Oxford Nanopore Technologies plc (ONT) Earnings Call Transcript & Summary

[Presentation] Good afternoon, everybody in the room and all of you online. Welcome to our first Capital Markets Day. So please be gentle with us. I'm going to talk and set the stage for today's Capital Markets Day, about vision and growth. As I hope most of you know, the company's goal is to enable the analysis of any living thing by anyone anywhere. I want to talk about a brief overview of the company, and our history, our journey and our future set in the stage of the presentations today. So we are a single molecule sensing platform company. We're focused on DNA, RNA analysis, sequencing genomic analysis. At the heart of everything we do is innovation, and you'll hear from Rosemary later. The Life Science Research Tools market, which I will abbreviate to research markets, is a $6.2 billion market, growing at 15% to 18% per annum. We're growing much faster than that. The potential for applied markets runs into an excess of $150 billion. And then the second part of today, we'll be talking about how we are uniquely positioned to go after those applied market industrial and applied market clinical applications. We've been selling products since 2015. We're in over 120 countries and we completed our factory where we make our consumables, flow cells and kits in 2018, and it has scalability built in to take us through based on our long-range planning to 2027. We've got 1,200 not 120 people. I remember those days. I knew everybody's name back then. The leadership post IPO 2 years and prior to that, has been together for over 15 years, same strong management. We have been -- let's get my first football analogy in blending that experience with youth from commercial leadership from our competitors as we really push through on what are our S2 and S3 customer types, which I should talk a little bit more about later. In numbers today, our 12-month year-on-year revenues were GBP 162.2 million, last 4 years, that's 46% compound annual growth. 75% of our revenues, 75% are from consumables. So this is repeat consumable sales. We have moved our margins since October 21 IPO from 42% to 57.6%. We have an evergreen IP portfolio, and I'll explain what I mean by that in a minute and 8,800 publications. These publications are critically important because we are, for the first time ever reading native DNA, not making copies, which is how the current sequencing market sits and they really drive use cases, which drives revenues and commercial growth. Our medium to long-term targets are to continue, as we said out at IPO, greater than 30% underlying growth. We expect in the medium to long term 10% to 20% at least to be clinical or applied industrial. We're on target to hit our 65% margin growth in the medium term and adjusted EBITDA breakeven in 2026. These growth trajectories and margin gains are driven by innovation, and Rosemary will talk through the innovation since IPO and what's coming next and expanding our commercial operations and our manufacturing scalability, innovation and manufacturing, continuous improvement and automation. So I could spend the whole of my session telling you about the key moments in the company's history. I'm just going to pick on 2. We were spun out of Oxford in 2005, but we very quickly partnered with Harvard, University of California, Santa Cruz, UMass Texas A&M. That's kind of the 5 founding Godfathers of Nanopore Sequencing, Nanopore Sensing. Today, that policy has led us to 34 license agreements, and it underpins what I described as our Evergreen IP portfolio. In 2015, we licensed from VIB in Belgium, a Nanopore CSG, which is central and was in our products from 2017 onwards as the sensing element for all of our platforms. So that gives us a 20-year IP lifetime from 2015. The other thing I want to just mention in this journey, is the application-specific integrated circuit invented from the ground up. In academia, even today, they still use 1 single channel. In 2012, we developed our first ASIC for MinION 512 channels. Within 3 years, on that same silicon footprint, so your cost of goods is fixed, we produced our PromethION Flow Cell, which is 6x the output. So we are leveraging Maules Law to continue to get higher output without impacting margins. Future looking, we have a voltage chip, which will give us 10,000 to 100,000 channels and ultimately lead to a 1-hour $10 genome. Now that is in research. So don't ask me when that's going to happen. It's 3 to 5 years out. So DNA/RNA, just very quickly, it's a source code of all living systems, which is why it speaks to our vision of enabling the analysis of anything by anyone anywhere. And it comes in a variety of sizes from tens of thousands of bases for viruses, millions for bacterial pathogens like E Coli [indiscernible]. As we know, human is 3 billion, less than 1% variation in all of us in that 3 billion and then crops that can be tens of thousands of bases or tens of billions of bases. What is it? What is our source code, how does it work? Is it responding or changing to treatment? Why does some drugs work on us? Why don't they work on others, infectious diseases, what you might do with genomics in a pandemic. I think you all understand that. So we're very interested in DNA and RNA. Rosemary will describe how our technology works. I just want to tell you the key features that distinguish us from optical-based systems, all optical-based systems. We read the native DNA. That is biologically significant. We are transitioning, for those of you who are old enough, from black and white TV to high-definition color in that biology, and you'll hear about that later. We can sequence any fragment length. If your biology is short, circulating tumor DNA or you want to sequence very complex genomes or chromosomes, long and ultra long will allow you to do that. And it produces a lot of genetics that you cannot see today that is often referred to as the dark genome. Real-time data generation, affordable, accessible, no CapEx, distributed plug-and-play sequencing. That's what underpins the highly differentiated nature of our platform. What does that mean? Richer insights 34%. So 1/3 of all disease causing variation is more than 1 single point mutation. So long reads, really changed that game and we start to look at the dark genome, fast time to result. This was a cancer application, accessible and affordable, short tandem repeats can impact things like Fragile X syndrome, Huntington's and often, these patients have multiple diseases. And with 1 MinION Nanopore, you can unpick these complex diseases, and you'll hear more about that from Danny Miller in the panel today. So our platforms, just like DNA, come in a variety of shapes and sizes small, right through to high throughput, high-end scale platforms. Each of these price ranges here are highly disruptive, is it's an OpEx model. There is no capital requirement. Anybody who has a PCR lab can run these platforms. You don't need millions of dollars to buy the equipment. You don't need multimillion dollar infrastructure to run them. Our business model is to see the market with MinION. And if you haven't had a look downstairs, our Generation 2 MinION was down, they've fused to an iPad. It's very cool, if you haven't seen it. Over 80% of those users Click and Collect, we have no interaction with them. So it's almost like selling software to them. They then produce these publications. That then drives commercial adoption. At the other end of the scale, with the GridION, PromethION fleet, P24, P2, P24 and P48, these are higher throughput customers, and they are sold to in a more traditional way. So those starter packs come and start at 50,000 for a GridION, got to 300,000 for a P48, and that is a traditional field-based account management support. And that's where we have been adding commercial people and the likes of Illumina and 10x to really help drive that S2/S3 customer base because that's where our revenues in the short term will give us up 30% year-on-year growth. Who are our customers? We have our genomic explorers. And in each case, you've got to see the 4-year growth in these customers. These people spend up to $25,000 with a mean spend of about $6,000. That's about -- I mean, I'm not going to give you forensic numbers. That's up for Tim for you. There's about 6,000 customers in this segment. Here, midrange labs using the features and benefits that we provide. They spend $25,000 to $250,000. These are GridION users primarily, mean spend $60,000, growth in that segment, 39%. PromethION, P24, P48, this is a segment and some of these who will really drive the short- to medium-term revenues. We have almost 100 customers here. They spent over $250,000 and their mean spend is $600,000. Those are approximate numbers. It's easy for me, 6, 60, 600. Since IPO, our growth year-on-year has been 32%. As I've said, our margins moved from 42% to 57.6%. We've acquired 1,000 new customers. We have a strong balance sheet. That growth is driven by P2, our Q20 plus chemistry, Dorado for accelerated base calling and short fragment mode because liquid biopsy and circulating tumor DNA is something that we think will be very important as an application. We have doubled our commercial team. We continue to blend people like Rich, who will be talking later today, joined from Illumina 7 or 8 years ago with new people who are joining from our competitors. We are expanding our global footprint. And in the second part of today, we'll talk a lot about collaborations and applied markets and industrial applications. So in terms of accelerating commercial execution in Life Science Research Tools. As I've said, we brought in talent from competition. You can see we are starting to see the early fruits of that investment with strong growth in America, in Europe and even China with a slowdown. So that is coming together. Our medium range greater than 65% margin targets, we're very confident because there's still a huge amount of innovation that we don't really properly talk about enough in flow cell manufacturing, coupled with our continuous improvements. And as I've said, we have the capabilities with automation to scale this business to meet our long-range plan. And we are really focused on quality in the factory as we start to think about applied market applications. So I could also spend a whole session talking about landmark key publications. These are just some of them. And if you zoom out, what we see thematically coming at us is that with the features and benefits of native DNA, high-definition, full color, long reads, short reads, ultra long reads, in human, cancer and infectious disease, these are the target areas that drive today's revenue in the short term, but these are also applied market opportunities that run into greater than $150 billion that we will also go after, just a dual approach, short term and medium to long term. That market is $6.2 billion, but it's this one that we're really interested in. And oncology alone, cancer applications. The #1 driver in cancer is methylation. With native DNA sequencing, we can read the whole methylome. We do not lose that signal and then have to do chemical manipulation to try and back calculator. So we believe with methylation, native DNA and long fragments, we will have a very important part to play in oncology applications, in human genetics, in infectious disease and Mark Miller from bioMérieux here today, and we announced strengthening of our relationship with bioMérieux, but do not underestimate the applied opportunities in biopharma in [indiscernible] and in food. These are underperforming unmet needs because you do not have small, cheap, affordable, accessible real-time streaming of data. And that's what will transform these markets, and Lou will talk about the opportunities there. So in my final few moments, I just want to kind of actually take you back to 2004, I come from a blood glucose point of care medical diagnostic background. We were told it was not possible for poor patients at home to be able to get clinical accuracy on a handheld home device. But we disrupted that market. MediSense was acquired by Abbott for nearly $900 million. I spent 7 years at Abbott Diagnostics. When I looked at Hagan Bayley single molecule sensing platform, I could see how those 14 years at MediSense that I had done, we could make small, portable, handheld sequences that would allow live data streaming and if you think about the computer revolution, we went from mainframe to desktop to handheld. It was the distributed nature of information at your fingertips that radically transformed and catalyze the information age. In exactly the same way, genomics has been forever in a mainframe moment. You need millions of dollars. You need hundreds of million dollar infrastructure and it's in large centralized facilities. We are catalyzing the transition from mainframe to desktop to handheld with our portfolio of products, and you will hear how that is disruptive and groundbreaking in multiple application markets in the second part of today. And we're very excited about that. We also -- as happened in the computer industry have thought very carefully about how we can enable our customers to innovate on this platform. We cannot possibly get our arms around the huge breadth, depth and diversity of applications in these applied markets. And John will walk you through our partnership programs, such that we have open source developer licenses so that customers can innovate for these applied industrial markets. And I want to emphasize, it's already happening. What is really exciting and interesting since we launched our Q20 chemistry last March, the number of applications and interest in applied market applications is really ratcheting up, and we're very excited about that. And we know that we are uniquely positioned, whether it's time to result, whether it's unique native DNA in cancer applications or infectious disease time to result. We have a value proposition that highly differentiates us from the rest of the market. This morning, we announced our collaboration with Mayo. I hope you all know who the Mayo Clinic is and that's to look at cancer applications. We've started with a couple, and we'll talk more on that as those programs progress. We've strengthened our relationship with bioMérieux in the infectious disease side. As I said, Mark Miller is here and he will be on the panel, so he'll talk more about that. This slide, I only saw 10 minutes ago. I'm going to give it a go. Key takeaways, the applied market opportunity runs into $150 billion. We believe and from the asset, when I set this company up that you were never going to get a mainframe to be in common use in clinic. I know that because I spent 14 years putting stuff into clinics. Our disruptive technology platform is underpinned by that robust innovation pipeline. I think that iPad with MinION could have a huge impact in rapid insights in critical care, in hospital laboratories in a distributed model. We have an experienced team, and we are adding fresh talent, which is challenging for us all times, but we are really gearing up, and you'll hear about some of the people who have joined from the competition. Since IPO, we have been hitting our commitments greater than 30% year-on-year growth. With that, I'm going to hand over to Rosemary. I'm a few minutes over time already. So you just to get us back on track. Thank you, and welcome to today's conference.

