My pleasure to introduce you to Rob Spignesi, President and CEO, who will be leading the presentation today, and Sean Wirtjes, CFO, who will be joining Rob for the Q&A. As a quick reminder, after the presentation, we'll open up for Q&A. With that, I will hand it over to Rob. Rob, thank you so much for joining us here today.
Thank you, Malika. Good morning, everyone. Again, my name is Rob Spignesi, CEO of Rapid Micro Biosystems, and again, joined by Sean Wirtjes, our CFO. For those of you who are joining us online, the presentation deck is available on our website under the Investor Relations section. It won't automatically sequence, so I'll do my best to keep us all synced up. So with that, we'll jump right in to slide three. By way of background and context on Rapid Micro Biosystems, we're focused on a critical part of the global pharmaceutical quality control infrastructure called microbial quality control. This is a regulated process all pharmaceutical companies go through to ensure their products are free of microbial contamination.
The challenge is, with these processes that are virtually in every manufacturing site around the world, is they haven't innovated and changed in about 100 years since Louis Pasteur invented the fundamental method. We'll go through this, and I'll explain it in context. But this situation is causing costs and risks for the industry. As a consequence, we've developed a technology that fully replaces and automates this critical process and brings microbial quality control into the 21st century, where it belongs. So there are a number of reasons why we're excited about our business and the opportunity in front of us. You know, first and foremost, we're operating in a large and growing market. It's under pressure to change.
So about a $10 billion+ TAM under pressure to change from regulators, from a data integrity standpoint, and also the industry itself, as new modalities of manufacturing are coming online with biologics and cell and gene therapy, just putting pressure on the legacy methods. We've got strong barriers to entry, first-mover advantage, which is clear, which is very important in this, in this particular segment, low competitive intensity, and a robust patent portfolio. We have the right product for this market in the Growth Direct platform, and I'll walk you through that. It's clear from our customers, we've been chosen by 70%. We're proud of this fact, that 70% of the global top 20 pharmaceutical companies have chosen our product with significant commercial runway in front of us.
We address all manufacturing modalities. It's really important to understand that, but we're especially strong in the advanced manufacturing modalities of biologics, and cell and gene therapy. It's also notable that, the Growth Direct systems are placed with 100% of approved, CAR T manufacturers. So it's very clear our value proposition is resonating in these, in these critical manufacturing environments. And we have an attractive, high-growth, recurring business model, where we place capital equipment and pull through a very high yield of recurring consumables and services, revenue, and I'll walk you through what that looks like, too. So for those of you who've never been inside a microbial quality control environment or lab inside a pharmaceutical, manufacturing site, this is what one looks like.
You'll walk in, you'll see typically lots of people, lots of paper, pencils, pens, lots of Petri dishes, and similar formats, and incubators. Again, microbial quality control is a regulated process, regulated by the FDA, the EMA, and all the equivalents around the world. And it's basically a high-volume testing process to make sure the manufacturing environments, the personnel, the air, the water, anything in and around the product, to include the product itself, is free of microbial contamination, so bacteria, mold, and other organisms. And briefly, the way this works, you know, typically today in the traditional method is, and think high school biology, effectively, where, you know, it could be a handful to dozens of technicians, depending on the size of the operation, with stacks and stacks of Petri dishes.
And there's different forms and flavors, basically growth media. Samples are taken throughout the manufacturing environment, and the personnel and the various parts of the operation. They're brought back to a lab, typically, and put in incubators. For those of you in this room, this could be a whole incubator, to give you a sense of the scale of these operations.
Then the technicians will come back a week later, several days later, or two weeks later, and visually inspect each and every Petri dish, for example, and visually count every single organism, write that down on a piece of paper, and you can see the technician in the slide doing that now, and it'll eventually find its way into a computer system that will be the system of record. So it's clearly a highly laborious process, very, very high volume. You know, one stat we like to throw out is, at a high-volume site, that site will use as many Petri dishes in a year, if you stacked them on top of each other, it'd be about 8 mi high.
This is hundreds per day, and in some sites, thousands per day, this process. It's very slow because you're waiting, again, days, if not weeks, for a result, an organism to grow up. It's insecure, a lot of manual manipulation, a lot of writing things, a lot of, you know, paper manipulation, and humans writing numbers down on pages. And it's open to falsification, and this is when I speak about data integrity today, this is what the regulators are worried about, and the operational impact of this cost and this delay to the ultimate release of product is clear, and also the potential for human error that could result in things like recalls. So this is fundamentally the-...
