Nautilus Biotechnology, Inc. (NASDAQ:NAUT) Q4 2023 Earnings Call Transcript

Nautilus Biotechnology, Inc. (NASDAQ:NAUT) Q4 2023 Earnings Call Transcript February 28, 2024

Nautilus Biotechnology, Inc. beats earnings expectations. Reported EPS is $0.14, expectations were $-0.16. NAUT isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, and thank you for standing by. Welcome to Nautilus Q4 2023 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. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Carrie Mendivil, Investor Relations. Please go ahead.

Carrie Mendivil: Thank you. Earlier today, Nautilus released financial results for the quarter and full year ended December 31, 2023. If you haven’t received this news release or if you’d like to be added to the company’s distribution list, please send an e-mail to Investor Relations at investorrelations@nautilus.bio. Joining me today from Nautilus are Sujal Patel, Co-Founder and CEO; Parag Mallick, Co-Founder and Chief Scientist; and Anna Mowry, Chief Financial Officer. Before we begin, I’d like to remind you that management will make statements during this call that are forward-looking within the meaning of the 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 in the press release Nautilus issued today. Except as required by law, Nautilus disclaims any intention or obligation to update or revise any financial or product pipeline projections or other 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 28, 2024. With that, I’ll turn the call over to Sujal.

Sujal Patel: Thanks, Carrie. Good morning, and thank you to everyone for joining us today. This morning, we’ll share our results for the fourth quarter and full year 2023 and provide an update on recent activities. But first, I want to thank our employees, our partners and our investors, creating a platform capable of enabling researchers to explore the mysteries and the potential of the proteome is very much a team effort. It requires strong alignment up and down the organization, vision, persistence and an unwavering commitment to our goal of improving human health. I’m grateful for the extraordinary work the entire team did in 2023 and for how they’ve kicked off 2024 stronger than ever. We recognize that we’re tackling a big hard problem that has never been successfully addressed.

And armed with the learnings of last year and years prior, we now have greater clarity about what remains to be done to deliver what we believe will be a game-changing platform to the market. We enter 2024 more energized than ever focused on the good that we anticipate our platform can do and confident in our ability to get there. When I reflect on 2023, I see it as a year of accomplishment and a foundational progress. Progress that will continue to build momentum for Nautilus as we move through 2024 and towards the planned launch of our proteome analysis platform in 2025. You’ll hear more details about specific R&D progress from Parag in just a few minutes and more context from me around the revised launch time frame a little later. But first, I want to reflect on what we continue to hear from potential customers and what I sense as I look across the market landscape.

At a high level, I’m encouraged by a growing awareness among researchers about the role that proteomic data can play is easily and cost effectively generated in augmenting other high-value biological data set. More specifically, we continue to receive enthusiastic feedback from the researchers and partners with whom we’ve directly engaged. They recognize the inherent limitations of both traditional analysis methods and of emerging affinity-based and peptide sequencing methods. They clearly understand how critically important single molecule intact protein analysis, which only Nautilus is designed to deliver will be to their expanded explorations of the proteome. We and they envision a day when their ability to explore the entire proteome more thoroughly will net fundamental advances in basic biological research, enabling researchers to make a substantial impact on the efficiency and cost-effectiveness of biomarker discovery and drug development.

While the desire on the part of researchers to finally have a breakthrough in the availability and cost, the valuable proteomic data is not new. What is new is the potential of actually delivering on that dream. That is fueling the imagination of researchers to think beyond what has been possible and towards the idea of what could be possible. This is a truly exciting time to be on the front line of proteomic innovation. With that, let me now turn the call over to Parag for an update on our progress on the R&D front. Parag?

Parag Mallick: Thanks, Sujal. Overall, we made solid progress against our core goals in 2023. Our major focus last year was on development activities, i.e., increasing scale, stability and reproducibility across our entire ecosystem, but especially our consumables. We additionally made significant progress in reducing the cost and complexity of producing our consumables. This progress goes hand-in-hand with advancing the reliability, quality and customer readiness of our instrument and software. Some examples of this progress include significantly increasing the development pace for our affinity reagents. This increase was a result of optimizing the yield and throughput of our reagent development pipeline. We also transitioned many of those new reagents into common experimental use.

