Bionano Genomics - Earnings Call - Q4 2020
March 23, 2021
Transcript
Speaker 0
Good day, and welcome to the Bionano Genomics Fourth Quarter and Year End twenty twenty Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. At this time, I would like to turn the conference over to Amy Conrad, Investor Relations for Bionano.
Amy, please proceed. Thank you, Hillary, and good afternoon, everyone. Welcome to the Bionano Genomics fourth quarter and year end twenty twenty financial results conference call. With me today are Doctor. Eric Holmlin, CEO of Bionano and Chris Stewart, CFO of Bionano.
After market close today, Bionano issued a press release announcing its financial results for the fourth quarter and year ended 12/31/2020. A copy of the release can be found on the Investor Relations page of the company's website. Before we begin, I would like to remind everyone that certain statements made during this conference call may be forward looking, including statements about BioNano's business strategy and commercialization plans, sales pipeline, anticipated benefits or improvements to the Saphyr system, the advantages of the Saphyr system over current technologies, our expectations regarding timing and content of study results and anticipated benefits of these studies in driving adoption of the Saphyr system. Such forward looking statements are based upon current expectations and there can be no assurances that the results contemplated in these statements will be realized. Actual results may differ materially from such statements due to a number of factors and risks, some of which are identified in our press release and other reports filed with the SEC.
These forward looking statements are based on information available to BioNano today, and the company assumes no obligation to update statements as circumstances change. An audio recording and webcast replay for today's conference call will also be available online in the Investors section of the company website. With that, I'll turn the call over to Eric. Eric?
Speaker 1
Thank you, Amy, and good afternoon, everyone. I want to thank you all for joining us on our year end 2020 call. And to open up today, I'd like to review our progress and updates, and then Chris will review the financials. I'll close it out, and then we'll open up the call for Q and A. But let me begin by saying that twenty twenty was really a tremendous year for Bionano.
And going into the year, our focus was on making it easier than ever for customers to get access to Saphyr data. The objective was to really raise awareness about the unique and extensive insight that Saphyr and optical genome mapping provide into structural variations in the genome. And despite the start that 2020 brought us and the challenges that came along with it, we were able to successfully increase the installed base of Saphyr systems to 97, which was an increase of 24 systems from the prior year. We shipped a record number of flow cells and removed a major roadblock for customers by expanding our services lab, which made Saphyr data available to customers for as little as a few $100. This concerted effort to seed the market resulted in a number of high profile customer engagements, numerous studies published in 2020 and fueled the presentations at our Next Generation Cytogenomics Symposium in January.
Globally, we saw a substantial increase in the interest in optical genome mapping for the power of genome analysis that it provides. We announced reagent rental agreements focused on cytogenomic validation studies with three of the largest children's hospitals in Europe and Spain, Italy and France. We had agreements with cytogenetics labs and hospitals in Germany, Switzerland, Slovenia, Australia, and Canada. We also saw traction throughout Europe and in Australia and Canada in part we believe due to the fact that their healthcare systems are single payer systems and the path to reimbursement for novel technologies in healthcare is typically faster than in other geographies. In The U.
S, we've noted that a path to reimbursement from third party payers is going to be a necessary step to gaining widespread adoption of optical genome mapping with the Saphyr system. And that's something that we recognize can be a long and challenging process, but we're very focused on addressing it. Now to complement the expansion of our commercial efforts, the utility of optical genome mapping with Saphyr was validated through benchmarking, scientific publication of data and of course clinical adoption. Throughout the year numerous rigorous and extensive comparisons of Saphyr were conducted against traditional cytogenetic methods, long read sequencing and the results of these comparisons were published in several key publications presented in different presentations at industry meetings that were taking place and through a variety of announcements. All of these studies showed that Saphyr is a superior alternative to traditional cytogenetics methods.
