Q4 2023 Earnings Summary
- Seer anticipates several high-impact peer-reviewed publications by customers throughout the year, including papers accepted in Nature Communications and Nature, demonstrating the value of the Proteograph technology, which could drive adoption and revenue growth.
- Approximately 75% of the installed Proteograph base has been upgraded to the new Proteograph XT Assay, improving throughput and reducing mass-spec time per sample by 2.5x without sacrificing depth. This allows customers to handle up to 10,000 samples annually with a single instrument, making large-scale studies feasible and cost-competitive.
- Seer is approaching price points where population-scale deep, unbiased proteomics are both feasible and comparable in cost to targeted approaches, enabling large-scale studies and opening new market opportunities.
- Decrease in revenue from a key customer PrognomIQ in 2024: PrognomIQ, a critical customer, is expected to be a significantly lower percentage of overall revenue in 2024 as they move from discovery to development phase, reducing their product usage and purchase volumes.
- Growth limitations due to intentional capping of STAC capacity: Despite high demand and a robust backlog for STAC services, SEER is capping its STAC capacity and does not plan to expand it, potentially limiting revenue growth from this segment. Management states they are not interested in becoming a service business, indicating a strategic decision to limit this revenue stream.
- Extended sales cycles and budget constraints impacting instrument sales: The macro-economic environment, including constrained biopharma CapEx budgets and cautious customer spending, is leading to longer sales cycles for SEER's capital equipment sales. This cautiousness is affecting adoption of new technology platforms like Proteograph, especially in China and Europe where visibility is low and customers are more price and budget conscious.
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PrognomIQ Revenue Decline
Q: Will PrognomIQ contribute less to revenue in 2024?
A: Yes, PrognomIQ is expected to be a significantly lower percentage of our overall revenue in 2024 as they move into the development phase and do less discovery work. We continue to see good interest from other parties. -
China Macro Outlook
Q: What are your assumptions for China in 2024 guidance?
A: We have limited visibility and are assuming no real improvement in China for 2024 due to continued challenges in adopting new technology. While the Chinese government is investing in proteomics, it's too early to see an impact. -
2024 Visibility and Swing Factors
Q: How is overall business visibility as you enter 2024?
A: We have a healthy pipeline in North America with strong interest. Europe looks pretty good but is more price-conscious. Key swing factors include the impact of upcoming publications and managing capacity in STAC. -
Sales Cycle Length
Q: How has the sales cycle for CapEx sales changed?
A: The macro-economic environment, including a slowdown in China and constrained biopharma CapEx budgets, has lengthened sales cycles. However, we've seen robust interest in our STAC program, with a backlog of demand. -
Publication Pipeline Impact
Q: Will new publications drive traction this year?
A: We expect upcoming high-quality papers in prestigious journals to support traction. However, we are not expecting a hockey stick effect; it's a brick-by-brick build. The data is very compelling and should help over time. -
STAC Capacity and Strategy
Q: Are you expanding STAC capacity to meet demand?
A: No, we are capping capacity for STAC as we don't aim to become a service business. We prefer customers move to our centers of excellence (COEs) where they can purchase consumables from us. -
Proteograph XT Upgrade
Q: Have most instruments been upgraded to Proteograph XT?
A: Yes, approximately 75% of our installed base has been upgraded to the Proteograph XT Assay, improving performance on complex samples. -
Pricing and Cost Competitiveness
Q: How are you positioned on pricing and cost?
A: We are price competitive, allowing access through instrument purchases, SIP loans, or STAC. Our price per sample is comparable to targeted technologies, enabling large-scale studies at feasible costs. -
Large-Scale Population Studies
Q: Can you support large-scale proteomic studies now?
A: We are approaching the price points and throughput needed for population-scale, deep, unbiased proteomics. We predict that such large studies will initiate in 2024. -
SIP vs. Purchases Split
Q: What's the split between SIP and purchases in placements?
A: Of the 23 instrument placements, about a third were loaners under the SIP program, less than the previous 50%. We anticipate a similar proportion in 2024.
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