Singular Genomics Systems, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Singular Genomics first quarter 2022 earnings conference call. At this time, all participants have been placed on a listen-only mode, and we'll open the floor up for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Philip Taylor. Sir, the floor is yours.

Thank you, Operator. Presenting today are Singular Genomics founder and chief executive officer, Drew Spaventa, and head of finance, Dalen Meter. Earlier today, Singular Genomics released financial results for the three months ended March 31st, 2022. A copy of the press release is available on the company's website. Before we begin, I would like to inform you that comments and responses to your questions during today's call reflect management's views as of today, May 10th, 2022 only, and will include forward-looking statements and opinion statements, including predictions, estimates, plans, expectations, and other information. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are more fully described in our press release issued earlier today in our filings with the Securities and Exchange Commission. Our SEC filings can be found on our website or on the SEC's website. Investors are cautioned not to place undue reliance on forward-looking statements. We disclaim any obligation to update or revise these forward-looking statements. Please note that this conference call will be available for audio replay on our website at singulargenomics.com on the events page of the news and events section on our investors page. With that, I will turn the call over to CEO, Drew Spaventa.

Hello, and thank you for joining Singular Genomics first quarter 2022 conference call. My prepared remarks today will touch on a few key areas, a brief reminder of our mission, commercial progress and opportunities, partnership activities, and our newly published sequencing data and applications note and progress on our product roadmap. Lastly, I'll provide a brief preview of what you can expect from Singular at AGBT. Here at Singular Genomics, our approach has always been to prioritize the needs of our customers and to advance sequencing to meet their needs. This philosophy remains at the forefront of how we think about our technology, our products, our business, and how we pursue our mission to accelerate genomics for the advancement of science and medicine. The incredibly talented team of scientists, engineers, operators, and commercial staff at Singular are more focused than ever to execute on this mission as we are about to commence our first customer shipment later this quarter. The G4 is the most powerful, fastest, and most flexible benchtop sequencer available today. It can produce more data output per hour than any other competitive system by a significant margin. The G4 offers unmatched speed, also leading peers by a significant margin. The speed of our novel rapid SPS chemistry developed in-house is a fundamental differentiator of our technology today and our technology roadmap going forward. The G4's flexibility is unmatched. Each of the four flow cells offers four individually addressable lanes. No other offering comes close to providing this level of flexibility and modularity, which allows customers to scale up or down to optimize their sequencing run capacity as they need. In addition to these fundamentally differentiated performance metrics, it is imperative to deliver gold standard accuracy and data quality. Now with seven external pre-production units placed in third-party labs over the past year, the G4 has consistently demonstrated industry gold standard accuracy levels of up to 99.9% or Q30 for 75 to 90% of base reads. Core to our mission is to provide this industry-leading performance at attractive pricing. We provide direct cost savings across the pricing spectrum in terms of cost per gigabase cost per read, or cost per experiment, depending on the setting and customer profile. To sum it up, compared to other competitive systems, the G4 can achieve a data output rate that is two to four times higher, over two times faster run times, unmatched four flow cell and 16 lane flexibility, gold standard accuracy, and highly competitive pricing. For customers, this combination will enable new, more desirable workflow patterns, through daily runs, flexible run sizes, and simultaneous run type variation. It can also replace several alternative or redundant sequencers and enable applications limited by pooling or batching. This is a value proposition we are proud of and excited to bring to market. Turning to our commercial progress, we continue to build our sales funnel and have added to our system order book since the last earnings call held in March. Shipments of the G4 system and F2 flow cells remain on track for this quarter. Interest and interactions with prospective customers is accelerating. Our robust engagement with potential users across end markets reinforces the exciting opportunity in front of us. We are actively scaling our commercial team, adding experienced sales reps and customer support personnel in key regions around the US in anticipation of