Nanostring (NSTG)

Douglas Farrell Vice President, Investor Relations & Corporate Communications
Bradley Gray Chief Executive Officer, President & Director
Thomas Bailey Chief Financial Officer
Tycho Peterson JPMorgan Chase & Co.
Doug Schenkel Cowen & Company
Daniel Arias Stifel, Nicolaus & Company
Daniel Brennan UBS Investment Bank
Catherine Schulte Baird
Tejas Savant Morgan Stanley
Call transcript
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Ladies and gentlemen, thank you for standing by. And welcome to the NanoString Fourth Quarter 2020 Operating Results. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised, this conference is being recorded. now today, hand Investor Doug would to conference Relations. I speaker your Farrell, Instructions] like the to over [Operator VP of Thank you. ahead. And go please

Douglas Farrell

Thank you, afternoon, operator, good and everyone.

President with Earlier CFO. afternoon, quarter we results Brad call and Bailey, financial this me our the the and Tom today Gray, On our for and released fiscal CEO; our XXXX. is fourth year

growth, financial statements trends projections, for penetrating we the call, and success forward-looking, offerings. are and anticipated this pandemic, prospects that future related of objectives, and may COVID-XX and planned make product business impact factors, expanding the our statements our During of addressable and the about strategic recent status including and development markets, focus

are are including and Forward-looking risks subject in statements described are to our which uncertainties risks beyond that and SEC of our filings. many control, uncertainties,

financial results guidance we differ be statements. in and we our this Our call, our these and made to earnings In modification guidance, compare undertake believe to we've that no our and financial from projected, interpret will forward-looking materially it to update connection easier with make Later results and release may results. Tom will this approach XXXX guidance. those obligation reviewing

measures non-GAAP a be GAAP supplement financial have is We as GAAP, prepared the financial adjusted measures, unless noted. calculation in in will to this our all Throughout call, selected detail measures, otherwise described which of press release.

in presentation building in XXXX opportunity include Relations in to press our of having in Investor we posted measures, adjusted rationale you later our participating many XXXX. to the reconciliation data other that can that and Cowen the well analysts forward GAAP using of measures, limitations non-GAAP I'd homepage year a full financial for to Healthcare under for the have aid we the each look and of there. release. with we'll this also our a find financial tab exhibits metrics to You and our be like week, description, models, quarter as To the everyone investors these Conference and for remind or selected speak non-GAAP and as

like over turn Brad. the to Now, I'd to call

Bradley Gray

cellular the molecular Joe of Beecham, applications. assays, single cell from the Cancer imager. Wellcome first portfolio and Transcriptome technologies genomics of Good response Doug. of already research This Journal shaping projects XXXX and can Third to Institute to five our understanding revolutionary resolved Illumina Atlas and users for Transcriptome a business. in power for down only that need Transcriptome banner Nature and February, today. the you new Atlas, and Spatial It's enabling Difficulty] up everyone how XXXX to the of Medical innovation method year, us leading joining Panelists a resistance CSO, impact for NanoString's our hosted our [Technical beginning spatial the Thanks, Genomic Sanger demonstrated coupling data the while spatial The explosive March multicellular spatially personalized In discussed this readout, improve we serves signaling also to to action, GeoMx DSP immunotherapy, from sub field, analysis biology spatial biology. sharing for of previewed our a of some Researcher significant Annual highlighted medicine. afternoon, with is of drug potentially the NGS year GeoMx as in institutions advances thank extend using be The and naming transcriptomics School spatial even the mechanism perfect Harvard which highlighted year the Atlas. spatial Whole venue DSP Whole began of our and Summit, biology our launch

we morning, gold growing for the registrants this drew or Biology than year's biology. more XXXX we Conference, kicked which in off Advances from interest AGBT, the over XX highlighting summit countries, sponsor. in are X,XXX and This Our Genome spatial Technology

for XXX of approximately researchers, submit the strategic and and the remarkable XXXX provide guidance, year pre-pandemic members and posters more three bringing discovery the by the and NanoString performance the imager. more tell while the accomplishments and to company accepted few generated substantial Over We presentations, has next and AGBT our AGBT community the NanoString. spatial other body find than We like now this morning. investment strategic over year, then we available platform abstracts of translational will GeoMx press for orders, biology is a We call the oral any step turn than GeoMx DSP spatial on major biology the to achieving through systems. you NGS XXXX. launching our NanoString objectives the any of as days and of and hyperlink financial an XX backdrop that spatial as release fourth original can replay for GeoMx choice five successfully details GeoMx orders among testament summit innovation. proud new the collaborators our of which pandemic. to from quarter cumulative Prospective to the most biology strong the highlight ahead. genomic on included spatial providers, the instrument XX readout. impressive set operating spatial a total for the our molecular many outlook GeoMx segment of that for times and was for entering by as given presentations website, AGBT a position I'm Tom to are operating review research, four XXXX of our a quarter, our back provide year our overview a we to I'll to before I'd including take participating an and achieved of margin, objectives customers abstracts outlining over of all the the results of our our in the issued a

into continuum of highland in customer spatial We we platform new products spatial with strategic also this focus pivoted announcing the spans a our spatial imager strength molecular the with year. We on by needs. program biology will From portfolio that position for December. of objectives three year the entered our seat

Our of is Atlas. to as to estimated DSPs a system billion the Whole into extend first the using $X we readout. market leadership GeoMx with nCounter we we began biology our Transcriptome what then spatial launch When objective the GeoMx, analysis targeted developing be translational

and is our a that both reviewed published in RNA well of provides analysis, running today, are research needs offers below but automated The workflow readout nCounter the one Of to leadership used nCounter fully instrument XX on spatial studies position that RNA GeoMx suited and has meet panels streamlined the to performance simple plex. workflow, research. protein, translational Our FFPE analyze protein customers ability or a peer a in robust [ph] all readout built performance targeted samples, and high-throughput. for XXX their consistent

