Earnings Call: Q3 2021

Nov 10, 2021

Good day, ladies and gentlemen, and welcome to the MaxSight Third Quarter Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Sean Menarquez. Good afternoon, everyone. My name is Sean Menardghas, I'm an analyst on the MaxSight team. Thank you all for participating in today's conference call. On the call from MaxSight, we have Doug Dorfler, Chief Executive Officer and Amanda Murphy, Chief Financial Officer. Earlier today, MaxSight released financial results for the Q3 ended September 30, 2021. A copy of the press release is available on the company's website. Before we begin, I need to read the following statement. Statements or comments made during this call may be forward looking statements within the meaning of federal securities laws. Any statements contained in this call that relate to expectations All predictions of future events, results or performance are forward looking statements. Actual results may differ materially From those expressed or implied in any forward looking statements due to a variety of factors, which are discussed in detail in our SEC filings, The company undertakes no obligation to publicly update any forward looking statements, whether because of new information, future events or otherwise. And with that, I will turn the call over to Doug. Well, thank you, Sean, and good afternoon, everyone, and thank you for joining MagSight's 3rd quarter earnings call. I will begin with a discussion of our business and operational highlights during the quarter and then we'll follow with a detailed financial review from Amanda. I will then open up the call for questions. I'm very excited with our performance in the Q3 of 2021, Our second time reporting as a NASDAQ listed company. During the quarter, we continued to deliver on all financial and strategic aspects of our plan as the premier cell engineering Welcome to the platform technology, supporting the development of advanced cell based therapeutics. Amanda will provide more details later in the call, but I note that we realized Very strong Q3 results as outlined in the press release published earlier today, driven by strong performance in our core Cell engineering business as well as substantial SPL, which is strategic platform license program related revenue recognized during the quarter. To summarize, total revenue was just over $10,000,000 representing a 50% growth compared to the same period in 2020. Our core instruments and disposables business grew 25% in the quarter, which lines up with our historic 5 year CAGR of 25%. We also recognized $2,000,000 in pre commercial clinical milestone revenues from our strategic platform, licensed commercial partners. This was well above our expectation for $1,000,000 in SPL related revenue for the remainder of the year, which we communicated last quarter. Revenue recognized from our SBL partners in the quarter was a result of multiple clinical milestones recognized in the quarter, some of which were recognized earlier than we initially anticipated as our partners achieved clinical development progress. So to preempt any specific questions about the specific drivers of milestone revenues during the Q and A session And as we have previously indicated, to ensure the confidentiality of our partnership agreements, we will be unable to answer any questions related to the FPL partners and progression of their program specifically. We believe the key takeaway is that this quarter's performance shows the power of our business model In our ability to share in the economics of our partners' ongoing clinical success, investment into and innovation in next generation cell therapies has been It continues at a high level throughout 2021. We have all seen the reality of regulatory uncertainty in the space As developers navigate a new world of advancing novel cell therapy approaches through the clinic, but we have also seen powerful data updates and progression Toward approvals for next generation cell therapies and consequently this quarter results show the potential for MaxCyte to participate in that progress. While we expect our partners to evolve their broader pipelines over time, more importantly, we have not seen any change by our partners and their intentions To invest in ex vivo cell therapies. To support this, we have seen continued growth in our SPL partner base As we believe MaxSight's proprietary electroporation platform provides both scalability and high performance that is essential in supporting The development and manufacture of complex next generation engineered cell therapies in a cGMP compliant environment. MaxSight's value continues to be further validated by our expanding customer base, including the ongoing success we have had in signing SPLs With 4 of these arrangements signed year to date, as well as the value of our FDA master file and equivalent We now have signed 15 SPLs signed after adding Sana Biotechnology in the 3rd quarter and Encarta Therapeutics announced earlier this month. We continue to build a burgeoning Pipeline of SPL partner opportunities across a variety of cell types, approaches and indications in ex vivo cell therapy. From an investment and growth acceleration perspective, we're committed to investing in the business and as such have focused on refreshing and refining our long term strategic plan. We intend to ramp investments in our research and development and sales and marketing competencies to take advantage of opportunities we see in this space to provide added value To