We advanced our fabrication and assembly processes for our nano pattern chip and flow cell. This refinement enabled both improvements in scale and reproducibility. We additionally qualified our external patterning and assembly partners. After refining our nano particle scaffolds, we more than 10x the throughput and scale of manufacturing for both our labeled probes and our nano particle scaffolds. 2023 also saw a continued focus on advancing our commercial instrument, especially the integration of the hardware, software and wetware elements, taking an instrument from concept to commercial readiness is complex and requires close coordination between teams across the company. I’m pleased with the progress I saw last year in this regard with the instrument becoming a true workhorse.

The combination of advances in our consumable production scale, reliability and reproducibility, the increased stability of our multicycle assays and the expansion and available number of commercial form factor instruments enabled us to successfully perform substantially greater numbers of longer-cycle experiments in the past quarter than we did in the prior several years combined. That work continues to accelerate in 2024. The deluge of data from these more numerous and larger scale experiments also drove advances in the software and bioinformatics aspects of our platform. In particular, like with the instrument, we have switched over from prototype software tools to the integrated and automated pipelines that will be used by our customers.

In the past, these analyses might take weeks of hands-on time to execute, and now analyses can be achieved with minutes of hands-on time. As we reported in Q2, the increasing experimental scale and assay robustness has enabled us to increase the set of model proteins that can be successfully decoded. We have diversified our models to include mixes of multiple proteins across a range of concentrations and are excited about further increasing the complexity of our model systems. These efforts are essential to the path towards verification and validation required for launch. Coming out of 2023 and into 2024, we remain focused on addressing the foundational elements required to launch our platform, ranging from how to mobilize single protein molecules on our nano pattern flow cell, how to detect diverse epitopes within proteins at single molecule resolution, the ability to run large-scale experiments involving a large number of probes across large numbers of cycles and an instrument ready to transition into broader use.

In an ongoing demonstration of our commitment to transparency and openness, we continue to reach out to the broader proteomics community with the objective of sharing the scientific underpinnings of our platform. These conversations frequently lead to suggestions of exciting and creative applications of our platform that we had not previously envisioned. The next major opportunity for data sharing and application ideation comes in two weeks at the US HUPO conference in Portland, Oregon. I am incredibly excited by the opportunities we’ll have at the event where we’ll be publicly presenting on the following topics, additional progress on the experimental implementation of PrIsM, further detail on our multi-affinity Pro pipeline and on computational methods to estimate false discovery rate Overall, we continue to listen to the proteomics community, our future customers to ensure that we are sharing with them ongoing updates on our progress towards specific technical areas.

One of the areas that I’m most excited about is the additional data we’ll be sharing resulting from the targeted proteoform studies of Tau and EGFR that we’ve been pursuing in partnership with Genentech and Amgen. All the advances that we’ve made towards advancing our platform for broad scale studies have synergistically and simultaneously advanced our platform for targeted proteoform studies. We continue to hear from the community how important proteoforms, as defined by combinations of splice variants and post-translational modifications, ARC [ph] disease biology and the excitement about our platform is uniquely suited to measure the molecular heterogeneity of proteoforms at single molecule resolution. As Sujal mentioned earlier, we come into this year clear eye about what work remains to be done and confident that we have a solid foundational understanding of what is required to get our platform into the hands of users, where it can have a profound impact.

With that, I’ll turn the call back to Sujal.

Sujal Patel: Thanks for the update, Parag. On another HUPO related note, at the event, Parag will be honored as the 2024 recipient of the Gilbert S. Omenn Computational Proteomics Award. This prestigious award recognizes Parag’s career achievements and long-standing leadership role in the development of bioinformatic analyses and the computational methods widely used by the proteomics community. Needless to say, we are very grateful to have him on our team. During past calls, we’ve spoken about the well-understood reality that shipping the first version of any truly groundbreaking product can be slower and more challenging than initially anticipated. As one of our board members is fond of saying, these delays are often based on encountering and knocking down one by one, what she refers to as FIW problems, challenges associated with being first in the world.