NGS of allow longer will in It allow of GeoMx served WTA, experiments Atlas quarter. These quarter. for second readout no with applicable disease, growth in knockout for published XXX our our by to our will presented spanning $X and Nature enthusiasm Atlas, last have more adopters. billion. to our the a particularly cost. WTA, and WTA to during AGBT research. great leveraging of are GeoMx see immuno-oncology, single-cell GeoMx researchers our high providing that we and XX% week, be program access Human Atlas, scientists billion human technology that biological $X followed synergy by increase WTA GeoMx products As QX. market shipping this offering XXXX Cancer far fields research plan orders. mouse the begin the they beginning Expanding assays. in readout. customers XX% applications WTA Atlas Illumina very biology, tapping RNA already intended demonstrate expressed projects, to the look leading of genes times a GeoMx Atlas, strengthen both, instrument GeoMx strong Alzheimer's already less launch of driven instrument RNA-seq. typified that There since announced Human in will reviewed Several field and a The Whole analyze. revenue, accounted content for of further projects, of times NGS is and We're it used early the The At aspect of this at immunology year. universal recently to future demand also accounted human go are well nCounter meetings, Last can which through models between first of With study market customer to both, to the beyond, estimated Transcriptome into strong, the Researchers Transcriptome assays month, doubled Whole Journal every research beyond you Whole oncology, published will QX demand COVID-XX. dozen Institute began by breast to $X,XXX TAP this biological launch the expected perform be a year by want we WTA this that than abstracts the value we research -- first week addressable from virtually GeoMx has customers true readout Whole so roughly essay We products the presented in systems to GeoMx in per that to indicators mouse the be neurology, or believe RNA the new estimated half Broad WTA pre-select interest. the GeoMx at and cancer, this studies will TAP and reach consumable majority and should we or for hypothesis-free Transcriptome Transcriptome WTA of required the the at have any the plex DSP and of price By for papers peer major WTA for our of of XX% XX second during and/or grown of our of QX, Transcriptome NGS ever version Medicine. traditional and sample, an to

interest Southwestern at study the in the For otherwise clusters tissues spatially and cells GeoMx researchers early RNA-seq, using the WTA location of and whole delighted cell within patterns assay. GeoMx similar the of cancer, Overall, single-cell influenced UT found transcriptome our expression bladder identifying we're to cells. localized with and previously instance, momentum, use how

Our second launch is for GeoMx of it's profiling. XXXX commercial see molecular advance leading next market spatial high-plex objective market the platform strategic experiments multi-cell our imager, is require and spatial the the to high-throughput, anticipated for development year. to for

identified at past this from as December. have market biology our need separate imaging a even in Day platform that measures highlighted higher presentation Investor resolution, Analyst for We an and

in The the FFPE in at samples. RNA different investment capabilities seven significant a Day. a believe We genes a solution spatial cell copy that XXXX. accordance study program has exceptional The instrument SMI research. of market-leading and adding or software instrument, probe accurate high-sensitivity, has customers plex derived the the is Our samples handles sub-cellular ahead SMI SMI opens to total resolution stage, tissue enable of will our single SMI week, SMI is from shared cell bright, information One presented the of program; designed in that demonstrating sensitivity a box, imaging as performance analyzes SMI and from sub-cellular such SMI bar typing to during currently are commercial user of down level, from the market-leading and molecular posters in at a proteins. amplification chemistry be small would both that single which [indiscernible] number. to our even at applications to December gene There RNA-seq, is imaging imaging. Analyst detail scalable of allows is new benefits for the performance by dimensions. keeps enabled spatial planned many expression a and types, in half cell our and detection platform offering imager, second very five beyond sample years validates of low and development XXXX for optimizing building already will the important with the the same the prep and balance the that and on prototype robust challenging interface lack three and demonstrated perform this be and Investor it of This focused including launch down and up and FFPE AGBT and mapping. set on short, high-plex in

use second interact cell and and Another types can typing with In the mapping measure cell study, a previously Two to One study using discovery cells applications each more demonstrates -- cancer than and PCR-sequencing, resolution, of XXXX confirming individual observations biopsy possible one a amazing they studies some made single plex high-throughput seq are single-cell in applications Cancer and them cell first with Cancer Dana Center transcripts study, and at of researchers being single-cell presented external in Fred other. collaborators, SMI thousands study those Farber had SMI. that each researchers that kidney run observations resolution. both from of Hutch neighborhoods to imaging, spatially. RNA- use with screen from in identify the by perform Center cells XXXX likely illustrates our which the for the enabling screens, a CRISPR to hundreds SMI

serve on a of Technology GeoMx The Access it early opening SMI that delivering begin By provide to process. expect of launch. covers GeoMx to resolution we and and spatial research our Program intend our of single-cell into believe access was spatial of today to the product with follow morning, are the Seattle into take our reviewed the from beginning SMI that to billion platform capability a will We that applications. We're customer program TAP will development allow used key of expanding same in TAP results orders portfolio a forward comprehensive GeoMx peer announced drove and our and SMI, development the the complements processing for provided we the segment, to successfully updating input technology as the billion. we ahead. we size to playbook to we $X prototype element we the research continuum perfect success or QX. during which multi-cell the double imaging markets of This over we look samples researchers that $X systems. you on We the for the send As of publications market, SMI year believe bring to

our levels. peaked our XXXX during impact to third the of in return business nCounter and business remain growth nCounter Our to environment. operating pre-COVID throughout balance robust challenging pandemic a is objective systems year. Demand QX, recovered for despite nCounter our the The

growth By returned pace more only the XXXX, generated of about of levels, both an the had approximately year. the and XX% slightly in nCounter instruments QX, for sold During we about increase XXX an double-digit base pre-pandemic of than instruments year-end, nCounter over We prior resulting to consumables. down systems, installed XXX systems from sequential in in sales XXX XXXX. sold systems