our customer base, this includes expanding our manufacturing footprint as our partners move closer to potential commercialization. We are moving into a 67,000 square foot facility in 2022 and are working to further in source key elements of our manufacturing process, Particularly around processing assemblies, we're also making significant investments in our process development lab, which will benefit both our cell therapy and Biomanufacturing Markets and Customers. We are also focused on further developing of our export product portfolio. We're on track for release of our new VLX platform under the Expert brand by the end of the year. While the market expansion opportunities for the VLX Large scale bioprocessing applications will take time to evolve. We're encouraged by the preliminary interest from initial customers. We are constantly evaluating potential market opportunities for the BLX and look forward to updating investors on the evolution of the BLX product roadmap over time. We launched the R50x8 processing assembly in September 2021. This exciting Portfolio expansion will allow scientists to do more transactions in less time and at a reduced cost per transaction, which will open up new applications for research on our platform and accelerate optimization. We believe this product can attract new customers to the technology In new applications at an earlier stage in their programs, helping us to establish relationships earlier and growing our customer base. We're also investing meaningfully in people and hiring at a fast pace. This year, we have made key hires and announced important internal promotions discussed on the previous call. We have added resources to our Alliance management team as a reflection of increased interest on the part of commercial cell therapy developers To work with us on a more strategic basis, as we look to the Q4 and into 2022, I continue to expect MaxSight to invest and grow headcount In all major areas of the organization, we have a bright future and are investing in the people who helped get us there. For example, our sales and marketing team is growing as we see opportunities to move into new applications and geographies. Investing and growing our sales and marketing team James Lovegood, as Senior Vice President of Global Marketing. James brings deep experience in cell therapy to the role We look forward to his efforts to grow adoption of the MaxCyte Xpert platform in cell based research and next generation drug development. In addition to Jim, we look forward to expanding the commercial team to support market development and customer engagement. We announced that our Board of Directors has appointed Richard Douglas as Chair of the Board. Richard Douglas has been a Board member since February 2018. He succeeds J. Stark Thompson, who will remain as a consultant to MaxSight. I look forward to Richard's leadership in his new role Thanks, Stark, for setting the global foundation as we build MaxSight. It's been a true honor to work with him and we thank him for his dedication and perspective. In closing, we have had a strong Q3 as we continue to execute on our financial and strategic goals. We are very excited about our opportunity going forward, particularly in the cell therapy market and believe we are making the right investments to drive growth across the business. I will now turn the call over to Amanda to discuss our Fancher results. Amanda? Thanks, Doug, and hello, everyone. As Doug mentioned, we saw very strong revenue growth this quarter with total revenue of $10,100,000 which was up 50% over the Q3 of 2020. This growth was driven primarily by strength in our underlying cell therapy business as well as SPL program related revenue, which I'll dive into in more detail in just a minute. Cell therapy revenue of $6,200,000 grew 38% over the Q3 of 2020. Just as a quick background, cell therapy represents Sales or licenses of instruments and sales of disposables to customers that are using the Xpert platform to manufacture ex vivo based cell based Despite a more difficult year over year comparison relative to the Q3 given COVID related dynamics, we reported growth in the core cell therapy business That's exceeding our historical run rate. Instrument purchases in cell therapy can often act as a precursor to SPLs as customers first purchase So that's encouraging in terms of the potential, for STLs in the future, and we've talked about our burgeoning pipeline in that area. Notably, our cell therapy customers are also less tied to CapEx spending, so to speak. So we're seeing a dynamic where revenue from our core business is less weighted to the 4th Quarter as we have seen in the past, given the strong performance we saw this quarter. And that's particularly driven by our cell therapy customers ramping Clinical trials. In terms of drug discovery, as a reminder, drug discovery represents sales of instruments and disposables to customers using the Xport For smaller scale biomanufacturing applications such as transient protein production and the manufacturing of proteins such as monoclonal antibodies, viral vectors, Vaccines and for small molecule discovery, and those sales are primarily made to large pharma. Drug discovery revenue in the quarter was 1.9 which was down 5% over the 3rd quarter, but slightly up on an absolute basis over the 2nd quarter. Drug Discovery revenue was notably strong in the Q3 of 2020 as people got back to work after the lockdowns of COVID. So we had also had a more difficult year over year comparison