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.
spk02: Good day and thank you for standing by. Welcome to the sheer fourth quarter and full year 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star one on your touchtone telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star then zero. I would now like to hand the conference over to your host today, Carrie Mendeville, Investor Relations. Please go ahead.
spk03: Thank you. Earlier today, SEER released financial results for the quarter and year ending December 31st, 2021. If you have not received this news release, or if you'd like to be added to the company's distribution list, please send an email to investors at seer.bio. Joining me today from SEER is Omid Fereqzad, Chairman, Chief Executive Officer and Founder, and David Horn, Chief Financial Officer. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section entitled forward-looking statements in the press release to your issue today. For a more complete list and description, please see the risk factors section of the company's yearly report on form 10K for the year ending December 31st, 2021, and as other filings of the Securities and Exchange Commission. Except as required by law, SEER 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. This conference call contains time-sensitive information and is accurate only as of the live broadcast, February 28th, 2022. With that, I'd like to turn the call over to Omid.
spk04: Thanks, Kerry, and thanks, everyone, for joining us this afternoon. 2021 was a momentous year for SEER. We had a strong first year as a publicly traded company with the commercial launch of our product and tangible progress across all areas of our strategic plan. These significant efforts resulted in $6.6 million in revenue for the year and laid the foundation for broad release of the Protograph product suite. We shipped 17 instruments to our collaborators and customers by the end of 2021. We completed the first two phases of our commercialization strategy and onboarded Lighthouse customers across multiple market segments, which paved the way for future market adoption and exemplification of the unique capabilities of our technologies. We demonstrated the power of this technology together with our customers with more than 25 abstracts across a number of scientific conferences. We established partnerships with industry-leading mass spec providers, Thermo Fisher, Bruker, and Cyax, and presented results on our joint workflows. We made great strides in strengthening teams across our organizations, including commercial, operations, quality, data science, and R&D. We made significant progress building our operation infrastructure, including systems and lab space and executed contracts with key suppliers and partners to support our growing customer base globally, all while minimizing disruption to the business during the COVID pandemic. We also continued to build our board of directors, adding strong operating leaders representing a cross-section of industries, company sizes, and market segments. I couldn't be more pleased with the progress we made in 2021, and I'm more confident than ever as we're squarely focused on the customer experience and the broad release of the Protograph product suite. I had previously shared at the JPMorgan Healthcare Conference in early January that we officially entered into broad release and have built a strong pipeline of demand for the ProteoGraph product suite. I'm encouraged by the depth and breadth of discussions we're having with potential customers. We believe we are well positioned to become the definitive tools leader in proteomics. We envision a future in which entire ecosystems and markets will be created or expanded with customers using the ProteoGraph product suite to access unbiased, deep, rapid, and scalable proteomics across a myriad of applications. Heading into 2022, we are continuing to ramp our commercial efforts to meet this expected demand. Over the course of the year, we will be focused on five key objectives. First, growing our installed based-up instruments. Second, expanding our partnership efforts to continue to extend our global reach, making it easy to access our technology and allow us to serve a diverse customer base. Third, supporting customers with an industry-leading onboarding and user experience so they can get up and running quickly. Fourth, continuing to build out our commercial capabilities, geographic footprint, and team. And fifth, driving the product roadmap and exploring more applications for proprietary engineered nanoparticles in 2022 and beyond. We have a strong pipeline of prospective customers with a roughly equal mix of academic and commercial entities. We're seeing interest across a broad range of applications, including biomarker discovery and target identification for drug development. For diseases such as neurodegenerative diseases, oncology, cardiovascular, and other complex diseases, and for market areas such as reproductive health, aging, veterinary, direct-to-consumer, and population-scale initiatives. The Proteograph product suite is performing exceptionally well in customers' hands. We routinely receive positive feedback about the product's usage, installation, and support experience, and this I'm very proud of. We have built a foundation for customers to log in and self-serve online, and we're launching a customer portal to enable this capability in the first quarter. The ease of onboarding and the power of our technology to deliver insight is demonstrated by how quickly limited release customers are presenting their data. Even small proof-of-principle studies using the Protograph product suite have generated exciting results and presentations at conferences. Larger studies are beginning in aging, cancer, and complex diseases. Oregon Health Sciences University, one of our collaboration sites, is running their study of approximately 1,000 samples in the first quarter, and they're currently about halfway through processing their samples. We expect they will submit abstracts later this year. During this week's U.S. CUPA conference in New Orleans, we're presenting seven