The underlying microbial quality control infrastructure on Planet Earth today in the vast majority of cases, in the vast majority of pharmaceutical sites around the world, and this is a problem we're going after. Just to zoom out on slide 6 for those online, this is how we look at the strategic context of the industry today. I think we can all agree that, you know, scientific and technological innovations have impacted on how we discover drugs from a research and discovery standpoint, and also downstream in how we manufacture, you know, drugs, and bioprocessing and manufacturing advancements have been notable.
But you know, as I just walked through, the fundamental quality control infrastructure around microbial quality control, you know, has not advanced, and we have this incongruent situation where this legacy method, in many cases, is ill-suited to support you know, the advancements in discovery and manufacturing. So again, as a consequence, we've developed the Growth Direct platform to solve this problem. It's the only fully automated and high-throughput and secure solution available in the world. The platform itself consists of the Growth Direct system, as you can see on the left, a full suite of proprietary consumables. It's important to note that we developed the system to automate the vast majority of daily routine use test volume, pretty much in any pharmaceutical manufacturing site.
So it's high-throughput, high-capacity system, and we're not focused on niche tests. We want the bulk of the microbial quality control tests. A full data and software complement that seamlessly and securely interconnects the Growth Direct system with the customer's Lab Information Management System, that allows paperless, two-way, secure information flow from the systems of record into the Growth Direct and back, and worldwide validation and support services. So we have teams of people around the world that provide validation services, and this is the process by which the system will be validated as a new system of record and be brought into routine use and support services as well, installation, preventative maintenance, things of that nature. The platform itself drives a very compelling value proposition. You know, first, data integrity.
I touched on this a couple times already. You'll hear it a lot. It's typically the 1, 2, or 3 reason why customers are adopting an automated technology, such as the Growth Direct, just given the regulatory and compliance pressure around data integrity. Customers can go from a data integrity challenged environment to a highly robust environment. You know, operational efficiency is also a very strong driver of our value proposition. The system is fully automated, w alk- away. It's automatic incubation, automatic vision inspection, and counting, and automatic delivery of data to the system. So it's it enables, you know, much faster decision-making. We can typically provide test results in half the time or less in the traditional method. So customers get secure data they can trust much faster. They can make a decision. "I can ship to market faster.
I can move to the next processing step faster. I can find a problem in my operation faster, and I can shut down manufacturing much faster, so I can stop producing scrap." So all this adds up to a very compelling hard dollar ROI. Then insight and accuracy. It's a computer-driven, machine-driven system, so it reduces and eliminates human error. As I touched on, human error can lead to, you know, challenges, such as recalls. You know, the sum total of this has led to strong global adoption, 140+ systems placed. A couple stats here. Again, the vast majority, 70% of the Global Top 20 pharma companies are using the system.
I touched on 100% of approved CAR T manufacturers are using this system, and that's just the nature of that business, very high volume test environment with fast turnaround requirements, perfectly situated for our system. Over 120 systems validated around the world, which is notable, and over 4.5 million consumables shipped. This is a snapshot, slide 8, for those online. This is a snapshot of the transformation that a customer goes through, the workflow. That legacy workflow I walked through with that technician you saw, this is basically the standard traditional microbial QC workflow.
I won't go through all of it, but you can see it's a 15-step, a lot of manipulation, moving things around, counting, incubators, paper, you know, very manual, many steps, up to 2 weeks for results, and it's clearly insecure, to a leaned out, 2-step, fully automated, accelerated workflow. So this is why customers. This is the fundamental transformation their operation goes through. And to pull back up on slide 9, for the strategic context of how we see our impact on the global value chain, this is really our vision, right? it's to create a new microbial quality control infrastructure across the planet.
I'll go through where we're situated around the world, but, you know, bringing microbial quality control on par with the balance of the value chain, you know, specifically around how drugs are manufactured and the pressure that's putting on the micro QC environment. On slide 10, a bit about our business model. As I touched on, we have a capital equipment placement and pull-through high-yield pull-through. So think of the initial capital placement as about a $500,000-$600,000 purchase order, right? The majority of that is the Growth Direct system that you saw, but also our validation, our one-time validation services, and we provide this service and charge for it.
