Ladies and gentlemen, thank you for standing by. And welcome to the Seer, Inc. Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session.

[Operator Instructions] I would now like to hand the conference over to your speaker host, Carrie Mendivil of Investor Relations. Please go ahead. Carrie Mendivil Thank you. Earlier today, Seer released financial results for the quarter ending June 30, 2021.

If you have not received this news release or if you’d like to be added to the company’s distribution list, please send an email to investor@seer.bio. Joining me today from Seer is Omid Farokhzad, Chairman, Chief Executive Officer and Founder; Omead Ostadan, President and Chief Operating Officer; and David Horn, Chief Financial Officer.

Before we begin, I’d like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated.

Additional information regarding these risks and uncertainties appears in the section entitled Forward-Looking Statements in the press release Seer issued today.

For a more complete listing of this description, please see the Risk Factors section in the company’s quarterly report on Form 10-Q for the quarter ending June 30, 2021, and in its other filings with the Securities and Exchange Commission.

Except as required by law, Seer disclaims any intention or obligation to update or revise any financial projects or forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time sensitive information that is accurate only as of the live broadcast, August 12, 2021.

With that, I’d like to turn the call to Omid..

Thanks, Carrie. I could not be more pleased with the positive trajectory of our business, as we continue to build on our strong start to the year.

Market response to the Proteograph Product Suite has been strong and we’re engaging with an increasing number of potential customers, representing a wide range of end markets across a broad set of geographies. This quarter we achieved an important commercial milestone, reporting our first revenue related to the sales of the Proteograph Product Suite.

Coming into 2021, we set high expectations for our team, two quarters into the year, we’re already ahead of where we thought we would be on a number of fronts.

These include, one, the breadth and the depth of our customer pipeline, two, the overall performance of our product in the hands of customers, three, the quality and the depth data generated from our customers, even with relatively small sample sizes that they’ve used to-date, and four, the level of interest from geographies across the globe.

I’m encouraged by our continued commercial and operational execution, as we move through our three-phase commercialization approach. Building on the collaboration phase, we’re currently in limited release phase and we expect to enter broad release phase in early 2022.

We’re well underway and making excellent progress in limited release, working with select set of customers across our key market segments. Our risk funnel of prospective customer continues to expand and mature.

We’ve now shipped and installed the Proteograph Product Suite at multiple limited release sites, including our first international customer, and we’re on track to onboard a high single-digit number of limited release customers in 2021.

Customers are excited by the performance of the Proteograph Product Suite, the speed with which they’re getting up and running, and the data they’re generating using their own samples.

We’re working closely with our customers to demonstrate the power of the Proteograph across a wide range of applications, including discovery research, early detection and biomarker discovery.

The early data being generated is affirming that the Proteograph is truly a disruptive product that will enable unprecedented access to the proteome with amino acid level resolution.

This level of resolution at this scale and speed is only enabled by the Proteograph Product Suite and is essential for understanding the enormous complexity of the proteome and the role specific protein variants play in affecting health and disease.

Initial data from our customers and prospective customers has exceeded my expectation and is demonstrating the depth and breadth of proteomic access that can be easily generated from our platform. OHSU Knight Cancer Institute was the first customer to receive a Proteograph Product Suite late last year.

They were able to successfully use data from their pilot project in Q1 to secure funding for prostate cancer study of at least 500 and possibly up to 1000 samples. This would be at least an order of magnitude greater than any unbiased and deep plasma proteomic study undertaken at the institute to-date.

They expect to initiate this project sometime in early fall. Another of our customers, the Broad Institute use the Proteograph Product Suite to study patient samples that they had previously analyzed using extensive depletion and fractionation workflows for unbiased proteomics.

In essence, they were aiming to compare the Proteograph to the workflow for which data was already known. With the Proteograph, they were able to detect low abundant proteins of known significance in the disease area, as well as novel candidate biomarkers.

This study was completed in a small fraction of the time compared to the original fractionation and depletion workflow. Importantly, the Proteograph provided this depth and breadth of proteomic coverage with reproducibility, speed and ease-of-use, which will enable much larger studies previously not possible.

Another example would be a global CRO with deep expertise in unbiased proteomics, who compared a set of samples running the Proteograph Product Suite with samples previously run under existing deep unbiased proteomic workflow.

When comparing the results, the samples processed under Proteograph yielded 3 times the number of proteins identify compared to their existing workflow and they were able to detect the majority of FDA approved biomarkers.

While most of these biomarkers are on the higher side of protein abundance scale, they were also able to detect a very large number of low abundant proteins such as cytokines that are of interest in disease pathogenesis.

This data is another example of the access to the broad dynamic range of the plasma proteome that the Proteograph uniquely provides at speed and scale that is unprecedented for unbiased proteomic.