posters, some in collaboration with our customers. demonstrating the power of unbiased B-proteomics at scale. In addition, there is an aid posted that will be presented by Prognomic, sharing their analysis of N-link glycans in cancer patients using the Proteograph product suite. Their study of 212 subjects, inclusive of 96 healthy controls, yielded hundreds of glycopeptides. Importantly, this demonstrates the Proteograph product suite's ability to detect glycosylated proteins. Glycosylation is a common post-transitional modification and is involved in the normal functioning of the cell and in the development of diseases such as cancer. Previously, these glycoproteins could only be robustly identified utilizing specific enrichment strategies. In one of our own posters being presented at the US HUPO, we're demonstrating our new software package. the Proteograph Analysis Suite, which leverages our scalable cloud-based software for large-scale proteogenomic data analysis and visualization. Another poster being presented demonstrates the high proteome depth, ability to identify new protein variants, and the reproducibility of our technology in customers' hands. with a 1% false discovery rate for protein identification. This was shown in a study with a cohort of 200 individuals, including Alzheimer's disease patients and healthy controls. Across this cohort, we identified at least 5,500 protein variants, inclusive of 4,700 unique protein groups at a 1% false discovery rate. Looking at this data at peptide level resolution, we identified over 63,000 peptides, inclusive of more than 1,350 unique peptide allele variants. Importantly, more than 500 of these peptide variants have not been previously reported in the major public peptide repositories or in the ClinVar genomic variant database. This is a key benefit of our technology. Our solution is the only available at-scale technology to deliver peptide and amino acid level resolution, which is needed to match with nucleotide level genomic information in order to broadly enable proteogenomics. As studies scale to larger cohorts, we expect to find increasing catalogs of protein variants, including alleles, splice forms, and post-transitional modification to enable increasingly more powerful proteogenomic analysis. At scale, we believe this kind of novel biological insight will be key to unlocking the proteome and likely lead to applications and therapeutics not otherwise possible. Geographically, we're seeing a growing interest across North America, Europe, and Asia, and as a result of our expanding commercial footprint. to our ongoing efforts in North America and Europe, we're diligently working through COVID constraints to establish our presence in China with installation and training occurring this month at our distributor in Light Medical. We're in an excellent position to expand our installed base in 2022 and are eager to continue to get the Protegraph product suite into customers' hands and see their biological insight grow. Earlier this year at the JPMorgan Healthcare Conference, we announced the launch of our Center of Excellence program, a program that partners SEER with select premier multi-omic service providers to offer unbiased deep proteomic services to customers around the world. We have strategically selected each COE based on geography and expertise. In North America, we have Biodesic Discovery Life Sciences, and Sanford Burnham Prevost Medical Discovery Institute, with services and expertise targeted at pharma, genomics, and academic customer group, respectively. Outside of the U.S., we have partnered with Evotech in Europe and Soulbrain in South Korea. These partners are at varying stages of commercializing their services using the Protograph product suite, and the majority of them are ready to go and have already received inquiries since our announcement at J.P. Morgan. We also announced a key collaboration to expand access of deep unbiased proteomics for genomics customers to enable proteogenomics and multiomics studies at previously unimaginable scale. Together with Discovery Life Sciences and Leany Genomics Service Provider, and one of our COEs, and Cyax, one of our current commercial partners and a leading provider of mass spec platforms, we have created a first-of-its-kind proteogenomic consortium. This is a multiyear collaboration that incorporates a three-phase expansion where Discovery will set up, expand, and offer defund bias proteomic capabilities to their existing genomic customers. ramping toward an annual capacity of over 100,000 samples per year. This is, of course, done using the Portograph product suite and the SIAC Xenotops 7600 platform. We expect the consortium to become operational in the second half of 2022 and look forward to updating you on its progress. I'm extremely pleased with the execution of our commercial strategy over the past year. None of this would have been possible without the critical talent to drive progress across these important fronts. And we have more than doubled our organization in 2021. We have also continued to build a diverse and experienced board with new members, including Mika Guliani, a seasoned life science and pharma leader with global experience across markets, including Asia. And Rachel Horowitz, a highly accomplished and distinguished scientist and CEO in a high growth emerging area of gene editing. We're very proud of our progress in attracting top performing, passionate people to see a team, and we believe this is the fuel to drive our business as we head into 2022. We are engaged with top institutions and scientists across the world to enable unbiased deep proteomics at scale. We're seeing first-of-their-kind, unbiased, large-scale projects being planned and funded. We're seeing robust performance of the product in customers' hands with compelling data being presented just months after gaining access to the technology. And we're building a strong pipeline across markets and customer groups as we continue to scale our commercial organization to open up a new gateway to the proteome and unlock this exciting opportunity ahead. And with that, I will now turn the call over to David.