That's again a process by which the system will go through the various validation stages to become a system of record for the customer, and a LIMS interconnect charge as well. So LIMS is a Lab Information Management System. This allows our system to seamlessly and securely, in a paperless fashion, interconnect with the various software systems at a customer site. So once the system is installed and goes through validation, it goes into what we call routine use, and that's when we start pulling through the recurring revenue. So we expect about $200,000-$250,000 per year per system in a customer environment.
The majority of that is the consumable pull-through, but also a high attach rate of our annual maintenance service contracts as well. So again, a very robust business model. And we do expect high adhesion and high stickiness once you go through the validation process, these can be quite sticky revenue. So a bit about the market size. Touched on it's a large and growing market. There's about 350 million microbial QC tests conducted every year, and the market breaks down to roughly a third in North America, a third in Europe, and a third in Asia. That translates to about a $5 billion annual TAM with regard to recurring revenue. And if you converted that 350 million tests into Growth Directs, it could translate to upwards of 10,000 systems.
So I touched on before, we have, you know, 140 systems placed, but the market potential and the commercial runway ahead of us is significantly higher. And that equates to about a $5 billion, you know, TAM, based on the $500,000 PO value I just went through. So this is about a $10 billion total opportunity we are going after, and broken down into an annual recurring and a one-time. The market's growing, well, 8% total market growth, and the advanced modalities of biologics and cell and gene, where we're especially situated, is growing faster than that at roughly mid-teens growth. A large market growing very, very quickly. Another strong element about our business is we have long-lasting, strong tailwinds pushing the market effectively to automation.
You know, the first is regulatory. Again, the EMA and the FDA have issued guidelines around data integrity and the challenges with it, and those guidelines are pushing effectively industry towards automation. There's a consequence to Growth Direct specifically. Industry is changing as well with regard to how we're manufacturing drugs around the world. Advanced modalities, I touched on, cell and gene therapies, biologics. Many of these therapies require faster turnaround and much higher test volume, just given the fundamental technology used and the process used. And that's putting intense pressure on the legacy methods. In some cases, the legacy methods just can't keep up with the, I'll call it the modern reality of pharmaceutical manufacturing around the world. T hen supply chain.
I think we all know the benefits of a robust and repeatable supply chain in a post-pandemic world, and supply challenges and supply issues are typically a top reason why supply chains can be less than robust. But these are the thematic global tailwinds that we believe are long-lasting, that are impacting our business now in a very positive way. So slide 13, personally, love this slide. So those in your room can see it. Those online, you can't see the customer logos, but this gives you a sense of who our customers are and where they are, right? So some key takeaways, as I touched on, the vast majority of the global top 20 are have our system, have systems placed.
Many of them have multiple systems in multiple sites. As you can see, you know, those in the room, the logos, the large pharma companies and large CDMOs, as well. But we also serve mid-size customers around the world as well, so, you know, some government customers included. We also have a strong footprint in biologics and cell and gene therapy, tends to be the majority of our business, globally, and CDMOs that serve those spaces. We also address small molecule and other formats of manufacturing as well. And I'll touch on a new product that we have that we've recently announced that will help expand into other segments as well in a few slides.
With regard to our footprint, our installed and placed footprint, we're equally balanced. Think of us as 40%-45% of our installation base in North America and an equivalent amount in Europe. So it's quite balanced between the two regions. A bit smaller in Asia, but we like what we see in Asia and are excited about the growth opportunity there, and we've had some recent announcements about that that we'll touch on later as well. And it's really important to note, last point on this slide, you know, our commercial strategy is about landing and expanding. So we've landed in many of these accounts.
We've obviously started the expansion and with many of these customers as well, but there's a lot of runway to go with regard to more applications inside our current customer footprint, certainly more sites and more Growth Directs in this current footprint. And of course, we're continually attracting new customers as well. So think of it as a really good start to a very large market with regard to commercial traction. A really important part of our growth strategy is new product innovation, and we've recently announced a press release, yesterday actually, the upcoming availability of our Rapid Sterility application, which we expect by mid-year this year.
So a Rapid Sterility, for context, is a critical. Sterility is a critical end-of-line application, where there are various tests I went through at a high level on previous slides about environmental monitoring and water testing. But sterility is the end-of-line test. It really is a gating test. It's a critical test, and it's the last test most companies will do to basically prove that the final drug format, could be a vial, could be a syringe, is truly sterile and is ready to go to a patient. So it really is gating, and it's a critical test.