It is clear that our customers are eager to move forward to perform large scale studies using unbiased deep plasma proteomics with amino acid level resolution. In fact, as customers are seeing the early data, they’re expanding their vision of what’s possible with the research.

And despite the fact that many of the Proteograph Product Suite were only installed near weeks or months ago, our customers already have generated compelling data that have resulted in the submission of numerous abstracts for upcoming fall conferences.

We expect to see more of this activity including peer-reviewed publications from Seer and potentially from customers, as we head into 2022. We also continue to see significant interest from geographies outside the U.S., especially from Asia-Pacific region, and in particular, China.

Given the high level of interest for immediate access to our technology in China and given the robust performance of the Proteograph Product Suite across our customer sites, we decided to accelerate our entry into this market. We were excited to announce this afternoon that we have established a distribution partners in China with Enlight Medical.

We view China as a significant opportunity for us and we’re delighted to partner with Enlight to enable institutions across the region to access the Proteograph Product Suite. Enlight is not only a region specific distributor, but also a partner with significant market access and regulatory expertise across the Olink space in China.

We believe this expertise will be valuable for our strategy of establishing the Proteograph Product Suite as a critical component of the entire research to clinical continuum in China.

As we expand our footprint across an increasing number of customer types, with what is already a disruptive product, we’re also pushing the envelope with the next set of innovations to further expand the capability of Proteograph Product Suite and I expect over the coming months, you will hear more from us about some of these innovations, which include driving up protein coverage, increasing throughput, driving down sample volume and optimizing use of model organisms.

We’re absolutely committed to driving a continuous stream of new products and product enhancements that will set the pace for innovation in proteomics. I’m extremely proud of our team, their ingenuity and their commitment to delivering products that allow us to access the proteome in ways never before possible.

We’re making strong progress across all dimensions of our business. We have reached a significant milestone with our first quarter of product revenue and while we’re at the onset of our journey and there’s still much to be done and to execute, we’re accelerating towards the opportunity in front of us.

I’m so inspired by the enthusiasm of our customers, the early successes with the Proteograph Product Suite, the growing ambitions for future projects and the impact we can have together to enhance our understanding of health and disease. With that, I will now turn the call over to Omead for more detail on our commercial progress..

Thank you. I’m excited by our strong commercial progress as we execute against our objectives for the year. We have an expanding install base of customers across discovery research, translational research, clinical development and biomarker discovery to name a few.

The Proteograph Product Suite is performing exceptionally well in the hands of customers, enabling them to generate data in ways previously not possible. We are well on our way to meeting our target of high single-digit limited release customers for the year and are expanding our funnel of prospective customers in advance of broad release.

We are growing our commercial team and along with it our commercial footprint. I’m particularly excited we have entered into a distribution agreement with Enlight Medical and are poised to enter China with a partner whose expertise and capabilities will enable us to reach the most impactful customers efficiently and expeditiously.

We are taking the right steps to broaden the footprint and impact of our technology, and to deliver the type of customer experience that will set us apart from others in our industry.

Despite the significant demand for our product, we remain committed to executing our three-phase commercial approach, which we believe is ideal for commercialization of truly disruptive products, such as the Proteograph Product Suite. We are already seeing the benefits of this strategy and action.

We have signed multiple limited release customers who have committed to undertake large scale studies demonstrating the unique power of the Proteograph Product Suite across a broad range of applications.

These are generally multi-month and in some cases multiyear agreements, which include a commitment to scaling to large cohort sizes in a relatively short timeframe. Given the nature and extent of these commitments, it is important to ensure mutual alignment and fit to create a foundational partnership that can expand over the course of time.

As these customers scale their studies, we anticipate the pace of abstracts, presentations and publications to accelerate and lead to even greater demand for access to the Proteograph Product Suite.

As Omid mentioned, a number of these customers submitted abstracts have already been accepted by leading industry conferences this fall, including ASMS at the end of October. We are delivering a highly differentiated customer experience and enabling our customers to rapidly expand their scientific vision.

The experiences of these customers are creating blueprints that others can follow to adopt and rapidly scale the Proteograph Product Suite during broad release.

A number of our collaboration and limited release customers have begun to serve as reference sites for prospective customers, and are willingly sharing their experience and their excitement with others who are interested in accessing the power of the Proteograph Product Suite.

The relationships, insights and proof points were establishing during the first two phases of our commercial release are enhancing our ability to develop applications, fine tune our approach to enable new markets and drive the next phase of product adoption.

With each new data set generated using the Proteograph Product Suite, we are seeing the power of this platform in action. Importantly, in every case, we’re aware of, data generated from the Proteograph Product Suite is exceeding the data generated using any other approach.

