Release Date: August 13, 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) progressed the development of the G4X Spatial Sequencer, which offers unique capabilities like Direct-Seq for sequencing RNA in situ.
- The company initiated its first spatial technology access services projects and added to its spatial pipeline of customers interested in services, collaborations, and G4X instruments.
- System uptime for the existing G4 installed base averaged 95% during the quarter, indicating high reliability.
- The company saw its highest quarterly total yet for consumable orders and shipments, with average annualized consumable pull-through for the installed base approximately doubling from Q1 to $60,000 in Q2.
- Singular Genomics Systems Inc (OMIC) successfully amended a long-term lease obligation, reducing its long-term lease obligations by approximately $50 million, enhancing financial flexibility.
Negative Points
- Revenue for the second quarter of 2024 was only $0.7 million, indicating limited sales growth.
- Gross profit was negative $0.2 million in Q2 2024, compared to negative $0.1 million in Q2 2023, showing a worsening gross margin.
- Operating expenses for Q2 2024 totaled $22.6 million, which, although lower than the previous year, still represents a significant expenditure.
- Net loss in Q2 2024 was $21.3 million, a substantial figure that highlights ongoing financial challenges.
- The company expects Q3 2024 cash burn to be higher than Q2 due to a one-time upfront lease modification payment of $4.5 million.
Q & A Highlights
Q: Can you confirm the timelines for early access and commercial launch of the G4X Spatial Sequencer?
A: Yes, we are on track to start early access by the end of Q4 this year and will sequentially roll out other early access sites through Q1 next year. We plan to have a commercial launch towards the end of Q2 next year. β Andrew Spaventa, CEO
Q: Can you provide more details on customer interest and the funnel for the G4X?
A: We have received very positive feedback, particularly on the cost and throughput advantages of the G4X. We have over 50 interested parties in our funnel, including academic settings, CROs, and major medical centers. Our focus is on prioritizing projects that do not require customization and have a long tail of work. β Andrew Spaventa, CEO
Q: What are the biggest technical or product development challenges you face before the commercial launch?
A: The main challenges include optimizing protocols for different tissue types, simplifying the workflow, and ensuring consistency in results. We are also focused on transferring the product into manufacturing and scaling it up. β Andrew Spaventa, CEO
Q: Should we interpret the step down in reagent rental placements as a shift in focus to the G4X?
A: Yes, our strategy is to maintain the existing network of customers and prepare them for conversion to the G4X. We are not actively pushing new systems for sequencing only; our priority is developing the G4X platform. β Andrew Spaventa, CEO
Q: Do a majority of your existing G4 customers have interest in spatial sequencing?
A: About two-thirds of our existing G4 customers have expressed interest in spatial sequencing. We expect a good number of initial customers to convert very early once the G4X is launched. β Andrew Spaventa, CEO
Q: Can you discuss the costs associated with the Spatial Sequencing Technology Access Services program?
A: The costs are included in our cash runway forecasts. We have earmarked several G4X systems for services and have a small number of lab personnel working on these projects. β Dalen Meeter, CFO
Q: What are the financial results for the second quarter of 2024?
A: Revenue was approximately $0.7 million, with $0.4 million from consumable sales and $0.3 million from one capital purchase instrument placement. Gross profit was negative $0.2 million, and operating expenses totaled $22.6 million. Net loss was $21.3 million. β Dalen Meeter, CFO
Q: Can you elaborate on the lease amendment announced last week?
A: We successfully amended a long-term lease, reducing our long-term lease obligations by approximately $50 million. This move enhances our financial flexibility, allowing us to focus more resources on the development and commercialization of the G4X. β Dalen Meeter, CFO
Q: How is the development of the G4X progressing?
A: We are advancing work on instrument method development, expanding compatible tissue types, and improving protocol performance. Our initial G4X kit offering will be our V1 immuno-oncology panel with 300 genes and 12 proteins. β Andrew Spaventa, CEO
Q: What is the strategy for the G4X early access program?
A: The early access program will include a select number of customers with early access to the G4X. The purpose is to learn and incorporate feedback for a broader commercial launch and to generate demand. β Andrew Spaventa, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
