Singular Genomics Systems, Inc.

Greetings and welcome to the Singular Genomics Systems Incorporated fourth quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Mr. Philip Taylor. Sir, you may begin.

Thank you, operator. Presenting today are Singular Genomics founder and chief executive officer, Drew Svobenta, and chief financial officer, Dalen Meter. Earlier today, Singular Genomics released financial results for the three months ended December 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 reflects management's views as of today, March 2, 2023 only, and will include forward-looking statements and opinion statements, including predictions, estimates, plans, expectations, and other information related to our financial and operating results, plans, and strategies. Actual results may differ materially from those expressed or implied by these statements as a result of certain risks and uncertainties. These risks and uncertainties are more fully described in our press release issued earlier today and in our filings with the Securities and Exchange Commission, including our most recent Form 10-K or 10-Q and the Form 8-K filed with today's press release. 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.

Good afternoon and welcome to Singular Genomics fourth quarter 2022 earnings call. We are pleased to update you on a very important and productive quarter as well as a milestone year for our company. We will focus on three key areas. First, business highlights and key accomplishments from 2022. Second, new data and product announcements. And third, the 2023 pillars of success. Starting with business highlights from 2022, first and foremost, we delivered our first quarterly revenue as we brought the G4 to market and shipped five instruments to customers, a key company goal and a major milestone achievement. Initial customers spanned a variety of market segments, including academic core labs, a commercial lab, and a hospital research lab. Feedback from customers has been positive, and the value proposition is resonating. Three of our five initial shipments were to academic core labs, including Harvard's Beth Israel Deaconess Medical Center, the Medical College of Wisconsin, and the University of New Mexico. At Harvard, the flexibility and speed of the G4 has been a key in allowing them to utilize a single instrument to run single-cell and spatial experiments with varying sample volumes and output requirements. At the Medical College of Wisconsin, the team has been impressed with the high quality of the sequencing data and single-day turnaround times. At the University of New Mexico, the flexibility of the G4 is ideally suited to address their diversity of applications. It is exciting that our initial customers have been able to demonstrate the G4's industry-leading combination of power, speed, flexibility, and accuracy. To achieve this important commercial milestone in Q4, our team addressed the challenges experienced with scaling manufacturing supply chain we discussed mid last year. The team moved swiftly to qualify alternative suppliers, redesigned certain components that have long lead times, implemented supplemental QC testing to ensure complex sub-components from suppliers and meeting specifications and reliability metrics, and advanced our final assembly, integration, and testing of instruments. The end result ultimately reduced the time required to build and bring up a G4 system by 25%. In addition to achieving our G4 shipment goals, we had several other key accomplishments for the year to note. We continued to build out a North American sales team with nine key territories to continue driving demand and growing the funnel of leads and opportunities. We expanded our marketing presence at 14 industry trade conferences and talks, including ASHG, AGBT, AMP, and PMWC, increasing our brand awareness and communicating the value proposition of the G4. We signed partnerships with 12 library prep and analysis partners, bringing the total as of year end to 18. This is designed to remove barriers to adoption of the G4 and facilitate a seamless integration into existing library prep workflows and data analysis pipelines. In operations, we successfully completed an ISO 9001 audit of our dedicated manufacturing facility and commissioned state-of-the-art clean rooms and lab space for scaling production of enzymes, nucleotides, flow cells, and reagents. We've progressed R&D work on our G4 instrument and consumables roadmap to bring improved flow cell specs and new kits to market. Lastly, we've progressed to PX, our second system in our product development pipeline. This system is developing the capabilities and methods for high-throughput in-situ spatial and single-cell analysis. building several prototype systems during the year, and more recently, signing our first partner for the technology access program. All of these accomplishments play an important role in establishing a foundation for cross-functional success going forward. I want to thank the entire team at Singular for their amazing contributions made in 2022. Turning to new data and