Coupled with the ease of use, scalability and reproducibility of the platform, the Proteograph Product Suite is demonstrating a level of performance that is unparalleled. I believe this unprecedented access to the proteome will drive novel insights from large scale unbiased and deep proteomic studies using our technology.

With that, I will now turn the call over to David for more details around our financials..

Thanks, Omead. Total revenue for the second quarter of 2021 was $1.3 million, compared to $71,000 in the second quarter of 2020. The increase in revenue was a result of initial sales of our Proteograph Product Suite and services performed for PrognomIQ.

Product revenue for the second quarter of 2021 was $837,000 and consisted primarily of products related to the Proteograph Product Suite, including SP100 instruments, consumable assay kits and platform evaluation studies.

In addition to product revenue related party revenue was $380,000, and consisted of consumable sales and services performed for PrognomIQ. Grant revenue was $117,000 and represents reimbursement of research costs related to our SBIR grant from the National Institutes of Health.

Total gross profit inclusive of grant revenue was $748,000 for the second quarter of 2021, representing a gross margin of 56%. Total operating expenses for the second quarter of 2021 were $17.4 million, compared to $6.4 million in the second quarter of 2020.

Research and development expenses for the second quarter of 2021 were $6.9 million, compared to $4.5 million in the second quarter of 2020.

The increase in R&D expenses was primarily driven by an increase in product development efforts related to our Proteograph Product Suite, including additional compensation benefits and stock-based compensation expense related to an increase in personnel and costs for expansion of facilities, as well as increased costs associated with laboratory equipment.

Selling, general and administrative expenses for the second quarter of 2021 were $10.5 million, compared to $1.9 million in the second quarter of 2020.

The increase in SG&A expenses was driven primarily by increased compensation, benefit and stock-based compensation expenses associated with an increase in personnel and increase in costs associated with becoming a publicly traded company. Net loss for the second quarter was $16.6 million, compared to $6.1 million in the second quarter of 2020.

We ended the second quarter of 2021 with approximately $518 million in cash, cash equivalents and investments.

As I shared on our last call, we plan to significantly increase our investment to grow and scale the company as we work to realize our vision of providing novel biological insights that will lead to new discoveries and ultimately improve human health.

As our work progresses, we continue to see numerous attractive investment opportunities across all areas of the organization that will allow us and our customers to unleash the full power of the Proteograph Product Suite and its unique capabilities. These areas include essay, application and software development.

In addition, we are continuing to scale up our commercial manufacturing operations ahead of broad release in early 2022. At this point, I’d like to turn the call back to Omid for closing comments. Omid Farokhzad Thanks, David. I’m incredibly proud of our team and the progress we’re making to transform proteomics and empower the scientific community.

Our continued execution has been fantastic and I’m extremely excited about the early data our customers are generating with the Proteograph Product Suite. This growing set of customer data further substantiates my belief that our approach to deep, unbiased, rapid proteomics at scale will open up a new gateway to the proteome.

We look forward to continuing to update you on our progress. And with that, we will now open it up to questions..

[Operator Instructions] And our first question coming from the line of Doug Schenkel with Cowen. Your line is open..

Hey, guys. Good afternoon and thank you for taking my questions. I want to -- I think, given some of the progress you talked about over in terms of what you’ve done since the last quarterly update, I think some of these questions are fair, if it’s still too early, of course, I think that’ll be understandable too. But let me take a shot.

So, we understand that your current early customers spend, areas like discovery research, oncology, complex disease and then just core proteo genomics.

I’m wondering if you could share how some of these early users are either thinking about or actually integrating Proteograph into their existing in-house mass spec-based workflows, essentially how they’re actually moving these towards production.

And it’s not too early to maybe talk a little bit about number of workflows per customer, the volume of each workflow, particularly for large scale biomarker studies, such as, over 1,000 samples, and across these parameters, how would you expect these to ramp over the coming quarters? Again, maybe it’s a little bit too early for that, but really, anything along those lines would be really helpful to hear about?.

Doug, thanks so much. Look, let me maybe tackle the front end of it and I might ask Omead to also comment as well. As we had mentioned, one of the key advantage of the Proteograph is that it’s a mass, and frankly, more broadly, just detector agnostic.

And so it can really sit in front of just nearly any mass spec and customers with a wide range of mass spec systems can, in fact, they are integrating the Proteograph Product Suite as part of the overall workflow. And they’re having great success.

I think you’re going to see some of that, in terms of abstract presentation from that in the upcoming conferences.

Now, as much as we’re encouraged by the rate at which customers are utilizing the Proteograph, some of the questions that they ask, for example, the number of workflow for mass spec or the pull-through, I just think it’s too early to comment on it.

I do think that we’re going to see a steady state kind of pace of integration of this workflow in front of mass specs and then we’re going to get a better sense of the pull-through I think over time. With regards to how much utilization are we seeing? I mean, this really depends on the customer type.

