All right. Well, good morning. I would like to welcome everyone to Bruker Corporation's 2023 Investor Day. I'm Justin Ward, Senior Director of Investor Relations and Corporate Development. Before we begin, I would like to refer you to our safe harbor statement, which is presented here now behind me on the screen, but is also accessible on the investor relations portion of the Bruker website in the IR Day presentation deck. We go back to the Yep. Now I will briefly review the agenda for the day. We will begin with Dr. Frank Laukien, Bruker's President and CEO, who will discuss Bruker's strategy and key opportunities with a particular focus on proteomics and spatial biology. After Frank, we will have various business leaders discuss some of the compelling innovations and opportunities across Bruker's Project Accelerate initiatives, including Dr.
Mark Munch, the President of Bruker Nano Group. Gerald Herman, Bruker's Chief Financial Officer, will discuss Bruker's financial performance, operational excellence program, and will provide an update to our medium-term financial outlook. Finally, we will conclude with a Q&A session. For those listening by webcast, please note that you can submit your questions through our investor relations inbox by emailing us at investors.relations@bruker.com. With that said, it is now my pleasure to introduce Bruker CEO, Frank Laukien.
Thank you very much. Good morning. Good morning to those online as well. These are not my slides, but we'll get there. I hope you enjoyed the tour this morning. Thank you for coming out a little bit early before the presentations and the Q&A. You've obviously seen some very unique NMR and mass spectrometry timsTOF tools in the last one hour and 15 minutes. Apologies to those online. The tour, we got carried away, of course, and had some very good questions. We're starting just a little bit late. Ladies and gentlemen, thank you for being here today.
It's really wonderful to see so many well-known faces and people that I've known on the, on the sell side or buy side for many years, and so many new people that are perhaps somewhat new to the Bruker story or just want to take a deeper dive today. I am Frank Laukien. I'm the president and CEO. With that, I'd like to jump into giving you an introduction and an update, so to speak. Right. Here is what I'm proposing, what might be some of the key takeaways of our Investor Day 2023. We call it disciplined entrepreneurialism at work. Our strategy, our Project Accelerate 2.0 initiatives, are clearly working. They are continuing to transform Bruker into a higher organic growth company.
We had, as you will see later in Gerald's presentation, from gone from or are going and have gone recently, in recent... the last 3 years, with very solid evidence from a market growth company to the one that has very significantly outgrown the organic growth rates of our market, and we expect to be able to continue to do that. For the timeframe in which we're for our medium-term outlook, we believe that we can outgrow the market, which may grow at 4%- 6%, by 200 to 300 basis points per year. This year, with a midpoint of our guidance at 10%, we would be higher than that. Last year, that was approximately true, and three years ago, we grew 19%, although that was partly a recovery from the COVID year 2020.
Nevertheless, excellent growth, and we expect to be able to be more permanently a high growth company. The dual strategy of Project Accelerate or dot 2.0, we'll talk a lot about some of the key initiatives there, particularly proteomics and spatial. Along with our operational excellence, rigor and discipline and excellent Bruker management process, that together, that's the dual strategy that delivers growth, that delivers market share gain, and very much so also margin expansion, and of course, ultimately, EPS growth. We expect to continue with that formula. It's really working for us.
We expect to see, as Gerald will give you more details, that we will also be not only be able to grow our revenue, and despite our very significant, roughly 10% R&D investment, to seize the historic large secular megatrends in spatial biology and proteomics, and to some extent, even in artificial intelligence for our semiconductor business, but we're not gonna focus on that today. Despite that very significant R&D investment, that is a good 3% or so above the peer average, we expect to make further progress into the low 20% operating margin, and we expect to deliver double-digit non-GAAP EPS growth. Our management process, that has now been honed for many years, is delivering much more predictability, visibility, and very good execution.
I hope you will agree that we've executed, and I would like to thank my colleagues all over the world, for executing extremely well and our leadership teams. It's that management process, of course, very good management team, great leadership team that we have here, a management process and one that's somewhat uniquely in the industry, that is a bit differentiated, focuses on, here it is again, that disciplined entrepreneurialism that is perhaps not emphasized as much in other management systems that you may be familiar with. We are focusing today, as you've heard, on Bruker investing to seize two very large secular trends: proteomics, maybe more broadly phenomics, because there's some we look at PTMs, we look at lipidomics, metabolomics.
We put all of that into the proteomics basket, some targeted, mostly unbiased, as well as the related field of spatial biology and some other related fields that Mark will explain. You may have seen our excitement, and I think you've seen that we've delivered results beyond excitement with our timsTOF PASEF platform, timsTOF doing 4D-Proteomics with the really unique ability to do large-scale collision cross-sections and additional molecular information at scale for better ways of dealing with a fundamental biological complexity that you have from cells, single cells to plasma. It continues to drive a, well, very fast evolution, if not a revolution in proteomics. We're not just riding the wave of proteomics, taking off in a big way. We are creating that way, and we're enabling it to a significant extent with the timsTOF. Bruker at a glance.
We have, you know, our revenue guidance. We have more than 8,500 colleagues now. We will continue to spend about 8%-10% on R&D. The other, the pie charts may be a little bit different than those of you who may have followed us for five or 10 or more years have seen. We continue to be very strong in academic and government, but even that used to be more than 50%, now it's just below 40%. Importantly, there's a lot of translational and clinical research in major academic medical centers. A lot of that proteomics and spatial biology growth is in translational and clinical research, so it would be in that academic government bucket. Importantly, there's a lot of good NIH and equivalent funding for clinical research in cancer and neuroscience and many other fields.
Industrial is not only good old industrial. There is some very exciting parts within our industrial space that go into green tech, from battery technology research, I'll give you a slide on that one, to superconducting technologies for future, even larger offshore wind turbines, to eventually magnetic confinement fusion as part of the renewable energy mix. We're playing a big role in that. Biopharma, with NMR and MassSpec and timsTOF tools, grown tremendously. For us, that continues to be an excellent market with excellent growth. Also in Q1, I know there's some concerns about the health of that market presently, where others see a softening and perhaps a slight decline. We may see a deceleration because you're not going to grow at 20% per year forever, but for us, we do not see a softening of those markets. They're very strong for us.
Microbiology, MALDI Biotyper molecular diagnostics, has become a mainstay of our business. Very solid, lots of consumables, lots of aftermarket, excellent margins. semiconductor metrology with the Science and Chips Act, now a similar Chips Act, whatever it's called, in Europe, of similar $50 billion in magnitude, the revolution in AI. Perhaps this company will benefit more than any other company in our tool space from this AI and revolution. maybe at our next investor day, in two years, maybe we'll also focus more on the non-life science parts, which really have excellent margins and growth potential. We, of course, also own the applied markets. Our geographic mix has changed quite a bit. If you look at us, we used to be nearly 50% Europe. That was good because we're very deeply involved in the European science community in collaboration.
Some of our timsTOF instruments have been developed these days with really collaborators on both sides of the Atlantic and in Asia, initially, primarily in Europe. That's a good thing. We're not that dependent. We're not that overweight, as some of you may call it, on Europe anymore. We had good Asia Pacific and South Asia growth. That's included in our APAC numbers here, India, for example. We've also had, and particularly had exceptional growth in the United States, particularly in biopharma, but also in academic medical research. That's why the Americas part, which used to be in the 20s and low 20s even for us years ago, is now come up to 30%. It's a very healthy balance, very healthy mix.
Project Accelerate, as you've known already, a few years ago, went over 50%, is now actually over 50, is now 56% of our revenue as of last year. Well, we won't read every word here, but culture is important, and we take it very seriously. We really are, and always have been, very passionate about the customer success, integrity, and quality in everything we do. We don't pay an agency for a new slogan every few years. We've had this innovation with integrity for many years, and, you know, it's strongly felt. That's what we're doing.
People in this company were compensated fairly and all of those good things, but really, people are very passionate, and they come to work with a sense of purpose in the leadership team, but not only in the leadership team, in the vast majority of our colleagues. It is a somewhat differentiated and unique culture that we really, really like, and that is a little bit of a different company in this industry. The Project Accelerate and Operational Excellence, just again, not going into every detail. All of these slides are available for your scrutiny later on, if you so choose. I always think of Project Accelerate 2.0 initiatives pulling up the growth rates, of course, going for new markets that have very large TAMs, very large secular trends, and pushing up, pulling up the margins.
Whereas with operational excellence, we push from below, we push up the margins with productivity gain, also with innovation and product refresh in our core business. Our core business is in excellent shape. We think we're gaining market share there. It has decent growth rates. It has margin improvements. This isn't some legacy business. This is absolutely essential for us. Operational excellence also is being applied to proteomics and spatial biology. We don't do starry-eyed innovation for a few years, and then we start with operational excellence. It's very much an integral part. It's part of that disciplined entrepreneurialism. Right. A few things to consider for those who have a longer term perspective. Our organic revenue CAGR in recent years has been 7.5%-8% in that range, right? A very nice improvement.
As I said, the last year was 10%. This year, the midpoint of our guidance is 10% as well. And we continue, and we, while we had even faster growth in our orders and therefore backlog growth, this is all good. Our non-GAAP, EPS, CAGR has come from the high single digits to the double digits, and we did this all along with a ROIC that we so far have consistently, even in the weaker 2020 COVID year, kept over 20%, something that we're proud of, and that matters to some of our investors. We've gone through different phases. Some of you may be familiar with... I won't go through that right now in the interest of time. Happy to discuss it over coffee later on. Right.
The Project Accelerate 2.0, this is our roadmap. These are the six initiatives. There's a lot of wording here. This is for... You either know it already, you can read it more, in more detail later on. Today, we're gonna focus on two. We're cherry-picking a little bit. I've seen other companies that do investor days or analyst days. They also sometimes focus on certain topics 'cause Bruker is very broad, Bruker is complicated. We have many tools, many markets. It's wonderful. It's called diversification. We're gonna focus on the green and the yellow, so to speak, today, with a high level, there's other subfields in there on proteomics and on spatial.
Part of our proteomics story, although we categorize it in the 10% microbio and molecular diagnostics, is really the most successful, by far, applied in clinical proteomics technology that's on the market. Sometimes we chuckle when we see that people are wondering where the mass spec will ever make it into the clinic. Huh? All right, we're there. Over 15 years+, we've delivered over more than 5,500 MALDI Biotypers that uses a proteomic fingerprinting method. It is clearly an applied and clinical proteomics method. Two-thirds of these instruments are in clinical microbiology. One-third are in applied markets, from water safety, water, food safety, product release in pharma industry, et cetera. It's a beautiful market we're developing. We're the clear market leader worldwide. With that, we're continuing to innovate. We're refreshing that product line with a MALDI Biotyper Sirius.
It can now actually do also a bit of lipidomics with the negative ion mode. I know that gets too technical, but there are some new things that have come out of certain academic research labs that have indicated that that's beneficial, additional information, functional information beyond the biological fingerprinting that we do with applied proteomics. There's additional functional and resistance information that you can get with lipidomics. We keep innovating. We have new workflows. We have new software. We keep innovating. This is one of our flywheels, and we just keep innovating with it, and if anything, our market position is getting stronger because we keep innovating, and we're also now displacing others that may already have an installed base. Over 5,500 systems out there.
We're placing about 500 per year, probably closer to 200 million IDs per year in total, but 100 million is a very conservative number. This has very much gone mainstream. Applied proteomics at its best. Right, quick excursion into something else, our magnetic resonance business. You saw some NMRs this morning. We're, as you will hear, going forward also, we're playing a bigger and bigger role with many of our core tools, also in clean tech, in this case, in battery research, but also in battery production, in QC, and in recycling even. There are many, many elements here.
I won't go into that. From production to conditioning to battery recycling, lithium-ion batteries, other batteries that are coming along, where we're playing a very important role with magnetic resonance, but also with our X-ray and IR and many other tools. Clean energy, another theme on clean energy, which is becoming more important, is applying our best our energy and superconducting technologies, 10% business, if you remember. They're getting into some very interesting markets with magnetic confinement fusion at ITER, but also some very large fusion pilot projects in Asia and China in particular, where we've received further orders since we announced this first.