Specifically, as you can see on this slide, we had growing excitement as more and more researchers got access to the breadth of data on structural variation and genome structural analysis in general that Saphyr can provide. And through these studies they demonstrated Saphyr's ability to go beyond the standard understanding of genome structure in a variety of clinically relevant, areas. On the clinical side specifically we are seeing Saphyr bring value to cytogenomic analysis by reducing the total reagent cost, turnaround time, labor cost and by simplifying the analysis of genomes in cancer patients and patients who are suspected of having a genetic disease all compared to today's workflows in cytogenetics and we believe that Saphyr offers a truly better, faster and more cost effective tool that overall will accelerate to actionable results and improve patient outcomes. We believe that this path to widespread adoption of optical genome mapping with Saphyr in The U. S.
Requires three main prerequisites. First, publishing multiple large studies that show concordance with the existing standard of care. There is a requirement for labs that adopt the Saphyr system across The U. S. To develop assays for clinical applications and validate those assays as laboratory developed tests.
And lastly, a clear path for clinics and labs that are operating optical genome mapping assays. They need to be able to bill insurance providers and be reimbursed for their tests before they'll comfortably convert over from the standard of care. Now one of the most important areas of validation in 2020 was with the University of Iowa Hospitals and Clinics who switched their method of molecular testing for patients presumed to have FSHD, which is a rare muscular disease with no approved therapy to optical genome mapping with the Saphyr system. In addition, we had a very meaningful publication come out using Saphyr data from UC San Francisco Children's and in collaboration with Oakland Children's Hospital. Here researchers and clinicians were able to diagnose additional eighteen percent of children who were otherwise undiagnosed standard of care testing using the Saphyr system.
Now this kind of work and all of the studies that have gone on over the course of twenty twenty are truly groundbreaking in the scientific advances that they bring in showing how diseases can be diagnosed with new tools, but they really enforce why everybody at Bionano Genomics shows up for work every day. We are truly determined to revolutionize the way diseases are diagnosed and in particular for children where a diagnosis of a disease can have a profound effect on their lives, on their families' lives and on the lives of the caregivers and the healthcare system overall. Our goal is to shorten the diagnostic journey and accelerate the path that these patients are on to managing their disease and in many cases the most effective treatment. Now in 2020 we've also made significant advances in our technology and released the biggest upgrade to our safe software capabilities, which together have continued to improve the capability of Saphyr. We introduced our newest DNA isolation kits which allow for faster and much simpler isolation of ultra long genomic DNA from smaller and smaller amounts of samples including solid tumors, which has removed one of the most significant hurdles in the study of structural variation in solid tumors.
We also saw our users conduct comprehensive structural variation analysis throughout oncology where they're able now to detect rare variants that may be the drivers of different diseases including genetic and inherited diseases as well as being able to see off target effects that may be occurring during CRISPR based gene editing. All the while using the Saphyr system and telling us that it's easier to use than other genome analysis systems in their labs. And so this feedback and the progress that we're making makes us believe that our system is ready to serve the needs in what is an increasingly large market for structural variation analysis both on the clinical side and on the research side. Expansion in the number of laboratory developed tests or LDTs in the market is another driver of wider and wider adoption. We announced last quarter, the German accreditation of Saphyr for the detection of various types of structural variations that cause constitutional genetic disorders.
And this is a prime example of how Saphyr can be an alternative to existing tools, getting to faster diagnoses but also reducing costs. Similar accreditation processes are underway, for genetic diseases and leukemias and other parts of Europe as well. Here in The United States, labs such as Praxis have launched a menu of laboratory developed tests and obtained reimbursement codes for them. Augusta University is also developing a novel laboratory developed test for cancer based on their results in heme malignancies and solid tumors which had been presented at the Cancer Genomics Consortium meeting. And so for us 2020 was really a spectacular year.
And now that we've had a chance to cover many of the advancements, I want to turn the focus to 2021 and talk a little bit about what we see ahead. 2021 is truly shaping up to be another transformational year for the company. Thanks to your support, our shareholders, we've taken major steps to secure the financial future of the company by raising a substantial amount of capital, which sets the stage for execution of our plan without the overhang of capital limitations. 2021 is going to be critical to the long term growth. We are squarely focused on driving the global development of Saphyr based assays for use in clinical testing of patients with genetic diseases and hematologic malignancies and on the adoption of Saphyr for use in larger clinical studies that will allow us to obtain a critical mass of data on Saphyr application across a number of key areas including prenatal and postnatal genetics, hematologic malignancies including leukemias and lymphomas and then solid tumors.