For example, we expect academic sites to run at a slower pace than if you would commercial sites. We can also expect that within commercial, we’ll have some very high throughput users, some other ones that some low throughput users. I think very similar to what you saw in genomics or sequencing.

I think your question is a perfectly fair one, Doug, but I would ask you to maybe just hold until we have a large installed base and a clear set of customer indicators that I can give you more color and be more accurate in my sense of customer utilization. I don’t know, if Omead wants to add to that or not, but that’s my perspective.

Omead?.

What -- certainly definitely nothing to add, other than just to reiterate.

I mean, Doug, having lived through this, at least, on the sequencing side of it, where we introduced a variety of different products, I think, as you know, it does take a few quarters worth sort of the developing an installed base and getting a sense for the rhythm of the customers, for us to be able to have a good enough feel to give you color.

The only other thing I’d say is just, the couple of things that are standing out to me is, the ease with which the system is not only getting sort of installed, but the ease with which customers are coming up to speed in using it as part of that integrated workflow to the point that you made earlier and part of the script.

This system was designed to do exactly that. But still, I’ve been very pleasantly surprised by the ease of that.

And the second piece of it is, to a point that Omid made a little bit early actually in the prepared remarks is, as they are turn -- beginning to turn the crank [ph] and generating data, it is very clear that the data is very positive for the customers.

So I think what you will likely see is that we’re going to get to a sense where customers are going to get their arms around the type of projects they want to do in the course of a couple of quarters and I think, at that point, we would be in a better position to give you some indicators..

That’s great. And I -- that is helpful. I know you’re making a lot of progress and I even acknowledging that, I know some of that question was probably a little bit early, but I figured I’d take a shot and the color you could provide was helpful. So thank you for that.

Maybe just one more kind of, I guess, more focused on your pipeline initiatives, and specifically, just thinking about where you are in nanoparticle design and optimization efforts.

I think you previously mentioned, the fact that there’s 275 distinct nanoparticles now and that there’s an upcoming publication, which will give us a little bit more detail on the profile of those and I’m just wondering as we hear more about that, what are the potential implications for pipeline development from here.

I mean, based on that, are we going to be able to understand your ability and maybe boost our confidence in your ability to generate additional nanoparticle panels tailored to specific applications more quickly. And also along those lines, how are you learning about platform breath.

What -- we learn more about the confidence you have and working with different biological sample types, different disease indications, different R&D workflows.

At a high level, I guess, I’m just trying to get at, how important the upcoming publications are coming and maybe even higher level where you are in this process?.

Thanks, Doug. Look, by the way, last time we announced it was 275. That number has grown. I’m not prepared to give a new number now. But suffice it to say that I think on -- literally on every call, we’ll have a growing number and the implication that it is growing nanoparticle library for our portfolio. I can kind of break it down into two parts.

One is having this large library is going to give us a ton of optionality in terms of what could be done in terms of product development and also give us speed to the market. Now, I would say, the area of research and discovery efforts has been an area of extreme progress. I would say, even since the last time we spoke.

So there’s lots of progress has been super sharp. What we’re seeing really is, we’re absorbing almost a network effect, if you would, in our understanding and progress, because of the addition of samples, nanoparticles.

These are providing just an incredible level of insight into the design engineering, where, for example, different combinations of different nanoparticles, different assay conditions. And then this set of data is going to be highly enabling in terms of different products to address different applications.

Now, some of what I just said, you should see, in an upcoming publication from Seer, I would say, in the second half of the year. Hopefully, you won’t have to wait too long in that second half of the year to see it. But more importantly, I think a lot of that work is going to find its way into the market as next set of products from Seer.

Anyway, I think, once you see the papers, once you begin to see what’s coming, I think, you’re going to have a very clear understanding of what’s possible using this platform..

That’s great. Thank you again. I’ll let others hop in. Have a good night..

Thank you so much, Doug. Be well..

Our next question coming from the line of Derik De Bruin with Bank of America. Your line is open..

Thanks for taking the question. This is Mark Ruskin on for Derik. I want to follow on a little bit on Doug’s last question there and approach it from a slightly different angle.

The way we kind of think through it is, anytime you have a new product rollout, especially something as new as the Proteograph, there’s going to be a learning curve, there’s sort of an experimentation phase where the customers, even the early active customers work out the cranks, not just in the Proteograph itself, but also in their workflows, in their experimental design and their own processes.

Now that you’re into the first quarter of direct interactions with these customers and they have the product on hand, any thoughts on how that’s rolling out, any updates on sort of timing on when you’re going to start seeing some of the more -- some of the protocols get worked out and go from the sort of early beta testing experimentation phase to a little bit more routine work and you’ll get some of the more regular feedback and response from these customers?.

