Singular Genomics Systems, Inc.

Greetings. Welcome to the Singular Genomics Systems Incorporated first quarter 2023 earnings conference call. All participants are in a listen-only mode. 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, Philip Taylor. You may begin.

Thank you, operator. Presenting today are Singular Genomics founder and chief executive officer, Bruce Paventa, and chief financial officer, Daylan Meter. Earlier today, Singular Genomics released financial results for the three months ended March 31, 2023. 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 9, 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 the 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-Q and 10-K filings and the Form 8-K filed with today's press release. Our SEC filings can be found on our website or 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 investor.singulargenomics.com in the Presentations and Events section. With that, I will turn the call over to CEO Drew Spaventa.

Good afternoon. and welcome to Singular Genomics first quarter 2023 earnings call. It was another productive quarter, and we look forward to updating you on the progress made across the business. We will focus our update on the following four key areas. One, commercial execution. Two, market opportunity. Three, operational execution. And four, our innovation pipeline. Starting with commercial execution, I am pleased to report another positive quarter of commercial progress for the company, including new G4 shipments, an increase in the order book, and increasing system utilization in the field. I am proud of the team's work during a busy Q1. We shipped three G4 systems during the quarter. This included two academic labs and a commercial clinical lab. We are encouraged to see the G4 getting traction across different customer segments, which we believe is a testament to the value proposition of the speed power, flexibility, and accuracy. Our customer service and support team was actively engaged with system shipments, installations, and trainings during the quarter, contributing to sequential quarter-over-quarter revenue growth as we recognized revenue on three G4 instrument placements in addition to shipping one reagent rental during the quarter. Customer feedback continues to validate the G4's value proposition as it relates to use cases in the field. For example, the University of New Mexico noted that, quote, Overall, we are very pleased with the performance of the G4 and with the support we have received from Singular Genomics. Our core facility has many users doing different kinds of projects, and the G4 fits perfectly into that setting. We have successfully used the G4 for bulk RNA-seq, 10X genomic single-cell RNA-seq, and for epigenetics assays like ChIP-seq and cut-and-run assays, end quote. In addition, I recently had the opportunity to visit several customers and prospective customers in the Boston area. The feedback on the G4 was positive, and they were impressed with the fast runtimes, flexibility of four flow cells with individual lanes, and quality of the system, noting the consistency of data across flow cells in a run. Early customer utilization and the rampant consumable pull-through is still in its early stages, and we expect this to increase over time as customers gain experience with the system and move more of their work onto the G4. Consistent with the launch of any new and complex technology, we intend to continue implementing enhancements to the system, which are designed to further improve usability and robustness. We expect this to support increasing utilization and consumable pull-through for systems in the field over time. I want to sincerely thank our early customers for their continued partnership and support in our mission to accelerate genomics for the advancement of science and medicine. Turning to market opportunity. We remain confident about our TAM, or total addressable market, and the G4's product market fit. We continue to believe that over half of the roughly $6 billion NGS market today is broadly addressable by mid-throughput sequencers such as the G4. This portion of the market is predominantly made up of about two-thirds research and translational labs and one-third clinical labs running applications such as targeted panels, RNA-seq, and single-cell RNA-seq. The G4 addresses these customers' needs and provides a compelling alternative in a market that is today largely served by a single NGS provider. Our sales funnel is strong and growing with triple digit qualified sales opportunities. A qualified sales opportunity fulfills these four criteria. One, there is a specific need. Two, there is budget available. Three, we are engaged with the decision maker. And four, there is a near-term timeline to purchase. While the funnel spans a variety of market segments, we are seeing early traction with academic core labs. Core labs are often managing varying sample volumes and output requirements from a wide range of applications. The combined speed, power, and flexibility of the G4 can enable these labs to optimize sequencing runs scaling up or down based on the needs of their PI's experiments and delivering results in less than a day. Beyond academic core labs, the speed and flexibility of the systems make them ideal for clinical research and commercial labs. We recently showcased the G4's performance capabilities along with some innovative methods and applications at the American Association for Cancer Research Conference in Orlando. Here, we presented posters and data sets demonstrating the G4's ability to deliver data with more speed, power, and operational efficiency than any other sequencing technologies in the market for applications in cancer research, including rapid somatic and germline variant detection. While the clinical market segment represents a smaller part of the sales funnel today, we expect this to grow over time as we increase our install base, grow the number of customer reference sites, and establish the G4 in the market. Turning to operational execution. Our focus has been on optimizing the supply chain, streamlining the manufacturing process, and continuing to improve the usability and robustness of the G4. We continue to execute on a foundational set of capabilities and infrastructure to support our next phase of growth in the second half of the year and into 2024. In operations, we are taking steps to improve our G4 production capabilities. These steps include increasing redundancy and alternative suppliers for certain critical components and working with vendors to refine specifications and improve component testing. Internally, We are implementing additional QC testing for incoming parts, reducing the time required to build and bring up the G4 instrument, and enhancing field service and support. We recently received ISO 9001 certification for our dedicated manufacturing facility in San Diego, a milestone accomplishment that represents our commitment to continual improvement and product quality. Turning to our innovation and product pipelines. We are excited about the pipeline of innovations, including improvements in performance and specs on the G4, higher throughput consumable kits, and specialty application kits with novel content and workflows for specific applications. We have started shipping F3 flow cells to early access customers. The F3 flow cell will expand our consumable offerings on the G4, doubling the number of reads and throughputs for the most widely run applications. In addition, Earlier this year, we announced the launch of our Max Reads kits for single-cell sequencing. This kit is designed to allow users to get up to 800 million reads per flow cell or 3.2 billion reads per run. Max Reads provides a novel method to achieve Novaseq-level pricing for single-cell sequencing on a benchtop system. We look forward to offering this kit in early access format later this quarter with a full commercial release in Q3. With the F3 and M-series single-cell kit both widely available in the second half of 2023, we expect to see an uptick in G4 system demand as these highly differentiated kits provide significant value to a wide set of customers in our target markets. We also expect an uptick in reagent pull-through given the higher data outputs and corresponding kit prices of both the F3 and MaxRead kits. And finally, we continue to progress the PX system with a focused team working on the PX instrument and methods development. We are also engaged with several potential TAP or technology access partners. We are collaborating with these KOLs to demonstrate novel applications utilizing the PX's high throughput in situ sequencing technology to provide spatial information in single cells and in tissue. At this stage, we are busy in the lab working on this system and look forward to sharing additional updates as we continue to develop. Before turning the call over to Dalen, I would like to provide some directional commentary on the 2023 outlook. We continue to believe a moderated deployment of systems in early 2023 is appropriate to lay the right foundation for sustainable success and prepare for a scaling phase in the second half of the year. We are seeing a positive start to the year with respect to the commercial engine. Our sales funnel is strong and the number of qualified opportunities is growing. We are getting early traction in the academic segment, with six of our 8G4 systems in the field being placed at academic labs. We believe budget cycles in this customer segment will be more back-end loaded during the year, resulting in purchases in the second half of the year. In addition, customer interest in our F3 and MaxRead kits remains high for many of the opportunities in our funnel. We believe this will be a significant driver of adoption as they become more broadly available in the coming months. Al? I'll turn the call over to Dalen to go through the details of our first quarter financial results.