serving our customer and future install base. Offering a premium user experience is a critical component to our growth strategy. We are continuing to push forward with our plans to scale the team through 2022. We are also offering customers the ability to engage with our technology through our in-house customer care lab. This offering to prospective new customers is a courtesy service to help validate customer applications on a G4 via sample optimization and testing in advance of purchasing. We intend to increase the capability of this lab and offering over time in line with customer feedback and demand. I would now like to share more information on how we are qualifying the commercial opportunity in the field and describe how differentiated G4 attributes allow us to segment major customer groups and key applications to best serve their unique needs. As we think about our target customers, three profiles stand out, academic core labs, clinical and research commercial labs, and emerging growth labs. I'll go into detail on how the G4 positions well within these three profiles. Number one, academic labs. These labs are often serving multiple PIs and run a wide range of applications with different requirements, including RNA-seq, single-cell, targeted panels, exomes, and whole genomes. They often don't have a steady flow of experiments and are more highly price sensitive given grant funding constraints. The flexibility of one, two, three, or four flow cells, each with individually addressable lanes, coupled with a 19-hour or less runtime is ideal for their needs. The four flow cell flexibility scales up or down to accommodate changing volumes and allows them to optimize sequencing runs based on the needs of their applications and experiments. The significantly faster turnaround time alleviates the requirement to wait and batch like size samples or runs. And we can offer favorable pricing across all G4 consumable kits down to single digit dollars per gigabase for many of these users. Number two, clinical and research commercial labs. These labs consist of small and large commercial organizations utilizing both clinical and research sequencing applications such as targeted panels, RNA-seq exomes, and rapid whole genomes. Clinical applications in this setting are often in the form of validated lab-developed tests or LDTs in a CLIA lab. The G4 fits well into these routine sequencing environments where turnaround time is constrained. The flexibility of the platform alleviates the need, once again, to weight and batch like-sized samples or runs. The power, in terms of gigabase throughput, combined with attractive pricing, provides a more scalable solution relative to other benchtop offerings in this segment. For a number of clinical and commercial labs, the G4 serves as the first alternative option for those currently using high-throughput sequencers. Number three, emerging growth labs. As we have noted on prior calls, the amount of capital that has flowed into healthcare over the last two years is more than the previous 10 years combined. A significant portion of that capital is making its way into new company creation and businesses that are built on NGS. These companies are running both research and clinical LVT-based applications. They are looking for a sequencing provider that can scale up with their needs over time in a cost-effective way. They don't want to spend $1 million on a piece of capital equipment. The G4 can scale up with their sequencing needs over time, providing scalable throughput options comparable to instruments ranging from MySeq through NextSeq all the way up to NovaSeq, SP, or S1, ultimately providing high throughput level volumes and pricing on a benchtop sequencer. We realize there are considerations beyond the power, speed, and flexibility that factor into customers' purchasing decisions. For some labs, largely academic core labs, costs are among the most important consideration given funding limitations. Our pricing strategies provide attractive economics for all users across the pricing spectrum, cost per gigabase, cost per read, and cost per experiment. We believe it's important to look at pricing beyond simply cost per gigabase. Oftentimes, pricing comparisons are quoted solely in the context of the highest number of cycles on a 100% fully utilized flow cell. This is often not what happens in customer labs. Full flow cell utilization is not always practical based on customer sequencing and application needs, required turnaround times, and sample flow. As a result, customers end up paying more for their run. Alternatively, they wait days, if not weeks, to batch samples and run only after a flow cell is more fully utilized. This is not practical for many customers. The G4 scales down cost efficiently due to the four flow cell modularity. This alleviates inefficiencies from both ends, reducing the need to wait to pool samples and reducing the need for low-flow cell utilization. Because of this, all customer types, low-, mid-, and high-volume users can realize cost savings with the G4 through operational efficiencies. In summation, we believe the G4 is a superior