Investors, analysts, customers and others with whom we speak acknowledge that building a game-changing proteomic analysis platform, especially the first of its kind product like ours is hard and simply takes time. Since we recognize how significant an impact will be created by the data that our platform is expected to produce, we are committed to ensuring that our company is fully ready to introduce, support and rapidly innovate on what is designed to be an incredibly high-quality, high-value product. The world of biology deserves our best and we have set an exceedingly high bar for ourselves. During recent calls, we’ve shared our thoughts on the experimental and related work that’s required to enable us to maintain a 2024 commercial launch time frame with the V1 product specifications that we believe will be transformative to our market.

Despite strong progress towards these goals and in the name of ensuring that we launch a product that meets our very high bar for quality and performance, we now plan to launch our Proteome analysis platform, instruments, reagents and software in 2025. We remain singularly focused on driving our scientific and development efforts forward in the most efficient, cost-effective way possible. I want to emphasize that we are not currently focused on creating short-term revenue opportunities. By choosing to focus intently on our development objectives, we believe we are positioning ourselves to create the best platform possible and make the maximum positive impact on the marketplace, biological science and long-term shareholder value. As you’ll hear from Anna in just a moment, we continue to operate in a very capital-efficient manner.

Our burn rate and cash balance are a significant advantage for us and to strike the right balance between maximizing our cash runway into 2026 while making the investments that are necessary to drive our scientific progress forward. For more on that and other things, let me hand the call over to Anna for a look at our Q4 and full year 2023 financials. Anna?

Anna Mowry: Thanks, Sujal. Total operating expenses for the fourth quarter of 2023 were $20.0 million, up $3.7 million compared to the fourth quarter of 2022 and $0.9 million above last quarter. This modest increase in operating expenses year-over-year was driven primarily by an increase in headcount to support the ongoing development of our products. Research and development expenses in the fourth quarter of 2023 were $12.5 million compared to $9.6 million in the prior year period. General and administrative expenses were $7.5 million in the fourth quarter of 2023 compared to $6.7 million in the prior year period. Overall net loss for the fourth quarter of 2023 was $17.0 million compared to $13.4 million in the prior year period.

For fiscal year 2023, operating expenses were $76.2 million, an increase of $12.5 million or 20% from $63.6 million in fiscal year 2022. This increase was driven primarily by an increase in headcount to support the ongoing development of our products. Net loss for the full year was $63.7 million compared to $57.9 million in fiscal year 2022, an increase of 10% year-over-year. Turning to our balance sheet. We ended the year with approximately $264 million in cash, cash equivalents and investments compared to $276 million at the end of last quarter. Over the past year, we have hired additional leadership count, particularly in R&D and increase the throughput of our development and production pipeline. Importantly, we have achieved improved efficiencies with operational spend, beating our internal expectations.

We entered 2024 with a lower burn rate and a strong cash balance, extending our cash runway into the second half of 2026. We remain committed to responsible financial stewardship to ensure flexibility ahead of our commercial launch. Today, we filed a shelf registration statement on Form S-3 as well as a prospectus supplement regarding a potential at-the-market offering of up to $125 million, which has not yet been declared effective. We view this filing as strictly good corporate housekeeping designed to allow us the flexibility to strategically and efficiently raise capital in the future. In 2024, we expect growth in spend to steadily increase as we continue to prepare for our commercial launch. This year, we expect our overall operating expenses to grow by approximately 25% from 2023 levels.

We are confident that we remain well positioned to execute on our strategy to launch a transformational platform in proteomics. With that, I’ll turn it back to Sujal.

Sujal Patel: Thanks, Anna. Anna’s report clearly demonstrates our steadfast commitment to responsible financial stewardship of this business as we move towards commercial availability in 2025. We’re excited about and energized by what lies ahead for Nautilus and the difference we believe our platform can make in biological science. Our mission to positively impact the health and lives of people around the world remains our guiding light and the high standard to which we hold ourselves. I’m grateful to our team, our investors, our strategic partners and our research collaborators for joining us on this journey to revolutionize proteomic and empower the scientific community in ways never thought possible. We made excellent progress in 2023 and look forward to building on those successes as we move through 2024 on our way to a commercial launch in 2025 and beyond. With that, I’ll turn the call back to the operator. Operator?