These data are expected to expand the number of publications including peer reviewed ones and support an increase in the number of laboratory developed tests on the market with the goal of reimbursement of Saphyr based laboratory developed tests by third party payers in The U. S. And around the world. Now a big part of our ability to drive adoption of Saphyr stems from the successful acquisition we made of LineaGen in 2020, which added important products and skills including the content, domain expertise required to build a reimbursed diagnostic menu on Saphyr. By combining these products and the services business, we believe that we can accelerate the broader adoption of Saphyr as a technology for clinical assay development through outside of genetics.
Overall, twenty twenty was a great year and a challenging against a challenging backdrop and we are continuing to gain traction in many important ways and we are seeing evidence that this strategy is working With 2020 showing us that Saphyr is ready to serve a significant need in a substantially large and growing market, we see that our customers are ready to adopt the new technology. And I believe our goal of establishing Bionano as the next great genomics company is greater than ever. And with that, I would like to turn the call over to Chris for an overview of financials. Chris?
Speaker 2
Thanks, Eric. Let me start with a review of our financial results for the fourth quarter and year ended 12/31/2020. Revenue in Q4 was approximately $4,000,000 consistent with the preliminary results that we issued back on January 7. This represents an increase of 43% compared to $2,800,000 in the same period of 2019. The increase was primarily driven by a $1,100,000 increase in service revenue, largely from our Lineagen subsidiary acquired in August 2020.
Revenue for the year came in at $8,500,000 down $1,600,000 or 16% from 2019, largely due to restrictions on our customers' lab operations related to COVID-nineteen. Whilst activity is picking up, we do believe that COVID-nineteen restrictions will continue to affect revenue across our business. Our gross margin came in at 30%, down 9% from the same period last year due mainly to lower instrument selling prices and some year end accounting entries related to inventory value cleanup. As Eric mentioned at the beginning of the call, we ended the year with an installed base of 97 Sapphire systems, an increase of 24 from the year end 2019. Our reagent rental and our services programs are doing well, reflecting an increasing interest in Saphyr and the incredibly novel and meaningful data that the system can produce.
We are actively trying to make it easier for potential customers to obtain and use Saphyr data, which we believe will lead to instrument and consumables revenue down the road. Operating expense for the 2020 was $12,300,000 an increase of approximately $3,400,000 compared to $8,900,000 in the same period of 2019. The increase is primarily due to an increase in salary expense. During 2020, headcount increased by 49, including 33 that joined us as a result of the Lineagen acquisition. Operating expenses for the year ended December 31 was $41,300,000 an increase of approximately $11,400,000 from the $29,900,000 in the same period of 2019.
The increase was comprised of about $4,500,000 of salary expense, 3,400,000.0 of legal and other outside services related to the acquisition and other corporate activities, dollars 2,600,000.0 of Lineage and expenses and just under $1,000,000 of various other net changes. Finally, our cash balance as of December 31 was $38,400,000 So clearly, 2021 is off to a great start. Since the beginning of the year, we raised about $335,000,000 through two underwritten public offerings, sales on our ATM facility and the exercise of outstanding warrants for our common stock, driven by the increase in our share price. Our strong balance sheet allows us to shift our focus achieving our long term vision of disrupting genomics and thereby contributing to advances in healthcare through the global adoption of Saphyr. Our main objectives for 2021 revolve around clearing additional barriers to widespread adoption through the execution of our clinical studies, continuing to build on the number of published studies showcasing the power of Saphyr and Saphyr data, supporting the development of LDTs and building on the market momentum that we started to see through the course of 2020.
With that, I'll turn the call back over to Eric to discuss some of our upcoming milestones, then we'll open the call up for Q and A. Eric?