in that segment as well. Ultimately, drug discoveries become a smaller part of our overall revenue mix. Given the strong growth in cell therapy, the shift in revenue mix towards cell therapy has been consistent over the past 5 years and we saw that again this quarter With cell therapy representing 77% of revenue excluding milestones and drug discovery representing just over 23% of revenue excluding milestones. That said, we are encouraged by the sequential uptick in the drug discovery business versus the Q2 of this year. It's a business that's been more challenged over the past that we've made over the past couple of years that served to lower the per transaction costs for customers and also have had active efforts to expand academic We reported $2,000,000 in program related revenue from our STL Earlier than we had anticipated, and these were made up of multiple milestones from customers. Surprises like this are encouraging and again, in our view, a testament to the value that MaxSight provides to our partners and the uniqueness of our revenue model and our ability to participate in downstream economics of our customers' programs. It does also demonstrate the difficulty we face in predicting the timing of SPO revenue As these are predicated on our customers' clinical successes and regulatory process given the early stage nature of our cell therapy customers' pipeline, So we do expect timing of milestone events to be lumpy for the near term until we see STL partner pipelines mature and as the number of STL Partners and active programs continues to expand. We'll do our best to provide visibility into SPL related revenue Potential over time as the milestone stat continues to grow. We continue to be encouraged, however, by the potential of SBL related program revenue over the next 12, 18, 24 months, particularly as our partners progress and enter and move through the clinic Given the potential for approvals even in the next couple of years, so we anticipate a growing and more broad based revenue stream related to the SPLs over the long term. Moving down the P and L. Gross margin was 91% in the quarter versus 89% in the 3rd quarter, with the difference being driven almost entirely by Excluding milestone related revenues, gross margins were flat relative to the Q2 of last year. Total operating expenses the Q3 of 2021, we're $11,600,000 compared to $8,900,000 in the Q3 of 2020. This increase was primarily driven by increases in headcount. As Doug mentioned, we are expanding in many areas in the business In terms of adding resources as well as growth based stock based comp, which was driven primarily by the increase in our stock price. And as a reminder, there were no meaningful Karma related expenses in this quarter. As Doug mentioned, we are making and plan to 36% over the last year's quarter and that's excluding Karma related expenses. Sales and marketing was up 58% over a year ago. And again, the primary goal here is to take advantage of the opportunities we see to accelerate organic growth over the next few years that we've We expect this investment to continue to ramp into 2022, primarily driven by additional headcount and overall And in operations, particularly around investment in manufacturing and marketing product development, and we can talk about this more in the Q and A. We are coming into the end of 2021 and into 2022 with a very healthy balance sheet. We have total cash and short term investments of $256,000,000 as of the end of the 3rd quarter and no debt. Lastly, we wanted to update our The success of our cell therapy partners this year has shifted the typical seasonality we normally see, as I mentioned, where we normally see revenue heavily weighted to the 4th quarter, which is more driven by CapEx and end of year budget cycles. As you can imagine, clinical trial timelines are less correlated to these dynamics, and we've seen some of our partners ramping ahead of progression in the clinical trial in clinical trial progression. And so we are encouraged by that progression, but it does change the seasonality a little bit for this year. As a result, we expect total revenue growth for the year to be greater than $33,000,000 This implies growth of roughly $26,000,000 So slightly ahead of where the beat in the quarter would put the numbers for the year versus our prior target of greater than 30,000,000 This does include SPL program related revenue. As it relates to our expectations for program related revenue in the 4th quarter, We would guide you to think about the magnitude is closer to what we saw in the first and the second quarters. Again, timing of these SPL Milestone recognition that data points can be hard to pinpoint. So we continue to track above our 5 year 25% revenue CAGR for the full year, and we're encouraged by the strength in our core cell therapy business. I will just note Cautionary language around any meaningful changes in COVID. We obviously are assuming status quo as it relates to COVID. And I'm sure many companies are making the same With that, I'll turn it back over to Doug. Thank you, Amanda. We remain excited about the opportunity to lead the industry forward as the premier cell engineering platform technology, supporting the development of advanced cell based therapeutics. Following the successful completion of our NASDAQ IPO, we were pleased to report strong Q3 results and update full year guidance. MagSight remains well positioned for growth and we are excited about the opportunities ahead. And our first