spk01: Thanks, Omid. Total revenue for the fourth quarter of 2021 was $3.1 million compared to $336,000 in the fourth quarter of 2020. This brought total revenue for the full year 2021 to $6.6 million compared to $656,000 in 2020. The increase in fourth quarter revenue was primarily due to sales of products related to the Proteograph product suite. Product-related revenue for the fourth quarter of 2021 was $3 million, including related party revenue of $1.2 million, and consisted of sales of SP-100 instruments, consumable kits, and platform evaluations. Related party revenue of $1.2 million represents product sales to Prognomic. Grant and other revenue from our SBIR grant from the NIH and research-related collaborations was $34,000 in the fourth quarter of 2021, representing a decrease in these activities from the fourth quarter of 2020. Total gross profit, inclusive of grant and other revenue, was $1.4 million for the fourth quarter of 2021, representing a gross margin of 47%. Total gross profit for the year was $3.4 million, representing a gross margin of 52%. Full-year gross margins benefited from strong consumable kit sales platform evaluations, service projects, and grant revenue. In 2022, we expect gross margins will be dampened due to an anticipated larger percentage of instrument sales, a significant reduction in service and grant revenue, and our continued investment in and scaling of our operations. As we have discussed previously, we continue to target long-term gross margins between 70 and 75%. Total operating expenses for the fourth quarter of 2021 were $21.3 million compared to $13.4 million in the fourth quarter of 2020. Total operating expenses for 2021 were $74.9 million inclusive of $25.9 million in stock-based compensation compared to $34.3 million inclusive of $7.3 million in stock-based compensation in 2020. Research and development expenses for the fourth quarter of 2021 were $8.2 million compared to $5.4 million in the fourth quarter of 2020. Research and development expenses for 2021 were $29.1 million compared to $18.9 million in 2020. The increase in R&D expenses was primarily driven by an increase in product development efforts related to the Protograph product suite, including increased headcount and other expenses related to employee compensation, including stock-based compensations. Selling general and administrative expenses for the fourth quarter of 2021 were $13.1 million compared to $8 million in the fourth quarter of 2020. SG&A expenses for 2021 were $45.8 million compared to $15.4 million in 2020. The increase in SG&A expenses was primarily driven by increased headcount and other expenses related to employee compensation, including stock-based compensation. In addition, we incurred increased marketing costs related to our commercialization efforts, as well as increased costs related to being a publicly traded company. Net loss for the fourth quarter was $19.7 million compared to $12.9 million in the fourth quarter of 2020. Net loss for 2021 was $71.2 million compared to $32.8 million in 2020. We ended the year with approximately $493 million in cash, cash equivalents, and investments. Turning to our outlook for 2022, we expect revenue to be in the range of $14 to $16 million. We expect revenue to consist primarily of sales of the Protograph product suite, which includes SP100 instruments, consumable kits, and software. At this time, we do not expect significant revenue from service-oriented projects or grant revenue. In 2022, we also expect to continue to increase our investments across commercial, operations, and R&D activities in order to scale our business and drive long-term revenue growth. We believe we are adequately capitalized to execute on our strategic plan and remain thoughtful and prudent with our deployment of capital in order to drive long-term value creation. At this point, I would like to turn the call back to Omid for closing comments.
spk04: Thanks, David. As we move forward in pursuit of our vision this year, we will continue to drive execution against our core strategies. I'm excited and humbled to lead such an amazing team, I'm inspired by the passion, the hard work, and the dedication that has allowed us to commercialize such a transformative product. I believe we have the technology, the team, and the strategy to bring the next phase in omics to labs around the globe. We're paving the way for a portfolio of products that will open a new gateway to the proteome. We look forward to sharing updates on our progress over the course of the year, and with that, we'll now open it up for questions.