Speaker 1
Yes. Thanks, Chris, for that summary. And what I think is clear here is that 2020 has really set an incredible foundation for us. And our fundraising here in 2021 has cleared the path for us to really focus on execution going forward. You know, what we've put together here is a summary of important milestones and what we see as the timing for each of them.
And, you know, the key takeaway from these milestones is that while we are focused on the commercialization and commercial adoption and utilization of Saphyr and optical genome mapping very broadly, we want to make sure that we really emphasize the importance of clearing the path to truly significant adoption overall. And so a lot of these milestones are based on that aspect. And so beginning with the second quarter, we expect to see important accreditations for the capabilities of Saphyr in certain European markets. These accreditations lower barriers for other labs in other markets to adopt more broadly. We will be expanding the commercial release of assays and capabilities on Saphyr, including prenatal assays for the first time in the third quarter as well as expanding additional pediatric assays around different sample types that can be adequately handled for optical genome mapping.
And then what we'll begin to see in the fourth quarter is a number of the key programs that are underway in clinical studies starting to show results. So we are expecting to see the interim publication of results from our pediatric clinical studies. We expect to see validation of additional laboratory developed tests and other reimbursement codes emerging from these clinical study sites. We're going to have a prototype of a next generation high throughput Saphyr, which will expand capabilities of optical genome mapping even broader than what they are today. And importantly, we expect the installed base of Saphyr systems to grow by as much as 50 on a year over year basis to 150 systems as a key step in just increasing the amount of utilization of Saphyr that's taking place in the market.
And so when we look at this progress, we see it as being very important. And we see it also in the context of a much larger vision. And that vision is really about what is the future of genome analysis. And to understand that vision, we look to the past and what we see is that the first twenty years in this century have focused on genome analysis that's based first on microarrays and then on next generation sequencing. And the impact that these technologies have had on healthcare broadly defined has been simply incredible.
And for investors, the value creation has been remarkable as well. But it's clear that innovation in these technologies is leveling off. So when we look to the future, what we see is that the era of big biology in genomics is going to be driven by new technology and certainly we see optical genome mapping and the Saphyr system at the center of the next big wave which is going to be focused on genome structure analysis. And so we think that we are really at the beginning of this incredible journey. We're pleased with the progress that we have but we're very focused on what the future brings and we couldn't be more excited about where we're positioned.
And so with that, operator, I'd like to turn it over to you for Q and A.
Speaker 2
And
Speaker 0
A. Our first question comes from Kevin DeGeeter of Oppenheimer. Please state your question.
Speaker 3
Hey, guys. Thanks for taking my questions. Just a couple for me today. First, with regard to the next gen optical imaging platform and the target to have a prototype by 4Q. Can you just walk us through a little bit in terms of the target product profile there?
And incrementally, what are the primary operational challenges to meet that 4Q timeline?
Speaker 1
Sure. So what we're focused on is building a platform that can serve the substantially higher throughput operating labs compared to your traditional community cytogenetics lab. The community cytogenetics labs represent the vast majority, but these higher volume labs take a significant amount of the volume. And so we are anticipating by the time the system is launched and, you know, up to full speed that it will represent a increase of approximately 14 fold over the current throughput of the Saphyr system which is roughly 5,000 human genomes per year. And so that's a pretty substantial overall increase in throughput.
When you talk about the milestones and work that needs to be done, it's relatively straightforward in that we've built these instruments before and the principles of operation are not changing, but we are adapting a completely novel optical imaging platform, which is, of course, off the shelf available today and we need to implement it in the configuration that's useful for optical genome mapping. But there's really no substantial invention involved. And so we believe that the program overall is relatively low risk.
Speaker 3
And I get a fair number of questions from investors with regard to the addressable market for Saphyr in the pediatric and prenatal markets. Can just comment on how you see the addressable opportunity in those two segments?
Speaker 1
Sure. I mean, we typically look at it from the perspective of the number of labs that are out there. And if those labs were to adopt Saphyr and convert their menus over, what would that look like? So in cytogenetics broadly speaking there's roughly 2,500 labs worldwide. Probably somewhere between 2,000,000 samples per year being processed for this type of molecular pathology.