You may have seen some of the fine print has changed further ITER orders, further, now also for plasma heating, for inner vertical targets that can extend extreme plasma heat, and of course, our very unique next-generation advanced superconductors for magnetic fusion. We also think, especially due to the extreme dependence of our onshore and offshore wind energy industry, that uses permanent magnets that are completely 99% sourced in only one country, where there's some geopolitical concern. Plus, as we want to go to larger and larger, maybe 20 MW offshore wind turbines, you have to go to superconductivity, we think. We're very pleased there's a DOE R&D project with a major U.S. energy company, where we've been chosen as the wire supplier.
There's new venues, even in wind energy and magnetic confinement fusion, that are very exciting to us. This isn't proteomics or spatial biology. We'll get to that, but there's some other cool stuff happening at Bruker and some very important trends that we're pursuing. Speaking of important trends, Yeah, you all know it, AI, and all the way to ChatGPT, is revolutionizing the world right now. We understand that NVIDIA is a beneficiary, but as you go down the value stream, of course, other semiconductor metrology tools companies, and particularly those that have very advanced capabilities for smaller featured chips, all the way to 3D packaging, to multilayer technologies. Those are the areas that we serve that are somewhat specialized, but the markets are growing towards us. We are doing well in that, and it's becoming a bigger part.
We're doing a lot with NMR, gigahertz NMR, structural biology, and unstructured biology for inherent disorder in biology and disease biology. Tremendously important, looking at binding, looking at kinetics, looking at time, 4D time and structure. Very unique capabilities that you don't get out of crystallography or cryo-EM, at least not to this extent. NMR, complementing these other technologies that are also very important, is doing very, very well. Here are some of our cool technologies. Magnets, of course. This wouldn't be Bruker if we didn't talk about magnets, especially that little compact 4 Kelvin magnet that needs so much less helium, fits into any single-story lab. We had some immediate orders after the launch last year. We already installed a couple at the end of last year.
We now have the larger two-story magnets, 1.2 GHz and the compact 1 GHz . We now have more than 26 installed or on order. We have a multi-year backlog, and we recently had announced two systems from the U.K. that already had wo of these 1 GHz , and now order two, 1.2 GHz systems for use by the entire science community, biology and green tech in the U.K. We hope that will be the rate to apply to the rest of the world. It's a little optimistic, nevertheless, this or what Spain has done and other countries, or Germany or Switzerland, is exemplary. We think others, eventually the U.S. and China and others, will follow.
Some very cool technologies, including use of AI and automated structure generation, whether you start de novo or from other AI programs that give you structures already, and some unbelievable technologies. The one in the middle, it's just kind of fun. Can you imagine something rotating 160,000 times mechanically per second? Well, this is what these probes do, and not just for fun, because you can look at membrane proteins and prions and aggregation and very important diseases with it. Well, today the focus is on spatial and proteomics. Actually, overlapping, a lot of the spatial we do is targeted proteomics, but in a spatial context, as Mark and Kevin and others will explain. Proteomics, as I said, we're also looking at post-translational modification or epiproteomics, lipidomics, metabolomics, often all bundled under phenomics.
We think we're the leading phenomics tools company, I think we will be one of the leading spatial biology companies. This has grown quite a bit. If you wanted to look at that, we added it all up, from applied proteomics to proteomics by timsTOF, to structural biology, to the relatively new but now soon also needle-moving spatial biology tools, we think that is now more than 25% of our revenue. Someday, I think this will be 50, but not by 2026, yeah, the somewhat longer-term horizon. Over time, I think we are already and will be the leading or one of the leading proteomics and spatial biology companies. It's really beginning in the aggregate, clearly moving the needle. A lot of investments, but very good gross margins.
Right, this is a slide that you may have seen already in the interest of time from our previous acquisitions. These are sample prep and automation and consumables for proteomics, or examples of what our previous software acquisitions have done for our proteomic solutions overall. Very successful introductions from acquisitions we did a year and a half ago. Here are some of the newer acquisitions. You'll hear from both the founders and CEOs of Inscopix and Biognosys today by video, so I won't talk about it, but very important capability in neuroscience research with microscopy, in vivo microscopy, and then in very high-end tools, consumable software and services for proteomics, primarily for drug and biopharma customers. Yeah, timsTOF, that's our very big flywheel. We really keep innovating in that. We think that in terms of innovation and capabilities, we continue to be clearly leading.
We now have over 700 of these systems installed, with many more on orders. We launched the timsTOF Ultra that you've seen downstairs. There's other products in that product range. This is a very important platform with very unique 4D capabilities, these TIMS and PASEF, just nobody else in the industry has anything like that. Some others are adding some basic ion mobility capability, but doing this at scale, doing 4D all the time and benefiting from artificial intelligence to deeper dissection is very important, not only scientifically, you know, I get excited about science and applications, but very much, very important for business. With that, this is what hopefully you'll conclude at the end of the day, and you'll hear a lot more from my colleagues. Thank you very much.
All right, thank you, Frank. Up next, we will have two presentations from two of the business leaders in our Bruker CALID Group. First, we will have Rohan Thakur, who's the President of Bruker's Life Science Mass Spec business. He will talk about unbiased deep 4D-Proteomics on the timsTOF. For those of you in the building with us here today, we just were down in the demo lab, and you saw many of those timsTOF instruments. After that, we will have Oliver Rinner, who is the President of Biognosys, which earlier this year became a part of Bruker. He will discuss proteomics drug discovery services and tools. With that...
Hello, everyone. My name is Rohan Thakur. I'm the President of Bruker's Life Sciences Mass Spectrometry Division, it's my pleasure to talk about the game-changing timsTOF platform and the impact it's had on the field of proteomics. You know, when we launched the timsTOF Pro at HUPO in 2017, it enabled proteomics to hit refresh. What I mean by that is, before timsTOF Pro and PASEF, an average proteomics run would take about 90 minutes to two hours, right? Because of the speed of PASEF and the duty cycle of TIMS. The timsTOF Pro allowed proteomics experiments to be done in 20 minutes or less, with more depth, with more identification of PTMs, and with higher confidence because of CCS values.
It essentially allowed us to check all four check marks on what's required in mass spectrometry, which is speed, robustness, sensitivity, and specificity. What we see today in the different applications of proteomics-based mass spectrometry is an increase in sample throughput and a decrease in sample amounts injected. This puts a lot of emphasis in sample preparation, which then requires the mass spectrometers to be more sensitive, because then you need, you know, data science to actually pick up on all these nuances. Together with our partners at CTC, Evosep, Ion Opticks, Cellenion, you know, we are developing an ecosystem to enable the various applications that we see in proteomics. One unique advantage that TIMS brings is CCS enablement.
In, you know, today's age of digital biology, where you have machine learning, and if you look at this wonderful perspective paper from Professor Matthias Mann, and the image on your left, you'll see that, you know, since about 2006, everything has remained pretty much the same in mass spectrometry, except for ion mobility. Ion mobility and the CCS values that you can derive, you know, it feeds the machine learning algorithms, which then makes the output more defined in terms of discovery. What this triggers is once users understand the benefits that PASEF brings, they embrace that, and the community starts to develop different techniques so that the different experiments are enabled, and the benefits are realized.
In 2018, just after we had launched the timsTOF Pro, we had data-dependent PASEF, and you can see today we have about seven different types of PASEF, specific for the different experiments, with some key improvements such as dia-PASEF for single-cell proteomics, Synchro PASEF, again, from Matthias' group, and of course, maximum information or midia- PASEF, which is quite significant in applications such as immunopeptidomics. The user community or the peer group recognizes these advances made, and you can see we've been rewarded for the introduction of PASEF by the European Proteomics Association. We were recognized at the International Human Proteomics Conference, and MALDI-2, which helps us in spatial biology, and once again for single-cell biology. We won the award at the European Proteomics Association for the advances made in proteomics-based mass spectrometry.
This year is no different. I think continuous innovation, bringing new products to market, it's hardwired in our DNA. We have made a revolutionary breakthrough in the sensitivity required for proteomics with the launch of the timsTOF Ultra and the CSI Ultra Ion Source. This is pretty significant because if you can see the graph here, we achieved about 5,500 protein groups and over 55,000 peptides at 125 picograms injected. This is K562 cells at 1% FDR. If you have highlighted the box there to show you, it's important for two reasons.
You can inject less, you get more protein coverage with the number of peptides that this system can analyze, which is fairly important, actually quite critical for experiments like immunopeptidomics, which are non-cryptic, but nine amino acids long, and you need to cover at the peptide level. The graph below that looks like two mountain peaks, shows you that with the enhanced sensitivity and the peptide coverage that we had at 1% FDR, you know, PASEF speeds, we're covering over five orders of dynamic range in this experiment. Of course, customers don't do HeLa or K562 every day. They're looking at real samples, and the benefits of high sensitivity and speed are nicely illustrated by Dr. Fabian Coscia at the MDC in Berlin, where he takes, you know, laser cancer microdissection of mouse liver FFPE tissue.
FFPE tissue is a difficult matrix, because of the cross-linking that occurs during the formalin fixing process. You know, he can isolate about one to two hepatocytes from mouse liver, and the detection limits are between 1,500 to 2,000 proteins from this very difficult matrix. Karl Mechtler, Professor Karl Mechtler, who's focused on quantitative proteomics, shows us how important it is to be quantitative at low levels injected. This is once again, K562, 200 picograms injected, about 6,000 protein groups, and a median CV of 10%. It's nice to have sensitivity, but to look at expression of proteins, you have to be quantitative, and this is very nicely illustrated by Professor Karl Mechtler, one of the pioneers of single-cell proteomics.
The unique value for TIMS in immunopeptidomics is shown beautifully in this paper from the Steve Carr Group at the Broad Institute. What TIMS lets you do is specifically isolate singly charged peptides in a specific region during the gas space separation in TIMS, which are then transitioned into the mass spectrometer, right? Identification of these low copy number HLA-1 and HLA-2 peptides are clearly differentiated and identified at very low copy numbers in a showcasing the value TIMS brings to high sensitivity applications such as immunopeptidomics. You can see compared to the competition, it's just clear which systems have the sensitivity to deliver on this key application. If you can do a single-cell proteomics, it opens up different fields where you can now start looking at the single-cell lipidome.
A lot of these systems and systems biology work in a cascade. As you dig deeper into single cells, it's Dr. Byeon Seul Kee at the Mayo Clinic, that's looking, once again, working together with our partners at Cellenion, to isolate single cells and then look at the lipidome as the cells get perturbed, and this is a good example in lung cancer. You can see how sensitivity and specificity of the timsTOF Ultra systems impact multi-omics in this space. Of course, if you have such a big increase in sensitivity, we're now entering the fourth decade of proteomics space mass spectrometry. Sensitivity of mass spectrometers since the 1990s has increased by almost, 1,000, if not 10,000-fold.
You could get more robust, flow a little higher, do micro flow rates, and see if you can use the robustness, not of the mass spectrometer this time, but specifically on the LC side, flow slightly higher, use heated electrospray, use larger bore columns so that they're more robust. Here's about 2,000 samples with tissues, with brain tissues and QCs that deliver about 10,000 protein groups. Once again, the sensitivity used in a different manner to accelerate discovery in proteomics. Well, if a 20-minute run's not fast enough, here is the Ralser Group at the Charité doing proteomics in three minutes. Pretty much proteomics at unprecedented scale that delivers on the precision and the sensitivity that's required together with reproducibility and high throughput.
Three-minute gradients, about 400 samples a day, truly proteomics at an unprecedented scale, you know, made possible by the timsTOF platform, which kind of checks, as I said earlier, speed, robustness, sensitivity, and specificity. We can go faster. This year at ASMS, which is this week, we launched a 300 hertz dda-PASEF experiment. The three minutes was too long. Here's lipidomics, 4D lipidomics in 1.5 minutes, using a 300 hertz PASEF mode to identify different species of lipids. Let's not forget, the timsTOF platform enabled bulk proteomics with the timsTOF HT. Spatial proteomics, as you can see here, with the timsTOF fleX, and of course, single-cell proteomics with the timsTOF Ultra now.