spk02: Thank you. If you have a question at this time, please press star, then 1 on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. We ask that you please limit yourself to one question and one follow-up. Our first question comes from the line of Tycho Peterson with J.P. Morgan. Your line is open. Please go ahead.
spk07: Hey, thanks. I'd like to start with a guide. Wondering if you could just give us any more color in terms of how you're thinking about instruments versus consumables. And then you did call out a step up in OpEx. Curious if you could just help us frame the magnitude of how you think about that step up and anything you could point to in terms of where the dollars are going, how much is going to the commercial channel versus R&D.
spk01: Sure. Tycho, it's David. Thanks for the question. In terms of instrument versus consumable, We do feel like it's going to, again, be majority instrument relative to consumable. We're not going to give you exact percent. But again, I think it would be something, you know, we still see good consumable pull through in revenue. But again, we think it's going to tip the balance towards instruments next year. And then in terms of OPEX, again, we're not going to give you a specific guidance on that. But again, I think it We are going to continue to see good investment across the organization, both in terms of operations and commercial. I think that's probably going to be the key investment area. And then product development, we're continuing to invest in our product pipeline. And then, obviously, R&D to kind of continue to seed the efforts and investments for long-term growth. But, again, we do see OPEX increasing. Obviously, headcounts increased. And we will, again, be prudent with those investments. We feel like we're very well capitalized today to execute on the plan.
spk07: And then a follow-up on just, you know, the roadmap. You know, you're currently doing around 2,000 plex. Some of your competitors are higher plex. I'm just curious if you could talk about plans to increase multiplexing over time. You know, is there a roadmap you can kind of point to in terms of where you might go from a multiplexing perspective?
spk04: Tycho, thank you. So from a product roadmap perspective, Tycho, we're focused really on kind of three areas in the near term and then some additional areas a bit further out. In the near term, as we put the product in the customer's hands, the feedback that we received, which by the way obviously mirrors the programs that we have internally, were that customers were looking for increased throughput And the proteograph really significantly adds the ability to do larger and larger studies, but you still have some limitation at the mass spec level. So they wanted increased throughput even at the mass spec level. So that was one. Second area was reduction in sample volume so that if you have a precious sample, especially a biobank sample, you can start off with a lower amount. And then third was increased content. And by that, I mean a larger number of protein IDs on a per sample basis. Remember, when we talk about, in SEER, when we talk about protein IDs, we're talking about the protein that are identified in a given sample at a 1% false discovery rate. This is an important point. So, for example, the five nanoparticle panel that we have, If you look at it across the various different studies, they can identify, I mean, to date, we have identified and we've actually discussed that type at your own conference just a couple of months ago, north of 12,000 proteins. And that number, by the way, is increasing. So, for example, if you just look at the Alzheimer study that I alluded to in my prepared remarks, you know, in that study, we're now north of 5,500 proteins inclusive of some protein variants. So I think from a content perspective, Tycho, the current technology allows us to access a very meaningful number of protein, including protein variants, at a very desirable false discovery rate of 1%. You can expect our follow-on products to essentially address the three areas that I mentioned, the additional throughput, the reduction in sample volume, and the additional content that comes. Now, if I look a little bit further out, so those three areas are areas that are being heavily invested on now, and they should also give you guidance in the product that is going to be forthcoming. If you look a bit further out, then areas that we're actually investing in are multiomics, both in terms of nanoparticles that can drive multiomic signal, and also investing in our analysis suite for multi-omic analysis, so proteogenomic analysis, for example. So I think when you look at the way that product behaves, if you compare it to some of our alternative products out there on the targeted side, again, you have to be careful that you might have a panel of ligand that identifies that is designed to identify a certain number of protein, but not all of those proteins are going to be identified in a given sample. So if we were going to say how many protein has the platform identified, the current existing, you know, five-particle panel, well, that number is north of 10,000. But in any given sample, you know, if that number is 2,000 to 3,000, depending on the sample type.
spk07: Okay, that's very helpful. And then maybe just one last one before I hop off. You know, cost per sample, as we think about early customers scaling up, you know, has that come up as an issue at all? And where do you think cost per sample needs to go ultimately to really drive the market?