Thank you, Gordon. Good afternoon, everyone. Tough crowd. I met a lot of you guys. I know you're far chattier than that. So I'm going to cover how our innovation engine is looking to fuel our growth over the next few years. My name is Rosemary, I've had the privilege of being in this company for 10 years since we've taken it from a small start-up in Oxford with massive, massive ambitions, and we're now a global player in the sequencing market and our ambitions have really not changed and we continue to deliver on them. I'm representing a very tenacious and tenured innovation team. It's a team who have been -- who have faced the impossible, the team who've been told it can't be done and delivered it. The innovation team is led by Clive Brown. We also have a fantastic applications and IP team with 445 strong, and we have to cover an enormous amount of ground with that. So we've got a platform to cover. We've got chemistry, engineering, algorithms, software, AI, machine learning, sample prep automation, it's a lot of ground to cover. And we work incredibly closely with each other to make sure that we're all in tune with each other at all times. We collaborate not only with ourselves, but we collaborate with our academic partners. We collaborate with industry leaders in electronics, people like [ in video ], people with Apple. We partner with our developer community, the guys who get that first taste of product as soon as it comes off the factory floor and also our customers who give us continuous feedback on what they want to see next and what we should be doing to make their lives easier. So we've created with this a highly differentiated product. So we innovate on 6 core components. We have a motor protein that ratchets the DNA through the Nanopore. We have a Nanopore that reads the DNA as it goes through. We have run conditions, be the salt fuel software, membranes, base calling algorithms that translate that signal into basis. And then, of course, our underlying platforms are ASIC, of which right now, we've got 3. We've got a Flongle with 126 channels for small experiments. MinION that's been a real workhorse for us with 512 channels, and the PromethION with 2,675. Now Gordon mentioned about our IP, and we do have an incredibly strong IP position. We get IP from 3 core areas. Our active research collaborations, active internal R&D and of course, now collaborations with customers and industrial partners. Really important as well is that a lot of companies, they establish their IP just as they get started. And then they kind of think, well, we've done this, but let's get on with making products. That's not the case for Oxford Nanopore with over 1,000 patents since 2016. So we continue to innovate to make sure that our efforts are well rewarded and protected in the long run. So innovation fueling growth. What are the 3 things that we really think around growth and innovation. First of all, what we want to do is take our existing technology, and we want to expand or take market share of the existing market. We want to take that technology into new markets like applied in clinical and consumer, and we want to take our platform and create entirely new spaces for new applications as we go into multi-omic. So be that protein, small molecule sensing. We have the platform that is right for those applications. I'm going to take you through all 3 of these, starting with the existing market. It's a really exciting time to be in genomics, where the cost of the genomics revolution. It took us about 100 years to go from DNA discovery to DNA sequencing. Then just over 10 years to assemble the first draft human assembly. And then 10 years to scale that from 1 billion a genome to under $1,000. And what we're seeing today is the birth of what we call the 2 whole genomes human or other, and what's really exciting is that we're starting this era already at scale. So with Oxford Nanopore, we're already offering these between $345 and $690. When we say whole genomes, what do we mean? So there are lots of different variation types in the human genome, small variants. This is what most of us when we hear genetic -- when we hear about genetic conditions, most of the information has come from small variants. This is something that's been fantastically well covered by today's technology, SNPs, indels and they impact things, sickle cell disease, cystic fibrosis. With the birth of long reads, we started to understand a lot more about larger and more complex variants. These are structural variants, copy number variants, repeat expansions, and they impact things on Alzheimer's, Parkinson's. And then what we've done is layer on top of that epigenetics, methylation, base modifications, massive drivers and things like oncology. And finally, dark genome, what people used to call junk DNA because we couldn't understand it. And actually, what we find is if you really look into those places, there are actually medically relevant genes that people have been ignoring for years and years. So what our customers have been telling us now is that you can reveal more biology with our platform. So what we've been missing really matters. And as Gordon says, over 30% of all disease-causing variation is found outside the regions that have been classically looked at. So today's paradigm, today's market, you've heard it before, devices can be expensive, cost up to 1 million. They come with big service contracts, big commitments on consumables and in order to run and in order to maintain the price per genome that you can get with large installations, you really need a high-end lab. So that's created sort of 3 different tiers of customers in the market today, really massive high-throughput sequencing centers. These have been really pivotal and actually driving a lot of the understanding that we have today. You then have medium-sized users. They operate sequencing routinely. They batch their samples so that they can get cost of -- they can achieve cost efficiencies. And then you have all of the other biologists who send their samples into these labs to get their answers out. And if you look at it in that respect, it kind of mirrors what we think of S1 on the bottom, S2 and S3 on the top. So that's the actual market that exists today. The biologist without the sequencer, the medium-size and the high throughput labs. Gordon talked about disrupting the current market. And if you read the textbook on disruptive innovation, they talk about really 3 key pillars: an enabling technology, which is an invention that makes the technology much, much more affordable, more accessible; a differentiated business model and a coherent value network. Now I'm going to talk about the technology. I'm going to touch upon the business model and the value network, but that will be expanded by my colleagues later today. So to cover our platform, I'm going to be covering platform, performance, products, our road map to applied and the world beyond DNA and RNA sequencing. And I apologize in advance, I'm going to have to go through some of the slides really quickly, but the good news for you guys is it's PDF and all available later. All right. So why are customers choosing Oxford Nanopore today? What is it about our platform that is making it attractive for them. Gordon has just gone through these. So sequencing of any fragment length direct DNA/RNA sequencing, real-time data generation, scalable formats, cost-effective plug and play and the 3 key benefits that we see time and time again every time a publication comes out with Oxford Nanopore name on it, it's either talking about richer insights, it's talking about fast results or is talking bringing in an element of accessibility. And every publication you see will touch on those. So sequencing DNA of any length, that is from cell-free DNA to ultra long so we can do anything from 20 basis to over 4 million. And we enabled this recently in something called short fragment mode, which is a simple button on our software. You can see it below deck and all you need to do is tell the software to ride out reads, which is short in 200 bases and all of those reads start appearing. So no different chemistries, no different instruments needed. It's the same instrument. You click a button on software, and short readers enabled. And it's incredibly important because DNA is not 1 shape or 1 size. DNA comes in all shapes and sizes. And so you need to be able to sequence what you've got. We get more biology from every read. So we get SNPs, indels, structure variation phasing and the customers recently published to say that with a single PromethION Flow Cell, they were able to achieve SNPs with higher accuracy than short-read sequencing. So, we've got very high performance variation detection. We are highly accurate and the most comprehensive technique for base modifications. So base modifications come in all shapes, all manner of sizes. So 5-Methyl C is what the industry classically uses, but we've got Hydroxymethyl C, 6 MA, 4 MC in development and more coming. Most of the market today uses the thing called it EPIC Array to measure methylation. The EPIC Array only covers 3% of the methylome. So all of the information that we've been gathered at scale is on 3% of the methylation with Nanopore, you can take that up to 97%. So an enormous amount of new biology to be discovered. Phasing with long reads, you can phase. Phasing is really important. So many of you may have heard of trio sequencing, where you sequence mother, father, patient in order to understand gene function and origin and you can do this without sequencing trios on Nanopore. And now all of those previous applications, those are all things that we do with Simplex, Duplex, a lot of people have heard about Duplex. That is really enabling TDT assemblies. But what is the TDT assembly? Anyone who's read a textbook about the human genome may be familiar with what the chromosomes look like under a microscope. And up until today, when you try to reassemble that, this is the kind of graph that you could generate. So you couldn't actually separate all of the genome out into its individual chromosomes. And what the telomere-to-telomere group have done is develop the tools so that you can do that. And this is with Nanopore only, you have a fully phased chromosome level assembly. And you can see the 22-plus X chromosome on there with really, really high consensus accuracy Q42. So again, so with Nanopore, you can see all of the different biology on DNA, but also RNA, we have isoform detection, RNA modes, expression analysis from bulk single cell and spatial. So everything that applies to DNA applies to RNA as well. So that was just -- there we go. So that was sort of 2 of the main features and how we derive that statement of richer insights. What about real-time data generation? Well, this is fantastic. It gets you faster results, you can track your run live, reads are available as soon as they're generated, which means if you're looking for a small amplicon or a small answer, a quick answer, you can do it in as little as 5 minutes. It also enables adaptive sampling, a unique feature to Oxford Nanopore where you can target, you can zone in on a region of interest and sequence only that without any upfront sample preparation, completely transformative for a lot of applications. We have scalable formats from small handheld to high and ultra-high output devices, and we make these really cost effective. So our flow cells we sell in order to get really, really attractive prices per gig, so you can see PromethION going there from $9 a gig to $2 a gig depending on the output that the users are getting. And the sequencers themselves, they're all part of starter pack. So MinION starting from $1,000, P2 solo. So that's a device that can run human genomes, $10,500. You have the mid-scale sequencers. So the GridION are the P2 integrated and of course, the higher throughput sequencers, the P24 and the P48. These