question is from Julia Simmons from Panmuregardens. Your line is open. Hello. Well done, on an excellent quarter. Quick question on, firstly, the VLX. Just wondering in terms of sales, clearly, it's got sort of application in both drug discovery and cell therapy applications. Is that going to be a sale or a license Julie, thanks for your continued support and appreciate your comments. So the VLX is on track to release it in the by the end of this year, December of 2021. You're right, it's going to be in both the cell therapy Space for allogeneic cell therapy and also in the drug development space for rapid production of monoclonals And also for certain biobectors production and suspension cells. We're working through The value pricing model for those applications, they may in fact be different. I would expect that we will have a Kind of a hybrid model, some sales and some leasing and some licensing, but depending upon the application, but we're kind of working that through We'll be rolling that out as we become more comfortable with the full product launch in 2022. Brilliant. Thank you very much. And another one just on recruitment. Clearly, you're sort of scaling up various different parts of the business following The NASDAQ IPO, which is all very encouraging. Are you finding there any areas where it's more difficult to recruit than others? Yes, it's a challenge. Obviously, having a NASDAQ symbol now moves us up Up in the popularity, if you will, so I think people are recognizing us and they can find out more information about us, which is good. Most of our work is in we're hiring in process development, we're hiring in sales and Marketing, unfortunately, over the years, we've been able to garner really excellent reputation in the field. So it's never easy to find the right kind of people, But we're building out our recruiting resources. To answer your question specifically, I think In the process development area, it's tough to find people. I think the sciences are difficult because we're seeing quite a bit of Investment coming into this space and there aren't a lot of people with a lot of experience in cell therapy. I think that plays to our strength because we have a very, very strong team from a commercial perspective. So on one hand, it's a challenge from a Recruiting perspective, on the other hand, from a marketing and sales perspective, we think that's an advantage that we can bring to the marketplace by helping customers solve their problems. Brilliant. Thanks very much. And our next question is from Max Massucci with Cowen and Company. Your line is open. Hi. Thanks for taking the questions. Nice quarter. So to start, nice to see the sales leadership Hire, along with some other hires in the commercial organization in recent quarters, in Q3 product revenues beat You've now signed 4 SPLs this year above the original expectation of 3. So can you give us your latest view on the sales Targeting strategy in terms of customer types, applications and the amount of focus that you're committing to new customer wins versus same customer growth. So Max, it's I think it's our view is It's just more of the same. We're expanding our ability to market more specifically in the digital In this digital world, I think that's one thing. I think we're also finding a lot of opportunities with our existing partners as they expand their programs. It's a new Indications and applications, so that's exciting. You'll be seeing some work that we're doing And attracting earlier stage cell therapy assets onto the MaxSight platform, I think you saw some of that with the Release of the ATX about 2 years ago and the launch of a number of additional disposables, which Process assemblies, which reduce the transfection costs for these earlier stage companies and allows them to come under our platform in More economic level for them to be able to afford in their early stages of development. So I don't think we're really focused one particular area, I think we've got a really robust pipeline. And part of our job really is to nurture those companies in the pipeline and find The new assets are being developed both in universities and in a number of these early stage incubators. Great. On PAs, you launched the R50x8 PA in September. You've also launched a number of other processing assemblies in the past, say, 6 months. Understanding it's still early, Can you speak to the demand you've seen for some of the more recent PA launches? And maybe just any tests that drove the strength in the razor Yes. So one thing we do, do when we launch disposables or processing assemblies is we We're careful in terms of the rollout to ensure that we could support the customers and we have the comp inventory and we can build out that business. And so We're doing quite a bit of that, which is important. We're seeing pretty much across the board increases in PA sales. So I mean, if you have any further thoughts about that split, but I think just across the board, we're seeing really strong Growth in the business, growth in PAs and in instruments and in licenses. Yes. I would just add that The new PA launches in the past couple of years have really been focused on the drug discovery side of the market, as Doug mentioned, in terms of lowering their multi well, Lowering transaction costs and we have more to come there. And so I think that's contributed to better results on the drug discovery side and we mentioned we're cautiously optimistic there in terms of the impact. We're actually optimistic there in