product announcements, it was all on display at the AGBT conference in early February. We hosted a successful customer and KOL event with over 60 lab directors and scientific leaders in attendance. The event provided an opportunity to develop relationships, solicit feedback on the value proposition of the G4, generate new leads, and drive opportunities forward. We presented 14 new datasets, 11 with industry-leading genomics partners, collectively showcasing high accuracy of the G4 system across many diverse applications, including single-cell sequencing, whole genome sequencing, and somatic whole exome sequencing. These data sets reinforce the G4's ability to fit into a robust and diverse set of workflows, putting the G4's speed, flexibility, accuracy, and power on display. We launched our MaxRead kits for single-cell sequencing with enthusiastic customer response. The MaxRead single-cell kit will allow users to get up to 800 million reads per flow cell or 3.2 billion reads per run at the low cost of $200 per sample for $1 per million reads. MaxReads provides a novel method to achieve Novaseq-level pricing for single-cell sequencing on a benchtop system. The flexibility of the G-Force for flow cells allows users to scale their run up or down based on sample volume at the same favorable economics. We intend to begin shipments in the second quarter. In addition, we were pleased to announce that Singular joined the 10X Genomics Compatible Partner Program, demonstrating the G-Force compatibility with the 10X Genomics Chromium single cell platform. The flexibility of the G4's four flow cells and four independent lanes matches precisely with the most widely used sample configurations on 10X's Genomics Chromium runs, providing an efficient way to optimize run sizes for single cell experiments. And lastly, we improved the specifications of the G4 F2 and F3 flow cells for both accuracy and read counts. Accuracy was raised to 80% to 90% greater than or equal to Q30. The throughput range of the F2 and F3 flow cells was increased up to 250 million and up to 450 million reads, respectively. All data sets and product specifications are posted on our website, and we encourage you to visit and see for yourself. The third topic I'd like to talk about today is how we are thinking about success this year, the 2023 four pillars of success. First, commercial execution. This means executing on and measuring the following key items, G4 system placements, reagent pull-through, and customer satisfaction. We have a good start with initial G4 placements in the field, customers starting to sequence, and we're receiving positive feedback and beginning to collect the data to set and deliver on each of these metrics. Second, G4 TAM quantification. This means establishing G4 product market fit in specific market segments, applications, and customer types with the goal of credibly framing the G4 TAM and measuring our progress in capturing market share. Third, operational excellence. This encompasses goals in the manufacturing side where we have objectives to improve supply chain, manufacturing efficiency, quality, and system performance and reliability. While challenges were overcome and progress was made on supply chain and manufacturing in 2022, this is a key area of continued focus with scale-up this year. Fourth, innovation and product pipeline. We have an exciting pipeline of innovations, including improvements in performance and specs on the G4 platform, new reagent kits offering higher throughput, higher accuracy, and longer read length. G4 specialty application kits with novel content and workflows for specific applications, and, of course, advancing the PX, the first high-throughput in-situ sequencing platform. We look forward to updating you through the year as these all progress. Before I turn it over to Dalen, we would like to provide some color on the 2023 outlook. We are incredibly encouraged by the magnitude of interest and engagement from AGBT, with a sales funnel well into the triple digits in terms of qualified leads. We are seeing strong interest, especially in academic labs, where longer budgeting and sales cycles typically result in instrument purchases in the second half of the year. Our funnel is strong and growing with real opportunities. Engagement with customers indicates the F3 and Mastery kits will be significant adoption drivers of the G4 as they become available in the coming months. We are currently applying learnings from early placements and taking the necessary time to improve on things such as system deployment, support and service, and instrument reliability to make sure we meet customers' expectations and lay the right foundation for sustainable success. This means a slow and moderated deployment early in 2023, ensuring a consistently positive customer experience during this early launch phase, and equally important, preparing for a scaling phase later this year. We will provide additional color and updates on 2023 in our Q1 earnings call. With that, I'll turn the call over to Dalen to go over the details of our fourth quarter financial results.