are incredibly competitive devices out there in the market. And of course, our commercial team enjoys selling them. Another piece that we get constantly asked about is how much do you have to invest in compute. And the answer is you don't. You have cost-effective all of the compute can be provided by a laptop for MinION. Anyone who's been downstairs and seen the P2 solar that's being run currently off of MacPro. So it's not a big investment for the handheld instruments. But for GridION, you can perfectly keep up with Q20 base calling of 5 MinION Flow Cells on a GridION so the compute is all integrated. And on the PromethION on the A series, you can do a Q20 base calling of 36 Flow Cells, so you can absolutely keep up with P24, and we've got more speed coming so the people here be fully enabled as well. So no need to buy extra compute for Nanopore sequencing. We are a plug-and-play. As you can see there from a tweet, receiving and setting up a GridION takes minutes. You open the box, plug it in and you can start your run. We have assisted online or in-person training. Those options are available for customers. Some are quite happy to train themselves. Others really want some help, and we're happy to do that. And then also in development, what we've got is the next generation of onboard troubleshooting. So we want to be able to give our customers a better and better experience when it comes to dealing with any particular issue. For example, here, someone is filling up their hard drive too much, which is a good and a bad problem. So once again, we've got all of our features and benefits covered. You also ask us all the time, how does this compare to the other players in the market. And they are unique features and benefits. They are Nanopore feature and benefits. So no one else can sequence any length from short to ultra long without having to do alternative chemistries or alternative instruments. No one else is actually sequencing the DNA/RNA, so they cannot get all of the modification information that we can. No one else gets real-time data generation. It's all batch based. You have to wait for the end of the run. They don't scale formats very well. So you don't -- what we tell our customers is please don't compromise your science in order to fit instrument. When it comes to cost effective, no CapEx requirement, we want customers to spend on sequencing, not a sequencer. And of course, because they're plug-and-play solutions, you don't need a team of experts to run experiments. So performance, another very, very constant topic, must get at least Charlie must get inundated by e-mails every other week around this. We've got a great track record of delivering performance upgrades. You've seen all of our instruments evolve during the years. Always really important to remember, most of our performance upgrades comes from our consumables. So these are our kits, our Flow Cells. We also ship a lot of upgrades through software, which basically means that anyone who buys an instrument that is their instrument for life and it just keeps getting better. Where are we today? We have Duplex feeds at 99.9%, Simplex read at 99%, both of those with headroom to improve. We've really taken the accuracy to the next level. However, it's really important to remember that if you're looking for things like SNPs, which is those 3 ticks along the top, you can see those SNPs even in our old chemistry, but of course, it gets clearer and clearer as the accuracy goes up. This has left us with an incredibly competitive platform, be it versus short reads or other long reads, Simplex and Duplex on Q20 is an incredibly competitive type of data, again, which is why our customers are getting really excited. When it comes to output, how we're driving the output up for all of our chemistries, we typically run in-house 150 gigs on native human genome. Customers are getting over 100 gigs in field, and we have performance in the pipeline of Simplex of being able to generate over 350 gigs with future chemistries, future motors. If you're over 300 gigs on a PromethION Flow Cell, your price per genome is at about $200. And that is how we will continue to drive competitiveness through -- into our customer hands, is by pushing and continuing to push output and accuracy in our innovation pipeline. Now we talk a lot about human genomes, and I know this could be quite a confusing space, but there's lots of ways of sequencing genomes. You can sequence at low coverage, so 1 to 10x of the depth. And that gives you information like genotyping. You can do a low past genome. So you've read the genome 15 to 20 times. And that will give you information like structural variation or methylation. Standard whole genome sequencing is what people use routinely. That's the most routine mechanism of sequencing a human genome. So you're going to read it 30 to 40 times over. That's the number of times they're going to read the genome. And just to walk you through what are the steps there for Oxford Nanopore. It's a DNA extraction step, that same industry standard, 1.5 hours. Size selection is optional for us, but you can do it. It's a 2-hour step, and library preparation 1 hour. So between receiving raw DNA and loading a Flow Cell 4.5-hour workflow. Loading of Flow Cells about 4 minutes each, I hope you will get the opportunity to do that downstairs. And sequencing, if you're doing 1 genome per Flow Cell is a 72-hour on with data streaming during the analysis. You're base calling in real time. And then the final point, really important, you're storing processed reads. If you're storing process reads industry standard file sizes. Customers can store all data if they want to, and it is an optimal feature of Nanopore. So how about our Duplex output. So currently in-house, we're at 50 gigs of Duplex per Flow Cell plus 40 gig Simplex and remember, Simplex is 99% accurate. And the performance that we have in the pipeline, the target we have is to reach over 100 gigs of Duplex with 50 gig Simplex output. And we can do that on PCR samples and our teams are working to bridge that gap. So why are customers choosing Nanopore today? What is it about our products? We started off with very focused core commercial values, accessible, low capital, transparent pricing, upgrades being included, community feedback into the product development, that's what we set out in 2015, what we wanted to do. These are the products that we've been selling up until today. We sell sample prep kits, sequencing as part of devices, part of starter packs, flow cells and our software is available to our customers. On the reagent side, we've got a broad range. This is really important. You've got over 8,000 publications because we enable a broad application space. Our kit that's dedicated to best performance is only 60 minutes, but we have rapid kits as well for 10. We are automation-ready. So, we have fantastic working relationships with Tecan, Hamilton, Beckman Coulter, Agilent, Open Trond Eppendorf. We have an enormous amount of collaboration already with our automation providers so that you can create 192 genomes a week from only 1 liquid handler and you can be running 4 P24 with that. So it's an incredibly efficient way of preparing samples. Devices are available through starter packs as we've covered before. And Flow Cells are really priced so that we can enable science at any scale, be it if someone in a school or a university wants to be running small experiments for under $100 on a fungal all the way to people who want to be running human genomes and you can do that for under $1,000 on a P2 solar, particularly with the pricing upgrades that we did around online calling this year. On secondary data analysis, we maintain sort of an open source style around that. So we've got pipelines that we package up for ease of use. We've been investing a lot into epitome. But really, what's next? What should we be doing next? And the answer is sample to answer. So these are a new product offering that we're working on at the moment. We already have some end-to-end workflows, so we combined our sample prep information with the informatics. And this delivers complete end-to-end workflows for human, telomere-to-telomere, single cell, plasmids again, so Rich will touch on these. And it really creates a very secure set of instructions that if a customer follows, they will get an answer. And we also then have sample to answer products. So the first was workflow was a set of instructions, TurBOT, which we'll be showing at ASHG in a couple of weeks. That is a sample-to-answer product. You load your DNA sample, and it does the DNA extraction, the sample preparation, library preparation, it loads the MinION and it hits go on the sequence, so you get an answer out of the other end. Now TurBOT is still quite a big instrument and Nanopore is all about disrupting genomics, and that is why we have track signing the pipeline. So that's a handheld device capable of sample extraction, library prep, sequencing and data analysis on a much, much smaller and more portable scale. And you will hear Clive talk about this at London calling this year. Assay bundle, something we tested during the pandemic with COVID. We sold these as a price per test in our shop. We had kits with primers, we had Plimrazers in there. Library preperagents, right number of Flow Cells. We also had an analysis pipeline embedded into GridION, so the customer only had to buy 1 part number and everything came ready. And it was really, really great, very popular. It really accelerated things. So this is something we will continue to explore selling these packages, these test packages so that customers can get everything in 1 box. Now analyzing COVID is quite simple, particularly with all of the work of the Arctic network, analyzing human genomes is more complicated. And so we are moving towards third-party integration so that we can go from variodetection to interpretation. So we've partnered with people like GenX. And this is going to initiate our analysis offering or more advanced analysis offering. We can ready detect variants. We really want to go into interpretation and in the future integrations with electronic health record providers. So how do we prepare our products to enter new markets? You've seen and heard the benefits. In the Life Science Research Tools, we move from developer releases to early access releases to release products. We then have Céline, feature frozen products, software and consumable version support for at least 12 months. And what we're doing here is an ISO 9001, we've got a clear pathway to 1345 and the PromethION is also currently in development. So that is how we really go after the applied market. And further to that, we then have the applied partner products, which are locked for specific applications. So Céline is quite open and you applied market products for specific applications. So we've got the building blocks in place. We've got a broad range of prep chemistries, scalable sequencers. We've got the software that's going ready from expert mode to workflow mode, and we've got our epitome analysis with fully integrated third-party interpretation. And our sample sponsored products. And John and the team will talk about the partnering that's in active development. So then to finish on what is beyond DNA and RNA sequencing. Well, at the moment, we've got a massive pipeline full of brand-new products be it Mark 1D, TurBOT, TraxION, voltage sensing, but also protein sequencing and liquid biopsy. With our collaborations in our academic space, we found that Nanoporsequence small biomarkers, microRNA, protein. So the capability of the platform is clearly there, and that is why it is absolutely present on all of our pipelines. And this is the innovation road map that you find in any annual report from Oxford Nanopore. And so with that, I think I'm ready to hand over to Rich, who's going to talk about our commercial execution.

