Singular Genomics Systems (OMIC) 8 Nov 222022 Q3 Earnings call transcript

Good day, ladies and gentlemen and welcome to the Singular Genomics Systems, Inc.

Third Quarter 2022 Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Philip Taylor, Investor Relations for Singular Genomics. Sir, the floor is yours.

Thank you, operator. Genomics’ Financial Chief Officer, Singular Spaventa; Officer, are Chief and Dalen today Founder Executive and Bruce Presenting Meeter. XXXX. Earlier results today, XX, for financial the X Singular months ended Genomics released September available copy on A press the release the website. of company’s is

and release and and inform may estimates, page. and of statements. page this that, the XXXX, Before replay operating and be information our that I available News Spaventa. on to in as or include Events Please for our only With other note XX-K CEO, website expressed to by Actual in or The reliance today’s website. most and revise Events be statements. results, undue our the reflect issued and call SEC on conference over responses & like a with these and release. any forward-looking plans of plans, Exchange as are statements to and during disclaim cautioned on audio found comments obligation management’s filings Investors questions will press on you recent more will views singulargenomics.com our our These statements forward-looking We we uncertainties. filings differ press opinion that or on call your the Investors Commission, or Form the filed today, earlier our today’s strategies. Form the Bruce results are will turn to place would including today predictions, can these website with risks those the X-K materially financial update described not begin, section XX-Q, call I uncertainties SEC’s expectations statements, from and to certain Securities risks including to November related forward-looking result of fully implied our X, at

on third we Single the call. forward to quarter and XXXX quarter you and It updating afternoon have the made look very across a Genomics productive welcome business. earnings progress to we Good was

chain our and our in product will topics: We three, on up; driving three the focus scale conviction success; manufacturing progress with GX’s and commercial roadmap. two, supply factors one, operations continued

First, fourth GX this continue as through of side, XXXX. are year ship the gradual in operations on on projected, the quarter scale to and track the up we

We system calls our which of supply have focus. on been made strong the third-party highlighted integration. and color, chain specifications we related reliable scale progress meeting a more to the provide area largely key related handful in previous manufacturing subsystems and challenges earnings of To in up, a has being

resolving quarter, significant we identifying made progress and This these issues.

We up have quality parts processes and test control also prior the to strengthened assembly. to systems

work have this of progress, new with this made an be nature. focus done, critical expected area to While significant with product of we remains any continued adversity

manufacturing have now instruments of to high-quality pleased are delight the streamline We the sight better will customers. that our GX. to to of We aim serve line reliable, build and

We and to will reliability and field. in of learn scale and more units as we to terms the internally the GX deploy about robustness production continue

learnings both these terms performance continue We KPIs. in on expect robustness make to to of based improvements and

level of available. delivering dedicated performance are We reliability highest the and

key more and The room past and competitive an differentiation second This and succeed in quarter success. areas landscape. sector increasingly factors driving on conviction roadmaps product on will GX announcements Singular’s opportunities the our transparent reaffirm of update focuses continued the build activities on commercial to information given competitive

across as it market. on across relates a accuracy of and about to for we customers GX roughly we combination fit, the from performance portion has workflow. this provides and up as cell GX We benefits more of this as number two-thirds will engage is This differentiated superior addresses matter and are differentiated markets of product tangible KPI even share scale types. of effective bullish unnecessary performance that or of would market is our a $X market decisions the application metrics remain and target market improve RNA-seq. market runtime, of Starting both in the We and will such that category thoughts economics. of value to on specs across mid single throughput market GX down batching overall time, and on such from of within about translational with billion compromising performance like market all power, NGS customers served or opportunity by across today clinical provides down And approximately the TAM these without CLL. ability The customers suited one-third sizes market resonated translation are flexibility believe for performance TAM, as the This the customers’ or top in delays NGS drive single rate, cost in with alternative total RNA-seq sequencer such we fit translational that front and these. experience believe commercial that avoid clear best an academic, a about provider. application labs, made half sample only customer needs panels, each predominantly or in inefficient over Rolling best solution output buying our run. top-down I compelling opportunity running of reads the is per cell broadly and top addressable a by up turnaround is is to and a the flow largely sequencers, GX from strong increasingly the and GX. major business or This GX execution. today, research our is clinical and further the perspective speed their flexibility The minimize opportunity one-third create labs The a that addressable data that to lane-to-lane ideally to TAM, in growing segments. and markets NGS that a applications we and offers most and back of labs largely is to to perspective optimistic target markets large becoming us sequencing and as excited