consumable systems safe. is these As additional which institutions lab revenue, nCounter nCounter as our reduced consumables had on come has for growth online, it keep will driver The impact a generate primary activities nCounter to researchers their pandemic business. pronounced the more

about per XX% remain with of Our in instrument pace a state pull-through roughly partially COVID consumable QX to of improving most XX% pull-through open a before quarter. activity. labs utilization the low dropped typical of Today, reduced fourth in to in

to neurology, new of that the continued menu as vaccinations. for collectively help into about such instrument to accounted expect continue for half in improvement second the to XXXX, consumables oncology. placements. areas our to new widespread drive of In to beyond and half nCounter in our adding panels base XXXX, expect following first installed outside our disease, expand infectious nCounter oncology, to Throughout we fields new the headwinds year, with We half of we panels adoption immunology, more result COVID-related this diversify modest of which

panel version outing response year. we mouse human instance, that of For complement panel last within infectious host expand research disease to plan will by launched this the a

over also growth and our Overall, for by to for we to base significant With NIH XXXX the details operating of nCounter grows in I'd turn and regenerative linearly, introduce Tom our installed biopharma pull-through of both our as continued panels new call and the like consumable review therapy medicine, see business will investment companies. We cellular results. areas that, normalizes. to the

Thomas Bailey

and thanks Brad, today. Thanks, for us joining all

instrument of revenue reflect was of sequential XXXX and of at [ph] we revenue QX of lower over conservative measures our GeoMx the revenue nCounter approximately and year-over-year. up in previous period. of this forma nCounter with return was case growth $XX.X about million beginning transaction XXXX product the QX compared million, occurred approximately XX% of revenue to and million, Veracyte same million, the consumables that recognize from fourth if to XX pro by continued December sold. has pro was Pursuant XX%. and QX Throughout the impacted as the $X the Recall was activity units $X.X representing quarter instruments XXXX. QX. sales. the derived X% the one-third most shipped, service For revenue to pandemic, the terms been lab year-over-year signal $XX.X transaction, as that forma from flat consumable revenue be million derived now to the instrument Veracyte was transaction per $X.X nCounter

While recovery lab to consumables lockdowns total December as a activity QX, XX% nCounter compared a late on to basis in particular infections into in and pro and yet activity revenue forma has as improved in January. in growth million, QX QX. COVID the to and surge to of pre-pandemic sequential $XX.X compared given occur, levels XX% lower XXXX, QX was QX

expectation sales imply year-over-year QX, GeoMx our in Our increased TAP growing XX% to about from up about and primarily about DSP revenue QX derived the per related recovering service revenue and annualized driven due pre-pandemic system per nCounter system, installed from XX% $X.X GeoMx Service to of instrument nCounter million increasing $XX,XXX of our growth, of $XX,XXX for and was both, projects, or by basis. quarter, contract service year. approximately per nCounter, pull-through pull-through $XX,XXX about consumable

expense including well initiatives. million, also savings our service initiatives, an investments commercial the a year. and These R&D spatial eliminated $XX.X Adjusted and ago, have driven impacted refer of change related offset revenue by as a adjusted points depreciation to remove travel year stock-based XX% due sales XX% year. biology investments realize offset about certain the to the the show the activities. by a to in of various compensation, sales, of partially whereby due a and being expenses Please We in Adjusted to ASP as Veracyte exhibits marketing operating impact our Veracyte-related webpage pandemic-related decline lower year-over-year. and quarter to GeoMx on [indiscernible] expense than SG&A our the how was and sales primarily customer million, are acceleration information or the to XX% by was of results we with in adjusted transaction. measures expenses. prior result loss non-GAAP a in as a QX certain from our margin or press non-GAAP mix or savings, as sales Veracyte are basis and consumable product our prepared. $XX.X $XX on which of was initiatives. last previous one-time service driven biology were on periods. savings compared and the QX COVID in increased trade our Veracyte margins spatial making Investor our digital related posted was was SG&A the Most as for transaction revenue group, release and items. instrument Relations savings of we decrease QX as than impact realized percentage XXX compared expense The in adjusted EBITDA Adjusted to improvement products of reductions XX% investments well support reduced now million, made basis by Turning year-over-year, provide detailed I'll decrease lower transaction lower was of partially as a we with nCounter we coupled expenses total of gross

guidance performance; materially year activity. we full consumables X XXXX to full to particular, impacted our XXXX by guidance in to April due landed on year reduced the revenue our now suspended nCounter, pre-pandemic lab upper uncertainty at results our was the end more pandemic, related Turning although GeoMx of range.

million, our in million adjusted year-over-year operating approximately growth outlook, million, margin X%. revenue the annual adjusted upper of Transitioning pre-pandemic cash, was activities and to representing results quarter For Adjusted forma from reduction capital million, for and service year exited to products we pro and and R&D XX%. of XX% was over the a and was XX%, line expense $XX.X representing $XX.X of was used XXXX reduction representing XXXX million. gross full Cash with XX% guidance was on the SG&A million XXXX, $XXX.X XXXX equivalents representing our to $XX.X product year-over-year growth range. of of end service investments. expenditures basis. cash $XXX expect short-term a $XXX revenue of $XXX expense XX% in with XXXX We million of year-over-year

annual revenue expect For XX GeoMx, growth to or of $XX to million XX%. XX% million we of

GeoMx sales, to approximately We about caught derive instrument instrument expect GeoMx and deliveries XX% to XXXX, up equal expect we bookings at and during from instrument about consumables. of be about one-third instruments two-thirds Having XX% GeoMx shipments revenue bookings on to with growing year-over-year. from XXXX in

between For pull-through pull-through now to $XX,XXX annualized panels an on with basis, the GeoMx raising customer as average NGS-enabled our and at $XX,XXX base. consumables, course year, across WTA over to ramp the that are are pull-through expected we installed of are instruments introduced and expect guidance our GeoMx