Hi, everybody. So I'm Rich Compton. I'm here to talk about the commercial operation, and I'll our focus on Life Science Research Market, which generates most of the near-term opportunity for us. So what I want to do today is take you through how really you've seen we offer the best products you can get for a large section in this market. And then how we're also building a best-in-class commercial operation really to help us get the message out. I'll also chat a little bit about longer-range opportunities in Applied Industrial and in Diagnostics, but these will be dealt later today by Lou and Emma. So we go back in time. I joined Nanopore in 2016 to help build the commercial team from scratch. When I first got to know the Nanopore found as well as BIOVIA, where I spent 12 years. That company was focused mainly on helping commercial customers, so predominantly pharma to deploy enterprise software into research, but also into GMP quality and other regulated environments. And we were readying that business for sale to Dassault and I was approached by Illumina to get over and join their team and back in 2011, it's easy to forget that Illumina were really in the doldrums at that stage. It was just after the failed rush takeover and the EMEA team back then were significantly underperforming. So we turned that around. I led the business through 3 years of better than 25% compound growth we scaled the business from around under USD 300 million annualized revenue to well over USD 600 million when I left. And at the end of that period with Illumina, they were pretty much in a monopoly position, but you could see the limitations of the short-read technology. And in late 2015, the Nanopore exec team gave me a call, and I was really happy to hop over. So focusing on Life Science Research, which is valued in total at about $6 billion. You saw those numbers from Gordon, we'll split that into around $3 billion of foundational research and then another $3 billion in translational applications. These workflows in translational are starting to be validated, sample numbers increase, and customers move into more routine use. And the second part of the market is really opening up for Nanopore. The presentations that follow will talk about that longer range market opportunity in full diagnostic and regulated markets. And it's a relatively small proportion of our business today, but there's a real profound opportunity due to the unique capabilities of the platform, which you'll see. So first, we go to the what. What are these customers up to. And we can split that into human and nonhuman use. Start with human, we divide that into 2 buckets. Human genetics, so things like rare and undiagnosed genetic disease, aging, Alzheimer's, autism, ALS. And then the other big bucket is cancer research, which is a really significant and growing area. On the nonhuman, we look at everything else. So viruses, bacteria, fungi, animals, plants, the largest sector here, which Gordon already mentioned, is infectious disease. And right across the board, you can see that there are heaps of publications coming out every week, enormous breadth of use of the technology already. And the foundational research, generally that's funded by universities, by grants from charitable institutions, a lot of government money going in there. There's also a lot of funding from industry. They support academic collaborations. And there's a lot of internal industrial research and development as well. And as I mentioned, as we move from the left to the right, the method start to get locked down and the handle cranking starts, which we love [ a spoke ] move into routine use. That transition is really good. These types of users tend to generate 3 or 4x the amount of consumable pull-through per device compared to folks doing the foundational research. Rosemary has already spoken about the product pathway for these customers, and it's a sector, you can see that we're really taking very seriously indeed. Next is the who. Who are these customers? And customers sit in a variety of places. There are a lot in universities, but also in industrial, pharmaceutical, food, home and personal care and so on. There's a lot going on in government and public health labs. They're kind of pivoting away at the moment from COVID and into thinking about key areas like pandemic preparedness and biosecurity. And while all of these customers are important, biopharma probably represents the largest growth opportunity for us right now, right away from early fundamental discovery all the way through to manufacturing and quality. That's the how. How do we reach these customers. And it really all depends on the type of customer and the application, and we'll optimize our approach to selling and support based on that. So for the research market on the left, it's really a technical and disruptive sell. We've built our own teams, sales, marketing and support. And these folks are really knowledgeable not just on our platform, but on our customers' applications and the discoveries that we can all make together. And then in some geographies or some market sectors, it's much better to team up with channel partners. They offer their experience in the local market, local logistics, regional banking systems and so on. And in certain market sectors, we also want to expand our reach with partners. So we want our direct teams focusing on the really high-value deals and partnering with Avantor, for instance, with their thousands of employees is helping us to grow and support our MinION customers. As we move to the right, where the sequencing and the results generated in that semi-regulated environment, we have a choice then between our own specialist sales teams and also partnering strategies, and John will be talking more about that later. So since IPO, we've doubled the size of the commercial team, and we're being careful to structure that sensibly to drive growth to the maximum velocity. And an important aspect of that is really about regionalization. And in the fourth quarter of '22, we restructured the global sales and support teams into 3 regions. It's really to make sure that we're closely aligned with the needs of our users. And while we have still global leadership and centralized strategy for the functions, we've taken significant steps to localize, making sure that we follow up on regional priorities, engage with regional scientific networks, provide local language support and so on. And at the territory level, they are local account teams, they're getting the message out, winning the deals and providing application support and then office-based inside sales, technical support and then customer service on top of that. And a nice example of how we're developing is in United Arab Emirates, the team started really by exclusively supporting the Emirati genome program. But now we've got a group of over 20, not only providing support for the Middle East, but also India and Africa too. We've got a real depth of world-class leadership. And you can see some of the bios up here and on our website. But beyond that, the broader teams are also extremely skilled. Sales and technical services teams include a lot of PhDs and post docs who made that transition to come across to the commercial world. It's a really smart and experienced team, and we all share that desire to shake things up in genomics. All right, so because we're the only company that can make a sequencer for $1,000 and even our largest devices as Rosemary was showing a really plug-and-play and require relatively little support, we can use a very different commercial model to our competition. So enabling growth while managing the cost. And we serve these 3 broad groups of customers, which Gordon introduced. So for S1, the explorers, we have a really light touch, mainly use digital to engage and then use digital and community-based support, which has much lower human overhead than our competitors. And as I mentioned, we're also partner in this area with Avantor. S2 in the middle is a really fast-growing customer group, where GridION and P2, these are the workhorse devices, and it's a core area for focus for our inside sales, our office-based sales team. S2 also really drives significant medium- to long-term growth, particularly in that translational sector, where I mentioned consumable pull-through is in the order of 3 to 4x the equivalent research lab. And S3 or the larger accounts provide that significant near-term growth with North America and Europe still expected to continue to be the key drivers of revenue growth. So Rosemary already introduced the benefit of the tech, and I'll try and bring this to life a bit with some examples from our user community. Just to stress, this isn't a long-read technology. So we really shouldn't be pigeonholing that way. What it is, is a new generation of sequencing tech. And the uppermost benefit here, the richer data is of paramount importance. We're seeing a real understanding of that in the market. A lot of that is due to the National Institute of Health, telomere-to-telomere consortium. We finally finished the human genome. And it's like, head-on, what are we here? Didn't we do that 20 years ago, and it's well known, we didn't finish it then. The tool is available at the time just weren't good enough. And a lot of the genome was missed back then. And dialing forward, the current tools from Illumina aren't good enough either around 1/5 of the genome can't be accurately sequenced with their or any other short-read system for that other. The problem is that short-read sequencing just breaks down in certain areas of the genome. The tricky areas include those areas that have got a high proportion of GC basis or highly repetitive regions. These are all no-go zones really for the current tech. You sort of look back and say at a high level, the way in which we understand genomics is a product of the tools we have available at the time to us. And Sanger and Illumina share many of the same limitations. So we've had 20-odd years of looking at the data in the same way. And scientists, consuming that data are really smart, and they've run out every last drop of research value of using these legacy platforms. Can still go into screening and testing with them based on the research that's being done, but researchers knew if they want to shift the needle and make new discoveries now, they've got to move forward with a different platform with Nanopore. So we've got a few funny examples here. And the first one is a story of going from a carriage to a multimillion dollar business. It's a customer who literally started running a plasmid sequencing service overnight in his garage. And the plasmid is a small circular bit of DNA found in bacteria. We use them in the lab all over the place for lots of different clever things. You could be producing large amounts of protein, so you want to study it more easily. Interestingly, they're also used as the delivery system for the enzymes that can edit genomes. So all these new gene therapies that are coming through also rely on them. And historically, folks would use Sanger sequencing, but it's slow, not very accurate. So an entrepreneurial, well-run service took hold of the market. We've seen this wholesale move to a better, faster, more affordable solution, which, in this case, is now a multimillion dollar business inside 2 years, they've become one of our top 5 customers in the world. So the next example was a recent trip to the West Coast of the U.S. for me. And it's always nice when the day starts with the customer telling you that they're canceling the service contract on their Illumina machine. And the main reason for this one was that it's better and faster, the results that they're getting with Nanopore at a lower cost and a lower complexity. So the story is about helping to treat eye infections. So endophthalmitis or infection actually inside the eyeball happens about once every 1,000 or so cataract procedures. But when you're doing as many as they do in the U.S., it's about 4,000 quite serious infections a year to deal with. The current standard to determine the cause of that infection is bacterial culture. So that's the Victorian method of streaking on a plate invented by Louis Pastor in 1860, takes 2 to 5 days for a result and it costs around $200. And with that, you miss things, some of the bugs just refuse to grow on the plate that they use. So sequencing is more comprehensive in determining the bug that's causing the problem. And you might reasonably ask them, well, why are all these labs using Illumina already? And it's really down to the cost of the device that gets in the way. They're smaller regional labs. They can't afford hundreds of thousands of dollars in capital cost. And with Illumina, you then have a choice, you have to batch multiple samples to keep the cost down, you can't really ask a patient to wait a couple of weeks with a serious infection. So the alternative is to run the Illumina sequence or half empty, which then makes it also unaffordable. And with Nanopore as Rosemary showed, none of these problems apply for us. We can go from sample collection to a report in around 6 hours or for $150 per sample. And you'll see from Jonathan later in the day that there are some very similar stories coming out about respiratory infection. The other interesting thing about these guys is that the practice that the team got led them to look at other conditions, inherited eye conditions and eye cancers. And again, Rosemary pointed out the elements of phasing and how that's important in starting to determine genetically inherited conditions. So neither of these applications can be done on the old Illumina box as well as they can on Nanopore. So as well as seeing a significant growth in the account for us, we're also growing into new applications, which is great. Final example is from the NIH. And as we mentioned, a lot of these no-go areas for Illumina are related to neurological or neuromuscular disease. So it wasn't that surprising to see that when NAH launched the major project, it's the center for Alzheimer's and related dementias, they're starting to sequence at scale, and they decided to work exclusively with us on that. We could bring some of the experience in large-scale wet lab automation that we kind of learned from the Emirati program and help them to ramp up really quickly. And the project is generating a new genetic resource for Alzheimer's and other related dementias from thousands of human brain samples. Interestingly, again, we're also seeing it already deliver new insights into structural variant mediated driver mutation for early onset Parkinson's, which you just can't see with short lead tech. NIH are also generating some of these proof points helping us demonstrate the accuracy of the platform. So we can point to NIH publication saying Nanopore are more accurate, but calling clinically relevant variation than Illumina. Just shifting gears slightly, there's been a shift in population scale programs pre and post pandemic. There are a fewer dollars out there in the national purchases -- in purses. So instead of replicating what was done here in the U.K. with Genomics England, they're starting in a more progressive manner, say, 5,000 to 10,000 samples rather than going immediately for 100,000. Also with the impact of the telomere-to-telomere work, they're realizing with starting with a complete picture is the best way. And we're seeing groups like Singapore publishing on exclusively Nanopore generated T2T genomes and using those to augment their national program. And with Nanopore, you got the opportunity to start small and scale do a few thousand Nanopore genomes, really get to look at the data and then decide what to do next, probably more Nanopore genomes. We don't have to bang on the door of these programs like we used to. I think they really know and respect the progress that we've made and attending to invite us into conversations. And obviously, these programs have been a key driver of S3 growth. And although we think they'll continue, they're likely to play out as a larger number of smaller opportunities from here on in. U.K., we're seeing an enormous amount of progress. And we just wanted to flesh out how the adoption in the U.K. is going. And it sort of illustrates the way for other countries and how projects start to connect and grow momentum. We're moving forward with Genomics England on a couple of fronts. I was back in the day with Illumina, we -- I was actually wearing this suit in Downing Street when the deal got signed. And it was a sort of qualified success of the main project, families who had kids with rare genetic conditions, only about 1/4 of that main program, got a diagnosis of the rare disease that was affecting their child, we're seeing way better results than that in places like Stanford. So we're going back with Genomics England to sequence 7,500 of those as yet undiagnosed and samples. In addition to this, cancer 1.0 on Illumina technology didn't really deliver turnaround time, richness of data that was needed where we're not just there, and I'm sure [indiscernible] can talk and provide a bit more color on this. So we're partnering to provide the technology platform for cancer 2.0, which is now rolling out across multiple centers. On top of Genomics England, in Q1, we announced a 22,000 sample cohort led by NIHR BioResource, that's for precision psychiatry. So that's going to be done exclusively or is being done exclusively with Nanopore. That takes us back to those neurological areas where Illumina can't sequence properly. So I think within again, see more excitement at Exeter, turnaround time and improve diagnostic yield, driving things as far as the adoption down there at the National Rapid Rare Disease program. And then finally, the rollout of pathogen sequencing to multiple NHS sites, which Jonathan and Emma will be chatting through soon. And it's sort of exciting to see this and defines the pathway for other countries. All the efforts that I've outlined are supported by a world-class global marketing team, and they ensure we have events like London calling and Nanopore Days, which are viewed as the best in the industry. Digital marketing teams are best in class. And you can see our share of voice on social with the blue line at the top there. All the efforts are then championed by a sizable community of key opinion leaders who are making discoveries with Nanopore. They help us spread the word of how our technology isn't the future so much, but it should be the new normal for genomics. We're really improving in getting that technical messaging out in a crisp way to potential customers. And it's important to translate the geeky science into what it delivers for them. And the team is wrapping this into a new campaign to illustrate what's been missing from traditional sequencing and that the richer data from long reads, from methylation, from isoforms, shouldn't be viewed as an add-on anymore, but it's really key to be viewed as doing up-to-date research. So here's the video. [Presentation]

