Thank you. Earlier today, Nautilus released financial results for the quarter ended March 31, 2024. If you haven't received this news release or if you'd like to be added to the company's distribution list, please send an email to [email protected]. Joining me today from Nautilus are Sujal Patel, Co-Founder and CEO; Parag Mallick, Co-Founder and Chief Scientist; and Anna Mowry, Chief Financial Officer. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking within the meaning of the federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section entitled Forward-Looking Statements in the press release Nautilus issued today. Except as required by law, Nautilus disclaims any intention or obligation to update or revise any financial or product pipeline projections or other forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast, April 30, 2024. With that, I'll turn the call over to Sujal.

Thanks, Ji-Yon, and welcome to everyone joining our Q1 2024 earnings call. Q1 was a highly productive quarter for Nautilus as we continue to execute on our vision to establish a new gold standard for the creation and comprehensive analysis of high-value proteomic data. In order to deliver a range of long-discussed and long-desired improvements in human health, biomedical research needs a dramatic acceleration in target identification and therapeutic development. But as they have for many years, researchers remain impeded by the lack of sensitivity, scale, and reproducibility of traditional protein analysis methods and of emerging affinity-based and peptide sequencing methods. We believe a fundamentally new approach is required to overcome these limitations and to unlock the potential value of the proteome, something we continue to view as one of the most significant untapped opportunities in biological science today. We and the proteomics key opinion leaders, with whom we regularly speak, understand how important intact single molecule protein analysis and the Nautilus platform could be to their explorations of the proteome. They know that deeper, richer proteomic data could one day make it possible for researchers to more quickly identify the mechanisms of action of diseases ranging from cancer to Alzheimer's. Understanding those mechanisms will be key to identifying effective treatments. Interestingly, many of these KOLs maintain a heavy focus on the use of mass spectrometry for proteomics. The positive attention our platform continues to receive from them is a good sign for things to come with this critically important and influential buying audience. As you'll hear from Parag in a few moments, those KOLs are encouraged by the data we shared at the recent U.S. HUPO conference, and several of them have begun imagining specific initiatives against which they plan to apply our platform as part of our early access program. As we've previously shared, the EAP will launch in the months leading up to commercial availability in 2025. Never intended to be a significant revenue driver, the program will serve as a high-value means by which to generate data to support both internally and externally generated scientific papers, customer grant proposals, and we'll get meaningful data into the hands of potential future customers. We will keep you informed as we get closer to launching the EAP. I remain pleased with the progress that has been made in development activities surrounding each of the core components of the platform, including the core reagents, sample preparation, affinity reagent probe, chips, flow cells, the instrument, and software. For more on those and other R&D-related updates, let me now turn the call over to Parag.

Thanks, Sujal. Overall, we continued to make solid progress against our core development goals in Q1. We remain incredibly focused on increasing scale, stability, and reproducibility across our consumables, assay, and platform, and continue to see meaningful gains along those dimensions. This progress goes hand-in-hand with advancing the reliability, quality, and customer readiness of our instrument and software. Platform stability enhancements increased consumable scale and quality, and increased instrument availability and capacity have allowed for a significant increase in the number of high cycle number protein decoding experiments that we can initiate and complete successfully. In fact, we completed nearly three times the number of experimental runs in Q1 as we did in Q4 of last year. This increase in experimental scale is essential as we continue to optimize all aspects of our platform towards launch targets. The increases in experimental scale and assay robustness have enabled us to increase the complexity of the model systems that we are using for ecosystem-wide optimization. We are excited to be continually increasing the complexity of these model systems to include an increased diversity of proteins across wider ranges of concentration. We are also excited about an increase in focus on activities critical to our commercial launch, such as pre-verification studies of key platform characteristics such as reproducibility and sensitivity. From the standpoint of sharing the foundational elements of our platform with the broader proteomics community, a highlight of Q1 was our participation in the annual conference of the U.S. Human Proteome Organization, U.S. HUPO. U.S. HUPO attracts many of the types of researchers and organizations that could be potential users of our platform. It was exciting to see that this year's conference attracted approximately 600 attendees, more than doubling the attendance of just two years ago. This increase in participation points clearly to increased interest in the proteomics space overall. From our standing room-only luncheon seminar to our many posters and significant traffic at our booth, HUPO provided an extraordinary opportunity to share with the community additional progress on the experimental implementation of PrISM, further detail on our multi-affinity probe pipeline, and on computational methods to estimate false discovery rate. In addition to continuing to educate the community about how our platform works, our goal this year was to begin introducing experimental data from our pre-verification studies that demonstrate the key performance characteristics of the platform. This new data on both broad scale and proteoform analysis generated a great deal of interest and questions from attendees. Specifically, we shared data showing ultra-sensitive and repeatable single molecule quantification of the protein transfer. One of the key differentiators of our platform is its incredible sensitivity. This is critical for finding diagnostic and prognostic biomarkers that can be indicative of diseases at their earliest and most treatable stages. We demonstrated lower limits of quantification in the high Octo to low-zeptimole range. This represents a more than five orders of magnitude better sensitivity than typical mass spectrometric methods. We also shared how, by exploiting the ability of our platform to iteratively probe individual molecules, we were able to quantify the abundances of 32 distinct tau protein forms. This measurement is not possible on both traditional and emerging peptide-based platforms. We showed the ability to also do measurements of tau from complex samples, such as enriched cell lysates. These results lay the foundation for future assays that enable more detailed investigations into the molecular mechanisms of tauopathies like Alzheimer's disease, as well as potentially opening new frontiers for more specific diagnostics. Beyond tau, we showed how the platform can be applied to measure EGFR proteoforms. These findings are the results of the targeted proteoforms studies that we have been pursuing in partnership with Genentech and Amgen. I and the other Nautilus team members in attendance sensed a significant shift in the depth of the questions we received from attendees during the event, clearly indicating an increased understanding of, and enthusiasm for, the Nautilus platform. Our booth was packed with researchers eager to understand how the platform might be well suited to addressing their specific research questions. One of my most enjoyable conversations was with a researcher who presented work on a new Alzheimer's disease biomarker that he believes is the result of changes in the abundance of a specific proteoform that is challenging to measure using traditional immunoassays. It's exciting to see how the additional data we've shared from the Nautilus platform is encouraging researchers to expand their proteomics horizons. With that, I'll turn the call back to Sujal.