Derik, I want to make one, if you make editorial before I respond, which is, this is not a beta product, what’s in the hands of our limited release customer is basically the commercial product that’s going to be in the hands of the broad release customers and there’s going to be various permutations of that product over time.

Now, these are early days, but we are seeing some trends emerging.

For example, we’re seeing different customers having preferences for their workflow parameters, depending on their MS systems that they’re using in their labs, like, gradient time or the choice of analysis from a data acquisition, do they use a data independent acquisition or data dependent acquisition? I think these are going to guide other follow-on customers, which is going to allow other customers to scale faster.

So it isn’t that we’re getting standard protocol come on from customers, but we’re definitely seeing that customers have their preferences. They’re working through that and a lot of that is going to be guide for others we are going to scale.

And I think, this is actually going to be an important part as we shift from a limited release phase to a broad commercial strategy.

Omead, anything you want to add to that from a customer perspective?.

Yeah. Maybe just a couple of things, actually one of the things we did invest a ton of effort and time, and I think, the team has done an exceptional job is creating, what I’ll call, these standardized canned workflows.

So the way this was actually working out in the case of certainly nearly every customer today is, we delivered a product to them, there is a standard workflow that configures with their existing mass spec and what they’re used to running, including some of the data analysis.

And so customers can get up and running with that and what we’re finding is that, again, as you would expect is, as we were working with the customers, we are taking in some of their input and refining some of those workflows.

But I want to be really, really clear, these are like well tested, tried and true workflows that customers are getting, so that they can actually go ahead and get on with the process of evaluating biological samples, as opposed to tinkering with technology development, right? And so we were definitely not in that phase of people are tinkering with technology development, we are actually using the technology in the way it was intended on biological samples.

As they do that, we and they are gaining insights that are helping us refine those workflows.

And I would actually expect, what’s going to happen is that in the case of subsequent products, and David Horn has brought this up a couple of times, one, the advantages of the Proteograph is that, we have the ability to deliver a package of consumables and assays that run on the same existing automation workflow and the same set of detectors.

So customers ability to be able to adopt and integrate new sets of nanoparticles, new sets of assays, is going to be very, very straightforward and simple, to a large extent, because it literally is substituting one set of nanoparticles and an assay protocol for another.

And so in that respect, what we’re seeing is, it is playing out as we had hoped in the hands of these customers that, as I mentioned earlier, their ability to drop in Proteograph and get up and running with very little customization has been fantastic..

Okay. Thanks. That’s helpful.

And if I could ask a follow up, regarding your announcement earlier today on with the Enlight Medical in China, previously, you had the non-exclusive commercial agreements with Bruker, with Thermo, now you’ve got the distribution agreement with Enlight, could you walk us through sort of the commercialization strategy, how that’s evolving? Why you decided to move in this direction in China, sort of any additional thoughts about OUS expansion and how that’s going to get built out?.

Yeah. Mark, look, China is a substantial market for us and we see substantial potential for business over time. We had originally anticipated and you may recall a few months ago, we talked about it, going into China, maybe second half of 2022. But really three things came up faster than we had expected that allowed us to go to China earlier.

First was, we were observing basically product performance that’s been exceptional, which made it clear to us that the product is ready for international customers. Across nearly every metric, robustness, run success, uptime, data quality, Proteograph Product Suite has been performing exceptionally well on customer sites.

Second reason was that the high caliber established commercial and academic institutions that were really demanding access to the platform in that geography. And we’ve been, frankly, very encouraged by the caliber of interest of the customers and we wanted to provide access to the Proteograph to them sooner.

And then the third, which I think was also very critical was that we’re able to identify phenomenal distributor partner with expertise in the life sciences and the clinical markets, really with a broad range of capabilities that, as I said earlier, included regulatory compliance, even manufacturing, if you ever need to in China.

This is someone by the way that that Omead had known the founder otherwise, for a number of years from his time at Illumina Ruilin. So maybe I’ll have actually Omead comment on that relationship, which actually was an important part of our decision as well.

Omead?.

Yeah.

I mean, I think, as you would expect, it’s really important that when you get into an agreement with the distributor, right, it is with any partner, but certainly distributor, that there is a high level of familiarity trust, that there is alignment of philosophies and a high degree of confidence that not only are they going to be able to sell and service the product, but they’re going to do it in a way that really represents our brand and what we wanted to represent to the customers.

And having what worked with Ruilin at Illumina for a little over four years, he was General Manager for Illumina’s business in Great China. I know him. I’ve worked with him. I’ve traveled with him. I’ve seen him with customers. I did -- there’s, I couldn’t think of somebody who would be a better partner for us in China.

And so that helps massively, right, because otherwise, usually you’re spending a bunch of time trying to get distributors and find the right partner.