Here's a beautiful example of spatial biology being used in a multi-omics manner, together with our partners again at AmberGen, to label proteins in tissue, do a label-free glycan image, and then compare it to the histopathology staining that's routine in a path lab. Dr. Peggi Angel makes use of this beautifully for studying different cancers and possibly being prognostic in this manner. Key takeaways as I close the talk, you know, I think we made a revolutionary breakthrough in the sensitivity that's required by the field. You know, we can identify low abundant proteins with higher coverage using smaller sample amounts.... As you saw, the user community has adopted the benefits of PASEF, so data formats will remain open, so that they can harvest the benefits and drive more discovery with the different tools at their disposal.
TIMS technology is new, so it's only in its 4th generation. It's about five years old, and we'll continue to evolve it so that the users benefit in 4D-Proteomics, lipidomics, more PTMs identified, of course, and it's playing a vital role in spatial proteomics, as you saw in the example with Peggy Angel. Upgradability will always be a top goal whenever possible, so that the users can benefit from the advances we make. Our M&A partners will continue to drive innovation, as you saw. You know, sample throughput is going up, and sample amounts are going down, so that puts emphasis on innovating in the sample prep area and in the software area, feeding machine learning, so the output that we derive has more information to make more intelligent decisions.
And I'd like to close by reminding everybody that MALDI Biotyper is a world leader in applied clinical proteomics, and it uses proteomics fingerprinting for fast ID in clinical microbiology. At Bruker, proteomics and innovations in proteomics is in our DNA. Thank you very much for your time and your attention.
Welcome, also from my side, to the Bruker Investor Day. My name is Oliver Rinner. I'm CEO of Biognosys. Biognosys has a history of 15 years at the frontier of proteomics technology. Since we spun off from the lab of proteomics pioneer, Ruedi Aebersold, we have been pushing the leading edge of proteomics technology, and we continue to do so with a high R&D intensity. Our mission is to provide researchers access to the most advanced proteomics technology, which over the years has helped us to build a large customer base, with many publications that reference or use our technology. We are located close to Zurich in Switzerland, have commercial presence in Cambridge, and soon will open their facility, too. In January 2023, Bruker took a majority stake in Biognosys, and we are now part of the Bruker family.
We address a fundamental problem in life science and medicine: understanding cellular function, health, and disease. Proteomics would not be possible without our ability to read the genome, but it goes far beyond and directly relates to the phenotype, the biological function. Reading the proteome on all functional levels is orders of magnitudes more complex than DNA sequencing, because it's not about sequencing proteins alone. Function proteomics plays on the structural level or even in the interaction between different proteins. Big data and AI will drive huge advances in the field, but alone will not help us to solve the biggest challenge in drug development. Only deep understanding of biological mechanisms will, and the role of proteomics is to achieve that, but at a much higher pace than classic biochemistry and cell biology could do in the past decades.
That's because virtually all the challenges in drug developments are connected to a lack of understanding of what happens in the proteome on a mechanistic level. Consequently, the main applications of proteomics today that we see in drug discovery and development are understanding the biological mode of action of compounds on one hand, and the discovery and development of protein signatures, biomarkers for preclinical and increasingly also clinical stages of development. Coming to the technology behind Biognosys. Our technology is centered around mass spectrometry, which, as a physical analytical technique, can address virtually all relevant levels of protein function in a highly scalable and also cost-efficient way. Biognosys has developed proprietary methods in sample preparation, automation, and especially also the data analytics software, which is key to exploit the extreme depth and complexity of mass spec data.
Since Biognosys co-invented the modern way of so-called data independent acquisition in 2012, with ever-increasing performance of mass spectrometers like Bruker's timsTOFs, we have seen a huge increase in analytical depth, shown here using identified proteins from cell line as a standard benchmark. Proteomics remains hard and is still less accessible than, for example, gene sequencing. Therefore, from the beginning, we focused on 2 market segments. The one are the experts that are able to operate a mass spectrometer, potential customers of Bruker, who can be the customers of our enabling products, and still a large, larger market.
Second, the other hand, are researchers that need proteomics to address their research questions, but are not enabled yet to run a mass spec facility or rather use our CRO services. Interestingly, these two markets were very separate in the beginning, but are now moving together. Many of our customers run with perhaps limited capacity proteomics in-house, at the same time, they work with us as a service provider. Our dual mode of working with the customers gives us the unique ability to position us as the partner of choice for all the proteomics needs. We cover these needs of early research, translational, and clinical trials with our three service platforms that address different research questions.
TrueTarget platform essentially turns the mass spectrometer into a structural biology tool that can uncover binding sites of compounds within the whole proteome. TrueDiscovery is the deep, large-scale profiling of thousands or 10,000 of proteins or their phosphorylation patterns. The TrueSignature can measure proteins with very high specificity and translate these discoveries into assays that can be used in clinical trials. The customer base for our services, almost exclusively biopharma, split between U.S. and Europe, and they use our platform as a service. Our software and reagent products enable mass spectrometry users to perform proteomics experiments themselves more effectively and to get much more out of their data. Our flagship software is Spectronaut, which is widely used in industry and academia by the top proteomics labs.
Here, this enables us to reach a customer base that is not accessible with our commercial CRO services, namely academic institutions and core facilities. All of them, users of mass spectrometry, are potential customers of Bruker, and together we can provide them with more complete and seamless solution. These synergies between Bruker and Biognosys that we are now building since our transaction in January 2023, go far beyond cross-selling or product bundling. Our joint mission is ultimately to enable researchers, drug developers, to turn biological samples into biological insights. With our products that complement the offerings of Bruker and partners like PreOmics, we can better support customers to be successful with the powerful but complex mass spectrometers.
With our CRO services, we provide them a direct route towards deeper biological insights with proteomics, and we can drive our ambition to establish proteomics as the key technology, beyond even what next-gen sequencing did for the genomics world. Since January, a lot happened already. We have launched a new data analysis platform, ProteoVerse, a high-throughput method for deep scalable plasma proteomics at the ASMS 2023, and a major new release of our flagship software, Spectronaut , with improved support for timsTOF data. We have also released our first joint offering, where we embed our widely used calibration iRT Kit in Bruker, in Bruker's ProteoScape platform. The most important step this year towards greater accessibility of our services is the setup of our new Cambridge-based mass spectrometry facility that brings us closer to the U.S. market and which will be online end of 2023.
Together, we can drive the further development of proteomics to achieve our goal to better understand the function of proteome for better lives. We are still at the beginning of a proteomics age, and I'm convinced that proteomics will transform the ways drugs are discovered and developed. As Biognosys, together with Bruker, we are well positioned to drive that transformation. Thank you very much for your attention.
Well, thank you to Oliver and Rohan. We trust that you have found these presentations very interesting and informative so far. We're going to take about a 10-minute break right now before we continue the program. Those of us with you, those of you with us on site, we have some refreshments, some food in the adjacent room. Please, we welcome you to that. For everyone on the webcast, we'll join you again in about 10 minutes here. Thank you. All right. Well, welcome back, everybody. Up next, we have Dr. Mark Munch, who's the President of the Bruker Nano Group. Bruker Nano Group has a wide portfolio of technologies and applications, but today he's going to focus on some of the exciting innovations in spatial and cell biology. With that, Mark?
Hello, good afternoon, everybody. Nice to see you all here. In this part of the presentation... If I could have the next slide, please. There. We're gonna talk about the yellow part of the hexagon. This is where we have spatial biology and cellular analysis. This is over $70 million of revenue for 2023 for us, and that supports a number of areas, and it really comes off a pretty broad core competency in fluorescence imaging. In that core competency of fluorescence imaging, there's a number of platforms, and every platform listed here, we are the leader in innovations and have the best product implementations. I'm gonna touch on later why that's relevant when I talk about spatial biology. Those platforms that I just showed support a number of interesting growth applications.
A lot of focus for this session will be on the Canopy CellScape system. That is our system for single-cell and subcellular-based spatial proteomic, spatial biology. That system also, you can examine cell suspensions in immunology, in this, the diagram shown on the lower left. We also have the Vutara super resolution platform, supports also many applications. One that's quite interesting is extracellular vesicles. We'll have a video later, that's a neuroscience-focused video, which comes off two of these core platforms. One is in what's called multiphoton microscopy, or for short, you can think of as called two-photon microscopy, and the others are recently acquired Inscopix, which is head-mounted 1P microscopy. Lastly, we have our Luxendo light-sheet microscopy platform. That also supports a number of interesting life science applications.
One in particular that's very interesting is organoid imaging. We're gonna focus on spatial biology, and one of the things I wanted to describe, and other people, companies describe the market this way, is how the market segments. To the left, you see the discovery research segment. This is a segment where you heard Rohan and Frank refer to. We have our timsTOF fleX or the MALDI base, that's mass spec base spatial biology, and that's really appropriately positioned for discovery research if you wanna do proteomics, but deep omics technology in terms of metabolomics or lipidomics and very kind of multi-omic. We also have the Acuity PaintScape system, which I won't talk about today. The focus here, we'll talk about the Canopy CellScape, and that goes across discovery research, but also into translational.
We think of translational as two segments, both translational academic as well as pharma, where we do clinical drug development support. Okay. Now, the CellScape platform, besides spanning all segments, it's the platform really that is positioned also when spatial starts moving to clinical diagnostics. It's mostly believed that spatial proteomics will be what moves to clinical diagnostics, the way we... You'll see as we go through these protocols and talk a little bit about the platform, why this is actually a technology that we feel we can take there in the future. Okay. Why is spatial important? Why is it so exciting, or why all the buzz about spatial? I think there's some, can be some confusion out there, but spatial is very valuable. It's really kind of brings whole new insights into biology.
On the diagram here, I'm showing the tumor microenvironment. In the field of oncology, the types of things that spatial allows answers to and where researchers are asking questions are, from having a tumor, you know, in a tissue, you know, what are and where are the cells in this tumor microenvironment? What are the subtypes of those cells, and how do they interact with each other? What does immune tumor infiltration look like, and what does that immune tumor cell interface look like? It's very, very important. This couldn't be done without spatial before, and this is why all the buzz is happening around spatial. On the right are more general questions.
If you go out any sort of disease beyond oncology, the big picture is, you know, what are the relationships between these cells, right? There are cell-cell communication networks. Cells know where they are. The question is, you know, do we understand the cell communication networks, and what are the roles of those cells? You know, what are they doing, and how are they communicating with each other? This is the promise of spatial biology, right? It's what provides these insights. Through those insights, the hope is and the promise is we can develop better diagnostics, and through those better diagnostics, we can develop better therapeutics. Spatial is a big deal. As I go through the talk a little bit, talk about the Canopy CellScape, keep in mind, biology is spatial, right?
There's high value in what it teaches us. Another thing to keep in mind is, biology is very complex, okay? Spatial biology is in early innings. It's just the beginning of this field. Okay, so the Canopy CellScape system, it's a very differentiated, quantitative, I'll emphasize that a lot, performance platform, and it services cancer, immunology, and neurobiology. Okay. One of the interesting things about Bruker, what makes me excited about working for Bruker and all our employees, is this flywheel concept or this thing. We go deep in technologies, and then we find all these application offshoots, okay? Canopy into spatial proteomics is one of those stories. Canopy was a CRO. They had perfected a multiplexed cyclic immunofluorescence technique very well.
They had developed a proprietary technique for eight log dynamic range detection and algorithms that used it, and they were operating that methodology as a CRO, offering services, okay. They didn't have an instrument, was lacking an instrument and didn't have panels and reagents. Okay. We saw an opportunity to get into spatial biology by adding a pivot, leveraging this core competency we have in fluorescence microscopy and instrumentation in general, okay? What we have done is now developed a best-in-class, high-resolution multiplex instrument that are optimized for those protocols. We've developed kits and panels to run on this instrument, and we do this still while running the CRO today, which further always advances our knowledge in terms of new markers, new panels to develop, okay? The result for us, in terms of completing, adding this.
pivot, is this differentiated, highly differentiated, quantitative, spatial proteomics platform with leading sensitivity and precision of quantification. I'm gonna show you a video in a second, but this will give you the highlights of the Canopy CellScape system, and then afterwards, I'll follow up with key elements and tell you really why this is really important. Let's roll the video. That video gave you some highlights, and so some things it touched on as features of the CellScape are the high optical resolution, the high dynamic range, the ability to multiplex up to high levels and whole tissue imaging and walk-away automation. Those are features, and there's a lot of confusion, I'd say, in spatial biology and so I'm gonna in general, in the marketplace.
