executed the full 3072 on all samples in the UK Biobank. An amazing milestone and achievement from the analysis service team at Olink. So huge congrats to them for that. And in terms of, as you know, we have not been sort of communicating the exact financials around this based on our agreement with the consortium. So, but you know that it's been quite aggressive pricing from our perspective. This is also a very important project and in raising awareness and importance and significance of both proteomics and O-Link. So, but it's great that this project is behind us, as Oscar alluded to, and you will see our service margins going back to more historical levels as we move forward.
spk06: Got it. That's helpful. And then on Explore, Oscar mentioned that the average pull through is around 700,000. And sort of how should we think about that trending as you add more Explore? I'm assuming there's going to be, you know, meaningful more additions into the second half. Obviously, you had only two in the last two quarters, I mean, back to back. So just wanted to understand how should we think about that line trending as new accounts come online and explore?
spk05: Sure. Carl, I don't know, maybe you're closest to that. Do you want to comment?
spk07: Yeah, sure, sure. Yeah, I think that last 12-month metric is a good one to look at just for the reason you mentioned. As I stated earlier, it's a bit nonlinear. So as we add, again, we have a strong pipeline in the second half. As we add more, you know, you're going to change the math there a little bit. So I'd keep an eye on that last 12-month metric, as I think that will be telling. But, yeah, the pull-through, as mentioned earlier, has exceeded expectations, and we're doing quite well at our sites in the adoption phase. has been robust. We've had sites expanding their capability, so increasing throughput during the quarter as well. So I think these are all, again, very sort of positive trends for the continued growth and success of the Explore business and the externalization of it.
spk06: Okay, that's helpful. And then just for maybe this is for John, On the antibody development side, I mean, you talked about the 4.5K launching at the year end. I mean, how should we think about the productivity on the new antibody development and internalization of that? And sort of maybe a question for Oscar to end there. Sort of as you continue to develop those, how should we think about the gross margin trend line as you bring more of those antibodies internally. So, just help me through that. Thanks so much.
spk05: Great, Puneet. Thank you. Yeah, and thanks for teaming that one up as well. I can take the opportunity to, I'm not sure if we have any colleagues on here from Olinko, the old Agrisera team that we acquired a couple of years back. Huge shout out to them as well. We have, as I communicated over the course as well, continue to approve the processes of success throughout the workflow from antigen immunization to harvest to purification and eventually PA development. So we are actually doing extremely well and a bit ahead of our internal curve and so forth. you know, in very good shape to hit the target, the milestones that we set out. So extremely good work by all the fantastic scientists within Olink in achieving that. And Oscar on the gross margin side, it's also good news.
spk02: Yeah, absolutely. So, I mean, as we expand our own library, you know, we will expect to sort of the explore kids margin to expand you know, up to a couple of, you know, percentage points, you know, when we sort of approach the sort of 4.5K product. Clearly, that will sort of, you know, take time and sort of, you know, the mix will develop within the explore segment, but it's definitely sort of, you know, a tailwind for the gross margin.
spk08: Got it, guys. Thank you.
spk00: Thanks, Monique. As a reminder, to ask a question, please press star 1-1. There are no further questions. I'd like to turn the call back over to John Hymer for any closing remarks.
spk05: Thank you very much, and thanks for joining us today and for your continued interest in O-Link. We look forward to keeping you updated on our progress and wish everyone a great day.
spk00: This concludes the program. You may now disconnect.
Disclaimer