And overall that represents somewhere in the neighborhood of a 3,000,000,000 to 3,500,000,000 market for us. That includes some of the research market as well. But something that I would really emphasize for these investors who are asking questions is that that's the market that is right in front of us today. And with the technology accelerating capabilities as quickly as it is being used in research to discover new applications, the total market opportunity for optical genome mapping goes well beyond that low single digit billion number and it's substantially larger. It's harder for us to quantify it specifically because some of the applications haven't even been developed.
Others are still on the come. Think about when optical genome mapping is used more broadly in prenatal testing and throughout pediatric testing. Thinking about more broadly a situation where genome analysis is conducted on every newborn, so not just the idea of doing sequencing and looking at SNPs but starting to look at genome mapping and structural variation as well. So the potential we believe is really very significant but some of these proximal markets add
Speaker 3
up to being in that range. Very helpful. Then lastly for me. With regard to the fourth quarter, what was the consumable revenue? And can you just comment on the relative split between side of the analytics and other applications?
Speaker 2
Yes. So consumable revenue was, let's see, I've got it right in front of me here, about $4,000,000 No, excuse me. Sorry. Give me one second here. I have multiple things going on.
Consumable revenue was about $1,300,000 in Q4.
Speaker 3
Qualitatively, how do we think about the split between do we think about split between cytogenetics and other end markets?
Speaker 1
Outside The United States, would just say outside The United States, it's it's, you know, $75.25 $80.20. And and I would say it's it's it's it's not quite a 100% human, but but it's almost entirely human. And then within that, it's seventy fivetwenty five. A lot of the nonhuman is still focused on drug development. So we've really shifted from a basic research tool that's used throughout genome analysis to one that's primarily used in human applications.
And outside The U. S. 75, 25, cyto versus research. In The U. S.
It's more balanced. We see increasing cyto types of applications, but it's closer to maybe 60% research, 40 cyto.
Speaker 3
So for now, Paul, I'll get back in the queue. Congratulations on better off the progress.
Speaker 1
Thank you, Phil.
Speaker 0
The next question comes from Jason McCarthy of Maxim Group. Please state your question.
Speaker 4
Hey, guys. Thanks for taking the questions. As opposed to kind of thinking about the revenue last year or even this year, can you talk a little bit more broadly about the not the shortcomings, I would call the shortcomings of NGS, whether it's long reads or short reads, and where that missing component to genomic interrogation really matters. And then maybe in the context of, you know, fifty percent of cancers don't get the proper diagnosis and genomic disease are even worse. And how Saphyr completes that puzzle, if you will.
And that's the story I think investors need to hear over this year.
Speaker 1
Yes. No, I mean, appreciate that sort of opportunity, Jason, because I think that's really where the focus should be. We have labored hard to develop the product and make it relevant in some really, really important end markets. What we're seeing now is that those markets are adopting. And so sure, it's important that we're selling the product and that people are paying for it.
That sort of validates it's a viable commercial product. But our focus is on really clearing the path to seeing this much, much wider adoption to fill these critical gaps. And on a regular basis, publications are appearing showing that sequencing as powerful as it is for detecting short, small variants really underperforms when it comes to detection of large structural variations. And if you if you just read through, and I know you're a kind of guy who would read through the medical guidelines, not everybody would, but if if you look at the medical guidelines for testing in genomic diseases, hematologic malignancies, solid tumors, they all recommend as the first line of analysis some form of structural variation detection, whether that karyotyping, microarrays, fluorescence in situ hybridization. And as much as there is an interest in having sequencing address those, markers, the publications show that sequencing cannot.
And furthermore, to really get next generation sequencing in particular to work well in the clinic, It still requires extraordinary depth of coverage which means that to make it work reliably, consistently at high throughput and at low cost, it's not possible to do a whole genome analysis. That's with next generation sequencing. I'm not even talking about long read sequencing. And so it really leaves an opportunity for optical genome mapping to come in and be the go to solution to look at structural variation that's, let's say, 500 base pairs and bigger. So where would that matter?
