Good day and thank you for standing by. Welcome to the Seer Inc. Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the call over to your speaker today, Carrie Mendivil, Investor Relations. You may begin.

Thank you. Earlier today, Seer released financial results for the quarter ended September 30th, 2022. If you've not 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 Seer is Omid Farokhzad, Chairman, Chief Executive Officer, President, and Chair; and David Horn, Chief Financial Officer. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section entitled Forward Looking Statements in the press release Seer issued today. For a more complete list and description, please see the Risk Factors section of the company's quarterly report on Form 10-Q for the quarter ended September 30th, 2022, and in its other filings with the Securities and Exchange Commission. Except as required by law, Seer disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time-sensitive information and is only accurate as of the live broadcast, November 8th, 2022. With that, I'd like to turn the call over to Omid.

Thanks, Carrie, and thanks, everyone, for joining us this afternoon. I'm encouraged by the growing enthusiasm for the Proteograph Product Suite across a variety of applications spanning discovery, translational, and clinical research. During the third quarter, our team continued to make important progress against our strategic plan, and we ended the quarter with $4 million in revenue, and approximately $441 million of cash, cash equivalents, and investments on our balance sheets. I have never been more bullish than I am today about the future of Seer. Our technology will meaningfully enable researchers to undertake population-scale studies that can uncover the complexity of the proteome, including the discovery and identification of previously unknown protein variants. Identifying and elucidating the biological role of these protein variants is the next frontier in the quest to understand human health and disease. To that end, key leaders in proteomics are calling for the establishment of the Human Proteoform Project, similar to the Human Genome Project, which was profoundly important in the transformation and acceleration of biological and medical research using genomics. The ambitious goal of this proposed initiative is to map the entire human proteome by generating a definitive reference set of protein variants produced from the genome. The needed discovery work simply cannot be done without the deep unbiased access to the proteome at scale that Seer uniquely enables today. We believe that initiatives like the Human Proteome Project are key in enabling the proteomic community to vastly increase the resolution of proteomic studies. For this to become a reality, we will need the synergistic combination of two distinct technologies. First, an unbiased detector with peptide-level resolution to identify and differentiate protein variants. And second, a platform to capture the vast array of protein variants at scale and in an unbiased way. This will enable population-scale studies, which will be required for identifying and cataloging the universe of protein variants. Now, the gold standard for an unbiased detector for proteomics is mass spectrometry, and the only commercially available platform for deep unbiased sampling of proteins at scale is Seer's Proteograph Product Suite. We expect Seer's platform will be a major enabler of initiatives such as the Human Proteome Project because of our ability to deeply interrogate the proteome in a scalable way, which provides an unmatched ability to discover and catalog novel content. Now, I'll start today by sharing some updates on our progress against a key objective to drive growth in 2022 and beyond, and then I will turn the call over to David to provide more detail on our financial results. As a reminder, our five key objectives are first, supporting customers to scale their use of the Proteograph Product Suite for projects of increasing size and scope. Second, expanding our global customer network and installed base of instruments. Third, continuing to build a team with commercial capabilities and geographic footprint. Fourth, expanding our partnerships to make it even easier for customers to adopt our technology, and fifth, driving a product roadmap to enable more applications. Starting with how our customers are using the Proteograph. We're excited to see our more established customers ramping the use of our technology, with an increasing interest in larger studies, ranging from hundreds to thousands of samples. As we've said previously, the Proteograph removes the barriers that previously constrained deep unbiased proteomic studies in complex sample types to fewer than 50 samples. Our technology is also highly extensible. Through our engagement with customers, and prospective customers, we're seeing significant interest in utilizing the Proteograph to explore a broad range of sample types, diseases, and organisms through studies of various scopes. With our growing installed base, our Centers of Excellence (COEs) coming online, and the addition of prospective customers to a sales pipeline, we have a line of sight to a growing number of larger studies. We're seeing excellent progress with our COE partners in both the size and scope of studies being performed. Three of our COE partners are now working with large pharma and academic customers in significant studies. In addition, these COEs are demonstrating the power of the Proteograph Product Suite with their own data. For example, Evotec has used the Proteograph to deeply interrogate the proteomic content of biological samples beyond plasma, such as urine, cerebrospinal fluid, and conditioned media. The latter enables studies of the secretome, which are proteins that are differentially secreted by cells and tissues in health and disease. Their team will be hosting a webinar in the coming weeks to discuss their data with different biofluids using the Proteograph Product Suite. We're also seeing interest from pharma and biotech customers in running service projects with hundreds of samples across various applications. These projects span a broad range of disease families, including neurodegenerative diseases, oncology, cardiovascular disease, reproductive health, and aging. Notably, our technology is inherently species-agnostic in that it also enables researchers to use the Proteograph Product Suite on studies with model organisms and applications in other end markets, such as animal health. We're encouraged by the breadth of projects among our customers and are excited to see multiple studies that were run earlier this year moving closer to manuscript submission. Customer-driven proof points are essential in developing the market for any first-of-its-kind product. We believe that as more third-party data enters the public domain over the coming months and years, the differentiated value proposition of the Proteograph Product Suite to provide novel insights into the proteome and to enable the next generation of multi-omics studies will become more and more established. While third-party data moves