I'm gonna take those features, and I'm gonna show you really why those matter in terms of benefits. This is the differentiating truth that matters, okay, and hopefully dispel a lot of confusion out here. The first one is this differentiated quantitative performance, which is supported by the high resolution, the high dynamic range, and the ability to plex up to really high levels. Okay. The second one is we're actually using a very straightforward, reliable technique. There's no false starts to your experimentation or delayed starts. This is using cyclic immunofluorescence, basically technology for immunofluorescence have been around for decades. I'll talk about how we do that and why that's important, and why that's differentiated in the way we do that.
Once you're up and imaging, getting productive, the fast time to results and the high throughput of our system, while maintaining this high performance. The last is around plexity or the ability to get to high plex and actually do it, not just claim you can do it, but really doing it, okay. Now, why should you really care about this? First of all, our customers care about that a lot, this is why you should care about it. You know, spatial, it's about seeing all the spatial neighborhood, not just some of the spatial neighborhood, but all the spatial neighborhood, seeing all the phenotypes and the gradation of phenotypes there. That's what that differentiated quantitative performance does.
The straightforward and fast time result, it's about being productive and not having these false starts and getting to your work without any lengthy assay to development, which are problems with other systems out there. The last is the ability to get confidence to whatever plex levels you want and the marker choices you want. This is what's really key and really actually differentiates us in the market. We're gonna step through each of those four benefits. The differentiated quantitative performance. This comes from two things. Comes from our very high, you know, for best-in-class optical resolution for our levels of plexity. We're at 182 nanometers per pixel, and there's kind of standard mode. That, combined with our high dynamic range, is 8 log dynamic range detection.
Those two features combine to deliver this quantitative phenotyping of all the cells, okay? Classifying, the ability to classify all those cells, in different expression levels, okay? Why that's important is you wanna see the whole neighborhood. The whole thing about spatial is seeing the cells and seeing those cell communication networks. You don't wanna just see most of the cells, you wanna see all the cells. You wanna have both of these things, high spatial resolution and the fidelity of high dynamic range, and that allows you to see all the cells. Why that is 'cause cells don't appear all in the same abundance, and they don't appear in all the same expression levels. That's why that's really important, and we're unique this way. The second thing is the phenotypes, it's a continuum, okay? It comes in degrees.
It's a gradation. If you don't have this high fidelity, you won't see all those degrees. Our ability, we can keep phenotyping and subtyping populations of cells. Really, really important. Some example, for example, of results taken on the CellScape, this is a spleen tissue. You can see the high fidelity, both in resolution and the high dynamic range. We can focus on any cell and say, "Okay, I wanna look at this cell here," and say, "Okay, this cyclic T cell," you can see high expression markers, you can see low expression markers, right? If you miss the low expression markers, you're gonna have a hard time phenotyping, first of all, but we can see gradations in the level of phenotyping, okay? We can just move through the sample. It's part of the feature of our software.
You can go to any cell, and you can produce these, phenotype, these expression strips. Okay. It's really important. This comes from this differentiated performance and resolution and high dynamic range. Okay, the pictures are nice, ability to phenotype, really important, what do you do with it? It has to do with quantitative results. You see others in the industry talking about relative cell counts. We're unique, and we get absolute cell counts. Okay, the spleen sample I just showed you of the leukemia, here based on in M1, the first column, 144,000. Okay, say I wanted to look at the how many regulatory T cells were in that view, 109. Okay? The control, for example, another non-disease spleen, 1,629.
We're down to single cell counts because we have that fidelity. In the same study, in the same leukemia, looking at the femur, we saw three regulatory T cells. This is the fidelity. That's why the differentiated quant performance matters. You're gonna miss that if you don't have that. This is what makes us very unique. More samples, breast cancer tissue. Again, you focus on any cell, you can produce these strips. Something that high fidelity allows us to do is we can actually segment and look at cell population clusters in a very different way. We use a standard way of UMAP and t-SNE plots. Something that you won't find competitors of us doing is bivariate gating, if you will, supervised gating techniques that are very, very common, developed for decades in flow cytometry.
We do it in spatial, we're the only ones that can do it in spatial, with good results is because we have this high fidelity. You won't see others doing this. For example, I want to look at immune cells. With supervised gating, I can say, "Okay, within immune cells, here are my T cells, here's my population, NKT cells, here's my NK cells." Okay, within that, I want to look further into T cells. Here's my helper T cells, here's my cytotoxic T cells. When I look further, here's the population of T reg cells. We can just keep going with this because we have this high-fidelity ability to look at subclass populations. Okay, the second benefit I described was this fast time result, right? Doing this with whole tissue imaging or whole slide imaging.
Here's a whole tissue image here. In the white box, let me show you, that is other competitors' field of view that use fluorescence microscopy, fluorescence-based techniques. This is ours in our standard mode. This is really important. This gives the ability to move through this tissue very, very quickly because we have just larger area field of view, and this is all done with this 182 nanometer per pixel resolution. Okay. Just going up to a little bit more field of view, this is what we call our Falcon Fast mode, and you see how you can just fly through the tissue. This is a 374 nanometer pixel, still sub-single-cell resolution, and still with that 8-log dynamic range detection, okay?
The ability to move through tissue has been very productive, and we can do this four batch samples at a time. This is how the CellScape operates. The third key benefit of all those features is it's a very straightforward technique. Our technique is based on using primary monoclonal antibodies. These are our markers that we're reading directly off of. Why that's important is this is what brings high specificity. We don't use secondary antibodies to read the signal. Secondary antibodies can have a problem. This is where you have cross-reactivity, and it can lack specificity. We don't do that. We also don't do oligo conjugations to antibodies or cross-link antibodies down to keep them in place while we're kind of dehybridizing our reading probes.
It's a very straightforward technique, and without these complications, you can just basically select probes, validate, and get to work right away. We can be very, very productive in our system, and this allows for very fast new marker validations. You know, we have 350 validated antibodies, markers, and with those, we've combined those into standard panels we offer. If somebody wants an extra custom marker, that's a very quick process for us. The last benefit is actually getting the high-plex, not just talking about it. In our system, Canopy CellScape, how it works is you stain up to five markers at a time, you image, you erase that signal, and you just go around this loop.
You keep going that loop, we go around that loop without any harsh chemical washes. We don't use chemical washes, okay? Techniques that use chemical washes, for example, trying to move secondary antibodies, the secondary antibodies are stuck on with high affinity, you actually have to use heat and chemicals to get them off, okay? If you're using a conjugated oligo technique, you have to dehybridize your reading probes, which again, is chemicals to get them off. We don't do any of that. Why that's important is those chemicals that competitors use, they degrade your sample, and that limits, in practicality, the plex levels you can get to. We just keep going around the circle, right? Here's a 100 plex breast cancer tissue.
I point out by the way, you can see the single cell resolution, the high fidelity here, looking at both abundant cells and faint cells. Okay? We just keep going, and we actually haven't found a plex limit on our technology yet, and the sample stays in place with high integrity. Okay, in summary, it's this differentiating truth that really matters, right? A lot of confusion out there in the industry, but it's here at the CellScape, we have this highly differentiated quantitative performance that allows you to see things, see cells and phenotypes that others miss. It's very straightforward, no false stops, no delayed starts to getting it work, and then moving through your sample very quickly at this high field of view that we have, while keeping that performance, and then lastly, actually getting to high plex.
Thank you very much for your attention, and we will now do a demo. I'd like to introduce here, Kevin Gamber. He's Vice President of Marketing and Product Management for Canopy, okay? Marco Navarro, who's gonna assist him, and they're gonna show you a great demo here, and you'll find it very interesting. Thank you.
Right, thanks, Mark. Thank you all for the opportunity here to demonstrate the CellScape instrument to you today. This is. We're quite excited about this. What you see, it's here on the table. There's two units. The main unit here is on the right. This is where all of the imaging and staining is performed, is on that unit. You'll see that there are, we'll see this in a second actually, that there are four, it will hold the four different samples at once. The unit there on the left, that is the microfluidics pump, and that's just responsible for delivering all the reagents to the CellScape unit on the right. You'll see that there are 15 different tubes there.
Each one of those tubes can hold a cocktail of five different antibodies. These are actually hot swappable during the experiment, so we're not limited in plex by even the number of tubes on the fluidics device. You can swap those during the experiment and keep on going in terms of plex. The samples themselves are loaded on our microfluidic chips, and Marco here is, I think he's got a, as soon as he gets that on there.
It is.
Has a microfluidic chip along with a tissue specimen, which is actually, this is a colorectal cancer tissue specimen. This is an FFPE sample. FFPE is the very common predominant sample type that's used in pathology labs everywhere. Basically, all you do is adhere that sample to the bottom of the chip, and what that enables you to do, the chip actually enables a few different things. There's a microfluidic device. You'll see it has an inlet and an outlet on the chip itself. That enables you to hook it up to the fluidics, once it's hooked up to the fluidics, it enables true walk-away automation.
By having that inlet and outlet, you can, as I said, hook it up. All the settings are automated on the device and imaged. The chip has some additional benefits. The next is around storage. Once the chip, the sample's on the chip, it's stable for up to two years, and you can also go back and reinvestigate your sample with additional markers at a later date. Say that you've done your experiment, some time has passed, and a new marker has come up of interest. You're able to go back and reinvestigate that tissue, that marker on the tissue. The last thing that it has is a barcode.
All the chips are barcoded, and this gives you a history of every single thing that has happened to that sample. There's no question about what is on the chip or what has happened. Now Marco, next, he's going to load the sample into the instrument, and then connect the two, the inlet and the outlet, then all we have to do after that is close the lid and hit go, and that's that. It's very simple. The, you know, the workflow is extremely simple, within about six to eight hours, after this, after this run, then you would get some beautiful images. I'm about to show you what some of those beautiful images look like. If I just narrow this.
Here, this is actually now a non-small cell lung cancer, and what you'll see here is an orange. This is all cancer tissue. If we can actually zoom in on this tissue fragment here, let me zoom out just a bit. You can actually see these red-blue cells here. These are cytotoxic T cells, which are about to attack this piece of tumor tissue. Obviously, a very important response in immuno-oncology. Next, let's take a look at another piece of this sample here.
You know, Mark showed you earlier, he was talking about the tumor microenvironment and how important that is, and how important it is to look at immune cells on the outside, which we just saw, but also that have infiltrated the tumor as well. You see that here. Again, this is a piece of tumor. Then inside here, you can actually see some immune cells. Let's just take a closer look here. You can actually see here in blue, in green, these are your B cells. These are the cells that make antibodies, and then in blue are some monocytes. You can see this tumor is well infiltrated with immune cells, which is a response that we would want to have as we fight cancer.
All right, let's move to a third area. In this area again, the tumor is in orange, what we're seeing here are in cyan and blue here are, these are dendritic cells, another type of immune cell. These are antigen-presenting cells. Then we also have another population of cell types, cells here. These are plasmacytoid dendritic cells. Again, just, you know, taking a look around the tissue, you can see all sorts of interesting biology. You can see, you know, really immuno-oncology happening in real time, which is an amazing feature of the technology. Pretty pictures are one thing, as Mark mentioned, being able to now understand these in a quantitative way, is another.
Next, I'd like to switch to some slides to show you a couple of examples of that. Mark did a great job of explaining how fidelity is so important in spatial biology. That fidelity is enabled by the high resolution, which we talked about, but also the HDR imaging. Just to give you an example of that, here we've got just a single exposure, we've got two cells outlined in the square and in the circle. In the square, you'll see a very, very dim cell, you can't even see all of it in this exposure. In the circle, you'll see a pretty good, well exposed cell.