execution Turning to to in these how we and markets. intend win commercial

Chief Our and for tools. implementing X Sam months board Ropp building and on been of underway Commercial engaging world evolving customers, now has set team, with with is sales Officer, commercial processes a the right class our

customers. that process the high-touch our We sales have engagement found with initial requires

on translate deep for conduct into specific engages evidenced and and or quantity opportunities schedule tangible they real team a a quality how in-sourcing performance of GX a cases, gain applications, allows some sequencing per or purchasing by to the customers turnaround the deep such This experiments, volumes. Our as direct and their of and has understanding This prospective for level their outsourcing labs, decision. understanding use the their basis. of or basis released part sample team the by of with to our cost the specs as been commercial engagement benefits and customers, staff received funnel versus sample reducing world a time, in workflows of resonating all feedback

the to roadmap Lastly, turning update. product

R&D about enthusiastic We our made by team. the are we progress

Feedback will M-Series development kits solution are the on believe pricing. ultra unique Max that kits recount KOLs SX further be to or offering attractive offer the strong. our from M-Series to kits sub-XXX flow provide continues progressing We flow customers consumable which NovaSeq more We will GX. Read expand cells, and of base a cell provide the on our level short-read at

all success on the We tops feedback. roadmap PX. have product priorities, but a made provide on to based the M-Series Obviously, customer brief a priority GX in we want our update

research market at and flex higher same needs cells number terms measure around tissue. to throughput, our expanding efforts and translational all to describe used and the labs. lower sample cost needs of and research are We of multi-homing Throughput, the samples solution are

protein Additionally, in to is area are of that limited These provide at concurrent look RNA for time throughput multi-homing a resolution. the we in most at ability the able out same facial read the at information and opportunity. wants solutions high high high with PX sample of expect Current same samples will and an and concurrently uniquely labs context PX deliver be this. to suited resolution, also their notably FFPE to

We the internal begin PX to call to late and financial platform. access bring with generate information to novel will over program, samples of initiate expand turn where partnering plan researchers Dalen the program in together access in-house in that, our and collaborations to We QX, with potential quarter information early are additional and applications to we our efforts begin to to excited which the plan leading R&D technology will industry third are results. I and With prioritize details over using go in this XXXX. work customers we in

I totaled then million Net operating QX I Drew. or non-cash for QX XXXX the XXXX. Operating QX pipeline per in in R&D growth, year-over-year to $XX.X overall infrastructure These launch, of covering third QX share of expenses or remarks was you, scaling will key directional the included million stock-based compared runway. of was the by increase $XX.X per including $X.X to financials quarter will metrics driven $X.X million on for and $XX.X quarter and product expense XXXX. GX third in start XXXX roadmap. provide XXXX compensation The million expenses loss of million third totals by headcount total million to XXXX and the in our XXXX. of quarter quarter share $XX.X cash third $X.XX for primarily the support $X.XX for compared Thank the

quarter was short-term loss and Our million. million. weighted average share count for $XX.X net excluding restricted approximately totaled to per cash calculate to used Ending cash, equivalents investments, cash share $XXX.X the

shipping to closing acceptance Our the strong is install and pace a GX with and process. on year systems consistent the our measured on customer at additional support ability team a out focused manufacture, note

we investments. our addition, closely hiring continue manage and In to

increase We priorities manufacturing and related commercial expect modestly R&D. product our QX across to investments in operations to

for and to remain into of the to back Thank runway mindful very you focusing we macro investments the and priorities environment half closing and are remarks. cash XXXX. of Drew first enable However,

first, and and with closing, quarter XXXX; operational third, one the related ahead sheet. steady want conviction themes as planned, enhancements to supply the shipments Thank execution in progressing manufacturing well through issues and strong and the multibillion-dollar value a today’s future with including: a progress its with product to in GX reiterate focused strong NGS road a all continued scale-up I you, GX towards our balance market; as of differentiation drive GX number proposition innovations, deliver chain to prioritized commercial Dalen. resolving fourth in In as update, priority unique supported maps in our second,

let’s Now Question-and-Answer to Session open operator. up questions,

Sykes Instructions] Matt, your line coming first the from live. Goldman Sachs. Matt is question [Operator from And is