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Q&A Session

Operator: [Operator Instructions] Our first question comes from Tejas Savant with Morgan Stanley. Your line is open.

Unidentified Analyst: Good morning. This is Yuko on for Tejas. Thank you for taking our questions. Could you further elaborate on the factors that led to the push out of the instrument to 2025? I appreciate the pace of development affinity reagents has significantly accelerated. But is that essentially the gating factor to launch at this point? And then could you also comment on whether you’re targeting launch in first half or second half of 2025?

Sujal Patel: Good morning, Yuko. Thank you for the question. Parag, maybe if you want to take the first half of that question and then I will address the second half.

Parag Mallick: Sure. That sounds great. Thanks so much for the question. Maybe just to start with commenting on the key aspects of the platform overall. So the foundation of the platform are three core elements, the method for depositing single molecules onto a hyper-dense nanopatterned array. Number two, an assay incorporating potentially hundreds of affinity reagents that are iteratively flowed over the array and image. And then three, the machine learning framework, which takes all of those pieces together. As we’ve been working through development, the key challenges we’ve been facing really have been ones of scale, quality, reproducibility and stability, which are critical for our end-to-end assay to be as robust as possible.

Additionally, we’ve been working through marching through increasing the complexity of our model systems from decoding model proteins to mixtures of proteins to increasingly complex model systems, like data, et cetera. And so as we work through that progression, that’s really the driver of ensuring that we marched that progression to have a product that is as consistent, reliable and performance as possible.

Sujal Patel: Great. Thanks, Parag. You could take the second half of your question here, in addition to what Parag said. So you asked about further specificity than what we said in our prepared remarks. And I think that at this point, we don’t want to provide any further specificity in 2025. But what I will tell you is that, we do expect, as we’ve previously discussed that prior to our full commercial launch, which means instruments, reagents and software. Before that launch, we will have a short beta period, which means physical instruments being placed to customer sites. Before that, we’ll have our early access period, which is the period where customers can send us samples, we can analyze them and return the data to the customer in our own facility.

And as we get to that early access period launch, I do expect that I will be able to provide further specificity on the time line and narrow it out as well as when we launched the EAP, the early access program, we’ll be able to talk about our expected launch specifications in much more detail as well.

Unidentified Analyst: Great. Thank you.

Operator: Our next question comes from the line of Brandon Couillard with Jefferies. Your line is open.

Unidentified Analyst: This is Matt on for Brandon. Maybe one for you, Ann, on the cash runway out to the back half of ’26. I think prior, you guys had talked about runway into ’26 given a number of ’24 launch scenarios. So now that you’re pointing to the ’25 launch but cash into the back half of ’26. I was just curious if there’s anything that changed? Are there other areas that you’re maybe monitoring or sharpening your pencil on? Thanks.

Anna Mowry: Matt, good morning. Thanks for the question. As you’ve heard us consistently say we’ve been very prudent in how we’ve been managing our investments. We continue to be very targeted in 2024 with our expectation of growth in OpEx around 25%. We expect cash burn to be a little bit higher than that as we start to make some capital investment. But overall, our runway doesn’t have any real sensitivity to our launch time line is we have the ability to manage our expenses to go with those – that time line.

Unidentified Analyst: Okay. Thanks. And then, I guess, kind of sticking with that topic on ’24, you guided to the 25% increase year-over-year. Can you just maybe talk about your ability to moderate that up and down last year, given the backdrop, you moderated down? Or should we think about ’24 is kind of more locked in at that range given the commercial launch in ’25?

Anna Mowry: Sure. We always have the ability to moderate up and down 25%, we feel, is a very targeted level of investment. We’re investing in all areas of the business. We’re continuing to invest in development as well as SG&A to support our manufacturing and production capabilities, potentially some commercial in there as well to the extent that we need to – we have the ability to moderate that as needed.