toward publications, we continue to publish on the underpinning of our technology to demonstrate its unique capabilities. To that end, during the third quarter, we announced the publication of a groundbreaking study in advanced materials, demonstrating the power of engineered nano-bio interactions to enable deep access to the proteome. This paper highlights how the combination of proteomic methods, nano-engineering, and machine learning enables the capture of thousands of proteins. The published results significantly expand the field's understanding of the nano-bio interactions, and how the optimization of these interactions could enable the discovery of novel biomarkers and biological insights. It is exciting to see the groundswell of enthusiasm emerging around proteomics. Over the past few months, we attended several conferences, where we continue to see a growing interest in the presentations from both Seer and our customers. This content is featured and available on our website. Most recently, our team attended the American Society of Human Genetics conference, or ASHG, in Los Angeles, where we presented three posters highlighting our proteogenomic capabilities. Although this conference is traditionally more focused on genomics, we were involved by the exceptional enthusiasm from potential customers who attended our posters, talks, and visited our booth. We're seeing increasing interest from genomics researchers who want to access proteogenomic content and are excited about what the Proteograph Product Suite enables. Importantly, a growing number of publications and commentary are also highlighting the challenges of existing targeted proteomic approaches. Researchers are excited about having unbiased access to the proteome, which enables them to discover novel protein variants and to deepen their multi-omics insights. To that end, we presented at the ASHG, demonstrating the power of our Proteograph Analysis Suite to enable user-friendly data visualization and reproducible analysis of proteomic and genomic data at scale, including the identification and exploration of variant peptides. We also demonstrated how the Proteograph enables disease classification and biomarker characterization in a poster looking at a 200 sample Alzheimer's cohort performed in approximately four weeks, generating data for over 5,000 proteins. Finally, in a study of non-small-cell lung cancer patients, we showed that peptide-level resolution can reveal biologically important differences in the expression of distinct variants of the same protein at the protein isoform level. This important difference in protein variant expression would have been masked if this study was performed at the protein level without peptide-level resolution. These presentations help demonstrate to researchers how the Proteograph Product Suite can enable high-resolution proteogenomic analyses by providing unbiased peptide-level data at scale, in a timeframe not previously possible. Now, turning our attention to our commercial progress. There continues to be a growing interest and excitement surrounding the Proteograph Product Suite across a wide range of customer types and applications. We're seeing strong interest across geographies, and our pipeline of qualified leads is equally split between academic and commercial customers. As we've said previously, the sales cycle for our commercial prospects is shorter relative to our academic prospects. The enthusiasm for the value proposition of our technology continues to grow, which has been a strong tailwind in a market full of economic headwinds. We continue to pay attention to the evolving macroeconomic environment, particularly related to the uncertainty regarding its impact on biopharma spending, constrained CapEx budgets, staffing shortages, and limited customer access in certain markets such as China. These factors have served to elongate the purchasing decision for potential customers. Our team continues to execute despite these challenges and will remain focused on the task at hand. To that end, we're making great progress hiring top talent to support our growing commercial efforts. Seer continues to attract leaders from across genomics, proteomics, and other leading omic companies. And I'm very proud of the team we have built and are continuing to build under Scott's commercial leadership. Now, we also continue to make important progress with the Proteogenomics Consortium. As a reminder, this is a multi-year collaboration that we established with Discovery Life Sciences, in which Discovery will offer deep unbiased proteomics capabilities to the existing and new genomic services customers, with a goal to ramp to an annual capacity of over 100,000 samples. Discovery Life Sciences has both the program and science instruments installed and will undertake a 500 sample proteogenomic study to generate marketing data for their upcoming launch. Finally, we're driving towards the next set of innovations to further extend the capabilities of the Proteograph Product Suite. Last quarter, we released our proteogenomic workflow or PAS 2.0, which makes high-resolution proteogenomic and novel biological insights accessible with a click of a button. Early feedback has been extremely positive, and we're committed to delivering continued advances that make it easier for different customer groups to adopt deep unbiased proteogenomic analyses at scale. As we mentioned, we're extremely encouraged by the interest and reception received for our presentations on this topic at the recent ASHG Conference. At Seer, our overarching objective is to allow our customers to see deeper into the proteome by innovating across workflows in our instruments, assays, consumables, and data analysis software. We're relentlessly focused on delivering a great customer experience from sample loading to final report. Our data and software teams are continuously expanding our data tools, data management, and data analysis with an eye on enabling a broad range of labs to adopt the Proteograph. We're also paving the path into the future, as we expect to see studies experience thousands and even tens of thousands of samples by innovating how large datasets can be managed to enable population-scale deep unbiased proteomic studies. One current example of how we're innovating with our analysis approach is the use of fear-generated peptide reference libraries. Using these libraries, we're able to delve 50% deeper into the proteome than we could previously by reanalyzing prior studies and discovering more content. Our goal is to incorporate these libraries, as well as multiple tools for larger studies and data sets into our Proteograph Analysis Suite releases in 2023. I'm so excited for what is ahead for Seer. Our customers continue to amaze us with the use of the Proteograph and to imagine what's possible in their proteomics studies, a testament to the value and power of our technology. I'm encouraged by the enthusiasm we're seeing across our current and prospective customer base, and I'm confident that we're well-positioned to capitalize on the large opportunities ahead. With that, I will now turn the call over to David.