These are heat maps, different than what I was showing you before, which were all the cells were just an individual color. This is actually a heat map, you know, black to red. Red is very high expression, black being very low to nonexistent expression. Here, we're just a single exposure. You can see that we can't quite see all the cells. What we do, is we actually take an additional exposure, now you can see more cells than you saw before. You can start to see more of that cell in the square. Now the square and the circle is starting to get saturated.
Now you're kinda reaching the upper limit of what you, of expression levels that you can detect in that, in that cell. Looking again, exposure three. Now, you can definitely see that the circle cell is beginning to be overexposed, and you're getting really good exposure of the cell in the square. Then finally, we have exposure four. This is the longest exposure, and now you've got two... Now everything's basically saturated and overexposed, and you're not gonna be able to do too much quantitative things with that. This is a problem because if you're if you're using another technology that's gonna force you to pick an individual exposure, one exposure, you're gonna have a very tough time of seeing all the cells, as Mark mentioned, which is so important.
With HDR imaging, we are able to see all the cells. We're able to utilize all of these exposures, combine them into a very wide, eight logs of dynamic range, and now you're able to quantify all these markers in each and every cell, and see every cell. I've been talking a lot about immuno-oncology. We're also able to explore applications outside immuno-oncology. Here's one I'd just like to share with you briefly. This is around celiac disease. As I'm sure you all well know, celiac disease is an autoimmune disease, characterized by sensitivity to gluten. What you'll see here are two samples here.
On the left, you have a healthy control, and on the right, we have a sample of celiac disease, and you'll see right away, you can see all the immune cells that are starting to pop out, just from this very high-level view. If we take a closer look, we can perform the bivariate gating that Mark mentioned, and each single one of these dots represents one of the cells that we saw on the prior slide. We can actually gate this in real time, so we can draw these gates, and we can see which cells we're selecting and which markers that we're selecting. By performing these gates and then sub-gates, we can identify all these sorts of different immune cells, and you see them here, and more.
Now we can identify and phenotype every single cell that's in our sample. We can then start to look at quantitative differences now between these the healthy control samples and the celiac disease samples. What you'll see here is, one, a decrease in epithelial cells, and that's indicative of the atrophy that you see in celiac disease. The other thing that you'll see here is an increase in immune cell type across the board in the in celiac disease. Then again, if we look at even more immune cell types, very now specialized populations of immune cell types, again, you can see this increase in immune cell populations.
Now we've gone from an image to actually something quantitative, and we can start to make some interesting observations about what's happening in our tissue. We can also perform the unsupervised gating that others do as well, and you'll see that on the left. Basically, all that is it's a computer algorithm that's taking a look at your sample and then grouping cells based on similarities in gene expression. On the right here, you can actually see, as Mark mentioned, this is actually now a heat map of individual markers, CD4 and CD8. What you can see here is there's there isn't just a plus or minus of expression. There's a continuum of expression from low to high.
You can see all of that here in these plots. You can actually take. Once you've identified those cells, you can also map them back onto your tissue. You can see exactly where they are. This is an example of cytotoxic T cells. We can quantify that as well. Again, you can see there's a large increase in cytotoxic T cells in the celiac tissue. Finally, we can do some more advanced spatial analyses. This isn't all that advanced here. We're just looking at pie charts. This is similar to what I showed you before. If we take a deeper look, we can develop these dendrograms.
This is very messy, I admit, but what I want you to focus on is that yellow-green bar in between the NK cells and the memory helper T cells. What you see in the celiac disease is that bar widens. That indicates there's a greater spatial relationship between those natural killer cells and the memory helper T cells. We have a way to visualize this other than just the images of these connections. With that, I'll just conclude here, the points I wanted to re-emphasize is just how simple that workflow was. Marco went through it very quickly here, it's automated with the fluidics unit. Marco literally walked away, we had that walk-away automation, as the system runs.
The HCR imaging, as I showed you, reveals all the cells, which is so important, if you're gonna phenotype your sample. You saw that continuum expression and that very large, wide, dynamic range. We were able to identify, phenotype, and quantify all the cells in the sample, and then also examine those spatial relationships between them. With that, I'll conclude, and just thank you all for your attention. I'm going to turn it back over to Mark, who's gonna now go and talk to us about neuroscience. Thanks, Mark. Thank you.
Okay, I hope you can see how powerful this CellScape platform really is. We're gonna talk again, it's another part of the flywheel, right? This is what makes Bruker very special. We go very deep into certain technologies, and then we find these different application offshoots. Again, still leveraging this core competency in fluorescence imaging, okay? I think I talked about chemical with fluorescence imaging. I know at the breaks, someone said, "Hey, that was a really nice spec." No, that was all fluorescence imaging, okay? This is fluorescence-based imaging as well, okay? This is neuroscience, okay? Neuroscience, hugely important. The importance of neuroscience research is very humongous. This is because there's an escalating health crisis around the world in terms of increasing brain orders, disorders and brain disease. Here's just some statistics.
I'll just talk about maybe three of them. One is prevalence. Pretty staggering statistics, you know, 25%, so one in four of us, of the world's population, will suffer from some sort of brain disorder in their lifetime, okay? Other is one in eight , okay, in the population, at any one time, will have some sort of brain disorder, okay? Dementia, okay, obviously increasing problem. 47.5 million people globally with 7.7 million new cases each year. Okay. These are big problems, right? A lot of spend happening in term of neurotherapeutics. Estimated in 2027, between $150 billion-$200 billion will be spent trying to tackle brain disorder or CNS. CNS, combined CNS and brain disorder functions. These are all the things we do in neuroscience using fluorescence microscopy.
On the left, I'm gonna take you through the length scales, is whole brain imaging. Then we also look at brain organoids, still pretty large length scale, somewhat smaller. The video you're gonna see in a second, then, is looking at actually live in vivo brain circuit mapping, okay? Then we just talked about spatial. Then at a final length scale, looking at the more molecular, looking between synaptic junctions between neurons, okay? Those are all supported by these platforms, where we have the best product implementations and the world's leading innovation, okay? Light-sheet, multiphoton, super-resolution, Inscopix, you know, head-mounted 1P, okay?
A couple of my colleagues here are gonna be in a video that we'll show you next, and those are Xiaomei Li and Kunal Ghosh. Let's roll that video.
Hi, I'm Kunal Ghosh, CEO of Inscopix, a part of Bruker Nano. The mental health challenge we face as a society today, and the state of affairs in neuro, is largely a result of a lack of effective drugs and treatments for brain disease and mental illness. In contrast to other therapeutic areas, neuro drug development is the costliest, approximately 40% higher than other diseases, at $2.6 billion on average from discovery to market.
... the longest, about 20% longer than other diseases, at 14 years to approval, and has among the highest failure rates, with a dismal 6% final approval rate. We have a fundamental failure of translation into the clinic, this is due to a lack of predictability in preclinical stages, often due to an overreliance on animal behavior-based preclinical models. To improve the odds of success and to bring better, more effective drugs to market, we need to build better preclinical models of disease that are more predictive of clinical efficacy. One way to build better preclinical models is by mapping brain circuits in both health and in disease, as opposed to just looking at animal behavior. Brain circuits are conserved across species, brain circuit-based models should have much higher predictive power than conventional animal behavioral-based methods.
Fluorescence microscopy has emerged as the ideal foundational technology to enable such structural and functional mapping of the brain. This is due to its unique capabilities enabling cellular and subcellular resolution with genetically targeted cell type specificity and enabling the recording of brain activity in real time. Bruker is the world leader in fluorescence microscopy for neuroscience, both for the academic research and for the translational and preclinical markets. We have two major complementary segments in our growing fluorescence microscopy portfolio to address the needs of neuroscience. The first, multiphoton fluorescence microscopy, is today the dominant technique for brain imaging for neuroscience research, addressing the needs of basic neuroscientists.
The second, the head-mounted fluorescence microscopy segment, recently created with the acquisition of Inscopix, extends the capabilities of wide-field fluorescence microscopy to now enable imaging in freely behaving animals to map brain circuits in action, addressing both basic science and translational and pharma market needs. My colleague, Xiaomei Li, will now review our activities in the multiphoton microscopy segment.
Thanks, Kunal. I am Xiaomei Li, the General Manager of Bruker Fluorescence Microscopy Business Unit. Multiphoton microscopy is a powerful technique for neuroscience research. It uses long-wavelength light for fluorescence excitation, which minimizes light scattering in tissue, enabling deep brain imaging with subcellular resolution. When neurons are tagged with fluorescence indicators of neural activity, multiphoton microscopy can structurally and functionally map the brain. The examples here illustrated deep imaging capability beyond the cortical layers into the hippocampal region, functional imaging of neuron firings with single-cell resolution, and the high resolution and atomic structure of the brain. Bruker has a long history in neuroscience and commands an industry-leading position. Our multiphoton microscopes are used by several hundred labs at top institutes and in the hands of many leading researchers across the world. There are many applications using multiphoton microscopy for neuroscience discoveries.
One important application is optogenetics, which uses light to trigger genetically modified neurons to fire. Neuroscientists desire to precisely activate functionally defined ensembles of neurons and observe how neurons communicate within the neural network, as well as drive behaviors. Bruker pioneered a spatially precise 3D photostimulation holographic module, which allows us researchers to conduct such a dream experiment. Here is an example of shining 3D light beams on two groups of neurons, functionally identified for two different licking behaviors. While our products have found multiple applications in basic brain science, we are increasingly finding our products in use by translational researchers and by pharma and the biotech companies. One such mainstream translational application is imaging very small protrusions called the dendritic spines. Dendritic spines receive inputs at synapses, which are connectors for neural network communications.
The turnover of dendritic spines is a hallmark feature of several neurodegenerative and neuropsychiatric diseases, such as Parkinson's and Alzheimer's. Let's go back to Kunal, who will tell you about a different brain imaging modality that is well-suited for brain translational research in addition to fundamental brain science.
Thank you, Xiaomei. Our multiphoton microscopy products, as Xiaomei just spoke about, have had a profound impact on understanding the brain and especially in serving the needs of the basic neuroscience research market. Our head-mounted fluorescence microscopy segment builds on our core competencies in fluorescence microscopy. The head-mounted fluorescence microscope, or miniscope, is a miniaturization of a benchtop epifluorescence microscope into a tiny device that can be worn on the cranium of a rodent, enabling the imaging of the individual dynamics of hundreds to thousands of neurons during free and natural behavior. In a translational context, this fundamentally now enables studying brain circuits in action, understanding how circuits are disrupted in disease, and in enabling the development of brain circuit-based preclinical models of disease. While the miniscope technology is relatively new-... It has already been recognized as one of the top 10 innovations in the life sciences.
There are over 1,200 Miniscope-based systems at over 550 sites worldwide, including the laboratories of six Nobel laureates, collectively resulting in over 200 publications. A good example of what the Miniscope can enable for translational research and for drug development can be found in Parkinson's. The state of affairs in Parkinson's is unfortunately emblematic of the state of neurotherapeutics development. Despite being a fairly well-understood disease, there have been over 2,000 largely failed clinical trials and only a few good drugs, with levodopa or L-Dopa, a 50-year-old drug, still the standard of care. This speaks to the fundamental failure of translation.
Conventional animal behavior-based models, which will pass a candidate compound as effective if the compound corrects the animal's head turns in a behavioral assay, fail to discriminate between clinically good and bad compounds, passing both a good drug such as L-Dopa, but also passing known bad drugs. If we could only look literally into the brain and extract a brain circuit signature for Parkinson's versus relying on a crude animal behavior-based readout, we would be able to screen compounds based on their ability to correct the underlying circuit deficit. Thanks to multiphoton microscopy, we know where to look in the brain. Xiaomei showed how our multiphoton systems are helping find brain regions and the specific cell types implicated in Parkinson's based on analyzing dendritic spine turnover and synaptic plasticity.