terms of the impact. We have a roadmap that obviously we're Working on it, but we haven't disclosed per se in terms of cell therapy as it relates to PAs and trying to find the sweet spot for the various different applications. You had asked earlier about some of the SPLs that we've added this year and we continue to expand the types of cells we're using. So a couple of The folks that we added, for example, are working NK cells. And so we're always thinking about that in terms of, RPA launch planning going forward. You can imagine that we're keeping that close to our chest at this point as it relates to cell therapy. On the cell therapy side, the strength It was a strong quarter generally, but we saw particular strength on the instrument side between the sales and the leases. So the leases is encouraging in that that's recurring revenue, right? Because once you're part of the SPL, then that becomes an annual Access fee, so to speak. So the more that makes up of our installed base, sort of the better from a Visibility recurring revenue standpoint. And then on the sales side, it does give us visibility into Future SPLs, meaning, a lot of our partners are buying initially and then as they move forward into Client getting tie in the enabling studies, that's where they start to convert. So encouraging all around. And I think, stay tuned on the cell therapy side as it relates to some of your PAs there, again thinking about sweet spots of applications. That's great. If I could just Maybe sneak one more in. Is there any feedback you can share from users of the 1st generation BLX instrument that's being used during the early access Period. And then second, just if you look at the roadmap to getting that instrument launched, are the final adjustments to the interface To standardize the instrument sort of done and just gearing up for the launch or are there still some technical factors that you're solving for ahead of the launch? Can you rephrase the second part of the question, Max? Is that around the PAs or is that something different? Yes. So just the roadmap between now and when the VLX is officially launched broadly, just curious if, Yes, if there are still some technical factors or final adjustments you're making to the technology or if it's just gearing up ahead of the commercial launch. Yes. So the first part, I mean, we spend a tremendous amount of effort with voice of customer. And so our team is out there Really understanding in a very intimate basis what our customers need to do their work and expand the applications for our technology. I think we've been quite successful in frankly nailing it, finding out exactly what the customer needs are and delivering it to them In a timely manner, so they can utilize the PAs. On the VLX side, we haven't released yet. And I would So I think I have to tell you that there's always some last minute changes that you're making when you're about to release a product. And I don't think any of these are major technical issues. It's more fine tuning for manufacturing management and Great. Thanks. Thanks. Thanks. I just wanted to add one thing and just your typical CFO here. So the VLX has been so we're clear, the VLX has been on the market. What we're doing now is Bringing it under the expert brand, which involves things like improving the user interface and thinking about design and whatnot. And it really puts us in the potential for entering new markets entirely in large scale bioprocessing Application, so I would think about this as more of a release of that under the expert umbrella. And then from there, we've got to build out Data to support large scale applications like transient protein production and viral vector manufacturing. So We're encouraged by the interest there from early customers and have been. I mean, otherwise, we wouldn't have made the choice to bring it into the Expert brand in the first place. But it's definitely a longer term revenue vector, so to speak, for us since it's newer markets. And as Doug said, it could be something that could play a role in cell therapy as those businesses scale. But again, those markets are still early stage. So Just not so that we get ahead of ourselves. We're excited about the product, have seen obviously early interest or we wouldn't have been investing in it And I think we can see some addressable market expansion from it, but just to put that caveat on there. Super helpful. Thanks for the color. And our next Question is from Dan Arias with Stifel. Your line is open. Hey, this is actually Evan Stamper on for Dan. Thanks for the question. Obviously, and you spoke to this, there are a couple of data points that came out in the quarter that clearly kind of spooked the market in terms of The outlook for cell therapy. Just kind of wondering if like in your conversations with your customers or just people in the industry, If you've seen any slowdown or even acceleration in activity, or kind of any change in sentiment in the near term? And then kind of longer term, If you think that I mean, I guess these were a few kind of always predicted that there would probably be some kind of ups and downs. But longer term, I mean, do you envision this having any impact on not maybe not the outlook, but Getting milestones just because of the regulatory backdrop? So let me take a crack at this first and then Andy can fill in the blanks. First off, I think that so we're still in the very early stages of these advanced cell therapies. I think you need to establish that. Secondly, manufacturing