Thanks Omid. Total revenue for the third quarter of 2022 was $4 million, representing an increase of 84% compared to $2.2 million in the third quarter of 2021. The increase in third quarter revenue was primarily due to increased sales of the Proteograph Product Suite and its related products. Product revenue for the third quarter of 2022 was $3.9 million, including related party revenue of $1.3 million and consisted of sales of SP100 instruments, consumable kits, and platform evaluations. Related party revenue of $1.3 million represents product sales to proteogenomic partners. Since our SBIR grant from the NIH was renewed in the third quarter, we expect a resumption of revenue contributions from grant and research-related collaborations, beginning in the fourth quarter. Total gross profit was $1.9 million for the third quarter of 2022, representing a gross margin of 49%. Our gross margins improved sequentially as a result of higher consumable sales in the third quarter, particularly as our early customers begin to ramp. We will continue to see variability in our overall gross margin on a quarter-by-quarter basis, as the proportion of instrument and consumable sales will fluctuate between any given quarter. We continue to expect our long-term gross margins to be between 70% and 75%. Total operating expenses for the third quarter of 2022 were $27 million, including $9.1 million of stock-based compensation, compared to $19.6 million, including $6.8 million of stock-based compensation in the third quarter of 2021. Research and development expenses for the third quarter of 2022 were $11.6 million, an increase of 49% compared to $7.7 million in the third quarter of 2021. The increase in R&D expenses was primarily due to an increase in product development efforts related to the Proteograph Product Suite, including $2.7 million in employee compensation costs and other related expenses, including stock-based compensation due to growth in research and development personnel, and an increase in expenses related to the build-out of our facilities to support our R&D efforts. Selling, general, and administrative expenses for the third quarter of 2022 were $15.4 million, an increase of 30% compared to $11.9 million in the third quarter of 2021. The increase in SG&A expenses was primarily driven by a $1.2 million increase in employee compensation and other related expenses, and a $1.1 million increase in stock-based compensation. Other increases are attributable to an increase in professional and consulting fees and our facility expansion. Net loss for the third quarter was $24 million compared to $18.4 million in the third quarter of 2021. We ended the quarter with approximately $441 million in cash, cash equivalents, and investments, and continue to be disciplined about our level of spend and the rate of return that we will earn on our deployed capital. With our extremely strong balance sheet and disciplined deployment of capital, we believe we are well funded to execute on our strategic plan for many years to come. Turning to our outlook for the year, we continue to expect revenue to be in the range of $14 million to $16 million for 2022. As Omid said, we're paying close attention to the evolving macroeconomic environment, which we believe may impact the timing and the scope of customers' purchasing decisions. Despite this environment, we are enthusiastic about the interest in our technology and expect our revenues to be in the upper half of our guidance range. At this point, I would like to turn the call back to Omid for closing comments.

