Release Date: July 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nautilus Biotechnology Inc (NAUT, Financial) has made significant progress in developing its proteomics platform, with promising results in detecting proteoforms.
- The company has a strong cash position, ending the quarter with approximately $233 million in cash, cash equivalents, and investments.
- Nautilus Biotechnology Inc (NAUT) has received enthusiastic feedback from key opinion leaders (KOLs) and the research community, particularly regarding its proteoform data.
- The company is on track for a commercial launch in 2025, with continued progress in core development goals and platform components.
- Nautilus Biotechnology Inc (NAUT) has managed to tightly control its operating expenses, with a revised growth forecast of 15% to 20%, down from the previous guidance of 25%.
Negative Points
- The company reported a net loss of $18.0 million for the second quarter of 2024, compared to $15.8 million in the prior year period.
- Operating expenses increased by 9% year-over-year, driven by continued investment in personnel and platform development.
- There is still uncertainty regarding the exact timeline for the commercial launch in 2025, with no specific milestones provided.
- The development of the platform has taken longer than initially anticipated, with previous launch targets being pushed back.
- Potential budget constraints from NIH and NSF could impact the academic end market, potentially elongating sales cycles and complicating capital acquisition.
Q & A Highlights
Q: Are you able to provide any further specificity on the launch timeline other than calendar year 2025? And if not, when would you be able to provide that insight? Is there a specific milestone that you might be looking to achieve?
A: Sujal Patel, President, Chief Executive Officer, Secretary, Director: We continue to believe that 2025 is still an appropriate time for the launch. We are working through development activities related to bringing all platform components together and building the necessary reagents. We anticipate providing more specificity once we can measure around 1,000 proteins or more from complex samples, which should occur before our early access period. The launch is likely in the second half of 2025.
Q: Are there any updates or additional color you could provide on what strategy you're looking at for the early access launch and what customers you'd be targeting?
A: Sujal Patel, President, Chief Executive Officer, Secretary, Director: Our early access programs aim to give proteomics-savvy customers early access to our platform to generate unique biological insights. This includes pharmaceutical organizations like Genentech and academic research organizations. The goal is to generate valuable data for publications and to secure preorders for the instrument.
Q: Could you dig a little bit more into the bioinformatics platform and what that looks like? Have you worked with customers to ensure they get reports and data that's easily understandable?
A: Parag Mallick, Chief Scientist, Director: Our bioinformatics platform spans several layers, from primary data quality to protein identification and quantification, comparative analysis, and integration with other data. We've done extensive voice of customer work to understand gaps and needs, and we've developed custom visualizations for proteoforms to help researchers understand the data.
Q: How are you thinking about the potential level of spend and budget for the academic end market next year, given concerns about NIH and NSF budgets?
A: Sujal Patel, President, Chief Executive Officer, Secretary, Director: We believe the novelty and value of our technology will help us penetrate the market despite potential budget constraints. We are open to various models like instrument rentals or leases to help customers get on board. Our high gross margins give us flexibility in these strategies.
Q: What areas are you achieving savings to modify your OpEx guidance from 25% to 15-20%?
A: Anna Mowry, Chief Financial Officer, Treasurer: We've realized we have the necessary resources in R&D and have limited further growth. We've also brought down the cost of reagents, offsetting their increased consumption. On the G&A side, we've found savings and delayed hiring the commercial team until we hit product milestones.
Q: Where are you in development progress for the instrument with respect to the launch target in 2025? Is the development of reagents the gating factor at this point?
A: Parag Mallick, Chief Scientist, Director: We've made significant progress in large-scale experiments, improving the scale, stability, and reliability of our platform components. The focus is now on getting the necessary reagents with the right characteristics on our platform.
Q: Regarding development cadence to reach a milestone where you can measure 1,000 proteins reproducibly, is this something that would happen quickly once you hit a certain point?
A: Sujal Patel, President, Chief Executive Officer, Secretary, Director: Once we have most of the necessary reagents, we will quickly move from measuring hundreds to thousands of proteins due to the exponential nature of our technology. The assay stability and reliability are already in place.
Q: How important are publications out of early access, and what should we be focused on there?
A: Parag Mallick, Chief Scientist, Director: Publications are critical for sharing information and generating excitement. We focus on core demonstrations of platform capabilities, integrated system applications, and biological studies. This multilayered approach helps drive adoption across different customer segments.
Q: How are you thinking about the diagnostic opportunity evolving, and will you go down the regulatory path at some point?
A: Sujal Patel, President, Chief Executive Officer, Secretary, Director: Our platform's dynamic range and sensitivity make it valuable for diagnostics, especially for low-concentration biomarkers. Initially, our product will be for RUO use cases, but we may consider pushing it through the FDA if its unique capabilities become necessary for clinical applications.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