Unidentified Analyst: Thanks. And then just last one, quick clarification. The Amgen, Genentech data you talked about, will that be presented at U.S. HUPO here in a couple of weeks? Or will that be another form? Thanks.

Sujal Patel: Okay. Go ahead, Parag.

Parag Mallick: I’ll take that. Yes. So we are planning to present that at U.S. HUPO. There will be poster presentations on that material, and we will also discuss it in our lunch seminar.

Unidentified Analyst: Super. Thank you.

Sujal Patel: And Matt. Just to add just a tiny bit of additional sort of information for you on the cash side. So the cash guidance of having a cash runway into the second half of 2026, of course, given the launch timeline of 2025, includes the build up of our commercial organization and includes the launch of the platform and the initial revenue ramp. And so all of that is baked into that. And so when you talk about flexibility, I think the biggest thing to highlight is that we as a company have been very good about managing that OpEx as the timeline moves up and down, and we expect to continue to do that as well. And so at the point that you start to see a tick up in that OpEx, I think that’s indicative of us getting closer to that launch.

Unidentified Analyst: Thanks. Appreciate it. I’ll leave it there.

Operator: Our next question comes from the line of Matt Sykes with Goldman Sachs. Your line is open.

Matt Sykes: Hey, good morning. Thanks for taking my questions. Maybe just on the push out of the platform to ’25. Just curious, you obviously are working with a number of customers today on the beta and the other things that you’re doing with Amgen, Genentech, et cetera. In terms of engaging a broader set of customers, given the push out to ’25, how do you maintain that momentum with broadening out and keeping that excitement about the product, just given the delay out to ’25?

Sujal Patel: Good morning, Matt. This is Sujal. Maybe I’ll tackle this one. I think that there are two ways that we intend to continue building momentum with the scientific community and with our potential customers. One is that at each of these major conferences, for example, this U.S. HUPO conference, which is coming up in a few weeks, we continue to present new and novel data about our platform that shows our progress towards a launch. And if you think about the core elements of our platform, building a single protein molecule array that’s uniform and dense, being able to decode proteins using our PrIsM method. And you think about the bioinformatics that are tied to our system. All of these are incredibly unique in the scientific community.

This is a method which has never been attempted before. And so that data to the scientific community on our potential customers is incredibly exciting. And as Parag has shared that data in the past and as you will do through this year, we continue to see a lot of excitement from potential customers from KOLs and from others in the scientific community around our platform. So that’s one primary method. Number two is that the work that we’re doing on Tau and EGFR with Genentech and Amgen as well as our other collaborators is incredibly exciting for our collaborators and for the scientific community. Our platform has the very unique capability being the only platform in the world that can fully elucidate the proteoform landscape of proteins of interest because it analyzes intact protein molecules and it can probe those molecules over and over again to gather more and more information.

That is incredibly important because these modifications could be indicative of therapeutic response. They could be biomarkers. They could be drug targets. And with that, that data, because it’s biologic insight that’s never been seen before, is really important to the site community and our potential customers. So that’s getting that data out into the world and showing what our platform is capable of is the second way that we are going to build excitement in the community about the platform. Now when you think about that kind of data and the fact that we are generating that type of proteoform data ahead of broad scale proteomic data, you might ask the question, and many have asked, are we going to put more emphasis behind that? Would we go and just launch proteoforms first.

And what I would tell you on that front is we continue to really love the momentum that we have on the proteoform side. We really like the customer traction that we’re seeing and the excitement and we’ll continue to consider those types of collaborations and work to expand the proteoform work that we have been doing with our existing collaborators as we work through this year and we start getting into next year.

Matt Sykes: Got it. And I think you might have answered part of my second question with what you had just said. But in terms of — you had originally talked about sort of targeting a certain percentage of the overall proteome launch that came down a little bit in order to launch it in ’24. As we look at ’25, does that coverage or however you want to classify it go back up again? Or are you still sort of targeting what you had said before in terms of what you’re going to be able to have available in ’25?