spk04: Tyco, look, I mean, I think your customers are always going to say, you know, I'd like it to be cheaper. But if you look at the price point, it's exactly where these customers are used to spending their in getting the kind of content on the genomic front. So the product is priced, you know, somewhere between an exome and a genome. Other products in the market are priced very similarly. But that all said, the SEER is really the only solution that can give them the unbiased proteomics and the ability to access new content at that scale. So I think the price point is right, Tycho. I'm not sure if there's going to be a lot of pressure for us to reduce the price at this point, but I think what you're going to see over time is additional value being given to the customer in terms of additional content that they get for the price point that we're at.
spk07: Okay. Very helpful. Thanks.
spk02: Thank you. And our next question comes from the line of Teja Savant with Morgan Stanley. Your line is open. Please go ahead.
spk06: Hey guys, good evening. Just a couple of quick ones for me to kick things off. Omid, can you share some color on the order funnel now that the broad release is underway? And where are you seeing the most interest?
spk04: Yeah, so Tejas, you know, we went into the broad release with a very meaningful interest and a pipeline of demand for the product. And we're seeing interest from other regions other than U.S., although I think for 2022, you can expect most of the revenue to be from U.S. It's a little bit early, Tejas, for us to discuss what percent of revenue is going to be from outside of the U.S. But if you think about that funnel of demand right now, there's basically three buckets. Obviously, the largest and really the most significant portion of it is the U.S. demand. In Europe, we're going to have a direct commercial operation. We also have Evotech at the center of excellence. That's an area that we're very focused on. And then also from Asia, and Asia is going to be an indirect through our distributor, which is Enlight Medical in China, and then through our COE in Korea. So I think, Tejas, the demand is coming globally. I think you can assume most of the sales in 2022 are going to be driven in the U.S.
spk01: Got it. That's helpful. Yeah, the only thing I would add, Tycho, is just obviously we're seeing interest broadly across commercial and academic. Just given the way these folks tend to operate, we do think the commercial folks will probably be a little more quicker to be able to fund and act than the academics. And so we do kind of expect more sales to commercial organizations over the course of the year.
spk06: Got it. David, that's actually a great segue into my follow-up here. On biopharma R&D spending, are you seeing any sense of, you know, some hesitancy around CapEx sales? And on your point on academic, I know you've talked about commercial being the dominant portion of the funnel here. But any sort of signs of sales cycles elongating further thanks to Omicron or not really?
spk01: Why don't I take the first part of it, Tejas, in terms of just CapEx demand from biopharma. We continue to have good interest, Tejas. We haven't, in our own experience to date, seen any significant pullback. People, I mean, again, these sales cycles take a while, right? But again, there is still interest in the technology and interest to explore and potentially acquire it. So we haven't seen any broader macro funding impact from biopharma at this stage. And then your second part of your question, Tejas?
spk06: That was on just academic customer trends. Any elongation of sales cycles there thanks to Omicron and so on or not really?
spk04: I would say, look, the academic folks, the cell cycle is going to be longer anyway, just by virtue of the fact that, you know, the whole grant cycle. But I think that they're impacted a bit more because in their case, they also have to access, you know, they have to get access to samples. in some cases, not so much in U.S., Tejas, but at least ex-U.S. We also have kind of difficulty getting to them for install. So I think that, if anything, the academics are probably impacted a little bit more, but the cycle we had expected to be longer for academics than pharma, I think that's going to be the case. I think if I look at the funnel of demand, you know, kind of more or less split down the middle in terms of pharma and academic folks.
spk06: Got it. Helpful. And then, David, just one quick question for you on the guide here. Can you share a little bit color around what you're assuming for instrument sales to the proteogenomics consortium here? I think, Omid, you mentioned it's ramping up in the second half. And should we be assuming sort of standard ESPs on those instrument sales into the consortium as well, or should we be thinking of a lower price point as you look to get it off the ground here?
spk01: Yeah, thanks, Tejas. We assume kind of little to minimal revenue, Tejas, in terms of the Protogenomics Consortium. We do expect it to get up and running in the back half of the year, but we've been very conservative in terms of our overall timing there and the amount of volume that goes through there. So very, very little is the answer on that front. And if you remember how the deal is structured, it is a deal where it's kind of a pay over time for the instrument. So we will be selling them consumable kits, and part of that over time will be used to pay for the instruments. So they won't pay up front, but they will pay over time. And so that's the way to think about that piece of it. Got it. Very helpful. Thanks for the time, guys. Thanks, Tejas.
spk02: Thank you. And our next question comes from the line of Derek D. Bruin with Bank of America. Your line is open. Please go ahead.