Thanks for the update, Parag. I could not agree more with Parag's takeaway from the event. Having been there myself, I heard so many things that convinced me that momentum for the space and for Nautilus are building in lockstep. Researchers are beginning to really focus on the role that next-gen technologies like Nautilus will play in creating advances in basic biological research, enabling them to make a substantial impact on the efficiency and cost-effectiveness of biomarker discovery and drug development. Our next significant opportunity to educate the community about the platform and our progression towards commercial availability will occur when Nautilus participates as a top-level sponsor of this year's HUPO World Congress, October 20 through 24 in Dresden, Germany. We look forward to that event as it aligns closely with the timing of when we anticipate having updates on both our scientific and business progress. When it comes to educating the marketplace and bringing the community along on the Nautilus journey, you've heard Parag say it many times how committed we are to being as transparent and fulsome as we can in our communications. To that end, and as a means of sparking interesting conversations about proteomics and its future, this quarter, we introduced the translating proteomics podcast and video series. Hosted by Parag and Dr. Andreas Huhmer, a 20-year Thermo veteran and now our Senior Director of Scientific Affairs, the show is not a deep dive on the Nautilus platform; rather, it explores the scientific underpinnings of proteomics and challenges the audience to imagine what may be possible in the future where proteomic data is more easily and cost-effectively created. We are heartened by the warm reception to the show's first few episodes and encourage anyone who wants a better and broader understanding of the space to subscribe and participate with suggestions for topics they'd like to see addressed. For a look at our financials, let me now hand the call over to Anna. Anna?

Thanks, Sujal. Total operating expenses for the first quarter of 2024 were $21.6 million, up $3.5 million compared to the first quarter of 2023 and $1.6 million above last quarter. This 20% increase in operating expenses year-over-year was driven primarily by continued investment in personnel and their activities towards the development of our platform. Research and development expenses in the first quarter of 2024 were $12.9 million, compared to $10.9 million in the prior year period. General and administrative expenses were $8.7 million in the first quarter of 2024, compared to $7.2 million in the prior year period. Overall net loss for the first quarter of 2024 was $18.7 million compared to $15.0 million in the prior year period. Turning to the balance sheet. We ended the year with approximately $248 million in cash, cash equivalents, and investments compared to $264 million at the end of last quarter. We continue to expect our total operating expenses to grow by approximately 25% from 2023 levels and growth in spend has steadily increased as we prepare for our commercial launch. We continue to anticipate our cash runway to extend into the second half of 2026. We remain focused on running a very capital-efficient business with tight management of our expenses, while making the investments necessary to drive our scientific progress forward. Looking ahead, we are confident that we are strongly positioned to execute our strategy efficiently to launch our game-changing proteome analysis platform. With that, I'll turn it back to Sujal.

Thanks, Anna. To wrap things up, we continue to make solid progress against our development and business goals. And for that, I want to thank the entire Nautilus team. We're excited about what's to come and we look forward to providing additional updates on our next call. With that, I'm happy to open the call up for questions. Operator?