focus on manufacturing is huge. And our sense is that that has been The tone of the last year or so that we need to make sure that we're better characterizing these products, That we're being able to measure potency more and we can manufacture them on a consistent basis. So those are three important Aspects of manufacturing that we think that MagSight can actually contribute to. And we think That's that issue those issues will be a good Way for MaxSight to continue to build our business out because we think that's a good trend for us to help enable the industry. We're seeing a lot of interest from our partners in making sure they get this right and spending more time on product characterization, which again benefits MagSight. I haven't seen very many folks move away from programs. I think we're trying to rationalize what they have in the clinic. There's clearly a lot of cell therapies going after some of the same targets. And I think there's going to be a not only a clinical rationalization, but also a commercial rationalization Yes. Evan, I would just add, As Doug said, it's early, but we've also seen some positive surprises. I mean, we Obviously, spoke to some of the milestones we received this quarter. While we can't speak to them specifically, We weren't expecting them, so that would imply that at least some of our partners are moving forward more quickly than we thought. And I think if you look at some of the PR in the space around investments that are being made, there's still Quite a lot going on, especially partnerships between even some of our own SPL partners. So not to Not take clinical hold seriously as we should, but I mean it happens. It's happened before with other players. And so I think there's puts and takes here just given the early stage nature, but I think Certainly, we aren't seeing any change in priorities. I mean, we continue to sign the SBLs. And I think to us, that's our Key scorecard, right, in terms of, is the space moving forward? Are we generating downstream economics? And are we Seeing that pipeline continue to grow, which we are. So if that's helpful. Yes. No, that's super helpful. Thanks. And just, I guess, maybe a little easier question for you guys. Just for the quarter, you mentioned kind of the strength in the instruments, Rich, I saw in terms of kind of pull throughs in the quarter, I mean, how did that kind of trend Versus 1Q and 2Q. And then in terms of the mix between leased and sold, is there anything notable there or any change there? I guess I'll take a stab. We haven't changed the ranges that We put out there in terms of pull through. So generally, as we said That can really fluctuate though depending on where our partners are in the development cycle. And with I think we've said We'll update these metrics towards the end of the year, at the end of the year, where we talked about 75 programs and 15% of those, give or take, are in the clinic, obviously, with 3 new SPLs. Those numbers are likely to be higher. But so our N is still relatively small. And so again, we've talked about High usage in the preclinical setting with lower volume PAs and then that sort of pulls back with the Phase 1 where obviously the patient population is smaller depending on the indication of course and that ramps up and we're seeing that same trend and over time that So to normalize, I would say we're still within the ranges that we've given, but we haven't really formally updated anything there. And in terms of the leases, just with the SPLs we signed and given that The instruments that fall under those SPLs are leased and they're not leased in a traditional way, but it's more of a item Like we talked about an access fee, those are becoming a bigger portion of the installed base, so to speak, as a percentage, and we saw that again. But Yes, it's slow but sure, right, because obviously, again, there's a smaller end of the folks that are in the clinic, If that's helpful. So we haven't given specific numbers and we'll update some of that information at the end of the year as we did last year. But those are the sort of qualitative trends we're seeing. Okay. If I just sneak one more in here, I know you're not going to talk about the program related revenues for the quarter, but I'm not really giving specifics, but can you just Kind of go back and I guess just repeat kind of what you said. I think you said did you say did you give the number of Customers that the revenues came from and I think you all just talked about having some of them or your customers actually had multiple Milestone payments, can you just kind of clarify or reiterate really just what you said already? Yes. I'm sorry if that was confusing. What we were just trying to say was that the program related revenue didn't come from one customer. So we didn't specifically say whether there was multiple revenue received from The same customer, we just said it's not all from 1. So there was more than 1 milestone received in the quarter. That's kind of the extent of it. Obviously, we just have to be careful what we say there. And we did say that we weren't I mean, I think last quarter we said we were expecting $1,000,000 for the year, which would have implied about $500,000 whether you put it in this quarter or next quarter. And so obviously, We saw a bigger number that was a surprise to us in terms of the progress that some of our partners are making and that's definitely encouraging. And then we said that we're expecting something similar in Q4 relative to Q1 