We have to have some applause for our marketing team. I love it. And so we're doing the hard launch of this at ASHG, and I just can't wait to see the customer reactions. Anyway, just bringing this to a close, delivering top class customer service is also really important the reorder rate and our market reputation. We can't deliver on the growth expectations without the capability to back it up. And there are 2 sides to delivering best-in-class customer experience really. First, digital, making sure that the systems for ordering, logistics, training, to help users get started a world-class. And we're fortunate, as Rosemary kind of touched on, we got heaps of metadata that can help support users proactively. So before they take a misstep, we're helping them correct things and get the best out of the sequencing run. The other thing is in the event that someone does have a mishap, then the sequencing run isn't lost. You just stop, wash the flow cell, reload rather than wait several days before knowing that you run screwed up in the case of the competition. The other side then is investment in local teams and partners to provide application and technical support to the reorder rates and opportunities for cross-selling and upselling are taken. So in summary, the commercial model enables us to go after the whole of that breadth of the opportunity in the Life Science Research Market. We're introducing new capabilities for customers that drive higher expectations of richness of data really in the whole market. Add to that improved turnaround time and improved accessibility so that technology can be available in every lab. So just finishing off, so we've seen examples of S1 accounts, transforming into multimillion dollar businesses. We've seen this breadth of reach that we have from the partnering model, and then focused development of key opinion leaders in S2 and S3 accounts, we are changing the market expectations as we watch. And you can see how easy it is to be totally excited, I am and the whole commercial team are. It's really a privilege to be out with these mind-blowing products and working hard. And what we're doing right now is locking in future growth. We're just the tip of the spear though. And you have to acknowledge the massive support we get from the rest of the company and what they're doing. So a big thank you to all of them. Right. So we're now moving to Q&A, and we'll take just a minute to rearrange the seating, but it's a pleasure for me to invite Rosemary, Gordon and Zoe back on to the stage. So thanks, guys.