Well, that's what all the medical guidelines are calling for so it would clearly matter there. But let's talk about drug development in cancer where fusion genes, for example, are incredibly important and of course there are many known ones out there that are the target of different, therapeutic development programs. But for every fusion protein that's known, we believe that there are many, many that have yet to be discovered because a tool like the Saphyr system is not being used broadly yet. And so think about an environment where essentially every genome that's being analyzed is run through maybe sequencing, fine, to look for small variants, but also through optical genome mapping to look for large genomic variation because it's definitely complementary to single nucleotide variants and maybe the more impactful story. And optical genome mapping on the SAFIRE system is the only one that's capable of doing that at a throughput that matters, a cost that matters, and at a turnaround time that matters.
And so that's really where this technology is positioned. And so the opportunity is really significant. And I've said this in my prepared remarks, but I think it's really important, which is that we're at the very beginning of the story. We're just writing the introduction right now.
Speaker 4
Right. And then also just one more broad thought that maybe you can help out with is microarrays kind of got rolled up with next gen sequencing, right? Next gen took them out. Western blots got rolled up and digitized proteomics. And then the natural progression for cytogenetics is not if, it's when.
It's going to move on to something else and it should be something like structural variation. Can you kind of give your view of that view, if would?
Speaker 1
Yeah. I mean, so, you know, thank you for pointing out two examples in history where a technology has consolidated other platforms into a single streamlined workflow. So NGS did it not only through microarrays but completely revolutionized Sanger sequencing. And so next generation sequencing is an amazing example of that. Western blot is another amazing example of that.
And that was done by companies and industries. So Illumina we know and others around next generation sequencing, Vintana, around the cell surface marker analysis. And so it's really I think a very clear and obvious path for optical genome mapping to streamline and industrialize the cytogenetics workflow. And something that's very interesting about this cytogenetics space is that laboratory directors there and people who work in cytogenetics see the technology revolution that optical genome mapping provides as something that they've been waiting for in many cases their whole career. So as you know, doctor Aker Chabe joined us as our first chief medical officer, last August and she sees the Saphyr system as that thing she's been looking for her entire career as a cytogeneticist and cytogenomics professional.
And she's not alone in that view. And so we really see Saphyr industrializing this workflow and becoming something that's used incredibly broadly. And for that reason, we actually call the sort of euphoria that Saphyr brings Cytopia because it's like Utopia for cytogeneticists. And it not only improves patient outcomes but it positions cytogenetics at the center of drug development and other areas of important discovery research where it just isn't used today because it's so laborious and time consuming. So we're about to see truly a revolution in genome analysis around structural variation detection that Saphyr brings.
Speaker 0
Our next question comes from Jeffrey Cohen of Ladenburg Thalmann. Please state your question.
Speaker 5
Hi, Eric, Chris and Aka. How are you?
Speaker 2
Hey, good. How are you?
Speaker 1
Hi, Jeff.
Speaker 5
Doing fine. So just a few questions. One follow-up to to Kevin's questions earlier. It sounded like you're gonna have two SKUs as far as the platform, one more for high throughput facilities and one, the current one, to continue with kind of the R and D side of things. Is that sort of a safe assumption?
Speaker 1
Yes. Which is to say that you know, we'll offer both platforms and, you know, that will enable us enable us to serve the market, as broadly as possible. But we don't see the current platform going away.
Speaker 5
Got it. Okay. And then secondly, could you talk about revenues and placements by geography, at least kind of in the macro standpoint for 2020 and maybe give us some sense of how that may look for 2021?
Speaker 2
Yes. So we're seeing strength in Europe. They're moving forward faster with getting systems validated into their workflow. U. S.
Is lagging a little bit behind though we've been stronger in the research market in The U. S. Than we have been traditionally, but we're starting to see an uptake in clinical revenue. And then China has been pretty quiet. Obviously, I think last year, for a lot of reasons, it was a quiet year.
But we see that picking up but lagging still behind Europe and North America. So we expect to see the most growth in Europe next year, followed by North America and then the Far East.