spk08: Hey, good afternoon. Hey, just curiosity, what's the – where did you end your installed base number at at the end of the year? And also, what sort of, like, pending – sort of give us some idea on the backlog. Just basically trying to get a sense of how she would be thinking about instrument growth in 22?
spk04: Yeah, Derek, so we ended the year – With 17 instrument shifts, I don't think we're going to be – we're not going to be disclosing what the expectation is in terms of instrument in 2022. Do I – at the end of the year, Derek, we'll give you one more update in terms of the number of instruments that ended up getting placed in 2022.
spk01: David, do you want to add to that? Yeah, no, I think, Derek, probably the way to think about it is, you know, a slightly higher percentage of instruments than consumables this year. And so, you know, we've given you the guide, and then you kind of know generally what the, you know, general selling price of the instrument is. So you can kind of, you know, do your math there. But, again, that's kind of, again, I think Omid kind of said we're not going to be giving specific guidance quarter to quarter on installed baser instruments.
spk08: Yeah, that's fine. Just was trying to get a ballpark figure. make sure that we're true at the end of the year. And, and related, I've had some people asking about the related party and sort of like how that trends in 2022.
spk01: Sure. I think you're, you know, we've been around a third of revenue is generally what it's been. And, and they were 35% at the year. I think in the first couple of quarters, you may see a similar percentage. And then as, as we ramp the, the non-related, you know, the other customers, basically that, that, percentage will start to come down. Great.
spk08: And on your experience of your customers so far, it's how quickly are they coming back to start additional programs, or is there a digestion period where they've got to look at the data, analyze it, publish it before they're coming back? Basically, I'm just sort of thinking about what's the experiment cycle time if people want to sort of go back and do iterations of experiments.
spk04: Yeah, Derek, I would say if you look at the Oregon Health, it's probably a good example. So remember, they got their instrument in December of 2020. That instrument was up and running in early 2021. They did a pilot study that they presented data on you know, kind of in Q3. Based on that pilot study, they then said that they were going to do a larger study, so they had to then kind of get the resources, both financial resources and also the samples, to get that study done. That was a study of 1,000 samples. And they are now underway. That 1,000 sample should be done in Q1, and then they'll process the data and they'll present it. So I think if you look at kind of the cadence of that, which is you spend a few months, you get to know the system, you run your pilot study, you love what you see, it forms the basis to do something substantial that follows. And I say Oregon is a good example, but on the back of Oregon, there is at least two other studies that are now starting of very similar scale. And of course, you know, someone like Prognomic, our own spin-out, those guys did not need to have that initial dating phase, if you would, in understanding the platform, because obviously it was a serious spin-off and they understood it. So they hit the ground running at scale. And in fact, they're now, Derek, at scale as they are, the magnitude of growth for them in terms of the kinds of studies that they will be doing is going to mirror some of the larger genomic studies. I mean, and I just think that, and by the way, you're going to begin to see data presented from them as well. So I think, Derek, at the end of the day, The science and the data is going to drive demand. You just have to give folks time to do that, and I think Oregon is a good example. Great.
spk08: Thank you very much. Thanks, Derek.
spk02: Thank you. And our next question comes from the line of Dan Brennan with Cowan. Your line is open. Please go ahead.
spk05: Great, guys. Thanks for the questions. Maybe the first one would just be on your commercial plans. Can you just walk us through a bit like where you are with field sales force Give us a sense of, like, what the plans are this year in terms of how many customers you plan to target, what is their targeting strategy, is there, like, an 80-20 rule? Just give us some flavor about your go-to-market strategy with the full commercial launch.
spk04: Yeah. Dan, thank you. So, Dan, we have said that we aren't going to be disclosing the number of reps that we have. provided that we're hiring about two quarter ahead of needs, both in terms of sales and support. So we're basically doing that and we're on schedule with that. And we're also building a sales team, not just in US, but also in Europe. We feed on the ground and a team that I'm super proud that's coming together in this product. And what was the second part of your question, Dan?
spk05: If we really could go to market, like give us a sense of, you know, are you going after the highest mass spec labs? Obviously, just kind of give us a sense of who are the types of customers in the first year of the full commercial launch that you're targeting.