Thanks, everyone. So we've just got a few minutes for Q&A. We're running a little bit over, but we don't want to surpass your questions. If you would like to ask a question, if you could just wait for the microphone to arrive. And perhaps we could ask you to ask one question at a time, that would be fantastic. Actually, you know what, we actually got -- we got one online that we wanted to quickly start with, which was a question came in around the most exciting development in the last year and what you'd like to see in the next year? So just to quickly start off with that, and then we'll take some questions from the floor.

Rosemary, would you like to...

Just one. Yes, I really think we've loved the launch of the P2 platform that's really -- we captured a lot of imagination with our customers. We've got over 500 out there and the types of applications and the type of feedback that we're getting is fantastic.

Do you mind if I share mine. It's really the Stanford world record, which you'll all have seen that they're doing very rapid turnaround, whole genomes and having worked with families who've got kids with rare genetic conditions for many years, seeing the not just the speed with which we can be doing that, but it was -- it's more about the improvement in diagnostic yield. John Gorzynski who's the PI who's running that program was at a recent Nanopore Day up in the Bay Area, and was talking about significant improvements to diagnostic yield and just helping resolve these problems for the families is wonderful to be involved with.

We're playing that game, interoperative brain surgery real-time sequencing with illumina.

Excellent. We've got a question from Charles.