Speaker 5
Got it. Okay. And then lastly for me, Eric, if you could talk a little more about some of the developments that are going on or expect to be going on as far as psychiatric disorders and other neurological conditions, that would be super helpful.
Speaker 1
Sure. Through our lineage in business, we are providing services to physicians who are managing patients with a variety of neurodevelopmental disorders including autism spectrum disorder and other, disorders that span that space. And our focus is to continue to serve them with the existing standard of care tools. But over the course of this year, we'll begin developing those applications on the Saphyr system and making them available through our own CLIA lab, working with payers to cover those assays. And so that's one area where we'll be focused on neurodevelopmental disorders.
Our customers in the research side of the market have been applying optical genome mapping to other neurodegenerative diseases such as Alzheimer's and ALS. And their results are simply spectacular and we expect that those programs to continue and it's expanded beyond the diseases that I mentioned like ALS and Alzheimer's which affects primarily, you know, older adults to include now applications and discovery research in pediatric populations. And so what we expect to see as a result of this research is that there can be novel content discovered that could be the basis of future laboratory developed tests. And so we'll just have to see how that research plays out but, it's an incredibly interesting area and it's an area that, you know, where structural variation is already known to play a significant role. And so the Saphyr system, almost certainly is going to amplify that.
Speaker 5
Got it. And then lastly for me, it feels like you broke through kind of the 1% TAM area on the research side of things. It's just it feels like perhaps 2021 may be the year that you break through to that one percent TAM on the commercial side. Is that a good way to take in the size of the platform out there and the capabilities and the growth anticipated for the coming year?
Speaker 1
Yes. I mean, the numbers that you're citing, I would need to get out my slide rule and verify those calculations. But breaking through barriers is clearly what what what has been happening for us and it's really been around awareness and understanding and appreciation. And what what what anybody, I think, you know, in the company would would would relay to you is that the amount of inbound interest in our target end markets is higher than it's ever been, and it'll be higher tomorrow than it than it was today. But we we have certain structural, you know, barriers.
You have to call them barriers. You have to call it what it is. We have certain structural barriers that that we need to address. And, you know, the reimbursement one is a big one here in The US. And we have we have great programs that are that are that are, you know, designed to address that.
And and and, you know, the most fundamental and foundational aspect of addressing that is building an incredible war chest of data that supports the utility of optical genome mapping in these settings and really validates it. And that's the basis of these clinical trials which our CMO has designed, and we're in the process of getting on your way and you'll see them progress significantly over the course of 2021 and 2022. And it's that foundation of data, like when we start climbing on top of that, that's when we're going to keep bursting through the next thresholds, if you will. And so, we've broken through in many respects and that's given us the opportunity to do more work. And those commercial breakthroughs will be we'll see them over the course of this year, but it's really after we get some key work done this year that those commercial breakthroughs will really start to take off.
Speaker 5
Okay, got it. Thanks for taking the questions and congrats on the readout.
Speaker 1
Yes, thank you.
Speaker 0
Our next question is from Scott Henry of Roth Capital. Please state your question.
Speaker 6
Thank you. Good afternoon and congratulations on quite a year so far. Just a couple of questions. And first, I don't know if you gave this, but did you mention how many Saphyr placements, whether it be a lease, a sale, were made during the quarter?
Speaker 2
Yeah. We we have approximately 12. Yeah. Uh-huh.
Speaker 6
Okay. 12. Alright. And just checking my numbers. So there were 96 installed I had at the end of q three.
So a lot of those, I would assume they're out there ready to install in q one. Is is that the correct way to think about it? Or whenever it may be in the future.
Speaker 1
Yes. That's right. Yes.
Speaker 6
Okay. Great. And then when we look out to 2021, how should we think about the quarters? I don't know how much COVID is going to impact the first half of the year. Just trying to get a sense on Q1.
Obviously, there's only eight days left in the quarter, but just trying to get a sense of how that trajectory may look throughout the year.
Speaker 2
So typically, Q1 is a little typically Q1 is a little seasonally soft for us as the labs spend their budgets in Q4 and then are working on saving money in Q1. It won't be dramatic. And then we expect to see modest growth through the year, quarter on quarter. For the full year, we expect to see like substantial double digit growth, but it's we don't think it's going to be triple digit growth. But we'll see year on year growth by the end of the year in the substantial double digits.
