Release Date: May 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Singular Genomics Systems Inc (OMIC, Financial) shipped 64 instruments during the quarter, indicating continued demand for their products.
- The G4 X spatial sequencer is uniquely positioned to address major throughput limitations in spatial sequencing, suggesting strong future growth potential.
- The company has seen an uptick in system utilization and consumables orders, showing increased customer engagement and product usage.
- Singular Genomics Systems Inc (OMIC) is expanding its Technology Access Program (TAP) and research collaborations, which is generating strong inbound interest from leading academic and biopharma sectors.
- Early feedback from collaborators and potential users has been positive, indicating a strong pipeline of new customer opportunities for the G4 X across various sectors.
Negative Points
- The company reported a net loss of $25 million for the quarter, which is higher than the previous year's loss of $23.6 million.
- Gross profit was negative $0.4 million in the first quarter of 2024, indicating challenges with cost management and profitability.
- Operating expenses increased year-over-year, adding financial pressure amidst efforts to scale and develop new technologies.
- The company is still in the process of productizing the G4 X, indicating that there may be delays and additional costs before it is ready for broader commercial launch.
- Singular Genomics Systems Inc (OMIC) is experiencing higher cash burn due to severance payments and other working capital needs, which could impact its financial stability if not managed effectively.
Q & A Highlights
Q: Can you update us on the funnel for the TAP program and how it has changed since the last quarter?
A: Andrew Spaventa, CEO of Singular Genomics Systems Inc, explained that the services funnel is divided into three segments: academic and core, biopharma, and CRO. The funnel is deep, with a significant number of projects in each segment. The company is prioritizing service projects that fit within their standard 300 gene immuno-oncology panel with minimal customization. Additionally, there is a funnel for the G4 X, prioritizing early access customers based on sample volume and customization needs.
Q: What are the specific areas of focus for adding capabilities to the G4 X in preparation for its 2025 launch?
A: CEO Andrew Spaventa highlighted that the focus is on transitioning from offering services to a product that can be sold directly. This includes hardening and optimizing the bioinformatics pipeline, software, and protocols across different tissue types. The company is also expanding from offering 50 genes to 300 genes to meet the specifications for the Q1 product.
Q: How are you balancing the support for existing G4 systems with the ramp-up to G4 X, considering both resource allocation and cash burn targets?
A: Andrew Spaventa noted that supporting the 30 existing G4 systems is manageable due to their geographical concentration and improved system stability. The company is maintaining a lean operation while preparing existing customers for the transition to G4 X, ensuring they are supported and trained for the new system.
Q: What is the expected cash burn trajectory for the rest of 2024, and how will cost savings impact this?
A: Andrew Spaventa projected that Q2 operating expenses would be approximately 10% to 15% lower sequentially, with further reductions in the second half of the year. The cost savings initiated in March are expected to ramp up throughout the year, contributing to a lower cash burn rate.
Q: When can we expect the first publications on the G4 X platform, and how will they compare to other players in the market?
A: The CEO mentioned that the company aims to have the 300 gene panel operational as a service by the end of the current quarter into Q3. They anticipate that service projects, especially with academic partners, will lead to publications later in the year. These publications will help demonstrate the platform's capabilities and differentiate it from competitors.
Q: How does the G4 X platform remain differentiated in the market, especially with potential new entrants like Illumina?
A: Andrew Spaventa emphasized the unique aspects of the G4 X's chemistry and instrument design, which allow for high throughput and speed in spatial sequencing. The foundation of their technology, protected by a robust IP portfolio, provides a strong competitive edge. The company is confident in the platform's distinct advantages in the spatial sequencing market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