So being able to come across -- being able to work with Ruilin was also another significant driver that gave us a high degree of confidence that we can not only go into China, but do it very successfully and have a representation of Seer as a brand and company that we will be very proud of, and obviously, that was a critically important factor to us..

Got it. Thank you so much..

Our next question coming from the line of Tycho Peterson with JPMorgan. Your line is open..

Hey. Thanks. Maybe another angle on the last questions around China, just wondering if you can help us size up the opportunity there.

If you could also talk a bit about the funding environment, are they potentially ahead or behind us in terms of funding proteomics? And what kind of applications do you think would be emerging for Seer and more research versus clinical?.

Let me have, maybe David take a crack at that.

David?.

Yeah. Sure. Tycho, I think, just from a -- I think if I got your different pieces, market opportunity, types of research and funding. Look, obviously, the market opportunity we feel is sizable. That goes without saying, which is, obviously, why we want to get there as both Omids talked about. We’re moving there a little bit sooner than maybe we planned.

But I think we are going to take a similar strategy, Tycho, which is, this is just sell it to anyone that comes. I think we’re going to be very measured in terms of finding the right partners, allow the limited release strategy. We already have -- had or beginning conversations with folks there.

And I think there’s a lot of interest, as you might expect, on the research side, right, just fundamental research, target discovery. Also, folks who may want to be more commercial services to provide broader access to folks who may not want to bring it in-house. Again, very similar strategy to what we’re doing here.

So, again, I think, there’s -- we feel like, again, big opportunity, there is funding there. We are going to be measured.

And then, over time, again, as we think about it, I think, again, over the long-term we’d expect China to kind of be in the similar realm of percent of revenues as other life science tools companies, right, that I’m sure -- well, that I know you’re very familiar with.

So again, we just feel like it’s a great opportunity to get a foothold there and to begin, again, a measured rollout..

Okay. And then on the clinical front, a couple of questions, I’m just curious if you could talk to traction, here in the U.S. for clinical partnerships. I know one of your partner is Biodesix, actually, I think, been presenting little bit of data.

So curious what you you’re seeing from them, any traction with liquid biopsy partnerships? And then the IPO model, I think, had about two-thirds of placements next year on the commercial side, about one-third on the academic side, is that still kind of the right ratio in your view?.

Tycho, Omid, here. Look, liquid biopsy, obviously, it’s an area where you are going to see folks moving into multi-omics, there’s some that are already multi-omics. I mean, we spun-off PrognomIQ, which is, I think, it’s going to be one that does multi-omics in unbiased way versus some of the others that do some targeted panels of multi-omics.

So, certainly, liquid biopsy is an area of very significant interest in the proteomics. Let me have Omead maybe kind of build on that as well as give you some of the other customer types of the clinical use that we are going to see coming Tycho..

And so, Tycho, I think, the guidance of roughly two-thirds commercial, a third academic/non-profit definitely goes. If anything, I’d say, halfway through the year, I think, the commercial side opportunity is quite frankly really substantial.

And not only that, but I think their ability, the commercial partners to move to scale is so significant that I wouldn’t be surprised ending the year the mix is even more heavily weighted towards commercial.

And in that connecting to the first part of the questions that you’re asked, they are going to be representative of their key application here as we have talked to you guys about for some time, which is early detection, certainly complex disease.

We have a number of license and we’re going to expect a biomarker discovery, as well as therapeutic development. And the other category that’s important for us are these CROs that serve a variety of pharmaceutical and biotech companies. So I would say that’s where we see the opportunity to shift, the weight is going to be more commercially oriented.

But again, remember, this is partly driven by our choice so we’re driving it towards that, more than anything else. And then, in terms of clinical impact, I think, we’re looking, again, early days of data. But I think if the data that people are generating off of the Proteograph is indicative of the potential of this technology, and I believe it is.

There is a wealth, I believe, of novel biologically relevant information that people are going to access that I think is going to underpin at a minimum significant areas of translational research, and ultimately, play out in one way or another in the clinical continuum, which is why as a company, we’ve been continuously focused on building a platform and an organization that can serve across that entire continuum, from research all the way through the clinic, because we think this product is going to have a definitive role to play in every one of those stages.

And again, super early days are going to -- I want to be cautious about my enthusiasm, but I think if it continues to play out the way it has, I think, you’re going to see that happen and I think we’re going to see it across the breadth of customers we’re going to have with the clinical focus..

Okay. That’s helpful.

And then two quick ones before I hop off, the commercial organization, can you just update us on a number of sales reps today and where do you think you’ll be at year end? And any hiring constraints we hear from a lot of companies that, human capital is kind of the bottleneck now, not financial capital? And then, separately on the pipeline, you highlighted a couple things, higher protein coverage, throughput, sample volume, optimizing model organisms are the kind of one or two things on top of the wish list for customers that, that they’re asking for today that you’re going to prioritize?.