Thanks, David. We made great strides this quarter and we continue to work closely with our customers as they scale their studies. It is exciting to see the Proteograph Product Suite being adopted by customers around the world to conduct first-of-their-kind studies that explore the proteome at a depth, resolution, and scale that was not possible previously. As we move ahead, we're excited about our opportunity, focused on our goals, and committed to enabling our technology. I look forward to updating you on our progress. With that, we will now open it up for questions.

And thank you. Our first question comes from Dan Brennan from Cowen. Your line is now open.

Great. Thank you for taking the questions. I guess the first one would be me. Omid, you talked about seeing significant interest from would-be customers or existing customers to explore a broad range of, I guess, trials or your different research. Can you just discuss some more color on the funnel, what it looks like? And kind of, what you've assumed within the full year guidance, particularly in light of the elongated close rates that you discussed?

Dan, thank you so much. So, we're seeing interest across really three different groups: proteomics folks that are mass spec experts, genomics folks that are really kind of new to proteomics, and are interested in adding proteomics to their research. And then genomic folks who are already generating proteomic data but are looking for alternatives to current offerings, and looking to see more from their studies. So, broadly speaking, that is the bucket of customers we're dealing with. And that split is from a pipeline perspective about 50/50 between our commercial industry customers and academic customers in both lead and our pipeline. I think as we're bringing customers from interest to a close, while the pipeline is about equally split between those two, we're seeing that the close rate for the commercial customer is higher. I think it's just a cycle of the funding dynamic differences between an academic researcher and a commercial researcher driving that more rapid sales cycle in the context of a commercial customer. That said, given the broader macro picture, we are seeing that the purchasing decisions for potential customers, both in terms of academic and commercial customers, are getting elongated. And the breadth of this study that folks are taking knows everything from basic research to translational work, looking at cohort studies, with diseases - neurodegenerative, aging, cancer - and also we're seeing studies now being done in the field of animal health. So, we actually just did a sizeable service project focused on non-human samples.

Yes. Dan, thanks for the question. Just in terms of the guidance, look, I think we're trying to factor that and what we're seeing just from an interest level and then just some of the macro headwinds. And so it's trying to balance those two tailwinds and headwinds on some of these things.