Charles Weston from RBC. I'm going to wrap 2 into 1. In terms of the price, you talked about $690 and $345 per genome. What's the price that's achievable by people actually in the field? And is that an all-in sequencing price. And then Part B relates to the whole Light Shield Twitter storm and the productivity improvements appear potentially quite substantial. So does that decrease those prices further?

Sure. It's Twitter storm, I would say Twitter debate. And I think it's really good to see our customers get creative yet. So we've introduced Light Shield so that customers cover up their flow cells when sequencing. It hasn't basically, it massively improves our output when you've got -- when your sequencing really short strands, most of the customers doing whole genome sequencing were being quite long. It does help them. It reduces variability in their hands, so it does help. In terms of what customers can get in field today, so one of the charts that we show where customers are marching towards that 150 gig. That is a live action customer, sequencing hundreds of genomes a month. And so in that case, that customer is quite comfortably getting $690 a genome because they want a high depth coverage. We do have a lot of customers, the decode paper being a fantastic example, where they were getting structural variation in methylation that were topping up their short-read sequencing with that information. They only need 15 x steps. And so in that case, they were generating -- they could be generating 2 genomes per flow cells, so $345. So yes, they are real world prices. and it is a library preparation kit and a flow cell, which are the 2 components that you need to buy from Oxford Nanopore.

Yes. I think I could add to that a little bit. I think our experience at fine grain control of the metadata of wet lab from extraction to prep to sequencing is now pretty well under control. So providing people with tech transfer around how to scale up operations is straightforward. And we've done an awful lot of work on the human variation workflow and plugging into tertiary analytics. So for that human sequencing market, which offers us the biggest opportunity for growth. I'm really comfortable with.

We've got [indiscernible] question.

So I have asked this before, but I can understand things can change with time and partnerships. So you have quite a wide addressable market reflecting the wide applications of your platform across a variety of research and clinical areas. If you had to pick 3 clinical areas, so sort of as specific as possible as in what's setting within cancer, what's setting within infectious disease, that your conviction would be the highest in terms of commercial success. What would those be? And how is your platform differentiated in this application store for better commercial prospects than your peers?

So yes, I'm still not going to answer your question. But I think the thing that Clive always says is we sell fishing nets, we don't go fishing. And that's really important strategically. The customers will innovate. And it won't necessarily be the largest commercial opportunity. It will be the one that really showcases and opens the door that the future of genomics is native modifications on DNA or RNA, RNA in particular for industrial biopharma applications. In terms of trying to pick 1, 2 or 3, I don't think we need to because the inbounds we get -- and Emma will touch on Asuragen. We already have partnerships where people have come with a unique value proposition that only Nanopore can solve, that then allows us to have this closed loop open developer license like Apple. And therefore, as they innovate, both parties are going to profit from that innovation. And that's kind of how we look at those. Picking 3 is not allowed in the company. Everybody can have their top 3, but they're not allowed to push them. It's just the way we think about how we want to commercialize. I don't know, Rich, if you wanted to add. Rich is the one who rocks out with lots of ideas all the time we just say no.

Again, I think we see particularly in cancer, we already have quite a lot of customers using us for fusion detection, particularly for things like hematological malignancy, kids who need to get on drugs way quicker than they currently are. So we're seeing those applications sort of start to bubble up already.

Got a question form Paul.

Paul Cuddon from Numis. I am just paying devil's advocate here. You've got 100 S3 customers, Illumina got 8,000, so quite a similar size. So what's the pushback still from that customer group? And secondly, have you got to kind of wait for these new mega projects to kind of crack into those type of customers? Or can you get into their more recurring budgets?

I think the 100 S3 customers is growing very rapidly. PromethION is only been around post pandemic. We launched it about a year before the pandemic. So I didn't really get a chance to stick compared to Illumina who have been around for 20 years. And that marketplace, that centralized has been around for a further 20 years prior to that for sanger sequencing. We are interested in penetrating those markets. But below the water line, we think there's 10x that customer base who would sequence complex genomes in their own laboratories. And the -- that sort of S1 group drive that adoption. And that's why P2 looks like a really interesting platform for us because now they can do at low cost at low entry point, quite complex genomes and biology. And that, we think, will continue to, as we saw with compute, move from centralized to distributed, decentralized sequencing. And what that means is customers then go out, generate data, get grants and you get that increasing customer base transitioning from service provision, sending their samples to a large central facility to doing sequencing real time in their labs. And that's what catalyzes that.

I think we're also as a team being really disciplined and focused. And an example of that might be in the single cell market where our marketing teams and product managers done a fabulous job, fully integrated end-to-end workflow based on 10x. And even I can sell this, right? You just go out and say, well, you're spending $1,200 on your prep with 10x you then get your cDNA, put it on an oversea and degrade that data to about 20% of the value, all of that isoform landscape is restricted. And if you're doing cancer, which probably 70% of that market are or immuno work, you've got to see the whole picture. So it's pretty simple for us to go in and say, you've got a bunch of these cDNAs in the freezer, that you've not smashed a bit to put on the alumina machine. Let's have a look at them with you, as Gordon says, with the P2. And then quite rapidly, these people have got hundreds of samples, which means that the model then for the P24 some of the larger packs that we have around that are coming through and being really focused around campaigns. We know where those top 200 10x users are and the teams are all on the hook for going out and communicating with those people.

Time for one more. Got a microphone. Another Q&A session later, so we'll get to.

James Gordon from JPMorgan. It was just one question actually on further innovation in the actual sequencing technology. So is it fair that you're largely now sort of done on detailed accuracy, speed and maybe even getting there on price, and so lots of it now is just about, I say just, but it's about getting people to use it in commercial applications or making it easier for people to use it? Or is there actually more to do on the innovation? Is there further things you're going to be able to do with the technology that are going to be important?

Perfection is the enemy of progress, no doubt, but we are not done. We will deliver the most comprehensive, the most accurate genomes, T-2-T ultimately on 1 flow cell at $100, then we think we might be done. But then we're going to introduce a voltage ship and do that in an hour for $10. So we won't be done until we have highly polished complete genome. In Singapore, I said to somebody, what happened 20 years ago, and somebody put the hand up and said that was the first genome was mapped. A customer stood up and said, that's a draft genome. We've had a draft genome over 20 years. So we're nowhere there finished, we're just starting on this.

Well, we've got time for 1 micro question, 1 minute left on the clock.

Blanka Porkolab from Barclays. Kind of going back to a previous one around Illumina. And obviously, they've been facing some challenges lately. I guess it would be great to know, have you benefited this in any way in terms of hiring or winning contracts or customer acquisitions, particularly on the S3 side?

Rich, do you want to take that one?

Yes, I can -- Obviously, again, it's unfortunate, I think, that things are so unsettled over there, but it has meant that we've got many people in the room here who've joined us over the last 6 to 12 months from Illumina. We're bringing in the best and the brightest people who unfortunately for them, have got a bit frustrated over there. And I'd probably refer back to the slides, things like the NIHR BioResource. A lot of the PIs involved in that were actually in the forerunner of Genomics England. And they can see now that for neurological conditions, you just don't get a full enough picture and came to engage with our local U.K. team and push that through. So there's a combination of market awareness and understanding of the capabilities that we're bringing and yes, we're also bringing in top talent at the moment.