Tycho, what was the second part of your question, repeat that one more time?.

Just on the R&D pipeline, you highlighted higher protein coverage, throughput, sample volume, optimizing for model organisms. I’m just wondering from customers, if there’s kind of one or two of those that are most important today..

Got it. Okay. Thanks, Tycho. Look, we’re both scaling the commercial organization and also investing in systems, that’s going to allow us to execute efficiently flawlessly, commercially. On the personnel side, I would say we’re in great shape. We have a fantastic team. We’re adding to it.

Now, remember, this year, we’re focused on onboarding, basically high single-digit number of limited release customers to add on top of before collaboration, customers and we announced that in the last earnings call that we have finished that.

So we’re going to be a little bit if you would light on sales reps then we’re going to be, say, by the end of next year, when we’re in the broad release. Now we expect, as you move forward, the ratio of sales reps to application scientists, at least through the end of 2022 to be kind of one to one.

And I think it’s important for us to be deeply engaged with the customers, the science, we not only want to deliver an exceptional customer experience, but draw from their insights, these early customers are going to be very important for us Tycho in terms of where we invest in R&D and how do we invest in our next commercial product, which actually feeds right into your second part of your question, which is, among the areas that we are focused on, what are some of the ones that the customers are showing interest? Look, there’s obviously depth up protein coverage is one where people are very, very interested.

And you’re going to see an abstract submitted by one of our collaborators that hopefully will be presented at the upcoming ASMS where they compared a very deep workflow of theirs, one of the deepest in plasma proteomics ever published. That literally takes a very, very long time to one very few samples.

And they compare that to an automated workflow coming up the Proteograph, the Proteograph runs 16 samples in seven hours.

And so they compared that workflow with the Proteograph and the Proteograph delivered a level of performance both in depth of coverage, breath, reproducibility, professional variance in those assets, that is on par or in some metrics even better than that.

They were able to see some biomarkers at an earlier time point in disease progression, where even their own assay couldn’t identify. So these are extremely promising. So depth covered, I think, is one. Obviously, sample volume is another one.

A lot of these clinical samples are very scarce, the customers view them very precious in their mind and so we are working towards decreasing sample volume.

And then the other area that, I would say, Tycho, we’re hearing a lot from customers in terms of their interest in protein variants, so PTM, post-translational modification, other protein variants that just happens at the level of genetic variants and kind of tying these PTMs and protein variants to health and disease status.

These are the areas that we’re hearing from the customer that’s important to them. These are also areas that we’re heavily investing in..

Okay. Thank you..

And our next question coming from the line of Tejas Savant with Morgan Stanley. Your line is open..

Hey, guys. Good evening.

So, one quick follow up on China, Omid? Is there an angle here where clinical adoption perhaps might even leapfrog research market traction versus the U.S., I mean, particularly as liquid biopsy companies there look to play catch up with some of their US peers?.

Omead, can you take that?.

Well, so really good question. And again, I’ll be careful about how we answered, because we’re just entering the market.

I think the commercial draw in China is very, very significant, for similar reasons as it is, quite frankly, outside of China, right? I mean, I think, and it is hitting that what you’re talking about, like, a lot of these companies are missing a lot of money in genomic and other omics and they progress to a certain extent.

And I think for the next great leap forward that they want to make, and particularly to be able to differentiate themselves from their competitors and/or get to a place where the efficacy of their tests is greater, their ability to get reimbursement is greater, all the rest of it, proteomics is a very, very important area for them and whether it’s in early detection or in complex disease, cardiovascular, neuro degenerative, aging, you name it, right?.

That’s the beauty of it is that where biology plays out proteins have a critically important role to play.

And so I would expect that we’re going to see a similar pattern as we do in the U.S., in that the initial draw, and in part, quite frankly, the initial focus of our commercial efforts is going to be on the commercial side of the customers, because I think they can move faster and they have more samples, and they can process more.

But that doesn’t mean we’re going to do it at the expense of academics. So I think I would expect a similar type of balance as what you’re going to see in the U.S. and the rest of the world. But you’re hitting on a really, really important point, the size of the commercial market in China is really substantial.

They’re extraordinarily well funded and growing fast. And that is one of the primary reasons why, obviously, it is such an area of importance, not only to us, but to just about any company operating in the space..

Very helpful. And then, Omid, I want to drill a little bit deeper on the point you made about throughput being one of the priority areas for your pipeline and how you expect the specs are evolve.

How much of that is driven by perhaps a desire to more rapidly penetrate the TAM here, in a sense, I mean, elasticity of demand? And is there any feedback that you can share with us from your limited release and collaboration customers on that $575 to $800 price point that you’ve outlined?.