Overall, the half. the year and launch expect customer the to revenue the on of the the organizations we weighted to we've expected the second we see recorded the to of expect our pattern consumables and and second making, make about to seasonal that is revenue in in been revenue commercial first support of of roughly investments to XXXX. half WTA year, in GeoMx GeoMx, first of are XX% and significant half the of of XX% For in continuing a be impact half

includes compared expect expect growth. XXXX. revenue nCounter TAP business, return revenue, or $XXX service we of and to $XX which XXXX, levels, pre-pandemic to about XX% In to instrument we million as to nCounter million For XX% flat to year-over-year approximately our all historical also about or

average $XX,XXX system on Our for to year. nCounter consumable full guidance pull-through assumes $XX,XXX the per of installed approximately also

pandemic significantly the the in lab the more year. continue assumes will first of impact half to activity guidance Our

that nCounter half and result, modestly the nCounter could revenue -- experiencing normalize half as compared to pattern XXXX; in to to are a half. first we the the We expecting of second is weighted seasonal a pull-through as of more second XXXX see

gross our XXXX with the XXXX, range We to will in heavy, as GeoMx. to XX% expect growth margin revenue adjusted continue be of consistent XX% in be XXXX, to given the of in instrument

overhead operating We added total products opportunity. in as WTA expenses manufacturing investments anticipation scale our expenses; of to capacity spatial XXXX in increase operating biology launch. we also XX% have reflecting market up we year-over-year, in Transitioning in facility expenses the and consumable in expect to approximately post our adjusted

compared For unveiled adjusted XXXX, about $XX research million, SMI we candidates. reflecting in as efforts in to X% million approximately recently and $XX increase expenses, well expect as continued consumables to investments and product to software, GeoMx development development XX% and or record for to

are add year. course the million, is about the compared making we investments $XX reflecting our the in as EBITDA employees selling, and reach XXXX our of administrative compared commercial initiatives. XX% we adjusted flat to as $XX investments XX% and to expenses, and to significant our efforts about For reflecting general to or we increase about commercial support expected spatial to growth, new including to SMI, biology XXX to revenue $XX the GeoMx and approximately expect million and a expected long-term balance of to record loss be million, expect to customer expand during for XXXX $XX million Adjusted

approximately $XX first revenue product million quarter, and expect million. service of to the $XX For we

million nCounter million $XX includes about service revenue $X $X in about and range and to QX GeoMx million. million Our $XX to of revenue,

one-to-one instrument our GeoMx significant expectation order for continued pattern of Our growth, balances about range book-to-bill instrument revenue. a and

below capacity expect we have will patterns -- to indicative and ranges in to significantly, QX, be also typical most lower nCounter which whereby in as revenue activity of sequential usually is lab QX. impact consumables guidance compared QX are and Our continuing XXX% seasonal season

for to closing Now, comments. turn call the I'll back our Brad over

Bradley Gray

Thanks, of research, Tom. NanoString product the the science leading spatial biology. in hottest life portfolio has market field

meeting, the as breakthrough being display molecular our is and is on where leadership at speak; using science our AGBT imager. GeoMx Our spatial presented DSP we

targeted for the continued estimated of spatial supports each expectation XXXX pull-through outstanding the sheet DSP consumable is GeoMx with GeoMx biology by year increased a bookings to billion instrument balance strong capture Our growth. to and poised investments growth TAM and system. be $XX generated

a opening the up to remarks. correct times $X,XXX for is clarify, With great value GeoMx XXX of that [Technical minor your the prepare to misstatement correction, one questions, Before our call for providing had from like I'd I'd questions. biological roughly I the line open previous Difficulty] the times at to WTA RNA content cost. our four like


Peterson [Operator first Our question with from Tycho JPMorgan. comes Instructions]

Your line is open.

Tycho Peterson

I'll SMI. start Hey, thanks. the Brad, with

see when how then, to any Just -- to still you the sense there locked about the in both? And the you of you to prototype? back overcome? be the for of kind also some the you cycle talk selling that -- can the you half there; do publications? I just we may think evaluating technical the And launch, hurdles guess, start then, SMI-GeoMx TAP year the do Is with earliest down what's could launch think program, customers between have that you need to

Bradley Gray

Tycho. Thanks,

of of the molecular half will in current year. instruments point the clarity, for imager half of launch the XXXX, the not So spatial second second

Tycho Peterson


Bradley Gray

The Technology orders the open is of Access accumulate take to we're studies showcase Program power imager. think today, spatial the molecular beginning and that interesting we

making in various of place robust hands We instruments of taking to in our focus on be user and the XXXX. lion's here in between the of and NanoString; software think those engineering be that's them easy of Really, preparedness great have customers; with stages is half successful, second XX are now share development as at the the use, really they the fully customers the interfaces work efforts, great to and product we samples. that to that our instruments can about make prototype the will launch receive

to SMI? Access begin when see other of come to publications know, we yield that will with and be dynamic well. Technology we'll that terms time types a begin around we we'll with AGBT and week, had selling Program beginning out You XXXX publications customers In this begin be that my that on in the would extremely instruments; studies hope doing us at showcasing to that GeoMx of what was that similar same the served in so those our it XXXX we're

discovery to we'll both of GeoMx is a same to terms piece precisely facilities price sales capital the cycle, research. selling think it translational -- similar equipment I In serve what at core to of is. think lab and SMI We range customers, that TAP the expected the be a be it's

going Our they're transcriptome control market of digital a focus whole the and automation, provides, labs research regions plaques to spatial and it's going high-throughput to -- imager ability modestly over that will genomics capabilities, efforts the of assays want both really for those the profile to indicate are core want profiler the provide. that that it that complement lower high it spatial interest, with resolution will the it's

probably same the that be believe launch. really spatial during customers, GeoMx experienced be it'll we So of and first, of set product existing going who've we'll to already be biology course, -- power the will the customers

Tycho Peterson

curious how mentioned revenues sales you are the depth? then, just what's of this And year? think scale And of guidance cap hiring say you XXX headed able in then, to for reps; about separately, I'm you