Sujal Patel: Yes. So I think that as I said in response to one of the questions earlier, I think we will have more specificity on our launch specifications as we launch our early access program for the platform. And so more specificity is coming in the quarters to come. But what I would say is that the comment you just made about us talking about bringing the initial specifications down a little bit was made on our Q3 conference call. And we have no intention of lowering our specifications any further. In fact, given the additional time that we have on our schedule, we may make up a little bit of around in some of the areas. So just as a reminder, those areas are the percentage of the proteome that we can cover the dynamic range of the system, the limited detection and quantification, those types of things.

And so — let’s get a couple of quarters in, and then I’ll give you some more specificity as we get closer. But I think that the additional time is potentially helpful to us.

Matt Sykes: Got it. And then just one more, if I may. Just are any sort of the issues or challenges that you’re having related to supplier issues or manufacturing capabilities? I know Parag talked about scale quality reproducibility as sort of some of the factors that you’re looking at, but just want to make sure that it seems like some of the supply issues are long gone. So I’m assuming it’s not really a supplier issue, manufacturing issue, it’s more of just the overall technology in the platform. We want to make sure you get it right when you launch it?

Sujal Patel: Yes, Matt, absolutely, the additional time needed is not related to supplier issues at all. In fact, our operations and manufacturing organization has done a spectacular job here. On the instrument side, making sure that all of our longer lead time parts are available in sufficient supply, building supplier relationships to focus on our launch and longer term. And then on the reagent side, the manufacturing and organization has done a great job really building the partner base that helps build those reagents, but as well as Parag described in his prepared remarks, they’ve done a really exceptional job with the yield and scale of our reagent production in-house, and we’re really excited with that. And so supply chain is not an issue for us.

Matt Sykes: Got it. Thank you very much.

Operator: Our next question comes from the line of Dan Brennan with TD Cowen. Your line is open.

Dan Brennan: Good morning. Thanks for taking the questions. Maybe the first one, just go back to the first question. Would you mind just going back to the factors that led to the decision to push it out. Maybe could you just give us some more concrete aspects of what you expected to have done by now kind of what’s delayed? I know Parag, you talked about scalability, reproducibility consistency. So I guess it’s all encompassed in that, but if there any more maybe granular metrics you can give us on that front? And then b, kind of related to that, when we think about the new time lines, is there like a checklist, if you will, that you could provide about any of the performance features, any of the reproducibility, anything that we should be monitoring so that as we get to Q2 and Q3 and Q4, like we can kind of say where are you on the checklist that gives people kind of a pathway, if you will, towards confidence towards the launch?

Sujal Patel: Parag, once again, why don’t you take the first half of that question? And then once we get to sort of checklist and things to look for milestones on the journey, I’ll take that part of the question.

Parag Mallick: Sure. Absolutely. So I think one of the key — when you ask the question about what are we looking at? Among the key areas that we’ve been focused has been those items that I mentioned before and in particular, the integration of all of those items together. And as we came into the back half of last year, we saw tremendous progress particularly on the integration and noticing that allowed us to really do experiments at a larger scale than we had before. As we work through those experiments, we look at the specific elements I talked before. Like are we able to just make sufficient reagents of sufficient quality and consistent consistency. These are not just for agents, but also flow cells, are we able to ensure that the flow cells have the stability that we want.

And so these are very much factors that ensure that when the product is in the hands of your customers, it’s a reliable, robust measurement instrument. And that’s really been the driver of our decision-making has been that ability to scale the platform to be able to measure a game-changing number of proteins at a sensitivity that we’re targeting.

Sujal Patel: So the second half of that question really is what are the milestones that we should be looking at? I think that as you’ll see in what we put out at U.S. HUPO here coming up in a couple of weeks, we continue to work with model proteins, evolving the scale of the assays that we’re running, meaning more probes, more cycles, decoding more proteins out of simple mixtures. Those — that work as we get through the first half of this year and into next year, we’ll start to evolve into actually decoding proteins out of biological samples that are complex like cell lysate. And as we’ve talked about in the past, at some point, we will have a significant number of proteins that are decoded out of lysate, whether it’s 500, 1,000, 2,000, 2,500 doesn’t matter.