questions. guys. my afternoon, Good taking for Thanks

are and the the chain there made sure in on sounds It you disruptions make kind supply call. putting first Drew, things comments of minimal. some to the maybe, made that at Just place of outset are like progress

about As in what of you or taken supply you that of think that sort place measured like is to an ‘XX we kind this of care feel through pace as put of ensure shipments, issue you something constraints go point? be won’t you’ve at it chain can the measures

question. Matt, question. Hey, a good the thanks for It’s

certain ones the complicated we’re think make are we’re now that doing a to subcomponent into are testing I there things That’s especially put sure before one component, part. they right system. internally subsystems,

us vendor a I they also are have can the ship before parts. perspective, think additional supply there QA/QC do take steps chain from management to we to

about work things going use the big them system. break parts and to being learn we find are systems. know in now, the beyond a on them integrate the up, reps we as subsystem new way make where are bring to a system a field to in start ways get intended. to and think is focus they sure the trying real-world we ways, they right the as are are going And system going we’re frankly, That to said, we once performance customers take more the I to

will it be continual So learning.

break is, nature as or The runs. other need the usage of again, high-volume robustness many time many, to instruments. help thing start have we they see after will reliability we expect the over you the I way general, continued in and over say to And understand in do improvements

market it So internally incorporating we point, learnings before you they monitoring, again, side to and taking once are they the leave. out will then to after kind on scale we’re take coming field, doing think are fairly back can of QA customer, and There And that’s the at I working to new complex. behave of them. in but testing sufficient and the going a just how learnings, have at understanding those context mostly the and also step repeated they be closely be use in everything subsystems and then with this a product

continue saying and there way and at So we perform a internally, we steps evolve the we’re learn taking scale. adapt long-winded of as system will are concrete how kind of to

just for Thanks launch number recognizing the PX, priority. it. one Got in color. execution GX that is on And then your the

at you As resources you conservatism have the to you feel ‘XX like and think certain sort profile level into about of maintain that the look there, do the PX in a of an and from and OpEx OpEx sheet have the you of ‘XX? you of or be through as shifting progress place able to move balance within some you will the kind priorities standpoint with that PX it budget to require have wanting

Yes.

those of the right through questions going are we’re that financial our kind We’re ourselves. year, next for and essentially, asking planning now

out extension. we flexibility product. is now, operational We find is deck in is advance PX, we intend team the from the at we on And need that on terms like runway we on think a we’re to your of sure of trying one we answer the to non-dilutive have product I it We think look PX. environment we in is separate hands-on ways macro market about in make would out being get do it. be we the part and essentially trying resources to before all question partnership where as what could frankly, continue additional figure to market to or I of on the constrained on ways skis PX. deliver at short are making resources lean now, to terms investing principles either to organization an we a maintain think right attract to we our sure just first love The GX the And excitement PX. continue as really we very lot be to spending more to in get developing and the first of to interest right how able to first how to over possible spend. it the in ways But really but throw want have the do insulated that and

we I sheet would invest it balanced, push runway viewpoint being certainly a of and a kind balance So perspective. conscious sure to from very forward, say, of of making extension but flexibility

of QX, customer you’re in question of particular highlighted concentration just groups resonating? that’s any the that Got just it. last And one the on past you’ve shipments making been in one within those

pretty It’s and or medium-sized shipments academic and still pretty well, between we’ve orders even that balanced. your profile The clinical QX private once There reliability, that’s customer once record, split QX – of small to will as is likely is be adopts companies. have your probably a a that – kind of there a level of have track taken you robust more we base that’s probably credibility. more but industrial.

how of placements. kind that’s thinking early So early the we’re funnel about and

Great. Thank you.

Cowen. live. your Tom next Tom, question coming line The Stevens from from you. Thank is is

for question. Thanks the all. taking Hi,

over the a the to competitive on you the guess, specifically in of of in from one the coming MGI mid-throughput lower what environment customers in have forward? when system? what I for given have GX picked has general they for guys, they ramp yes, which growth you coming you the the that And going said confidence guess to kind I with regards and had brief presence space, to Just have evolving kind you U.S.

at looking that a versus been of, in realistically was that Candidly, the decision who aware at we or customer Tom. see We point buying thanks. buying engagements MGI the against. That’s really existing still Illumina there a system decision NextSeq we’re where this predominantly buying a selling or GX. was GX. potentially customer in that I’m between an haven’t NovaSeq or Yes, is typically

to So I that specifically. couldn’t really speak

one QA/QC made kind team, of insulates you Great, that changes of that. think GX the even thanks potentially kind kinks which now ramp, more out And chain for to side management so you’re going the that the you on What QA/QC too. then just Thanks. side on kind from semi some have forward? of and custom supply seeing

Yes.