sequencing platform in terms of core KPIs with favorable pricing and strong value propositions in some of the largest and fastest-growing markets. Now, I'll turn to our recent highlights and partnership activities. Integrating with customers' existing workflows as a plug-and-play solution has been a priority. We have already made significant progress with nine partners previously announced, including some of the most widely used library prep providers. We continue to expand our partner network to work with innovative and collaborative companies to accelerate our mission. As such, we are excited to announce that we have entered into two new partnerships with library prep solution providers, Bio-Rad Laboratories and Quantibio. With Bio-Rad, we are validating its Sequoia library prep kits for RNAC. With Quantibio, we are validating its Spark kits, a product line for both DNA and RNA sample prep. In addition, we are proud to announce our partnership with market-leading bioinformatics solutions provider, NVIDIA. With NVIDIA, we are validating the G4's workflows with their Parabricks secondary analysis platform with the goal of providing accelerated secondary analysis and data handling. Next, I'll provide a few updates on our recently disclosed G4 sequencing data and application notes. If you recall from our last quarterly earnings call, we highlighted a technical report where the G4 demonstrated state-of-the-art accuracy in whole human genome sequencing. We are pleased to expand the portfolio of available data and share some of the highlights from our most recently published application note to further demonstrate the performance and versatility of the G4 in one of the most widely run applications, RNA-Seq. The study covered RNA samples on the G4 compared to Illumina NextSeq 2000. Samples were individually loaded onto different flow cells on the G4 to highlight the sequence's reproducibility, both within the system and compared to the NextSeq. The G4 processed these RNA libraries using 2 by 100 base pair sequencing. Each sample produced 25 million reads for RNA-seq analysis for both the G4 and the NextSeq 2000. The overall comparison was nearly identical across all secondary RNA-seq analysis metrics, substantiating that the G4 meets customers' needs on quality and accuracy, coupled with the potential to produce results at a much faster rate given the shorter sequencing runtimes. In addition to our progress on standard sequencing applications, we continue to make headway on our specialized applications kits, HD-Seq for variant detection and extended rate sequencing or XR-Seq. We continue to advance our development of HD-Seq and are now demonstrated greater than Q50 accuracy impaired read 150 base formats with greater than 100 million reads per flow cell. We recently published a technical paper on XRC novel library prep method to enable longer molecule reconstructed from standard paired read 150 base cycle data. The study demonstrated how this technique can be used to reconstruct one to three kilobase long fragments from short read technology. We believe it has the potential to fill unmet needs in areas such as immunology for therapeutic antibody and T cell discovery, protein engineering, and vaccines for infectious disease. We expect the XR-Seq method to aid in the characterization of complex DNA libraries with high accuracy and throughput, ultimately expanding the utility of the G4. Transitioning now to the PX system, we are assembling our first beta instruments now. Later this year, we are planning to open a technology access program, or TAP, for early PX collaborators. The TAP will offer early customers and thought leaders the ability to collaborate with us to develop assays and applications in advance of the commercial launch in late 2023. Turning to AGBT, we are looking forward to meeting in person at the conference in June. We anticipate having a G4 system onsite for demos, hosting KOL discussions and networking events, showcasing new technical developments and application notes, and providing additional data and highlights from our specialized application kits. In addition, at AGBT, we are excited to provide a sneak preview of one of the disruptive innovations that our development team has been working on, the max reflow cell. We believe the max-read flow cell will redefine how customers think about cost and flexibility for short-read applications in the 30 to 100 base pair range, a configuration that is applicable to applications such as short-read counting for NIPT, proteomics, and single-cell RNA-seq. And one final note. As highlighted last quarter, we launched our scientific advisory board. We recently issued a press release noting the distinguished group of academic and industry experts on the SAB, David Barker, Lawrence Fong, David Ledbetter, Elaine Martis, and Daniel Shoemaker. We are thrilled to work with this exceptional group of industry thought leaders who advise in the company's product and service offering and R&D pipeline. With that, I will now turn the call over to Dalen to go over the details of our first quarter financial results and operational progress.