Tejas, let me take the first part of that, which is you know, customers need customer demand. And then the price elasticity and the feedback on the -- on our -- how much we’re going to charge them, let me answer that. Look, we’re seeing customers being very interested and almost very surprised by the quality of data that’s coming off the Proteograph.

If you take Oregon Health, they’re about to embark on a study that is over a long larger than any study that institution had ever been able to do before in terms of deep unbiased proteomics. And they could do that at a cost price time, that makes it possible to do those size of studies.

And what is that worth to a customer? Well, look they are paying for those types of studies in terms of accessing the transcriptome or the genome and they pay for that all day long. The issue hasn’t been, is there a market there to be had, that you could charge people for. The issue has been there was just no technology that could deliver that.

So I think as the Proteograph in the hands of customer is delivering the kind of values, the kind of data that we had anticipated would be possible, I think there is going to be a massive demand and I think we’re seeing that and I think that Omead had comments on that, in terms of accessing it and the kinds of studies they’re going to do with it.

I think they’re just going to grow. Let me now Omead talk about maybe pricing and elasticity of that as well..

Sure. So, I think, again, early days, I want to continue to be careful about making statements that are too broad and too general. But in part because of I think what Omid just said, the capability where this technology is affording customers is something that they just can’t fundamentally access any other way.

And the value of the resulting output, so the insights they’re getting is novel and it is orthogonal and it’s highly valuable to understand in biology.

And I think, for a lot of the -- I would say, the key opinion leaders that we’ve been talking to, they are more focused on that, quite frankly, than the unit price of a sample, in part because we’re operating in the unit part of the sample is an area they’re familiar with in terms of genomics and transcriptomics, and epigenomics, right.

So we’re not like creating new price points in the era of biological, molecular biological research or translational, that are unfamiliar with, it is a matter of helping them understand that the value of the data that they’re getting out of this approach is at least on par, and in my guess is, in most cases, more helpful than if they were to spend that money, say, doing another biological approach.

And so, again, it is a little bit of a self selection process, because we’re talking with key opinion leaders, right? So I want to be careful about that.

But so far price, in terms of adoption of the technology among these customers has not been an issue, really the driver has been, I want to be able to do property powered studies and be able to discover things, I can’t with any other methodology and we provide them with a mechanism to do that and that’s what’s exciting people and that’s what’s bringing them to the table and that’s what’s getting them to scale this..

Very helpful. Thank you. And then one final one for me, the first part is more of a really an industry question, not the Seer specific question.

But can you talk a little bit about the amount of proteomics work today that happens outside of the mass spec setting? And then my second question is, Omid, are you starting to have any early conversations with potential population proteomics customers at all in terms of just socializing them with the Proteograph?.

So, Tejas, let me take a crack at the first part of it, which is, we are -- we live today in the era that you did not have access to deep unbiased proteomic at any scale, that actually matters plenty of customers.

And so if you’re a customer, in need of a accessing proteomic content of any scale that is relevant, to put that in the context of some genomic information that you may have, where you do have access to scale, you were forced to go down an alternative path, which is really a targeted path.

I think the -- I think we kind of saw that movie play some 15 years ago, where Etihad [ph] had provided access and then when NGS and genomic came up? Well, from a revenue perspective, they were below once customer gave access to that technology, they adopted it and it went forward.

I think we’re going to have to see what the revenue growth is going to look like, Tejas and then we can kind of model that out for you in predicting how much of those targeted uses are going to come become part of an unbiased approach.

Certainly from a discovery perspective, the content that gets generated using an unbiased approach is just you can’t even compare that to what is possible to do using a targeted panel. And today, Tejas, other than the customers that have the Proteograph in their lab, no other customer can access unbiased proteomics at any scale.

So maybe then you have or tackle the second part of the question..

And you have to forgive me, can you repeat the second part of your question, I’m having short-term memory..

Yeah.

Of course, I was just curious if you started having any early conversations with potential population proteomics, customers just socializing them with the technology and the Proteograph?.

That was certainly in terms of discussions. Yes, I mean, I think, there’s -- as I -- I think we’ve mentioned it, there’s a high level of awareness around our technology, particularly in the broader community and that includes folks who are involved with population genomics. And so, yes, but those are awfully early conversations.

And like I said, our focus right now, especially in 2021, establishing that base of limited release customers for this specific subset of applications that we had highlighted to all and we’re making excellent progress around that.

But, obviously, we’re talking to other groups as well, because those other opportunities we expect are going to materialize in the future. But, certainly, that’s not where our focus is right now in 2021..

Perfect. Thanks so much, guys..

Thank you, Tejas..

I am showing no further questions at this time. And ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect. Everyone have a great day..