We changes. personnel haven’t made management or

working a you we’re testing It’s more always to they that of learn quality And the of dozens as and your to units is things have the making kind business. of part I and subsystems on well. bring all units, up you variability bringing release to into control just is parts R&D make basically not – have time. small and vendor and all you take working an and been to It’s your on up scale we’re transfer in that able that time that bring There machine up of to just sure the instruments. are us. part is There as of it test multiple lot bring from with a manufacturing things subsystems, machine building of making able part and eventually the does to things getting robustly sure of early properly. they and parts. it you’re big transferring a up predictability And part to another consistency the the bring of with sure focusing to but a think start get take before up of working small through development and also sequencer up to nuanced and being a manufacturing, that’s means a kind that those of is it’s

you the want it’s reliable comment to manufacturing. to integration just that It’s need and systems supply related make downstream these transfer and the to made, not I get the sure just that you So, time chain. robust

that well. on strides made have We as

to and QA-QC a So, the that’s this real bring no just focus point, change think – at personnel yes, transfer on up, manufacturing. system, I understanding really

Thanks. Good stuff.

next John, line live. your from UBS. coming Thank you. is from question is John Sourbeer The

question. Hi. Thanks for the taking

plan what Does you on to in are generating mean a like? XQ? ship capacity Is shipping in you previously on to still mentioned revenues to next instruments ship quantify backlog XQ. track? you I any month And think just you the per Just currently two that commentary or looks that quarter? And one on track to way the or said

Hi John, Yes. this Dalen. is

are point. plans don’t have backlog to We a I do think this not disclosing that. metric at we

that commentary I more ability capacity we in previously XXXX of know to systems that into two we per here month still up standpoint, I to ramp. manufacturing these deploy QX an kind scaling revenue product some units, acceptance one typical think the gave From customer for tied our is early to of process initial around is think And gradually a about holds. about there recognition this. a what launch as which and like pretty

trying are work We acceptance the installation to through that and engaged customers the with process.

Our days our is that shipment, bit about a XX to post get target. of But kind different. situation aim little each done that’s is in but

can process well you in system expect that kind standpoint. QX to So, will a acceptance have tied of out that rev/rec goes it that here each as from

just I announcement And the on conversations NextSeq all the like existing you mostly with the a Got it’s cycle potential at it. and Illumina those since then guess sales customers. in X-Leap are the couple changed [ph] conversations months sounds having, on Have X-Leap it XXXX? ago and for of

say Most been this we Hey. there is are customers of Drew. the that typically really speaking mid-throughput. in a I are John, with the change. wouldn’t has

are lot a So, low their are we are end they NextSeq that running the Increasingly, customers sending running or with of of they talking out NovaSeq. are the sequencing.

think doing both down throughput. flexibility where and and to sequencing throughput ability a the the of they sending GX. of to turning opportunity higher out with instrument, area the an sequencing with them catch be real to have or are that’s out I and a is lower there scale customers up might internal certain And some types So,

we those traction customers. So, a had of lot types with have of

question terms your in to back really through specifically. X-Leap. heard of my much X-Leap again, think on I I haven’t original office

looks as new I what a is there that’s see do will think on was quite going for for it’s like I probably a bench-top line there ‘XX that little to to some sequencer, happening and mid-throughput. be which available point. wait some wait was features think like not retrofit were new versus of bit having don’t anything in for Illumina looks out a clarity subset And time. It a on released at of the NovaSeq if

was a think I labs. high probably target for event factories that clearing again, in little super anything, So, bit if our genome high-throughput us throughput is or it segment, in not

a I existing table different we is ways, actually opportunity in we and it’s feel the customer with new think very getting. market, So, the of the the with systems within entrants differentiated all coming it’s very all lot of of kind the fits feedback highly are terms like real. well in that to cards really on and – And flipped now

guess it. shipments in clarification then just on question And I Got just last earlier. one XQ the

far, a are we little the third there third shipped over quarter, in the about of yet later still that the are given the have way through way instruments quarter? a a or any Just through so you anticipated

have. We

have shipped. We

instruments, We detail go the and and the forward earnings updating instruments more ship shipped recent into the going the look next we feedback. placement, those to next And to installation, should how much are it’s months. couple not you on going, over shipments we customer of are have more call we unfolding, at yet but probably since all

us yes, and So, a for time really are excited. we exciting it’s

questions. for Thanks the it. taking Got

John. Thanks

[Operator Bank is Instructions] your America. from Ryskin the of Michael And coming next Michael, line question is live. from