With that knowledge, we can now use the Miniscope platform to literally image in that brain region, in this case, the striatum, and record the dynamics of those specific cell types in both normal and disease states. As you can see from these data sets, there are distinct patterns of activity in Parkinson's. The Miniscope platform can be used to acquire such data over multiple animals, and we can use that data to extract a circuit signature or biomarker of the disease. As we might expect, it turns out that the circuit-based preclinical model is much more predictive than conventional animal behavior-based methods in predicting clinical efficacy, showing that L-Dopa is indeed effective, but not passing the known clinically bad candidate compounds. The tools we have talked about today are examples of cutting-edge instrument development that are transforming the state of brain research and neurodrug development.
All right. Well, thank you so much, Mark and team, for showing all of us some of these, incredibly exciting instruments and software that's clearly enabling, breakthrough discoveries across many, many areas of life sciences. While that may be a very difficult act to follow, I know many of you are very eager to hear from our next presenter, CFO of Bruker, Gerald Herman, who will give you, an overview of Bruker's financial performance and operational excellence, as well as update you on, some of our medium-term financial outlook. Gerald?
Well, thank you, all. Thank you so much for joining me. Now we're gonna talk about something really interesting, which is the financial section. I'm here to share an overview of the 2023 guidance, our medium-term outlook, and some other updates with you, let's jump right in. I'd like to start today with a reminder of our fiscal year 2023 guidance, which is unchanged, actually, from the outlook we provided in our May 4th, first quarter 2023 earnings results. There's no new news here today on the outlook for 2023 on the basis of our strength in bookings and our record backlog, in May, we increased our overall guidance to a range of $2.83 billion-$2.88 billion for the year, or organic revenue growth of 9%-11% year-over-year.
We expect a foreign exchange tailwind of about 1%, acquisitions, another 2%, all leading to guidance of 2023 reported revenue growth in a range of 12%-14%. On the bottom line, we raised our non-GAAP EPS guidance by $0.03 to $2.55-$2.60, which represents non-GAAP EPS growth of 9%-11% compared to 2022. We will not be discussing much about the 2023 guidance today, we will for sure revisit it during our second quarter 2023 earnings call in early August. As Frank noted earlier, our revenue profile has really been transformed over the past few years. Bruker has had a long established leading presence in academic government research markets, as well as strengthening biopharma markets in biopharma, microbiology, and the microelectronics and semiconductor metrology market segments.
At Bruker, we carry deep scientific roots, as you've just heard, which helps to strengthen our already solid positions in core research market segments across the globe. While we're continuing to focus on stable, academic government research markets, there's now a healthier mix with respect to higher growth in biopharma and also industrial green tech and clean tech markets. These end markets carry strong secular trends and are contributing to our accelerating revenue growth, as well as our improved margin performance. Overall, these diversified markets really help to mitigate market and macro risks in a way that really wasn't available to us years ago. In the middle of the slide, you can see that our Project Accelerate 2.0 initiatives now make up 56% of the total revenue of Bruker, up from 51% about two years ago.
This reaffirms our Project Accelerate strategy, which targets faster-growing markets with higher-margin life science solutions. For those of you that have followed Bruker for some time, as Frank mentioned, we have shifted a lot of our geographic mix, now reflecting quite a balanced mix across Europe, the Americas, and the Asia Pacific region. We've seen much faster growth in the U.S., but as well in the APAC region, and a balancing or rebalancing away from our traditional strength in Europe over the past few years. On this slide, you can clearly see our significant organic revenue acceleration coming out of the COVID period here, starting in 2021, with 19% organic revenue growth, followed by 10% in 2022, and our 2023 guide of 10% organic growth at the midpoint of our guide.
Due to supply chain constraints in 2022, consistent order growth, and continuing BSI book-to-bill ratios of greater than one for over 20 quarters, we now have record backlog, further fueled, actually, by excellent order growth in the first quarter of 2023. Some of that first quarter demand was clearly driven by strong China orders from their loan stimulus program. When we step back and look at this over the last 2 years, we also saw broad-based demand in orders for our unique life science tools across most geographies and actually most end markets. This level of sustained demand confirms that our Project Accelerate 2.0 initiatives are, in fact, accelerating revenue and improving our margins.
If we move to the next slide, on the left of this slide, you can see our strengthening gross margin performance over the period 2017-2023, with our BSI gross margins expected to be greater than 55% in 2023. This represents annual average improvement of about 85 basis points in gross margin during this period, reflecting innovation and value pricing actions in response to inflation, as well as operational excellence at work in improving productivity in our production and operations. We've also delivered an average of 50 basis points of operating margin expansion per year during the same 5-year period. This is especially impressive because we continue to invest heavily in strengthening our portfolio and positioning in key markets, notably proteomics and spatial biology and biopharma, during this five-year period.
R&D investments were in the 9+% range during this period, with priority investments going on in the fastest-growing opportunities. These actions have translated into significant improvements in our profitability, with non-GAAP EPS more than doubling from 2017 to 2023. Overall, we believe these investments position us well to continue to deliver on the organic revenue and EPS growth we expect in 2024 and beyond. Turning to our revenue growth outlook for the next few years, we expect several drivers to continue to drive strong organic revenue growth in the 2024-2026 period. You heard today from some of our key leaders on the momentum we are building in the proteomics and spatial biology areas, we also expect to see growth off of a healthy, well-managed core business of about $1.3 billion of annual revenue.
A few comments, if I may, on the core business. This doesn't get a lot of attention generally in the investor community, but we have a solid, growing core business in healthy markets, including advanced X-ray tools, FTIR and NIR molecular spectroscopy, nanoservice and analytical tools, and, of course, superconducting products. We're continuously strengthening these core businesses through operational excellence to grow and improve the margins and to gain share. Our core business is expected to contribute steady revenue growth through the outlook period in the mid-single digits. In addition, our other Project Accelerate 2.0 initiatives, like our biopharma and applied initiatives, our semi and microelectronics metrology tools, microbiology and molecular diagnostics, after-market revenue streams, are well positioned to continued solid growth over this period, which we estimate will be in the high single-digit range.
Of course, we expect the highest growth to come from proteomics and spatial biology, which you've just heard of, over the next three years. You've now heard about these remarkable opportunities in these major markets, where we have differentiated strong solutions, are already gaining market share, while the markets are rapidly expanding. We anticipate organic revenue growth in the double-digit range from proteomics and spatial biology. Given the margin expansion opportunities we see in this area, I'd just like to offer a few more details on operational excellence. Operational excellence is the second important pillar of Bruker's strategy. We use operational excellence to describe generally a toolbox of programs that are designed to drive growth and market share and expand and sustain our gross and operating margins.
These programs include continuous improvement, lean initiatives, productivity enhancements, commercial excellence initiatives covering sales and marketing and business development actions, as well as R&D and product lifecycle management practices. Operational excellence principles are also applied vigorously to our G&A and infrastructure functions to improve efficiency and productivity. All these programs are firmly rooted in the Bruker management process that provides discipline and structure to these operational excellence programs. Just a couple of highlights regarding operational efficiency and productivity improvements. We're nearing completion of a major footprint expansion in our CALID group in Bremen, Germany. This expansion will meet the strong demand for our mass spec systems, including the timsTOF platform you've heard about today, but also optimizing our final assembly and test activities for our MALDI Biotyper and other platforms.
Our recent building expansion in Hanau, Germany, positions us to move past some capacity constraints we have, which have been driven by strong global demand for our superconducting wire. We soon expect to see production workflow along with capacity expansion there. In our new facilities, we're squarely focused on sustainable energy solutions that drive energy efficiency, long-term cost savings, and support environmental sustainability. More on that in a moment. On the commercial excellence front, we're making significant commercial investments to support growth across the Project Accelerate portfolio. For example, we recently made sales and service investments to scale up our commercial and technical teams globally to expand our marketing reach in proteomic solutions. Also added channels to support the CellScape system you saw today, as well as upcoming product launches for our Acuity Spatial Genomics.
Finally, as we begin to move beyond the supply chain challenges we saw in 2022 and early part of 2023, we expect strong focus on reducing inventory levels and driving improvements in cash flow. From improving profitability over the past few years, we are now generating significant operating cash flow. The operating cash flow continues to be impacted by working capital growth, which we consciously accepted to manage the growth and supply chain challenges during and after COVID. Remember, this cash flow from an operations perspective is after investing heavily in innovation with R&D investments at or about 9%+ of our revenue annually during this period. As we move forward, we intend to carefully manage operating expenses and our working capital under accelerating growth conditions.
On the right side of the slide, you can see that we have made significant capital expenditure investments to expand production capacity to meet the strong demand. I should note that we do experience some lumpiness from time to time in our free cash flow, quarter to quarter, connected to cash advances and the like, but overall, we expect to be able to improve our operating cash flow generation over the next few years. Turning now briefly to one of the most important elements of Bruker: innovation. We've consistently invested at a high level of R&D as a percentage of revenue compared to our peers. Year after year, we've invested 9+% of revenue into R&D, and in 2023, our R&D budget's expected to exceed $300 million, or about 10% of our revenue.
We believe this to be a key competitive advantage as it drives solutions, leadership, and deep applications expertise, some of which you've seen here today. You can see on the slide some of the fields in which we lead as a result of these innovative investments, but I'd specifically highlight the investments we make in proteomics and spatial biology. Annually, at ASMS, we announce and launch new timsTOF solutions to meet discovery and translational research opportunities, and we also continue to forward-fund our leading Canopy and soon Acuity spatial biology solutions. Before moving to our medium-term outlook, I wanted to draw your attention to the fact that we did issue a 2023 sustainability report yesterday. The report confirms Bruker's commitment to social responsibility, transparency, and progress in many high-impact ESG-related areas.
I'd encourage you to take a moment to review the report, because it highlights the many innovative solutions that we have introduced to address environmental challenges, advanced disease, research and scientific discovery, identify hazard materials in our environment, secure the safety and authenticity of food and other materials, and advance research and development of next-generation and renewable energy technologies, and also to improve recycling. It also outlines our ESG strategy, initiatives, and performance and will serve as the foundation for other future sustainability reports. You can see some several important elements highlighted under the E, S, and G components of this slide, but I'd encourage you to review the report to see more information. Just a couple of comments on our capital deployment strategy. I get a number of questions in this area.
Essentially, simply, our number one priority is continuing to invest in opportunities that support the core business in our Project Accelerate 2.0 initiatives. That means funding significant R&D and sales and marketing investments that support innovation and drive market gain, capital expenditures that drive capacity and productivity, as well as thoughtful, strategic, and bolt-on M&A. Coupled with our investments in growth initiatives, we consistently maintain a strong balance sheet with excellent liquidity and conservative leverage. We currently have capacity and flexibility in our capital structure to address interesting portfolio additions that may come along. You see here on the slide, we deliver a leading ROIC performance exceeding 20% and have done so consistently over the past five years, including difficult market conditions like 2020. A final comment on returning capital to shareholders.
Our strategy supports a steady dividend, and in May 2023, our board again authorized an up to $500 million share repurchase program for the next two years. We intend to return capital to shareholders over time and like the flexibility to pause, start, or restart buybacks, depending on the opportunities that stand in front of us that support the growth of the business. Turning now to our medium-term outlook, looking out to 2024 to 2026. In 2021, we communicated our expectation of 5%-7% organic revenue CAGR over the medium term, and I'm pleased to report to you that despite supply chain and some macro headwinds, we expect to be very much on track with that target.
For our updated medium-term outlook, we expect that Bruker organic revenue will outgrow the market, which we estimate to be 4%-6% growth by 200-300 basis points annually. We project that we will generate $3.4 billion-$3.6 billion of revenue in 2026. Given that our full year 2023 guidance takes us to a projected revenue of $2.83 billion-$2.88 billion, this implies a three-year organic revenue CAGR of 6%-8% over the 2024-2026 outlook period, or 7% growth at the midpoint.
As you've just heard, excellent opportunities in proteomics and spatial biology, combined with solid secular end markets from our other Project Accelerate 2.0 initiatives and our core business, give us a clear line of sight towards $3.5 billion of revenue by 2026. Moreover, with improved operating leverage, increasing Project Accelerate 2.0 mix, our operational excellence initiatives, we also expect to continue to deliver operating margin expansion even after 10% R&D investments annually over the outlook period. Measuring the midpoint of our projection for 2026 against the expected 2023 operating margin of 19.3%, our model implies 170 to 270 basis points of expansion over the three-year period. Our goal for 2026 is a non-GAAP operating margin in the range of 21%-22%.