Bradley Gray

our And the Yes, in from the tap guidance. revenue is TAP revenue really SMIs modest. is embedded

it to guidance, but so dollars guessing million meant showcase You revenue -- for that. be of lot than not designed it's is know, maybe XXXX, the not in to I'm probably power the in a driver instrument; is this a more a us really

question of remind sorry, I'm Tycho; me? second -- your terms In

Tycho Peterson

mentioned hiring of the You sales reps. XXX

Bradley Gray

which now alone with are alone. a had nCounter we GeoMx even nCounter -- the opportunity either or readout The that facing exceeds vastly we yes. TAM either with Yes, that with

sales first particular to later and instrument place are the that the take scaling SMI. advantage huge in opportunity we GeoMx we to have instruments up force of So

not late go our some expect we're in in be year, of direct I in first to year. we'll generalist our Our sales them they're segments. force of discovery And capable they is addressing in Europe, Asia, those markets not and and of are bifurcated market -- North hiring and be America direct direct translational, who both between of we'll -- most today, where early next reps are this markets expanding

Tycho Peterson

about then you nCounter, you your GeoMx, that this Okay. do then, interest? talk are you Is been last NGS. year? the oncology? see mainly about XX% disease? readout the or one is? previously Is And think you interest And just split as XX% whole think going know, seeing I had infectious where Where we transcriptome; on on it early can Where yearly immuno

Bradley Gray


Day, So I use look considering who instrument, at about our plan are people it's who XX-XX people a readout. our think, still up GeoMx from our of we even today, showed if nCounter think what funnel split and readout. Investor NGS we're funnel And that a that's of to where funnel you, by represented we substantially December where I is across minority purchasing NGS the at

be of forward analysis. in we the And panel of course, spatial an transcript the But have four. expect or tissue disorders. at terms And esoteric of different past, more where And that specifically systems Whole But very uses high getting skin oncology. continue the research, for whole XX% best interest, applications. built. of know, I COVID-XX to application number interest look this the like other we but long of from, rare of or top diseases tail a include because demand that And know where areas is customers in a least of of disease, three in we high engaged Oncology year with there's many in are the using a so researchers interested rare below or targeted lot have NGS one Transcriptome which long remains infectious know Atlas of or area tail nCounter GeoMx that answering we'll believe will coming you readout. did kidney NGS sold not it's is to a broaden, the I to neurology,

Tycho Peterson

Okay, thank you.


Schenkel with question is Douglas next Our Cowen. from

Your line is open.

Doug Schenkel

Hey, taking good afternoon, for guys. guidance. Thank you just starting questions, our on

You where you a could the essentially go toggle, your know, kind in through as different construct. guidance of things I think know, way,

because the things towards you margin One you expect the through year to pandemic that be to be strong. expect at heavy, XXXX of essentially me, that And remain the placements jumped levels, indicated out you capital. close tilted were mix to expect the instrument, you gross pretty to capital

strong, exactly that by uncertainty. know the And to you expect XXXX? what bit demand upside going with sure I'm consumable a probably starting be the the if XXXX. there would quickly of of the want what of that's return over know kind do year. and associated that one guidance, lab remain your if wondering both you of than risk targets course is relative you you're So is that And not more to does activity that mindful But might look you're be that COVID-XX like, extension, just to like was means if, is uncertainty to in you're where to thinking part it logic going margin instrument behind mean for that normal things

Bradley Gray

Now, thanks question, for Doug. the

And to we XXXX. is, are in XXXX small gross think, of relative expansion I know, levels. by reflective guiding think in increase that consumable You to XXXX modest compared mix a a in I margin

admittedly, the to rates. GeoMx half instrument of our So normal the lot two mix begin instrument a revenue their run said, has been. in year, our in expect rather will expectations be a back consumables, to the per consumer relative tempering do clearly mix normal as is consumables we we instrument, more half one first Our rates achieve to though, overall nCounter is of Tom which net, of than heavy instrument sort think nCounter run thirds And third there

So of any consumable I think don't demand. signaling kind we're about concern overall

historical is to genomics think the to given mix But relative many mix. we're instruments instruments just it's going placing, there. enrich I nCounter substantially remain for how

Thomas Bailey

prepared gross in So comment respecting margin remarks, my I one other as well did make, as.

been and be WTA are will investing have once up the to throughout we for year. We capacity the ramp in

quickly, be gross more if there could absolutely. that that to into things potentially factored our have we range. margin So upside that some we recovered said, range With

Doug Schenkel

improvement, thing of I probably prudent is like does March. helpful. that mean, conservative. I running sign the which seem I at. more would not guess beginning return overly just at That's Okay. but sitting you a baking the here kind being getting a meant some numbers, normal, fully It's through to in was That's assuming the you're what it were guys to do of we're it as wasn't as

Day, I you in an translational recognize the and clinical but discovery just is research, away both with some I clinical move envision also, your develop how and down where clinic. So that not You of in your translational assets helpful. GeoMx adoption, keep as down I partners from you well did products? associated highlighted the and of in At you positioned because Analyst know, you might that that seek them a that think there opportunity. just purposes help actively Clearly I to counter. line well as But research divestiture that think color is the focused Could of for ambitions clinical line. is scenario with for more the clinical

I'm about longer just term, how think trying to So reconcile things? to these

Bradley Gray

absolutely a billion time. that there's of was total GeoMx agree overall TAM, you estimated a our $XX is opportunity in we with Doug, X huge Yeah, spatial X billion an diagnostic and over reserved And biology, diagnostics. as in for reminder, billion

certainly mostly that know, way we're we'll developed about Health one and how Oregon really serving a GeoMx. there partner development of kind for with medical several one the organization, medical of does Mayo centers, And innovators have commercial to service really restart choose over enable out early opportunity and to our to simply academic the with partnerships up for time, easily LVT's really ways. DNA and call or either our address commercialize we start whom labs foreseeable another $X to could enabling Both lab development. haven't for we go like and LVT formal platform, how ourselves the and IVD retains on Science you could could future, We diagnostic dealer; the TAM. We effort organizations, kit as that program, of organizations sort Today, corporate let's commitment test diagnostics, build warrant. or GeoMx it we we University allow Or could arms and an simply made on the IBD. focused billion

think I it. we diagnostic of us it's the really we early want so declare, a will how is, And to pursue remain that to all for flexible and then nature opportunity and see we little what