[indiscernible] on is Thank you question. the for This for Hey. Mike.

the you how develop landscape second start are evaluating seen these have to competitive So, we I customers And in since insight maybe change was options? quarter, any some you wondering the have have on seen off, here. if all conversations customer

Illumina think I the market then we is most share and target conversations had think segment, and there weren’t which customers around our other general I that bench-top the core ways a do a labs potentially much medium-sized largely not mind is essentially, few we going academics, mid customer or entrants. and for going it. really dice sequencers, of there But of within are is about in Again, change can we largely customers is buying on And throughput high-end are small the to throughput again, high high high those really be instrument. Most say target were that sequencers super think of that a what businesses. and NovaSeq our to the profiles markets. I would markets, new super Yes. as end the one

us, for think much there since I So, don’t QX. is changed that’s

think and I know to is I once can be and get the And big and we few frankly, the their reliable is credibility the out thing, track a there they dozen record. in going have there think GX and people works it’s market it data. and

of a the think value and the I the reflect value going the really speed, the cost of all proposition GX. in true sudden, the flexibility to is

systems know still out it’s think to who until they place is think that hard which trying off. out that, there Beneath and get – had needs used figure but value is market, to and I that checked time there trustworthiness resonates to credibility to still has proposition everyone established. I reliability, where So, out It’s when. the in been early. how be figure really I everyone

makes That sense.

abilities, you one customer change seen budgets at and macro environment quarter funding, for Another all? the on much spending have in in

For the of change. any couldn’t no, speak academics, I

they sending are them, have a scale in small to place different. nature think Kind businesses, and of times, invest still R&D. budgets a lot sequencing and of that lot kind us with likely own their funding I I the become have medium one to in of is more value they because the they a And of has out on think do as up-charge money clear of I of to save a sequencing is and people on an the lab core service. how about that thinking propositions are

seen companies, buying small bottom than they conscious much are makes don’t for they And think I line, sure it really change buy, financially. making other the on that sure a just making medium-sized sense we so of have and whatever cost

I the scale where potentially, high mid-level area think throughput, different larger super little a market. it’s bit not but throughput the or high high-use one super is

outlay think that those think NextSeq they if thinking – CLIA-type there make money that right upgrade industrial are clinical those back. an So, sure in is are how NextSeq, is part, just I on there old tail are larger-scale you an a for you fleet how long now, their types is probably the the of if But customers scrutiny not customers either of I more a bit even trading customers, and people have most probably near-term, of savings. through cycle to or are attractive for I more or customer about earlier kind upfront of there ROI shops, little adopters. after think QX, just are of year fruit next of And make you have lower capital think terms in going our credibility profile we that the once established we of of QX some kind and hanging in they long-term

on And and manufacturing quick That And seeing makes of year sense. are we about consumables? or the quarter how half quarter on one following pressures more back it going or of instruments into one this any you either here, kind the supply back just chain, think up ‘XX? on the should the last early

board been board. the the costs across has there but seen increases have across increases not we think extreme, in modest of I cost,

something GX the cited it’s challenges instrument. The cautious definitely and conscious related to that were previously are specifically So, we had of. we more

on haven’t We spoke a it’s we any consumables of thinking second absolutely think now. profile about, cost really nor say experienced something the yet. would and focus although order I margin challenges I right are is But

types things. performance, and orders that and those will start and profile margin quickly, robustness, of to systems up very materials the getting and building shifting then reliability, running First

pressure think I some on upward nothing yes, price, definitely extreme. but So,

Got it. Thank Q&A of End you.

and does you. conclude today’s this Thank time. conference. And there were gentlemen, Ladies no in questions this queue at other

day. wonderful and You a time at your participation. may your disconnect have phone this lines you Thank for