Okay. We're observing an increasing number of larger studies and publications, which we believe will generate interest and potentially aid the sales process. Is there anything notable we should be anticipating in the near future, whether at year-end or in the first half of 2023, particularly regarding any significant studies that could serve as key selling points?

Sure, Dan. Look, just let me paint that picture, and then I'll kind of hone in with high resolution. Since we started, there have been 109 presentations at conferences. Of that 109, 19 of them were from customers, and this is going back to 2020. Of course, we just started in 2020, so that year had about five presentations from Seer and none from customers. It really picked up in 2021. But what's interesting is if you look at 2022 alone, there have been 66 presentations from Seer and 12 from customers, this is at conferences. But importantly, we need to see peer-reviewed publications that Seer has been publishing, our first one was in Nature Communications. Then we did the PNAS paper, most recently, the Advanced Material paper. So, I look at publications, the visibility, at least for a handful of manuscripts among customers, my expectation is they are going to be submitted at the tail end of this year and then heading into next year. I think we should then begin to see these submissions come out in the form of publications, probably in the second half of 2023, and the scope of them are varied. I mean, just yesterday I was talking to a proteomics KOL who has an instrument in his lab. He was just giving me an update on a study that they had run, where they were able to see upwards of 5,000 proteins. In his judgment, an unbiased proteomics with the ease of the workflow that Seer offers for a high degree of accuracy and reproducibility gives you 5,000 proteins in the market. So that is the kind of thing that's going to be getting published from an expert. But in addition to that, biomarker papers, folks looking at different diseases. There's actually one KOL who's also used other platforms in the past, other proteomic platforms in the past, so is that - if you would earn an expert user of the various different proteomic technologies and has also gotten access to the Seer technology, my expectation is that the data set is going to get published. I think what's coming then should be really validating of exceptional quality of high-impact papers. Obviously, we've seen some of it. But these are really customer work, customer data published at their own pace.

Great. If I could sneak one more in, any guideposts as we're heading into the fourth quarter, how to think about next year? Obviously, you're not going to guide here, but with consensus or revenue doubling, I'm just wondering, given the comments on macro and elongated decisions, but at the same time, all the momentum from that customer channel, just wondering any early thoughts about how we should think about next year?

Yes, Dan. Thanks for the question. Look, as you know, we're not going to give guidance until our fourth-quarter call next year. Look, I think as we think about it, again, some time will pass, but certainly, the macro environments are not lost on us, both with inflation and raising interest rates, as well as you know, some of the layoffs and things people are seeing across the sector. So we're just being mindful. Again, we always want to be thoughtful and conservative as we approach it. So again, I think we're just going to have to weigh everything, both the positive tailwinds from the customers, relative to just the macro constraints of budgets being tightened in CapEx, decisions being elongated, and kind of how that all factors in.

Okay. All right. Great, guys. Thank you.

Thanks, Dan.

And thank you. And one moment for our next question. And our next question comes from Derik De Bruin from Bank of America. Your line is now open.

Hi, good afternoon. So Dan just asked the question that was sort of the one I was getting from investors, which is sort of the outlook for next year. But to explain that a bit, can you talk a little about sort of your OpEx plans? I mean, you have a ton of cash on the balance sheet, but just how should we think about your spending patterns for next year and hiring and such things?

Yes, Derik, thanks for the question. Look, we are very prudent with our spend and our deployment of capital. I think you can expect us to continue to be so. We've also been real thoughtful about how we're going to spend that capital. And so I don't think, in the metric we tend to use is free cash flow and looking at our free cash flow burn. And look, we're going to be very thoughtful about keeping that in check, and not doing anything that's imprudent. And we certainly feel like we do have a huge asset in our cash and we want to preserve that and deploy that as appropriately as we can over the course of next year, so that we're in good position to weather the storm, however long it lasts, and when it comes. So again, I think we're going to be really, really mindful in terms of our spend.