The challenge with sterility tests, like the other formats of tests that are out there, it's very slow, it's very manual, it's a broth-based liquid testing process that takes two weeks and sometimes more to get a result. Meanwhile, patients are waiting for release, the company has inventory tied up, and it's just like in a legacy, and data integrity can be a challenge as well. So this technology has been designed to bring all the benefits of the Growth Direct, so faster test results, we'll chat about that in the next slide, and all the other benefits I chatted about with regard to better data integrity, full automation, lower costs, better secure data, et cetera. We're especially excited, slide 15 for those online, about the performance of this technology.
Now, we believe it's going to be truly differentiated, not only against the compendial method, and by compendial, I mean the traditional legacy method, but also other available options on the market today. So, you know, two critical markers, if you will, or two critical performance criteria for this kit. And by the way, think of this as a consumable that will work on the Growth Direct, so it's expanded menu. Consistent with our strategy of automating the vast majority of daily routine use volumes at a pharmaceutical site, and sterility testing falls into that category. So the first one is time to detection. This is the speed at which you can detect the first organism.
And this is sterility: a single organism will cause a failure. So we can do that with this technology in as little as 12 hours versus 3-5 days. And that gives the customer a heads-up that they have a sterility failure, and they have to take immediate root cause and countermeasure. And then time to result. This is the time to the final result. This is the time at which you can consider that test complete and ship that product to market and get it to a patient. You know, our technology can be as little as 1-3 days versus, as I mentioned before, 2 weeks for the compendial. So, those customers that validate in a 1-3-day period could ship to market, ship to patients much, much, much faster.
It really can change the game from a workflow standpoint. This is truly, you know, in our opinion, a technological triumph. I do want to congratulate the Rapid Micro Biosystems team that worked on this. This has been a journey to get to this point, and we are incredibly excited about what this innovation will do in our global markets. We have an intense focus on gross margin improvement. It's important to note in our business, we had to invest considerable sums in creating infrastructure to serve that global customer base that you saw. So we're serving a global customer base. These customers are in GMP routine production of advanced therapies in many cases.
So we had to have an infrastructure, supply chain, manufacturing, service infrastructure to serve them properly. So that required investment, which has impacted our gross margins. So that being said, though, as our business scales, we do expect our business and our revenue to start to cover these costs and have a significant positive impact on our gross margins from an operating leverage standpoint. You know, that being said, we also have a number of focused initiatives on reducing the actual cost of our products, specifically, which will provide gross margin improvement, increasing our manufacturing efficiency, specifically around our. We have a fully automated consumable manufacturing line. Improving the efficiency and throughput of that is a very high priority for the business. And increased service productivity and efficiency.
As you saw, we've got systems around the world, that we've got people around the world providing services. And as we get density with more customers and get more efficient with our service delivery, that will also drive gross margin improvement. So the sum total of this, we expect positive gross margins in the full year of 2024, and expansion at the company level to 50%-60% as we continue to scale the business over time. Okay, to wrap up on slide 17 for those online, I want to reiterate some financial performance announcements that we've recently issued to market for both Q4 and full year 2023.
Q4, we had revenue of $6.2 million to $6.4 million, 45% growth from the prior year, so a strong growth quarter. It's our fifth quarter in a row, notably exceeding revenue guidance. We placed six Growth Direct systems in the quarter, which is our highest in over two years, so leaving 2023 with good momentum. We also had a press release last week regarding Samsung Biologics. We're happy to welcome a great company like Samsung to the Rapid Micro Biosystems family, as a customer. As I touched on, we have the Growth Direct systems now placed with 100% of commercially approved CAR T therapy manufacturers. A notable accomplishment.
Completed the validation of 9 new systems, and we have cash runway at least into the second half of 2026, which is an extension of previous updates that we've provided, you all. On a full year basis, revenue of $22.4 million to $22.6 million, which is better than 30% growth on the full year. 16 systems placed, 18 systems validated, and a year-end cash balance of $95 million. So appreciate all your time and attention. I think we have a few minutes left for some Q&A. Mallika?
Thank you so much, and congratulations on all the amazing work your team has accomplished over the past year. Maybe to kick off Q&A, you touched upon this: you released three press releases last week, and that included one about Samsung Biologics, it included one about pre-announcing revenue, and you also spoke about the new product. Is there anything more that you can provide us on those three press releases?