spk04: Yeah. So, Dan, if I look at the pipeline of demand that we have right now, it actually sort of mirrors exactly what we had in terms of customer type that we said we were going to have in the limited release. But the limited release was supposed to be a guide for these Lighthouse customers. So that includes customers in academia, customers in large biopharma, customers in the early detection and diagnostic space, customers in, you know, biotech companies focused on drug development, CROs, as you just mentioned, You know, and then obviously our own COEs. The biggest one now is the, includes also our proteogenomic consortium with Discovery Lab Sciences, albeit our other COEs, including Evotech in Europe, you know, are going to be starting to take orders as well. So then, it's basically across that entire spectrum. And not just, if you would, the mass spec focused, core labs, as you mentioned.
spk05: Great. Thanks, Omid. And I think the question was asked earlier, but I'm just wondering, in terms of the placements that you expect to make in 22, is there a firm backlog in place for any of that? Like, how would you characterize? I know the qualitative adjectives were very constructive, but is there any more granular view towards, you know, a third of our placements we feel like we've got to give visibility on, or anything of that sort?
spk04: Yeah. Dan, I think that, you know, David mentioned that which is you can assume that in 2022 that a healthy part of our revenue is going to be instrument-based. We need to have that install base. In other words, this is the razor, razor blade model. We've got to have an install base that's large enough so that the pull-through begins to be meaningful and for us to hit our target margins that we're interested in having when SEER is a mature commercial entity. If I look at that six different customer segment, if you would, my expectation is that the distribution that we had in terms of our limited release is actually going to more or less play out, meaning I expect for us to have customers across every one of those six segments in terms of 2022. And then the exact number of instruments then, we're just not going to do that right now. we will tell you the numbers at the end of the year and kind of provide more granular information. And then the reason for that is at this point, we just need to understand it better ourselves so that we can give you information that is at least based on some sound assumptions. Let me see if David wants to add to that.
spk01: Yeah, Dan, the only thing I would add just in terms of the visibility point, recall that quite a few of our limited release customers did enter into multi-year agreements with us. And so we do have some visibility on some of the pull-through relative to this year and what the anticipated, you know, agreements with those entities does say. So we do have some visibility on, you know, 2022. But again, I just wanted to, you know, we're not going to be providing, you know, quarterly instrument placements or the like, but we do have some visibility.
spk05: And maybe just one final, like what are some of the early learnings that you've had, like with the with the first year and kind of the limited launch now as you go into the full launch, what are some of the things that you learned in year one that you're taking ahead to year two that'll help with the commercial rollout?
spk04: Yeah. Dan, I would say, look, you know, on the – on what is better, what we're now doing better is our install time has materially – become more efficient since we started. In other words, if I look back at the time that it took us to install the organ instrument and to validate it and to get those guys up and running, and where we are today, we're probably 4x faster in terms of our install time in a highly reproducible way in getting these customers up and running so that from the time that they get the instrument to the time that they can actually start running pilot studies is much shorter than when we started. I think that's quite positive. But I have to say, again, on a more positive note, boy, the instrument really behaved extremely well in the hands of customers. They were doing runs where kind of like batch to batch runs in different days, interval variability. Those numbers are all super tight. So the instrument behaved really, really well. I'm super proud of our product development team, our operation team, and our commercial team. But the areas that I think we noticeably improved are getting the customers up and running faster. And my expectation, by the way, is that that is probably at a – at a point where we're comfortable with. I don't see a ton of improvement there because from the time that the instrument now hits the ground there till the time that it's validated and they can use it, it's just around a month. It's hard to kind of beat that time frame. Let me know if you have any other questions.
spk01: Yeah, the only thing I would add, Dan, is just, you know, it's really fun to watch putting a disruptive technology in the hands of these different types of customers. And I think some of the learnings is people are going to do a whole variety of things. I mean, we've got just the flexibility breadth of the platform. I mean, we've got folks not only doing all the biomarker work and target development work and that type of thing, early detection, but also people looking at animal models using the same nanoparticle panel. doing plant and other types of things. So it's just exciting to see people taking the technology and using it in ways that is very encouraging and also really interesting in terms of potential things we hope to see down the road from a data perspective.
spk05: Great. Thanks, Dave. Thanks. Thanks, Amit. Thank you, Dan.
spk02: Thank you, and this does conclude today's question and answer session. Ladies and gentlemen, this also does conclude today's conference call. Thank you for participating. You may now disconnect. Everyone have a great day.
Disclaimer