Doug Schenkel

with Brad, one, you equivalents. of last capital million And Traditionally, the investing most year over to growth organically. close your cash in Okay. gone in $XXX has and

could think been about your existing position? external Are you balance augment with ahead, also to more you the positioned the As that and past you with are your well you in open your maybe have sheet. technologies, but how year making than investments

Bradley Gray

can that have in capable I into been about an to technologies keep on more past we or organic are have certainly a happening spatial And on. the bolster for brand, natural eye bringing one in Yes, you acquire channel, elsewhere absolutely that technologies. we the owner are balance our open there the be our enviable market portfolio. we close partner NanoString and mean, the this could than believe molecular a nature and other and today, sheet, Assay engine today things size strength think with a biology exciting and we have most we field. think imager, here around. innovation for between whole spatial that or of Transcriptome the of have leading and market innovation of we a we the roadmaps one and exciting That genomics the very And being I said, corner of don't our lot companies or we of know, the shape and in

are we that think I past. targeted thoughtful we than interested more of capable and the continue more in remain the have we'll anything do But in So and and future. to we

Doug Schenkel

right, thanks All the I lot. a appreciate time.


question Our from Arias with Daniel next is Stifel.

open. is line Your

Daniel Arias

time the it's of a on And there if the you thanks had Hey, think next we fast guys, do whole Assays, year? Cancer this you the you envision Transcriptome if evolves year? for to and I mix for early, stab, over of what know but to Discovery how could the course questions. the Assays take split Transcriptome Brad forward kind

Bradley Gray

question, It's Dan. good a

think think the benefit I researchers. enabled Atlas, directly base. existing the product GeoMx for, orders to appeals are which we have the systems XXX first Cancer cancer NGS Transcriptome that has GeoMx When the vast majority taken that about first it installed our you was our

a at field Transcriptome installed beyond appeal base allows real that the WTA but to to believe very clip. a will directly of existing will sell into The extent good to cancer. it excitement to Assay So base existing the certainly Assay I appeal to our our installed we of us what is, whole certain continue the

terms So of more Transcriptome rather I a is more result, more of which sell the to Transcriptome know time as take kits. CTA, Assays you you the of know, is this the time the Atlas, to And quarters. dominant by assay. order popular several And mean, next time, Atlas will or year, in Transcriptome think begun in an consumable instruments, Atlas whole than eclipses more first the impact before whole assay whole probably period the beyond is, larger hope have that's I I installed we've because base cancer. we'll science the where be for By areas a I entering the think of it

Daniel Arias

Yeah, okay, model. helpful the for very was that

year the there. is else assumption we're another you year ask nothing an of the that for that as whole to or one samples the samples into translational because for are But helpful mean, per might variable their it's on the me know important seven Transcriptome. number model be work guideposts run per the Let obviously, also I context give some well, early that XXX I with days had to if the assets? of in you launch. able element are

Bradley Gray

process of terms days samples Yes, as that in annual NGS systems you number said, from of GeoMx enabled determining about it's will very the early basis.

we year derived formally we will previous pull more that year And increased systems that previously I'd $XX,XXX from from is per per had $XX,XXX to $XX,XXX system view the to guidance our $XX,XXX. consumable predominantly per a than today, samples NGS know, You to estimated. say

do estimated might that recall, year per year. in at And NGS the process described samples had per value that half would the XXX per per twice about enabled samples of we $XXX systems systems we enabled year sample. number nCounter, you'll at approximately about the past, GeoMx As

still with we be of relative drives number up the that were in early described that the early per enthusiastic update that But Assays, days. Tom be it's our that's was showed think learn an that that that And behavior our going customer CTA experiences QX And and plus to real you provide very there. quarters before we're really know, need my year. and seem hope increase NGS in before samples is and that what the we'll that QX than time, CTA to can quite these guidance overall $XX,XXX running adoption expectations. we customers But, we'll of several future. the have of I GeoMx higher there's raising over

Daniel Arias

Okay, so much. super. Thanks


is UBS. next from Our question Dan Brennan with

Your line is open.

Daniel Brennan

through Great, kind is questions. the year? just exiting backlog growth, of to the orders remind just what order XX% guys. what guess the the first of you number for Thanks that one trying taking was GeoMx think total to the XX% I XXXX? And when for you XXXX. outlook you had us Can about was talked in

Thomas Bailey

Yeah, so it's Dan, I'll Tom. take that

our about the the And base but you end year was XX orders year. at XXX shipped that we right we So around the of about, we for as XXX, instruments. had reported recall, full that installed

be got then waiting be we've waiting would when shipped of the installed. look are that we number backlog. have that about that about orders still And instruments orders that total at the our So to XX into we've you versus total be number XX means year. And the expectation year, are in this headed throughout to that that backlog were i.e. maintained shipped,

we that guidance. XX% on revenue you commented get the commentary or growth, the numbers in So the XX% to splits with that's where lining up and on

Daniel Brennan

put leads And what to or suggest like like funnel qualitative, quite number model. know, bragging, then just wondering, like typically for any would you any looks the you in discuss other know close we'll XXXX? that qualitatively the about, color But more that, things you