Yeah, the press release and the discussion here was reasonably, you know, complete, but I'll just kind of take them again and, you know, perhaps add more color. So last week, we announced that Samsung selected the Growth Direct system to automate their micro QC. Samsung is clearly a large, well-known, discerning customer. The fact that they chose our company and our technology, we think speaks volumes about the company and the technology, and we're very excited to have Samsung as a customer. We did place a multi-system order with Samsung in 2023, and we expect to continue to grow with them in the quarters and years to follow. But we're very excited about it.
We do quite well in the CDMO space, generally. Those in the room here likely saw many of the large CDMOs that we also work with. But it's... We're incredibly proud to welcome Samsung on board. Yesterday, we had two press releases, one regarding the upcoming availability of our Rapid Sterility and then the financial results. You know, first, on Rapid Sterility, we think this is a strong need in the market for a Rapid Sterility product and application that benefits from the Growth Direct platform, right?
A fully automated, you know, walk away, very high data integrity, rapid system that provides secure results quickly for customers to make a decision in a very critical part of their operation, which is Rapid Sterility. So we think the combination of the brand and the understanding of the Growth Direct, coupled with the capability around performance that I went through in the presentation, constitutes a winning and very, very compelling value proposition for all of our customers. But also, it'll facilitate entry for us and expand our opportunity more so into sterile injectables and sterile generics as well.
That's a segment that we haven't been as deeply, you know, focused on and penetrated into, and the Rapid Sterility application will also allow us not only to continue to grow within biologics and cell and gene therapies, but also into the small molecule space, injectable space as well, and vaccines, et cetera. And last one, the financial performance still on the screen. So that's. We're happy to have... We're proud of the year. You know, it was a year of execution for us. It's great to leave the year with momentum, with the Q4 performance. We'll have a lot more to say about how 2024 looks at our Q4 earnings call.
But, yeah, I think I touched on it with regard to the Samsung news, the sterility news, the business performance, where we are, our focus on, you know, continuing of commercial execution, commercial strategy, and, and gross margins. You know, we like what we see, and we'll be excited to offer more information up on the earnings call.
Thank you, and maybe a quick follow-up on the financials. You did talk about positive gross margins in 2024. Are there any leading indicators we need to keep an eye on? What is the quarterly cadence you're thinking of here?
Yeah, I'll take that one, Mallika. Thanks. Yeah, I think, you know, we talked in the, in our Q3 call about the fact that, you know, we are making good progress across the, the kind of key vectors that are driving margin improvement for us. I think, you know, top-line growth volume, Rob touched on that, critical for us. You know, if you look at Q3, we grew 30%. Q4, as Rob just touched on, we grew 45%. So that is a key contributor to us driving continued and significant margin expansion. We also talked in Q2 and Q3 about the fact that we were making improvements to our automated manufacturing line that we manufacture our, the bulk of our consumables on.
So, we expect to see benefits from that in Q4 and as we move into 2024, and we're looking at moving other things into automated manufacturing at the same time. So as we continue to make progress there, that should also be a tailwind to our margin expansion. And then there's a lot of effort in our company focused on taking cost out of products. The majority of the cost of our products is materials. We have things like strategic sourcing initiatives. We're looking at the design of products, a number of different things across the business that we're focused on, that are also going to be things that drive margin improvement. And we've said publicly already that we expect 2024 to be a positive gross margin year.
You know, those are the things that are going to drive when that happens, when we do flip positive. It's that volume growth, it's the progress we make on throughput and efficiency and automation and those cost reduction efforts.
Yeah.
Yeah.
Maybe one last question on financials. We see the year-end cash balance of $95 million on the screen. Would it be possible to share your thoughts on runway and capital?
Sure. Yeah, just Rob mentioned in his comments that, you know, we've revised our cash runway guidance and pushed it out. And we believe at this point that we can make it at least into the second half of 2026 with that $95 million balance. You know, that comes from, you know, our continued execution on the things that are gonna help us move that cash burn down over time. And we do expect the combination of top-line growth, margin expansion, and very tight OpEx control in our business over the next couple of years to put us on a pretty good trajectory in terms of the reduction of burn as we move our way through the next couple of years. So we'll continue to look at that, and, you know, assess where that puts us.
I think, you know, there are opportunities for us if, depending on the choices that we make, to push that out even further, we believe, but at this point, that's, that's where we see that cash balance getting us to at this point.
Mm-hmm.
Thank you. Are there any other questions from the audience? If not, we can go ahead and close out the session. Thank you so much for sharing this informative presentation with us, and thank you all for joining us here today.