This leads us to forecast double-digit EPS CAGR in the range of 10%-13%, as reflected on the right side of this chart, to a level of $3.40-$3.70 per share in 2026. I should add that our outlook model for revenue growth is before any future capital deployment for M&A, which could be incremental to our outlook for 2026. Just to recap, our medium-term outlook for 2026 is summarized as follows: revenue in a range of $3.4 billion-$3.6 billion, non-GAAP operating margins in a range of 21%-22%, and non-GAAP EPS in a range of $3.40-$3.70 per share. Our outlook assumes a tax rate of around 27%.
Further details around the third, the three-year financial outlook model that we've been discussing will be available on our investor relations website after the conclusion of today's event. That concludes my remarks. Thank you very much for your interest in Bruker, and I'll now turn it over to Frank for some closing remarks. Thank you very much.
Thank you. Okay, here we go. Thank you very much. Before we go, we'll take a short break in a moment and then start the Q&A. I think you see a lot of change and transformation at Bruker, and a lot of good things at Bruker remain the same, and we're very proud of those and continue to drive that forward. You see a big emphasis on biology. I keep preaching at Bruker, we have physics and chemistry and engineering and math as our basis. That's why we build very good, unique instruments from gigahertz NMRs to MALDI Biotypers to the new CellScape, to many other examples you've heard. Not to forget the timsTOF, very unique scientific instrumentation, but we leverage that, of course, for non-biological, semiconductor or food analysis, chemistry, solutions.
More and more, we're going very, very deep in becoming a biology company and actually a disease biology company, at least in microbiology and infectious disease. You heard a lot about neuroscience research today. You will hear more and more also about cancer research and cancer testing, and eventually cancer diagnostics. Many other new trends from AI being a mega trend that we will benefit from to many of the green tech and clean tech trends. A lot of moving pieces, and we look forward to the Q&A, and then, of course, eventually having you here, back here or wherever we meet in New York in a couple of years for a future investor day. There'll be some of the same topics, of course, spatial biology and proteomics.
We think they will be very, very big for the transformational for Bruker, but also new opportunities that I've mentioned or that we've teased about already. I predict we'll be talking about Project Accelerate 3.0 in a couple of years, and you kind of see where it's going, neuroscience, cancer, clean tech. It's not replacing other areas. We're just very, very blessed, having so many organic opportunities ahead of us.
Thank you. Let's take a three-minute break, then we'll start the Q&A. Quick bio break, then we'll be here for your questions.
All right, well, welcome back, everybody. We're going to jump into Q&A here, do maybe about 25 minutes of Q&A. You know, we reiterated our guidance for the year. Really, we kind of encourage you guys to inquire more about kind of the longer-term opportunities we're pursuing here and the longer-term type guidance. With that, yeah, if you want to jump in here?
Thanks. Mike Ryskin, Bank of America, thanks for the presentation. That was really great. Appreciate it. First I want to ask real quick about your expectation for academic and government funding going forward. You know, as you highlighted, a lot of exposure there for you, still about 40% of revenues, and that's been really strong in the last couple of years, but now there's expectations in the U.S. and in Europe that could moderate. What is, you know, what's sort of built into your assumptions for the three-year guide? What are the potential offsets you have if that does, you know, trickle down?
I mean, our total NIH exposure is perhaps around 5%. If you know, if it really came, the slower growth may have a 30 to 50 bps growth impact on us, but I think it'll be much less than that because it's really not. For us, the NIH budget is a very large budget, and it really is much more about allocation and priorities. We think some of the highest priorities will be in spatial, single cell biology and in proteomics, phenomics. In the past, it was very much focused on genomics and next generation sequencing. That's not going to go away, but I think it's going to be de-emphasized relatively to these higher priorities in the life sciences.
I would just observe, I mean, in 2022, we had a 100 basis points headwind from losing the Russia business. This year, we built in a 50 to 100 bps headwind from not being able to export all of our semiconductor metrology tools to China. We're taking these things into account. They're taken into account in our long-term guidance. Overall, the academic government, and particularly also the academic medical research center, spending and investment in our types of tools is incredibly strong and basically anywhere in the world we look.
Just real quick, if I can do a follow-up.
Yeah.
-on, you know, within Project Accelerate, obviously, a lot of the focus was on spatial today and fluorescence. Is there additional opportunity there for bolt-on acquisitions? You highlighted a couple today that really built out your capabilities. Is that where we should look for new technologies to come in, or is there more sort of homegrown organic efforts there?
Oh, we tend to do that pretty regularly. I don't know what the, you know, and often we deploy $50 million-$100 million, sometimes more in a year on bolt-on acquisitions. Biognosys was a good example. We became a majority holder in Biognosys. Inscopix was an excellent example. A year ago, we bought PreOmics, or again, a majority position. Undoubtedly, we will continue to fill out the portfolio where we have, where we see benefits to more complete solutions.
Yeah, I think Puneet was, had his hand. Rachel, yeah, please.
Hey, Rachel Vatnsdal, JP Morgan. Thanks for taking the questions. Thanks for everything today. It was great. Just first, maybe could you spend a minute talking about how many months of backlog you have today? How does that really contemplate into the cadence of the new guidance that you guys have laid out here? You grew 10% last year. Midpoint of the guide for 2023 implies 10% organic this year as well. How does that kind of read across? Is 2024, just given those tough comps, should we expect that to be lower than this more, you know, range of the midterm guide, or could it just be higher given that backlog commentary? I have a follow-up as well.
I'm very confident that we're not giving 2024 guidance today, but the general question maybe I'll give to you.
Well, first of all, on the backlog question, we have about 8.5 months currently of backlog, and that's record backlog for Bruker. As I've just said in my presentation, we've had 20 quarters of BSI book-to-bill ratios greater than one, which essentially means we're not eating into that backlog. At the moment, it's a little hard to predict exactly what's going to happen with 2024, but we have quite a long runway, it seems to me, multi years, in order to be able to get that backlog down over time.
Perfect. Maybe just as a follow-up on the margin expansion, that OpEx guidance implies roughly, you know, low 70 basis points of expansion on an annual basis to get to the 21%-22% operating margin in 2026. That's up from the 50 basis points CAGR that you guys flagged on the five-year over the last five years. Can you just walk us through where are you seeing that margin acceleration come from? You know, is it more on the gross margin line, or are you seeing some operating leverage as well?
That's maybe a clarification, if I may, because we have some temporary headwinds to our margins this year. Certainly about 60 bps comes from currency, you know, we hope that doesn't repeat itself next year. We have another 60 bps that comes from M&A, but you know that M&A is now part of us, so those are businesses like Inscopix or like Biognosys that aren't at the corporate average yet. I think a better way to think about our margin expansion is sort of in that 30 to 50 bps, and I'm just taking a pro forma view on 2023, and then it gets you more to those numbers. We're not increasing our margin expansion to 70 bps. That's a bit of an artifact of 2023.
Helpful. Thank you.
Hey, Frank, Puneet here. It seemed like USF backlog was 20, 6. This is the gigahertz backlog. Just, correct me if I'm wrong, but that, did that increase meaningfully because, you know, from the China orders? If that, if there is, you know, expectations for any further China orders, is the China stimulus at this point, complete?
Not complete, but mostly came in in Q1 and a little bit in Q4 for us. Probably a little bit in Q2 still. We'll have to see. Yes, indeed, that was made for very strong orders again and further backlog expansion in Q1.
Okay.
Then, follow up on, you know, timsTOF stuff. Obviously, you know, great technology has made quite a bit of strides. When you look at the technology versus, you know, the competition. First, one market question and maybe a sort of a technical question. The market question is, are we seeing continued expansion of this market towards higher price into $1 million+ instrumentation? Is that where that seems like where timsTOF Ultra is headed, and another competitor is headed that way, too. Do you think that market is ripe for $1 million+ instruments and in proteomics at this point?
On the technical aspect, you know, how would you compare, contrast versus the, you know, the new competitive launch from up here, which was more high-res and a tough attachment to it?
Right. I think there is a market niche that's sizable for $1 million+ instruments in proteomics, in the discovery research, right? I understand that a competitor has launched a very expensive, very heavy, big new instrument. Our Ultra is also up in the above $1 million. There is a niche for that, so it's for the flex. It's not that small, as not as small as one might expect. I don't think that this is necessarily the harbinger of the proteomics market.
I think the sub-$1 million, $750,000 market, eventually also lower-priced systems, you know, not low-cost systems, but $500,000-$600,000 systems, eventually bench top systems, I think is where there will be perhaps even more significant growth in the long run, and we're very much pursuing that as well in that direction. We have outstanding instruments that sell well today, that sell well below $1 million, and that can have amazing performance and competitive performance. We don't know how a $1.8 million instrument will fare in that market. That remains to be seen when it truly launches and the demo labs have it, and they can ship. We shall see. We're very comfortable with our timsTOF platform and the new Ultra launch. That's all I can say.
Okay, yeah. Maybe one here.
I think that that hand has been up for a while.
Okay. Thanks, Frank. Dan Brennan from TD Cowen. Maybe just on spatial, could you just remind us, I forget, you know, can you just size your spatial business? Obviously, it cuts across a lot of areas. I don't know how you want to size it. Can you help us fit it in? Because you've got some other more genomic players out there that make a lot of noise on spatial. You're coming in from the protein side. Could you give us a flavor for, you know, on the protein side, where there is some competition, exactly kind of what you think your addressable market is, the way they've sized it. Just give us a flavor for...
You highlight all this differentiation, which is a lot of unique features, but I think it would be helpful both to think about maybe a size, what's an implied growth rate, and then how we think about, you know, kind of the addressable market that you serve there.
Yeah. Let's start with the, I guess, the TAM, the size of the market. For all spatial biology, you know, we'd sized that actually in two years ago, and I think we still view it similarly. You saw, I think, much larger estimates of that size from others, but, you know, we saw it as a eventually kind of $5 billion TAM, which I think is plenty large enough, without getting, you know, too carried away with the TAM type numbers that people were throwing around. Large TAM, right? I think, well, boy, that's pretty large. As long as something's large, I'm not gonna quibble about whether it's $4 billion or $5 billion. That's the TAM.
You know, of the yellow part of the hexagon, right, the spatial biology and cellular analysis, that's gonna do over $70 million this year total. Of that, which is truly just spatial, it's about a third of that. Yeah.
You want to talk about spatial transcriptomics versus proteomics.
Oh, yeah.
really market segments, right?
Yeah, really is. The, you saw this rush, if you're quite aware of the spatial transcriptomic players, right? That market got pretty crowded and there's been some that have gone by the wayside that don't practice that anymore. Then in spatial proteomics, where we started, and by the way, I forgot to mention that instrument, we developed that only in 18 months, and that's again, because of that core competency we had. Pretty quickly, much later start than others. In the spatial proteomics, it really is a different set of players that really push the main transcriptomic theme. Yeah, we kind of view those as two different segments.
If you're really trying to phenotype well and really understand the tumor microenvironment, proteomics dominates what you really want to look at. Where the transcriptomics comes in is where, you know, not everything's on the surface of a cell, so cytokines, chemokines, or just want to understand other aspects about cell state in terms of gene expression. How we view the transcriptomic statement coming from the proteomic side is we don't believe on the transcriptomic side that it makes sense to just do high plex for plex sake. You wanna do the level of plex on RNA. I guess I glossed over it. We have done RNA on the CellScape. We use RNA scope. We do it just to really give insights to the, to the extra biology that goes beyond phenotyping. Yeah.
I would, I would add, perhaps, you've seen the $5 billion TAM that we're talking about a bit more conservatively. Others have talked about $10 billion, $12 billion TAMs. I think using your Canadian phrases, they're getting ahead of their skis. Thinking about translational and clinical markets that are still going to evolve eventually. I don't argue that eventually it may not be a $10 billion-$12 billion TAM over maybe a, you know, a decade. I would predict or we would predict that the spatial proteomics will be the bigger part of the market.