Our first question comes from Yuko Oku with Morgan Stanley.

Hi, this is Madison speaking for Yuko. I wanted to confirm the timeline; you are still targeting an expected launch in 2025, correct? Also, do you have any updated thoughts on timelines further than 2025? Are there specific milestones you believe need to be reached before we gain clarity on the exact launch timing? Lastly, what steps are you taking to avoid any further delays beyond 2025?

Yes. The last time we provided timeline guidance was during our previous fiscal year 2023 call. We haven’t made any updates now, but things are continuing to progress along the timeline we previously outlined. While we don't have more specific details at this moment, I mentioned in the Q&A of the last call that as we reach a point where we can measure a significant number of proteins, around 1,000 to 2,000, from cell lysate in a reliable and reproducible manner, that will be a crucial milestone for us. At that stage, we should be able to project the remaining timeline with greater accuracy and it will be an excellent opportunity for us to discuss the final or near-final product specifications and pricing with the scientific community and potential customers, so stay tuned.

Okay, that's good to hear. And then maybe just turning to U.S. HUPO data. I know you've shared data that demonstrates the platform's ability to quantify mixtures of tau proteoforms that you guys were talking about. So, stepping back, I was just wondering what are some biological questions or use cases that could be answered with this ability? I think you mentioned Alzheimer's on the call. And for context, could you share how you would go about characterizing proteoform mixtures on a mass spec, for example?

Sure, I'll take that. This is Parag. When we think about proteoforms generally, we think about them as providing additional detail and specificity about the function of a protein such as tau. So, for instance, the first level of regulation is just by whether tau is present or absent; the second being how much is present; and then the third level of detail that we're really getting to for the first time is studying how tau is modified and what the prevalence of the different modified proteoforms are that may have, for instance, three different phosphorylation sites that have been populated, and an additional splice variant. The way that you would use this data is really in two places. The first is understanding the biology of the disease right now because this hasn't been measurable before. We really don't understand how these proteoforms contribute to driving either the initial onset of diseases like Alzheimer's or their progression. But it's hypothesized that different people may have different distributions of these variants that may drive their disease to progress more quickly or more slowly. Additionally, they may be used in the periphery as biomarkers to delineate where the disease course is to determine whether or not particular therapeutics might be effective. And so there's a tremendous amount of excitement about being able to provide that level of detail into the disease and its mechanisms and progression. As for mass spectrometry, the traditional method of mass spectrometry, shotgun proteomics, which looks at peptides, is unable to measure proteoforms at all. Another method, which has been pioneered by our collaborator, Neil Kelleher, is called top-down mass spectrometry, and that method is able to generally identify the masses of different proteoforms and from those masses infer what proteoforms might be present. However, our method is extremely direct as well as single molecule, instead of looking at large ensembles of molecules.

Our next question comes from Matt Sykes with Goldman Sachs.

Hi, this is Evie on for Matt. So, I know in the past, you've mentioned the antibodies as being one of the final pieces needed to address before the launch. Can you give an update on how you're working through that? And then any other areas of improvement before the launch?

Parag, do you want to tackle this one first, and I'll add any color at the end?

Sure. As we've talked about in the past, thank you for the question. Really, there are a couple of key areas that we've been focused on. The first is scale and that applies to the reagent aspect of the consumables, the chips, and flow cells as well as the instruments themselves. And scale has two different pieces. The first is, just are we able to manufacture sufficient amounts of these consumables with sufficient quality and to build a reproducible assay? The second aspect of scale has to do with the ability to execute successfully on large cycle experiments, dozens, hundreds of cycles. And we've demonstrated at HUPO data showing that the protein stays immobilized on the chip over 100 cycles that we don't see substantial degradation in binding rates that might indicate damage to the proteins. We additionally demonstrated we don't see significant buildup on the surface of the chips. So those are two key aspects of scale that we're continuing to focus on as well as robustness. Alongside those development efforts are traditional things like guard-banding to understand what the specifications need to be for each of the components in the system. When we talk about the reagents themselves and the affinity reagents, what we're focused on there is really about the characterization of the affinity reagents to understand very specifically for each affinity reagent, what does it bind to? How well does it bind? What are its other biophysical characteristics? Is it a little sticky? Is it easy to produce? So, there are a number of aspects to the affinity reagents that really get to understanding the individual behavior of each reagent at a level of detail that is not typical for a standard affinity reagent workflow.

Okay, great. That was super helpful. And then, how are you shoring up your supply chain ahead of the launch, sort of on the back of that question, and also balancing your cash runway through the second half of 2026?

