Seer(US:SEER)2022-11-09 01:42Financial Data and Key Metrics Changes - Total revenue for Q3 2022 was $4 million, an increase of 84% compared to $2.2 million in Q3 2021, primarily due to increased sales of the Proteograph Product Suite [43][44] - Total gross profit was $1.9 million for Q3 2022, representing a gross margin of 49%, which improved sequentially due to higher consumable sales [45] - Net loss for Q3 2022 was $24 million, compared to $18.4 million in Q3 2021 [49] Business Line Data and Key Metrics Changes - Product revenue for Q3 2022 was $3.9 million, including related party revenue of $1.3 million from sales of SP100 instruments, consumable kits, and platform evaluations [44] - Research and development expenses for Q3 2022 were $11.6 million, an increase of 49% compared to $7.7 million in Q3 2021, driven by increased product development efforts related to the Proteograph Product Suite [47] - Selling, general, and administrative expenses for Q3 2022 were $15.4 million, an increase of 30% compared to $11.9 million in Q3 2021 [48] Market Data and Key Metrics Changes - The company is seeing strong interest across geographies, with a pipeline of qualified leads split equally between academic and commercial customers [30] - The macroeconomic environment is impacting biopharma spending, with constrained CapEx budgets and elongated purchasing decisions noted in various markets, including China and Europe [32][84] Company Strategy and Development Direction - The company aims to support customers in scaling their use of the Proteograph Product Suite, expand its global customer network, and enhance partnerships to facilitate technology adoption [15] - The strategic focus includes driving a product roadmap to enable more applications and increasing the resolution of proteomic studies through initiatives like the Human Proteome Project [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the growing enthusiasm for the Proteograph Product Suite and its potential to enable population-scale studies [8][41] - The company expects revenue for 2022 to be in the range of $14 million to $16 million, with enthusiasm for technology expected to drive revenues towards the upper half of this range despite macroeconomic challenges [50] Other Important Information - The company ended Q3 2022 with approximately $441 million in cash, cash equivalents, and investments, indicating a strong balance sheet to support strategic plans [49] - The company has renewed its SBIR grant from the NIH, expecting a resumption of revenue contributions from grant and research-related collaborations starting in Q4 2022 [44] Q&A Session Summary Question: Can you discuss the funnel and guidance for the full year? - Management noted significant interest from proteomics and genomics researchers, with a pipeline split 50/50 between commercial and academic customers, but elongated purchasing decisions due to macroeconomic factors [56][60] Question: What notable publications or studies should be expected? - Management highlighted that several manuscripts are expected to be submitted by the end of 2022 and into 2023, with a focus on high-impact studies demonstrating the capabilities of the Proteograph [64][67] Question: How should spending patterns be viewed for next year? - Management emphasized a prudent approach to spending, with a focus on maintaining free cash flow and being mindful of capital deployment [75][76] Question: Are larger scale proteomics studies expected to contribute meaningfully in 2023? - Management indicated visibility for multi-thousand sample studies in 2023 but not for studies involving tens of thousands of samples yet [78] Question: How do purchasing cycles differ by geography? - Management noted that purchasing decisions are elongated globally, with specific challenges in China and Europe due to economic conditions [84][86] Question: What is the outlook for the Proteogenomics Consortium? - Management expressed optimism about the partnership's potential to scale, with strong interest from genomics customers seeking access to data [90] Question: Can you elaborate on gross margin improvements? - Management attributed the increase in gross margin to higher consumable sales and discussed potential improvements in instrument and kit gross margins over time [94][96] Question: What is the scope of revenue from research customers? - Management clarified that grant revenue from the NIH will resume in Q4, historically ranging from tens of thousands to low hundreds of thousands per quarter [100] Question: Are there plans to work with liquid biopsy companies? - Management confirmed ongoing discussions with various companies to integrate proteomics into genomic analysis workflows [102]