Any significant number of proteins out of lysate means that all of the aspects of our system have come together. Our single molecule hyper-dense array, our multicycling assay. We have sufficient reagents. And because the system works in a computational matter, by the time we get to that point, we have a significant number of reagents, more than half of the way towards a product launch. And so for us, that milestone is a critical milestone that will be pretty close to when we launch an early access program and begin taking customer orders for early access samples. It’ll be about the point that we update Wall Street on timelines and launch specifications. And when I talk to analysts and investors both, that’s the key milestone that I make sure that everyone is looking for, and we are not at that point yet.

But looking at the progress that’s been made, particularly the progress made here in the, the beginning of this year, I think that I’m really enthusiastic and excited about what I’m seeing, and we’ll be back to update you on that as we move through this year and closer to our anticipated 2025 launch.

Dan Brennan: Got it. And so you’re basically saying if it’s 500 or 1,000 to 2,000, just the fact you do 500 consistently reproducibility, you hit the metrics you want. That will be like a clear bar like because that was one of the follow-up questions like where are you on this progress to validate the threshold if it’s 500 to 1,000, 2,000. So just kind of within that context, it’s — I guess the number of proteins isn’t as critical or just getting to 500 is what’s important?

Sujal Patel: That’s right. So if you think about what we have done kind of in the last few years here, that we’ve been public and been updating Wall street, we’ve spent a lot of time refining our affinity reagent development, qualification and screening processes, as well as scaling those up. And just in the last four or five quarters, we’ve doubled the topple funnel of our capabilities with respect to reagent development twice. So we enter the year with a significant amount of bandwidth to be able to build affinity reagents, and we continue to scale up the qualification and screening side of things. And so as all of that stuff is becoming qualified, getting into our assay, going through testing, we are going through the process of understanding exactly what those affinity reagents bind to and how they perform in our assay, we’re getting rid of the ones that aren’t qualified for our platform.

As that process happens, we’ll start to see an increasing number of proteins coming out of a decode of a complex sample like cell lysate. Now, by the time that we’re showing you 500, there’s going to be a big pipeline of more reagents behind it that are going to go and take that number from 500 to 750 to 1000 to 5000 and so forth. And if you’ll recall, we’ve always shown a chart, and there’s an updated one, which is in our slide deck that is on our investor relations part of our website. We’ve always shown a chart that shows that there’s an exponential relationship between the number of probes that we have and the number of proteins that we can detect and quantify in a complex biological sample. And so unlike a traditional assay where I have five antibodies, I see five things.

I have 10 antibodies, I see 10 things for us. By the time that I come to you with 500, the majority, the vast majority of the work in the assay has been done and most of the affinity reagents have been built.

Dan Brennan: Got it. And then maybe final one. So the early access would be so ’24 there will be early access. I’m sorry, I know you talked about it in the prepared remarks, but just in terms — can you just clarify or just kind of reiterate kind of the time line ahead of the actual commercial launch what we should expect? Thank you.

Sujal Patel: Yeah. What we said in our prepared remarks and in responses to questions here this morning, we’ve said that we anticipate our full commercial launch in 2025. That means shipping our instrument reagents and software prior to that ship date, call it approximately six, seven, eight months, will be an early access period. And that early access period will be a model where we’re analyzing customer samples in our facility. We’re sending them the results. The goals there are not just to generate data that we can publish, that we can show to the scientific community to build momentum, but just as importantly, to start to focus on the early pipeline building activities and sales activities that get preorders built for the platform when it comes out in 2025.

We don’t currently have any more specificity on the date of the start of that early access program. But based on the launch timeline, you kind of back up from that six, seven, eight months, and that’s when we’ll be running the early access program and the launch of that program, meaning when we tell customers we’re ready to start taking orders for early access, will precede that by a few months.

Dan Brennan: Terrific. Thanks a lot.

Operator: And I’m showing no further questions at this time. This concludes today’s conference call. Thank you for participating. You may now disconnect.