Yeah.
That's what you need in translational and clinical work, whereas this very high plex, oligoplexing, is more in discovery research.
Yeah. I was just gonna say that those to access those large TAMs, which really include in those estimates, whether it's our numbers or others, it's really when people start talking about clinical diagnostics, right? This is pretty uniformly felt. I'd say not really just by the spatial proteomics players, is that it's spatial proteomics, which will get to clinical first and actually and be the dominant force there in clinical. Yeah.
Maybe just a follow-up on the 6%- 8% organic guide. Just wondering, how would you characterize that? Obviously, there's, you know, you've got the near-term concerns over pharma, maybe some economic pressure, but net-net, you've got a lot of... You know, you've been certainly exceeding that pretty healthily. You've got R&D at this level. You've got these breakout growth opportunities. Is it balanced, or kind of where would you highlight would be the biggest drivers of upside to that 6% - 8%? Thanks.
Well, before the pandemic, we were sort of a 4.5%-5% organic growth company, right? Our previous medium-term guidance from our Investor Day two years ago for 2024 implied 5%-7%, 6% on the midpoint. We're raising that further. Yes, this year we're growing faster. We're not predicting a slowdown, and maybe that'll be the conclusion that some of you write down. I don't know. We're just trying to give reasonable guidance that we hopefully can deliver and perhaps also a little bit over-deliver in certain years. There are some near-term concerns about a slowdown of the economy, and there clearly are some macroeconomic and even geopolitical risks, right?
We think this is prudent guidance for 7% at the midpoint that we hope to be able to deliver with a better than 50% probability, right? If we can overperform in some years, we'll be delighted to do so.
Hi, guys. Dan Arias from Stifel. I guess I have to apologize because I'm probably gonna ask just a version of Dan's question here. Mark, can you just maybe talk about a served addressable market or think about that $5 billion a little bit more today?
Yeah.
Because to Frank's point, some of these life sciences companies have gotten themselves in trouble with $5 billion, $10 billion, $20 billion TAMs, and then seeing some growth peering out, that makes you wonder what is actually addressable today.
Exactly.
How do you see the portion of the market that is focused on proteomics, focused on it in a way that moves beyond just what you can get from some of these in situ platforms that offer protein capabilities? Ultimately, what portion of the market do you think that that might be today?
Yeah. again, we sized that in two years ago as well, of that $5 billion, we had about $1 billion or so. I think that's pretty close to the SAM, if you will, the service market. You know, it's in that kind of, $800 million-$1 billion type range.
Okay.
Yeah, for spatial power.
For spatial.
For spatial in general.
Spatial.
Yeah. Yeah.
Okay, then just a follow-on, if I could: Is there a recurring revenue stream behind the CellScape?
Yeah.
If so, what might that be?
Certainly, I talked briefly in my talk about the kits and panels. You know, it's an open system, what customers are looking for are these pre-validated panels where you can say, "Hey, do you have an immuno-oncology panel to run?" You know, it'd be like a 23 plex panel. Those are consumables that follow on, and then there also are custom markers that they often will augment those panels with. That's one, and the other is actually the chips themselves that we run on, that are, you know, proprietary and to our That go match to our system, where everything's checked out. Those are definitely important consumable stream elements that go on top of this.
Until you ask the question over time, I don't think it'll be a razor blade model, which may be may play 20-80, but proteomics and spatial proteomics could very well, in a quite a few years forward, be sort of at that 50-50 level, 50% aftermarket consumable software and 50% instrumentation. That's a bit down the road, but that's sort of the trajectory, not unlike our MALDI Biotyper. Actually, the MALDI Biotyper is a little bit more on the consumable side, even.
Thanks. John Sourbeer, UBS. Frank, you talked about it at the beginning of the presentation, just some of the onshoring and semiconductor opportunity. When you think about the long-term guidance, are you willing to quantify any of orders there or where you see that on the driver?
Mark is also running our semiconductor metrology and microelectronics business within the Nano Group, so maybe I'll have him comment. Yeah.
Yeah. We see semiconductor obviously, we saw it before the, like, the U.S. Chips Act onshore as long-term growth, and we plotted that out pretty carefully. According to some of these before, I'll kind of date myself when I say this, but I've been in and out of semiconductor for quite some time, and what's great about semiconductor is it's a growth segment. It's kind of known to cycle, but it cycles a lot less than it used to back when I was doing it 25 years ago. That has to do with the fact that chips are everywhere, right? Kind of Internet of Things, electronics everywhere, and then now with this explosion of AI on top of that's even going to be more so. Long-term growth prospects are very, very good.
Traditionally, if you kind of plot out that kind of long-term CAGR for the markets we participate in, it's always in that 10%, you know, 10%-11% kind of range. Regarding the US Chips Act, that now adds some extra in terms of the U.S. market. You don't build a fab overnight. Of course, those chip companies are still kind of negotiating and wrangling with the government. That's just kind of this a tailwind that's there for the U.S. market, and you'll see companies kind of make then their own decisions about how they deploy within the U.S. That's happening.
We're already actually having instruments go into some of those first sites that were kind of, are kind of already in progress before the Chips Act. They were grateful that it happened. You know, we're kind of deploying some of that. That's gonna be a multi-year, multi-year thing.
I mean, we're in the first inning.
Yeah.
First half of the first inning on that coming through. This will be, yeah, three to five years. Of course, the European Chips Act now being at $47 billion, once you translate it, will also be pretty significant. It doesn't have quite as much political baggage and requirements, so maybe it'll get implemented a little faster, but don't get me started.
Thanks. You know, one key, you mentioned China stimulus. I guess just any thoughts on just the China market in general, maybe near term and long term, what the opportunities are there?
Well, there clearly was a bit of a bolus, right? I mean, the Q1 orders and late Q4 orders, which were really pretty outstanding. Some of that is a bit of a pull forward within the year, our teams tell us. Other than this annual effect, or this timing effect, there was some clear additional business. As in other stimulus programs, even in 2009, 2010, 2011, that tended to benefit, is our observation, the big ticket items, and we do sell big ticket items. timsTOF and NMR orders were pretty strong. When people get an extra $1 million, they tend to buy a $1 million-dollar system and don't, you know, buy lots of consumables for the next three years.
We've benefited from that, and other than that, look, I mean, China is, continues to be a very strong market economy that's obviously very much investment-focused. Excluding geopolitical risks, which we all know are out there, right? I mean, China is a terrific market.
Hey, Josh from Cleveland Research. Thanks for all the time and detail today. Frank, maybe, or Mark, maybe going back to the proteomics and spatialomics markets, I think in the deck, you referenced low double-digit growth. I'm just curious if you could provide kind of an upper bound to that range. I mean, it seems like if you're at 20% there, a path to low double digits for total growth is very reasonable. Any more context you could provide would be helpful.
Well, it has many ranges, right? There are some things like the MALDI Biotyper, where the instrumentation is now growing in the high single digits. There are some things like CellScape that initially will have very, very high growth rates from a small basis, right? There's, you have things like timsTOF in between that has, you know, very good, very good double-digit growth rates. No, it's not growing by 50% or 80% anymore. It still has a remarkable growth rates.
Okay.
I didn't really give you the answer. That was deliberate. It's a range, but when you combine it, and of course-
The way to think about it.
Volume average it, right? The bigger divisions grow a little bit, or businesses grow a little bit more slowly eventually than something that's just been launched.
Sure.
Right.
You didn't talk much about the service business. I wondered if you could provide an update on portion of revenue coming from service, the core growth drivers there, and then context on kind of growth outlook and margin outlook in that business.
We generally think about that as a high single-digit growth business with a little bit dilutive on operating margin, on gross margin, but excellent on operating margin. That's just the gift that gives on giving, right? I mean, that just keeps growing and it is service. It is increasingly also software. We didn't talk about that at all today. There's a growing software business within BioSpin for analytical markets and lab markets. Of course, there's a lot of software investment in proteomics. There will be a lot in spatial biology as well. It's not all one concentrated central software business, but many parts of our businesses have software. There's also dedicated software business. Again, something to talk about in the future.
Yes, consumables and kits are I think, the aftermarket is now about 30% of our revenue.
Thirty.
Gone up from the 20s and mid-20s to 30% over time. That will go higher, although we are still really quite proud to be a premier or maybe the premier scientific instruments company, because that's where you can really create new markets and can do innovation, and then eventually you pull in the aftermarket into that. But if you only do aftermarket, you're probably gonna be a follower. We're not a follower, generally. Anyway.
I think we have time for maybe one or two more questions. Not. All right.
Okay.
You want to sneak one in here? Yeah, please.
If anybody needs to leave and catch a flight, we're gonna be here for a little bit longer for questions, but if anybody needs to run out, feel free to do so.
Gerald, can I just sneak one in on productivity and efficiency? Where do you think you are there, just in the process of improvement and how much you have that's sort of untapped, low-hanging fruit versus iterations of processes that you might have already put in place?
The really big bulk of that in restructuring and taking cost out and outsourcing was sort of in that 14, 15, 16, 17 time frame, when we also ended up growing a little bit more slowly, right? Other than that, it's a continuous process. Every year, as part of our management and strategy process, not only do we have great ideas for new solutions and new markets, but we take out cost, we improve productivity, we look for, you know, lower cost of goods sold. These days, it's not you know, you also want to lowest total cost of ownership and our buying rights, we need these days, we spend a little bit more money on having two sources for everything after the world is fragmented again, and we've been out of a supply chain crisis. It never ends.
I mean, that's a continuous management process. Right now there is no discernible, "Oh, we're in this inning," or, "We're at this inflection point. We're in this continuous improvement phase that will never end." It's really a very core part of.
Yeah.
management cadence and process.
That's particularly true for the new facilities, including.
Yeah
our production and operations facilities.
There, I would say there has been a bit of a CapEx bolus, and we're still in that, and maybe another year into it after that, where we're well above $120 or towards $130 in CapEx. That's probably gonna come down a little bit, but we're hesitating to put that into our guidance because, you know, we are expanding capacity and capabilities rather quickly, and that's. Sometimes even our acquisitions then lead to.
Yeah
further CapEx. Whether that's really gonna level off from that $120 million-$130 million per year level, which historically is high for us, or whether it remains at that level, we will see. It's very good investments. We feel great about those investments, and they help us on productivity and capacity. We're really building not just for the next capacity, not only for the next two or three years, but for the next decade at considerable growth rates.
Any other? Right here.
Just one last one, if I could squeeze in. If you look at the overall market, Frank, it just... In terms of M&A, just... I know you talked briefly about it, but, you know, given the, you know, COVID cash and some of the, you know, broader life and life science tools market, I mean, from your perspective, why are we not seeing more, you know, M&A? Is it more on the seller side, that hesitation, or are they expect, you know, meaningfully still higher expectations, or is it a matter of, you know, the right fit and technology? What's... Just wanted to get your high-level thoughts there. Thank you.
Yeah, I'm not sure. We're not a serial acquirer. We're not one of the core compounders. You know, we hope to be an innovator. We're not a narrow innovator. We obviously have enough diversity, but we're also not trying to do everything in our industry, from centrifuges to freezers, right? For us, it's typically about strategy and fit, but also sometimes about just, you know, valuations have come down, but look at the PNLs of some of the potential targets. This disciplined entrepreneurialism also means we're not gonna do acquisitions that would be damaging to our stakeholders.
Great. Thank you.
Yeah.
All right. I don't know if you want to have any closing comments, Frank?
Thank you very much for coming here. I mean, really, very many of you have spent in much of the day with us. I hope, we hope you thought the lab tours were useful and that we picked two focused topics. We talked a little bit about other stuff, but we thought we'd highlight two focused topics. I know you know quite a bit about our proteomics work and what others are doing in proteomics. I thought today was a great day for showing you what we're doing in spatial biology. Yeah, we went a little bit deep into some more details and even gave you a full demo, a partial demo here at least, but I hope you thought it was interesting for understanding Bruker and where we're going. Thank you very much.
Thank you.