Are there any updates on the larger scale proteomics studies you mentioned earlier? Will those be starting in 2023 and contribute more significantly?

The answer is, it depends on how you define large. Do I have visibility to a 50,000 sample study next year? I don't. Do I have visibility to multi-thousand sample study next year? I absolutely do. But I think the key point to keep in mind is that the premise, that the underlying foundational premise for starting this company is consistently proving to be exactly correct, which is, this field is directionally moving towards deciphering the complexity of the protein at the protein variant and the proteomic form level. We're beginning to see the scientific community talk about it in that way and see as uniquely offering that solution. When we started, the largest unbiased study in plasma doing the proteomics was 48 samples. Now we've got customers that are talking about doing multi-thousand sample studies shortly after launch, so this is remarkable. By the way, I have every expectation that we will absolutely see those multi-thousands of sample studies also emerge; it's just that as of today, I don't have visibility for that to be a 2023 event.

Great. Thanks.

Thanks, Derik.

And thank you. And one moment for our next question. And our next question comes from Tejas Savant from Morgan Stanley. Your line is now open.

Hi, this is Neel on Tejas. So, one of the build-off that question on elongation purchasing cycles are these trends divergent as far as the different geographies that you're targeting? And what is your current handle on the risk of push-ups to these decisions that could swing placements between say year-end and early 2023?

Yes, thanks, Neel. Yes, so in terms of the purchasing decisions, I think the question is really around geography. Are we seeing it different in different places? So certainly, China remains China, in terms of the lock downs, and just lack of access to customers. That continues to factor in. In terms of Europe, I think that's certainly something where, certainly with the inflation headwinds that they're seeing there, not to mention the FX risk, I mean, obviously, we sell in dollars and our products become more expensive. That just adds to the elongation of people thinking about it, constrained capital budgets and so forth. And then in the US, again, I think as we've mentioned on previous calls, it's really just the macro of not only inflation, but then capital budgets, that people are looking at reassessing. We've seen approval levels get kicked up a level for people. So they need to go up a level to get approvals where they wouldn't have had to in the past. We've actually heard of a couple of customers putting a freeze on all CapEx budget or CapEx spend for the rest of the year. So, these anecdotes just kind of add up to people are just taking longer to think about things. I think it's globally with various factors factoring into the global picture in terms of headwinds.

Got it. And on that second part, does the current guidance kind of contemplate that risk of any swings between quarter-to-quarter or?

Yes, I mean, again, we're trying to reopen the guidance at 14 to 16. And as we said, we do expect it in the upper half of that range. But as you know, I mean, look, given we're on a very small revenue base, one or two deals can swing it either way. So, again, we're just trying to be prudent. But as we sit here today, we are trying to factor in those various factors in our remarks.

Appreciate the color and one more for me. So, as you progress towards those initial customer sample runs for the Proteogenomics Consortium, by year-end, any high-level thoughts on how you see this partnership beginning to scale through 2023?

Yes, I'm not going to comment on 2023 yet with respect to the partnership. I will say DLS and SCIEX have been fantastic partners. I think we all have the same goal to get it up and running and scaling as quickly as we can, and working closely with them. Again, we've got great interest. In fact, we both had booths at ASHG, DLS, and SCIEX, and the team was jointly talking to different people. There were certain genomics customers who said it sounded great, would love to just get access to data, how can I do that quickly? For those customers, it's not probably about buying an instrument, but it’s about going through one of our COEs including the Proteogenomics Consortium. So, being able to kind of have them talk to DLS at the same time they're talking to us, I think was great. And just kind of shows you the interest people have in trying to access our data on a relatively quick basis. We're really encouraged by that, and look forward to working closely with both DLS and SCIEX next year to ramp the consortium further.

That's great. Appreciate the time.

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