That's a great question, Evie, and I'll address it. This is Sujal. From a supply chain perspective, we continue to make progress in the electronic components. We are purchasing parts in advance and managing our inventory of long lead time items for our instruments. We are also enhancing our contract manufacturing capabilities to produce instruments outside of our facilities, which we are using internally for testing and validation studies in collaboration with our partners. This work is ongoing, and we do not anticipate any major issues. Regarding chips and consumables, we are further developing our supply chain for chips and flow cells, increasing its capacity and tightening our production tolerances. In the first quarter, we implemented several minor adjustments to the flow cell design that will continue into the second quarter, aimed at enhancing reagent quality. Our reagents fall into two categories: bulk buffers and similar items, which we mostly produce with external partners, and the antibody and probe components. We have been developing a strong supply chain for these, building some components internally while sourcing others externally, and we are managing the supply of input materials as well. I don't foresee any problems as we scale up later this year and into next year.

And next question comes from Matt Stanton with Jefferies.

You guys discussed in the prepared remarks, but it sounds like the experimental runs continue to make good progress. If you go back to last quarter, I think you talked about an order of magnitude improvement three times better sequentially in Q1 as well. Just given how important this is for scaling the platform, I guess, how much more of an improvement do you need or should we expect to see? Are you getting closer to kind of where these models and systems need to be?

Yes, I'll address that. To begin, when we consider our launch targets, we generally expect to be able to perform measurements using hundreds of probes in two colors, aiming for a target of around 150 to 200 cycles. Therefore, you can expect us to continue progressing towards that goal, enhancing reproducibility and stability across those hundreds of cycles. Regarding reliability and reproducibility, we are also focusing on end-to-end assay reproducibility instead of just component reproducibility. For instance, in the limited detection studies we presented at U.S. HUPO, we repeated those measurements multiple times using different instruments, operators, and days. These are the types of advancements we will keep striving for as we move towards the release of our instrument and platform.

And then, maybe one for Sujal. Sounds like a lot of positive momentum coming out of HUPO. Would love to just hear a little more on some of the learnings from the recent event here in the U.S. and then what you'll look to build upon ahead of the event this fall in Germany. It sounds like there was a lot of interest, you might have a bit more of an update, both for the scientific and investment community. So just would love your thoughts on kind of building on the recent momentum and capitalizing on the next event here in October.

Yes, why don't I start that, and then I'll let Parag maybe delve in a little bit more detail. I think that the U.S. HUPO event was one where I think that we continue to see a lot of momentum, both for the proteomics space, but for Nautilus specifically as well. I was down there in Portland and had the opportunity to walk around and see all the posters in the booths. I had a number of conversations with many of the KOLs and scientists in the proteomics space, and there certainly was a lot of excitement around the data that we were showing and the Nautilus method. Our booth traffic was excellent. We had a lot of people who are well-known proteomics scientists, not just stopping by, but stopping by and spending extended amounts of time talking to our booth staff, having conversations with Parag or myself or with Nick Nelson, our Chief Business Officer, and really engaging in a way that I think was gratifying to see, but as well, I would say, is a little bit different and improved from what we've seen in years past. So I think that was great. One of the other highlights, I was down there during one of Parag's talks. Parag had multiple talks at the U.S. HUPO conference. And one of his talks was really an updated version of the talk that he's given before, which really describes the genesis of the Nautilus scientific method, our technology, how the assay works, and what our end goals are as well as updated data. Parag's session was absolutely packed. We were turning away our competitors at the door who were trying to get in. Every seat was full with potential customers and scientists looking to learn more. The aisles were full of people, really great to see and lots of good questions and engagement as well. So from that regard, I think it was a really successful show. And just to address the second half of your question head-on, and then I'll let Parag add any detail that he wants to add. But certainly for World HUPO coming up, we're working very hard to take the data that we have now and take it one step closer to having a product that's out the door. We're not committed to exactly what we have as we head into World HUPO here, but we're hopeful that we can start showing much more data than just being able to detail transplant, for example, which is what we showed at U.S. HUPO, and so we're working hard, our heads are down, and the entire team is focused on that. Parag, anything to add there in terms of some detail on U.S. HUPO?

Yes. I think one of the largest, as Sujal mentioned, one of the largest changes that we saw was a transition in key opinion leaders and other scientists asking to understand how the platform works towards a transition towards could I use it for my specific application. And those applications were incredibly wide-ranging. They ranged from very detailed mechanistic studies or biological time courses or biomarker studies, but it spanned a wide range of substrates from cell lysates to blood to CSF. And seeing researchers get into that level of detail of really thinking through how our platform might apply to the research questions that they're asking shows that they've gotten beyond understanding the way that it works, and we're really excited about how it might expand their proteomic horizons.

I'm showing no further questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.