Speaker 6
Okay, great. And I haven't seen the 10 ks yet. Could you give me a sense of where the real time shares outstanding are given a lot of levers in there?
Speaker 2
Yes, exactly. So we ended the year with 189,000,000 And right now, we've got about $280,000,000 shares outstanding with all the work we've done this year.
Speaker 6
Okay. That's helpful. And then I guess just kind of a big picture question for Eric. Obviously, it's a different company today than it was even four months ago, both in terms of market cap, in terms of cash balance. So given that change in those dynamics, how do you think about managing the company today versus then?
I mean, will there be any changes to the business model, perhaps growing faster, being able to invest more in SG and A and R and D? Just trying to think of how you view it today versus four months. Maybe you don't view it differently at all, but my guess is you probably do.
Speaker 2
Yes. No, it's a great question.
Speaker 1
And I think that that's I think if you're asking it, it's probably a question on a lot of people's minds. And we have, you know, we've sort of allowed that question to hang around for a while and haven't gone for an immediate answer, but we're very definitive. You know, the company is positioned in an absolutely exciting,
Speaker 4
substantial
Speaker 1
market genomics with a very differentiated technology that serves an unmet need which by the measurements that we can make on that unmet need is really substantial like the end user markets are in the billions. But we're pretty sure that the the the total opportunity is is bigger than anybody expects today and that only, you know, only time and more discoveries is gonna open that up. And so we don't think that it makes sense to change the business model at all. What makes the most sense is to take advantage of the resources that investors have made available to us and put that money to work behind the incredible story of optical genome mapping and Saphyr system in helping patients in making new discoveries that are going to transform different diseases and really advancing the overall healthcare objectives of genomics broadly defined in this new era of big biology driven by structural variation analysis. And so, you know, the the capital is there to help us really double down on this plan.
It's not there to help us change the plan. It doesn't mean that we don't see the need for, you know, tuck ins and different technologies that are out there, you know, in in in in the space that would accelerate our plan. But the capital is there for us to double down on the original vision and make that happen sooner than we might have been able to make it happen without the capital.
Speaker 6
Okay, great. Thank you for the color on that. Congratulations again and thanks for taking the questions.
Speaker 0
Our next question is from Kevin DeGeer of Oppenheimer.
Speaker 3
Hey, just to follow-up on Scott's point, just to clarify for financial modeling. How are you thinking about the split between rate and rental and capital purchase on that kind of, call it, 53 or more units you'd have to place this year?
Speaker 2
Yes. So right now, we see it as roughly fifty-fifty. And then it gets a little bit interesting because we're starting to see some early Regent rentals that are now converting to sales. So what I think we're going to end up seeing going forward is a little bit 50% plus reagent rentals. And then some of those a lot of those will transition to sales over the course of six months to a year.
Speaker 3
Got it. And recognizing you don't provide guidance as such on operating expenses, I think we all expect OpEx expenses to accelerate pretty meaningfully this year. Any parameters you would provide as to how to think about, either over the course of the next twelve months or longer term, the trajectory of spend?
Speaker 2
Yes. So the biggest things we're investing in this year are first headcount. We're adding headcount across the sales and marketing organization and in R and D, and we're also spending on these clinical trials. That's where, as you heard from Meric where our focus is, is on getting those clinical trials going as fast as we can get them going. So yes, so OpEx is going to be up this year.
I don't think it's going to be staggering, I'd say somewhere in the 20% to 40% range this year. And then I would probably keep it in that range for, you know, for the next couple of years. That that range
Speaker 3
That's all for me. Great. Thank you.
Speaker 0
We have reached the end of the question and answer session. And I will now turn the call over to Eric for closing remarks.
Speaker 1
Yes, great. Thank you, operator, and thank you to everybody who attended the call today, and we look forward to seeing you soon for our first quarter twenty twenty one call. Thank you very much.
Speaker 0
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, have a great day.