Rapid Micro Biosystems, Inc.

Thank you for holding, and welcome everyone to the Rapid Micro Biosystems 3rd Quarter 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you'd like to withdraw your question, again press the star 1. Thank you. I'll now turn the call over to Mike Bollier, Investor Relations. Mr. Borley, go ahead.

Good morning, and thank you for joining the Rapid Microbio Systems third quarter 2023 earnings call. Joining me on the call are Rob Spignessi, President and Chief Executive Officer, and Sean Wurchis, Chief Financial Officer. Earlier today, we issued a press release announcing our third quarter 2023 financial results. A copy of the release is available on the company's website at rapidmicrobio.com under Investors in the News and Events section. Before we begin, I'd like to remind you that many statements made during this call may be considered forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the 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 including, but not limited to, statements relating to Rapid Micro's financial condition, anticipated year-end cash balance, cash runway, future revenue, and system placements, expectations for and planned activities related to the company's business development and growth, customer interest and adoption of the growth direct system, expectations for RMB nucleus mold alarm and rapid sterility, and the potential impact of macroeconomic uncertainty on Rapid Micro's business. 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 Rapid Micro's business, please refer to the risk factors section of our annual report on Form 10-K filed with the Securities Exchange Commission on March 10th, 2023 as amended as such risk factors are updated in our subsequent 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. This conference call contains time sensitive information. and is accurate only as of the live broadcast today, November 3rd, 2023. Rapid Micro disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. And with that, I'll turn the call over to Rob.

Thank you, Mike. Good morning, everyone, and thank you for joining us to review our third quarter 2023 results. I will begin this morning's call with an overview of our third quarter performance, followed by a review of the progress we have made in advancing our growth strategy. I will then turn the call over to Sean for a more detailed review of our financial results and outlook. Total revenue was $6.1 million, representing a 30% increase compared to Q3 last year and above our guidance for the third consecutive quarter. The strength was broad-based. with growth of approximately 30 percent in both product and service revenue for the second consecutive quarter. Based on our solid year-to-date results and supported by a strong balance sheet, we are reaffirming our guidance of at least $22 million in revenue, representing approximately 30 percent growth for the full year. During the third quarter, we placed five growth direct systems, including at least one in each of North America, Europe, and Asia. This included the placement of a system with a new top five global pharma customer. As a result, our customer base now includes two-thirds of the global top 20 pharmaceutical manufacturers. We also completed four validations in the quarter. With all three sales regions staffed, our funnel has expanded meaningfully since the start of the year and is well-balanced geographically. Biologics and cell and gene therapy customers remain our largest opportunities. as a growth direct is ideally suited for the high volume testing, full automation, robust data integrity, and fast turnaround time required in these segments. That being said, we also have meaningful opportunities in segments such as small molecule and sterile injectable manufacturing, where our global commercial presence is providing insight and access to new opportunities. As many of you are aware, there are several thousand clinical trials for biologics in approximately 1,000 clinical trials for cell and gene therapies ongoing today. With the Growth Direct, customers can achieve faster time to results, improve data integrity, enhance accuracy, and greater sample capacity than current methods. In these high-value segments, the value proposition of using the only fully automated rapid detection platform for microbial quality control clearly resonates with this customer base. In fact, the Growth Direct is currently being used in the manufacture of five of the six commercially approved CAR T therapies and expected to place a system with the one remaining therapy later this quarter. We also have a significant footprint within biologics manufacturing, which remains our largest segment for system placements. Notably, according to the FDA, there are close to 700 licensed biologic therapies currently on the market, which creates a large growth opportunity. Our significant progress and penetration into the commercial cell and gene and biologics market, combined with our presence within the majority of the global top 20 pharma companies, speaks to the value proposition of the Growth Direct. We are proud to be trusted partners on these critical, lifesaving therapies and believe that this level of success keeps us on a path to establishing the Growth Direct as the industry standard for pharma microbial QC testing globally. As we continue to focus on our commercial execution and specifically on accelerating system placements, one of our objectives is to increase opportunity generation and the velocity of our funnel through direct customer engagement. We recently opened a growth direct demonstration lab in our Lexington, Massachusetts facility and have already hosted several prospective customers. This new lab complements our state-of-the-art automated consumable manufacturing line and provides a platform to showcase our comprehensive set of manufacturing and operations capabilities to customers. During these tailored customer interactions, we include detailed discussions about professional services, which include validation and system integration support. This high-touch approach to selling instills confidence in our customers and reinforces our position as a trusted, long-term strategic partner of choice. Additionally, we continue to use our customer demonstration lab near Munich, Germany, to host high-value events for our European customers. In early October, we again participated as a platinum sponsor at the annual PDA Pharmaceutical Microbiology Conference. In addition to the conference, we hosted an invite-only event where prospective and existing customers are paired with members of our commercial and executive leadership team to enable deeper engagement with key users and decision-makers. Over the three-day conference and including our customer event, we generated numerous high-quality leads. And finally, in late November, Johnson & Johnson will host a multi-day Growth Direct event at their site in Scheffhausen, Switzerland. The purpose of this event is to facilitate collaboration and education by bringing together industry thought leaders, customers, and prospective customers to discuss current business goals and to share best practices. We anticipate that over 60 customer participants will attend, and the event will feature expert panel discussions on topics such as automation and regulatory approaches using the Growth Direct. In addition, participants will tour a local customer site that includes a fully validated Growth Direct system in a GMP environment. New product development is another important component of our growth strategy. Our goal is to innovate new products that solve customer challenges and create meaningful differentiation and competitive advantage, strengthen partnerships, and enhance the growth of REX value proposition. Additionally, we expect innovative products such as Mold Alarm and Rapid Sterility to become new sources of revenue growth and drive margin expansion. With respect to Rapid Sterility, we continue to increase focus on commercialization and expect to be able to provide a more significant update next quarter. In summary, We continue to make good progress against our growth strategy. Accelerating system placement remains our highest priority. Despite the ongoing challenges posed by the macroeconomic environment, we have achieved nearly 30% growth year-to-date through Q3, which demonstrates that the actions we have been taking to improve our commercial execution and enhance customer experience are gaining traction. Additionally, we are focused on leveraging internal cost initiatives, which combined with the scale we are beginning to achieve, will continue to drive gross margin improvement. And with that, I'll now turn the call over to Sean to discuss our third quarter performance. Sean?