and Q2. So We've got similar numbers that you saw in the first half of the year each quarter. So just still seeing progress from our partners, maybe not quite as much as we saw this quarter. And then next year, again, as we see the stack build, I think we're depending on how this how our visibility trends and it is difficult because you're talking about Partners and the FDA and can imagine that that's not easy for a company like us to predict exactly where that falls per quarter, so to speak. But the more we sign, the more programs are stacked within each time period. And so We'll be able to guide, I think, moving more so as we go along here, just because there'll be Less risk that something moves from quarter to quarter, but that's just the reality we face, as you can imagine in serving a biotech world. Yes. Awesome. Thanks so much for answering the questions. And our next question is from Matt Larew with William Blair. Your line is open. Hi, good afternoon. It was interesting to see the Enkara SPL because I think that was the first confirmed NK cell therapy program. And I was curious, you referenced the burgeoning pipeline on the SPL partner side. So Just curious if there's been any notable changes to the composition of that pipeline with respect to cell types approaches or indications? Yes. So I think we mentioned it the last time that that pipeline has been more robust than it is and this continues to build and grow. I think that the way that I can look at it, I think we look at it, if you look at companies, I think I mentioned this before, there have been finance over the last couple of years. And there are approaches, whether that be different cell types or Different loading molecules, different indications. I think we're tracking pretty well to The broad array of approaches that are going on in these advanced cellular therapies. So that's pretty exciting for us, Right. It's a lot more out of Jamaica than it was a few years ago. We're seeing different kinds of cell types Moving into non oncology indications, which we think are going to be quite exciting. And so I think from the just A broad view, we're tracking pretty consistently where this entire field is moving. And then, And then, And then, Cellularity also has an NK based approach as well as part of their pipeline. Okay, got it, got it. I guess we can see that was confirmed. Okay. And then just thinking about The pacing of the team additions here over the next 12 to 18 months, obviously, you put new sales later in place. But I guess anything To think about in terms of next year in terms of pacing of team addition throughout the year? Well, we are building the marketing team. We mentioned that Jim Loecker just joined us about a month or so ago, It comes with just a tremendous amount of experience in energy and understanding of the global markets. So quite excited for him to be on. And part of what his, remit is to help us build a scalable marketing organization that would line up with Tom Ross' Leadership in building a global and scalable sales organization. So we're in the process of doing both of those things. I mentioned that we're building out process development labs inside MaxSight To better line up with what our customers are using our products and as they move both in cell therapy and myel process, so we're excited about that. There's obviously some SG and A that we're needing to build just because we're now a public company. And another major area of investment will be in It's manufacturing. So we see a real opportunity for us to become more basic in certain elements of the Process and assembly manufacturing. We want more flexibility in instrumentation. As you likely know, we're pretty basic in instrument manufacturing. So we want to bring more of that in house, which will allow us to have better control over the quality and also more flexibility as this This still continues to develop over the course of the next several years. Okay. Thank you. And our next question is from Mark Massaro with BTIG. Your line is open. Hey, guys. This is Vivian on for Mark. Thanks for taking the questions. So can you discuss pipeline initiatives As it pertains to updated disposables, I know you had touched on cell therapy. And if there's any room to improve on trans Great question. I think we were always pushing to improve the efficiency of our process, the scalability of the process, both the instruments and disposals. We're also spending quite a bit of time to ensuring that they have more utility. Our R50x8 is a really unique product that can do It's a strip or 8, but it can also turn into a 96 well site with extraordinarily high consistency across from well to well, which is really important in Certain aspects of discovery, both in small and large molecule discovery, but also in software. Another area that we're focused in right now, and I think you talked about this in our Use of proceeds is how we can better integrate the work that we're doing with pre and post electropropriation processes So that we can provide more of a plug and play, if you will, solution to our partners and have them integrate Our operation into a larger, if you look, close system, which many, many companies are able to do in the near term. Okay, great. And if I could just add a quick follow-up. Given the revenue mix shift towards cell therapy, What types of cell therapy clinical trials are you involved with or enabling at the moment? And how do you see this space evolving moving forward? So I think, Amanda, can I talk