Thomas Bailey

well, generation that gold XXXX through earlier GeoMx which the remained incredibly high styled over had summit, last events that case has our Yeah, we spatial it workshop I AGBT today. that has into week, you plus people know, lead held XXX the with the was we held on registrants sponsor

you to getting launch. it's a know, think the coming lead said, engagement Atlas high of therefore month and level very Transcriptome I nine generation being we're cycle. whole sales out That of a six

are going So months of orders. to going leads just nine we're to take that mature now, those purchase types into the into funnel

of the that But year. with strengthening see the going to going we're to in pleased the level of think of bring. very book that order back we're interest I'm half overall I the So actual

Daniel Brennan

if When you you at, operating like no way quantify, wondering at full XXX% think about demand capacity, is were state really know, if less the like, labs we than the you impact from there's just still, will, much with still COVID in, for steady to outlook? how being today, baked non

Bradley Gray

quarter, of system. to every labs, update CRM you know, you on the think I given status we've according to own an our Yeah,

maybe to our to of research XX% around as of provided hoped update, said that they vaccinated, resume at normally seasonality of expectations, that You labs I have half partially what fully open to. we November, have the will we open. were the would XX% the I would call the the believe, improved, play were second by of we had we're through. we'll nCounter in know, there, on their XX% look course, at into that open. now, we pace that accustomed where are And but fourth which been Strengthening, people we I and through full for we’re to what that in look think and last haven't back the I to come is really to through XX% continue And really pull that partially a mean, at going see that we're the lab believe at best measure half, the I on steady way our nCounter of consumables, speed first what fourth it means think XX%, this And you if in in state was quarter. consumable quarter year,

Daniel Brennan

on on a I we chemistry, know players XXx the And price just multiple Brad do about is how funding FFPE so with think then the new on, competitive just as their just one large in as thinking into but you it ramp, XXXX compete, landscape. factored I'm anything just wondering, you about and are Has then the think that? you how all it changed know, competitive to about the market

Bradley Gray

applications field life been of declared is the new research. field in the biology obviously a the spatial really as important that's science journal by know, kind nature, Well, of leaders set lightning, you of most

this GeoMx, products who out I the I companies field. biology launch And in benefit net, genomics, and that smaller where its position infancy, has is was will feel But elegant into room field, many will a carved which great leadership industrial XXx really set brand of of like incumbents at to described through the and everyone. complete both which from. have be first We a today, dialogues that and NanoString this plenty there's spatial introducing continue solution great a of for and

compatibility and that's is, not know, of mind there that. this about are customer Paraffin-embedded is has that things only competitive But guess three forward XXXX. In to Paraffin-embedded terms seeing We'll of the Visium create be from amount it it product not I'm a out. more certain [ph] yet in [ph] sure Formalin-fixed that comes will held to in that possible. translational I noise data GeoMx it the One will advantage interest you made coming begun keep as on Formalin-fixed has shipping. Synnex research Genomics, look and

automation, continue throughput, experimental things. will of results from the those from benefit reliability benefit increases design also region high We of interest enables and novel which the to all selection and that

GeoMx landscape regions The researchers mind picture Visium that quite approach, [ph] broad really profiling exactly provides different the which which all the second in want thing to than really provides of tissue is is bear a on in interest approach, of zooms it. where and

centers many in [ph] and bench leading products. competing different other is quite both. And in two selling Visium life the many same tools, instruments, already capital using where different the And they're third for so compete markets same you're thing And way. complimentary are dollars they're that the actually a unlike science space. GeoMx

see provided customers side an adopt broad of one false Visium kind You other. the is And in genomics landscape customers research a a to say time know, that that from product, research, systems Visium do are going so scale instruments, the we whereas dichotomy, it's to then [ph] while is angle automated to GeoMx using buying [ph] as and time. only or really really for consumable on large for

our XXXX. and in it. confident maintain to feel And translational that expect leadership in We so don't really changing see I

Daniel Brennan

final The one.

asked, sorry if answered think I'm you Tycho I it.

how Just in great or about in balance do was M&A the just we sheet shape. that on think

from we do expect XXXX? in what So NanoString

Bradley Gray

inorganic Yeah, obviously I that deploy guiding into hurry think not a in growth. capital that we're to we're

done is the have You know, need you it. in to the be history really different. NanoString never more, not and has acquisition assertive or our an But sheet balance now know, we had ever about

As think the the field biology. that's I spatial I a said innovation of happening lot title, we in have of

a deep, intending We're has not it You But channel arise. do great deep what a something year. by that needs. to the are saying stretch market we're and a we know, and guiding and a this position NanoString should to of clearly acquire great brand that that any we're understanding need opportunity in

Daniel Brennan

Brad. Thanks, Great.


Schulte Our next question is from with Baird. Catherine

line Your open. is

Catherine Schulte

think but GeoMx of Hey, guys, curious perspective? of came pacing quarter in thanks kind for about a waiting half year, the that last first quarter guess, about question. a quarterly first, talked that How us gave you we half orders. [indiscernible] I XXXX roadmap second give kind verses from order for should

Bradley Gray

it year. XX% in on to this the for course for a XXXX, oncology. GeoMx would are XX% I to XX% reiterate that at those half revenue, which instruments of beyond customers be half the was that the uptake course when well. I in was to readout this to Tom the then a into protein into in purchase to Atlas, of was when really, order who their new ago, selling around Atlas, areas look I whole half. the main for our primarily in the that's points during Yeah, and to the time. is think year, first basis quarterly about at some a second And purposes the offering is of who the and in over And of I Transcriptome XX% first half nCounter think that think And begin second of the evaluating look began Transcriptome six expect the be see number launched And think way centered to the as newly probably months buying overall first we'll instrument made growth of Cancer GeoMx

Thomas Bailey

specifically simply quarterly I Katherine, instruments, to that way about relates think facing. as to A

in As closer thirds one would big our book each that with of we XX% a is orders. guidance said, And and bit right about be year a bill, pretty last instruments. backlog be a to XX%, two we entered which would order where overall to to growth we one would that about nuance of to relative of to be quarter,

pretty that this what could a the with do quarterly you a get range for year what tight sense that full give way, for aligns if So we and year. the look it pacing math, to like, the you you'll got would

Catherine Schulte

But what Got percent what and a we it. of boxes for And GeoMx the around thoughts back if take give view nCounter longer term appreciate updated XXXX. up commentary step any and on GeoMx could of with next have kind over it could the over the two of to couple labs see penetration a coupled way, and in next you years similar sequencing-only three years?