about some of these public ones? I think we had talked about our relationship with CRISPR, My relationship with Precision and products that are being developed by both those companies enabled by MagSight's Technology. We worked with Editas, one of their products is also identified with us more and also appear on the 2 company And so we're seeing progress across the board in all those programs. We really don't get specific about any programs that are Not publicly disclosed by our partners and so the ones they talked about are publicly disclosed by our partners. And our question is from Jacob Johnson with Stephens. Your line is open. Hey, good afternoon. Congrats on a nice quarter. Maybe Doug, going back to something you mentioned earlier, you talked about working Earlier stage customers, can you just talk about your efforts to work with large academic medical centers and maybe how important that is For you to kind of build out the beginning of the funnel. Great question, Jacob. It's always been important for us. As you can imagine, Most of the advanced therapies related to self care have come out of academic centers. And we're continuing to see that trend continue. So what we have been doing is, more formalizing those relationships with these groups. We've had long standing Some of that major academic translational medical centers, but we also see the opportunity for us to expand our footprint into a number of More ones that have kind of gotten on the bandwagon, if you will, building out centralized facilities, core facilities for cell therapy, A lot more interest again as I mentioned before in new applications of cell therapies outside of oncology, which is It will be exciting. And so we're spending we're hiring people to better understand How we can build those alliances with the large translational academic centers globally, what their requirements are, and I think we've done a pretty good handle on that. And part of our expansion process is really to make sure that we've got that property resourced. And so we can work with these companies, Work with these PIs when they're really getting very early in the ideation, if you will, of these new cell therapies. So that's part of the trip to this is that you also don't want to get involved in kind of pure academic research. So that's there's a fine line there that we're really working through to make sure that we don't get Into that whole academic research area, we're really focusing on translational therapeutic centers The work that you're doing is directed toward a potential commercial product. Got it. Thanks for that, Doug. And then just Amanda, Two kind of nitpicky financial questions. R and D ticked down sequentially this quarter. I assume that's related Some Karma expenses rolling off, and I would assume that should start growing from here. Can you just kind of confirm that? And then also, I think CapEx Yes, good question. So we did, as you mentioned, have the roll off of Karma complete in the first half. So, that's part of it. I mean, from here, just Generally, I would think about obviously, we've talked about a number of areas of investment, particularly in headcount Across all three buckets of operating expenses, stock based comp is year over year also something to think about And then as we build out Some other areas in R and D. So I think I would think about it as not necessarily a run rate from here, but investment From here, particularly on the headcount side, which is becoming obviously a key for us as we think through our strategic planning. And We've talked a lot about how we see the potential to accelerate organic growth and growth in general. And obviously, that all starts right with building out The team. So, I don't know if that's helpful, but that's how I would think about it. We also had obviously a pickup not in R and D, but in pubco expenses and things like that. So I would kind of look at this quarter as the base With further investment from here given the opportunities we see, I'm trying to think if there's anything else in the OpEx That would be, like not recurring. There's probably some Small stuff, but I would think about it as growing. And then in terms of CapEx, yes, so we're obviously investing in manufacturing quite a bit. We haven't guided to what that looks like for We haven't guided to what that looks like for next year, but we're expanding on the manufacturing side. And To the extent that we think about it in a 3 to 5 year or 3 long term horizon, even some of the initiatives that we are I have talked publicly about as far as moving up and downstream, whether that be internal build or buy, obviously, that likely will CapEx to some degree. So again, it's sort of, I would kind of think about this quarter as a good base Outside of Karma and then stock based comp being a factor that we that you have to kind of think through. And then from there, just investment to do it across the board, if that's helpful. No, that's great. Thanks for that, Amanda. Thanks for taking the questions. I am showing no further questions at this time. I would now like to turn the conference back to Mr. Doug Dorfler. Well, thanks everybody for joining us today. It's been an exciting time for our company and we appreciate your support and your excellent questions. And we look forward to updating this group on our Q4 progress when it makes our earnings call. So thank you very much. Stay safe and enjoy Thanksgiving. Thank you. Thanks everyone. Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.