Bradley Gray

on about we ranges. those say changed nothing probably we're them. since in has discuss would long But target really view topics, position capital, to our I or I a guidance, think term last provide don't

about be year, the I on as readout, readout XXX our nCounter nCounter GeoMx earlier, into read into of this for expect order know, nCounter out. XX used You something of I go for nCounter new a to XX We're would mean new base. selling instrument said which would systems to half to systems installed

readout means And you it's opportunity stage. GS, terms have within penetrating, there. of by enormous no saturating making at then progress an know, that we nCounter but So, in that

and with the has spatial installed penetrated think at the continues Assay, addressable every the companion I with look system, to be natural single Transcriptome we to for very Chromium system the certainly Whole Illumina a GeoMx chromium is biology. be analogy think best And base. very successfully a would which

Catherine Schulte

about if think And right. of indicator revenue then me, would of for more All rather that SMI success consider of of you And one just saw as per-sample to project kind a customers or terms lamp the that a and how that program? launch of basis? about projects on GeoMx last generator, what come what [ph] number you can in initially? an you be than a then program per you're interest we similar a with pricing that thinking you talk to Should through

Bradley Gray


It's targeted to with think that going I half year. a be have to key going who impact. this at SMI yield for that things of could doing we think scientists are papers reviewed technology highly our program we're opinion interesting peer leading certain

initiated fine in that definition And success. quantity If year not ordered would so projects of could say, a And and know, don't us to XX yield, good really for it's a with a sense we game finish of year. review papers XX quality to the game, me, great. year, be be I would that next this that

Catherine Schulte

Great. right. you. All Thank


comes question line Morgan from with next Your Savant of Stanley. Tejas

is open. line Your

Tejas Savant

Hey, guys, evening. good

bit SMI. than already launched, us maybe program TAP have So a you've of start Brad, little may you're earlier The anticipated. some I'll with

launch yet? a is where early next you towards to backend? could versus mean the commercial call would of rather year see of access first half that also middle that So we in make scenario perhaps the Or too just quarter the of than start the And sort there a beta fourth in next year?

Bradley Gray

the top Tejas, really, to coming wanted genomic engage We it opportunity sets our thanks first the data AGBT with world. the in And week, two use meeting this would customer not to for and in opinion the It out researchers with of begin TAP the with to question. SMI launch. acceleration to this to do a was communicated signal about leaders begin does perfect launch. what previously talk they a key therefor opportunity the for platform timelines an the initiate to

in You lab. feedback the will a before want customer interface incorporated user systems product get we play know into, software into effort incorporate ever user particular, to that be critical that it the what and the early and could in we development

of let's ourselves So launch that get pull don't ahead and timeline not -- forward.

remains I timeline. the overall think what we communicated December in

Tejas Savant

players any have two moment one plans then on, Dragon you takeaways data it. data Fair Illumina and customers. GeoMx, the term just you your on of better in as important at longer sharing more for -- the across the beyond tools was Do around obviously sort partnership? the Got that enough. intriguing need And open sort more know, of spatial help from one to session of of obviously, pre-AGBT the capitalize

Bradley Gray

we're we about Yes, talk them do, ready to Tejas. just though, not much yet

in -- many product our access to and across R&D it development There's graphics today this and their gain data the processing needs organization. people it's customers the the that have back things within data in analysis. single like, to than multiple compute GeoMx GeoMx cloud, many engineering the I've in and group us help our the even opportunities more software NGS clearly do to for capacity imaging molecular do We of enable biology, do share largest organization and even into users, times, store in said we our the overall

works We have nothing of announce stay to the year there the in but lot over tuned ahead. a yet the course today;

Tejas Savant

to to that mean, the But for might of overall what final push next margins Got it. one your that recovery of of making a high year out mentioned I know launch got Tom of offering do XX% I the sort to which -- mix. because investments you've recover the WTA sort little obviously And range? kind you as this plus on then SMI timeframe you bit. for expect sort I of margins. XX%-ish one well, service coming margin around mean Tom, you're expectations instrument year up

think to any event this given adding lines of and the at color we assume over you're year? loaded should course that is here? And Or the as about XX% cadence XX-plus should commercial more reps more XX% the of that on SG&A stage? then, So XXX we flat front-end just that's over

Thomas Bailey

end instrument the Sure. about expansion, back instrument be mix would kind that the On Probably heavy. that fairly of coming think right margin think in to for of Tejas, having 'XX. terms launch for continues at GeoMx same thinking it another way you're the I the and of at longer term margins I time while

comment process but think in And as number would we a those you long-term people. don't of it coupled get folks that activity I recruiting we're have for that's quickly the as various them hired year, I With full have expansion, think when further expense are dials number pay back future they we we to of we full on got year, account you the consumables intent usual expect up middle pattern is bumped quarters XXX even where to obviously on is particularly, But ramp to into what respect term we'll that pull-through get the year. still then would guidance, those with margin positions that folks first expect more we've then, seasonal the time half reasons. for visibility our pull-through be we making SG&A, I for in. capacity or feel possibly look the for on the usually about expense that in add be as bullish taking be to of more the that to a think So we speak back might don't the half, takes we'll over half for to can, -- be SG&A the about a heavier the some the quarter investments versus that bit first like little as as going, And though and overtime. longer and just to hire

So, that question. answers hopefully your

got you've know. If us let clarifications, other

Tejas Savant

much, so Thanks guys. Perfect. it. Got


gentlemen, turn for Q&A closing back to now over call the Ladies and the remarks. concludes Doug any I'll session. this Farrell

Douglas Farrell

joining for us much very Thanks today.

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