Fantastic. Well, I think that's all we've got time for now for Q&A, and we've got a customer panel coming up right next. But thank you very much indeed. So you've heard about the Life Science Research Tools market that foundational phase of discovery, things that are happening even over the road at the natural history museum where they're using Nanopore biodiversity and consultation research. So across the road, the other side at Imperial where they're looking at biomedical research and discovery. And you've also heard about our intent to drive uses in clinical settings that drives both growth and, of course, the impact that everyone in this world, I think, wants to see. So from discovery to impact from bench to bedside is driven many times by pioneering scientists and clinicians and people in business. And we're really lucky today to be joined by 4 people leading in the areas that we've highlighted as focus areas for us, so cancer, human disease and infectious disease. So firstly, we're going to start off with an infectious disease session, and I'm really happy to welcome to the stage Mark Miller, who's EVP and Chief Medical Officer of bioMérieux; and also Jonathan Edgeworth, whose consultant microbiologist at Guy's and St Thomas' Hospitall. Great. So I don't know how many of you are very familiar with bioMérieux, but just a few quick stats about bioMérieux. So it's a world leader in the field of invitro diagnostics since 1963. And with products being sold in more than 160 countries and about EUR 3.6 billion in revenue in 2022. And a lot of work is around infectious disease, determining the source of disease and consumer safety. You may have also seen this morning that we announced a strategic investment from bioMérieux, which is really strengthening the collaboration between our 2 countries. Now Mark is not here to talk about the transaction, but he is here to talk about the relationship that our 2 companies have. So really, we start off thinking about the complementary elements of our 2 companies, how we work together. So in April, we announced that we were building a collaboration to bring in-vitro diagnostics to market in infectious disease. So -- why is this partnership exciting? And how are the 2 companies complementary in that market?

Thanks. It's a great pleasure to be here. We're very excited as a company to be here. I'm very excited personally to be here. So thank you for the invitation from everybody. So yes, for those of you who don't know bioMérieux, you heard the statistics, but we make IVDs. We make in-vitro diagnostics that have gone through regulatory pathways and every test is associated with the patient, every test result effective patient, patient management, patient diagnosis. So why are we interested in Oxford Nanopore. It seems obvious to us anyways, we have all of our success really based on innovation, innovation that brings kind of revolutionary technology to patients. We always look for things that are faster, give more actionable information and are easier to use. And all 3 of those, we look for impact. You saw on the video impact, we always look for patient impact. It's my job in medical. Medical affairs is to look for that patient impact or healthcare system impact. And so it was natural that as we look in the revolutions and the technologies that have brought success to bioMérieux. So automating blood culture systems, automating susceptibility testing, MALDI-TOF mass spectrometry, where the pioneers of syndromic highly multiplex PCR that the next evolution or revolution in clinical microbiology, we see as Oxford sequencing, Oxford Nanopore sequencing. And so it's natural for us to be then take the next step and to want to collaborate and to develop products that really start impacting patients in infectious diseases. And so that -- it's very natural. To us, it's natural. It's very complementary. You have the technology, which is really astounding and very, very much correlated with impacting patient care. We have the knowledge of how to bring IVD products to market regulatory pathways, medical affairs, KOL interactions, evidence generation and all that's required for maximum market access. And so the 2 are very complementary and very exciting.

So you've talked about some of the elements that are involved in bringing products to market. It's obviously a very complex and a very nuanced process that takes time and skills. So where are the sort of the headwinds and the tailwinds in terms of bringing infectious disease tests to market that changed market dynamics.

Yes. I mean, there's always challenges and especially in IVDs. There's an ever-increasing complexity of regulatory pathways, which also now have become geographic. There's also geographic specialization in regulatory pathways. We also have to do a lot of evidence generation to show medical and economic benefits. So just being the latest, greatest technology is not good enough, whether it's a diagnostic, a vaccine or a therapeutic. You have to show that there is a real impact medically or economically on the patient or on the healthcare systems. So we have to do a lot of that evidence generation, a lot of interaction with stakeholders, patients and caregivers. Then there is also this competing centralization and decentralization of labs that's going on, which we have to deal with. Some tests are better suited for point of care. Other tests are suited for reference labs and there's in between as well. So we have to deal with all of this. And all this leads to a complexity that means that we have to -- that of experience in bringing these products to market.

So we were talking earlier about TB, and I know this is something that you feel very passionate about. And we are all very aware of the specter of antibiotic resistance that's Illuminati. I think it's been 10 years since the AMR report -- the one report came out. And one of the things that we know about is obviously understanding drug resistance is key to being able to manage it. So we've spoken about TB being one of the projects that we're working on together. What is it around the challenge there and potentially the solution that's exciting you?

So that's probably one of the most exciting projects, certainly, personally, but also business to business. If you look at the statistics today, so just in general, antibiotic resistance, which we're very graciously less affected in Western Europe and North America. But in Asia and Africa and Latin America are absolutely horrific. And so when you look at the statistics, there's about 5 million people every year that die related to antibiotic resistant infections and about 1.3 million that die directly from it. Now I'm not minimizing COVID. COVID killed about 20 million people, but it killed 20 million people over about 2 to 3 years. This antibiotic resistance kills 1.3 million people directly each and every year and it's growing. So antibiotic resistance is huge. 80%, 85% of what we do at bioMérieux is related directly or directly to antibiotic resistance. And if you look at tuberculosis as a particular case, it's very frightening. So every year, I know, again, we're less touched by tuberculosis in the west. But in the world in general, mostly in developing countries, there's 10 million new cases of TB every year, 1.6 million of those die, of the ones with cases and the ones who die, 10% of those are children. And when you look at the -- even the treatment, 20% of drug resistant tuberculosis, which is a huge problem requiring 1, 2, 3 years of treatment and 3, 4, 5 different drugs okay, that occurs in 20% of people who failed treatment. So these are numbers that are absolutely staggering in terms of the number of people and the number of tests and the amount of drug resistance. Today, it is so difficult to diagnose drug-resistant tuberculosis. It takes 4, 5, 6 weeks to determine the entire susceptibility profile, to find out who needs additional drugs. There's a lot of treatment failures related to that. And we can do that together between bioMérieux and Oxford Nanopore, we can produce results in about 2 days instead of almost 2 months sometimes. So this is very dramatic. And again, if I go back to my first statement impact on patients, you can imagine what the impact on patients is, young or old with tuberculosis if we can tell that they have drug-resistant or drug susceptible tuberculosis in 1 or 2 days instead of 6 to 8 weeks.

That's really amazing and talks back to the impact point that we were talking about for I'm sure you'll get some questions on that, but I just want to quickly ask Jonathan. So Jonathan to us is not only a consultant at Guy's and St Thomas', but also works with [indiscernible] to make sure that we can deliver this impact and this commercial opportunity not only in the U.K., but globally and in helping us to understand exactly what you've spoken about, about how healthcare providers need to think about these problems. So I know you'll do really exciting work in respiratory metagenomics, particularly with the intensive care setting. And I wonder if you could quickly tell us a little bit about that.

Yes. Thanks. So I've been working on Nanopore sequencing and metagenomics for about 5 years now. Metagenomics is when you take clinical samples and you essentially sequence all the organisms in those samples. What's unique about Oxford Nanopore Technologies, that's within 6 hours. So you can provide those results back to patients to clinicians on the ICU on that same day. So we took that research. And for the last 3 years, over the winter seasons, we've been providing metagenomic pilot services for patients coming in who are ventilated with severe community and hospital acquired pneumonia. And the clinicians send us the samples on the patients they're most concerned about in the morning and then in the afternoon on a ward round or whenever the results arrive, we'll go down at the bedside and provide those results to clinicians. So we've, frankly, been quite astounded at the impacts we've seen. So it's not just the results from culture that we rely on for our day-to-day practice, but we find additional and previously undetected hidden organisms, perhaps things that are skewed by antibiotics, things that we weren't looking for. And that has a significant impact for patients. So actually, on the day we came back with those results, we can change the antibiotics in almost half of patients you either put them on the right antibiotics because they're not or you can stop the antibiotics that they don't need, as Mark said, and that limits the pressure of antimicrobial resistance. But the thing is because it's a sequence-based test, you also identify the antimicrobial resistance determines and the virions factors in the typing. So you have information not only for patient care, but you sort of get free as a secondary use case. Genetic information that helps with AMR surveillance and pandemic preparedness. So this is all coming out in publications at the moment, and we've shown that data to NHS England and UK HSA. And they, too, can see quite what a revolutionary impact that could have for patient care, but also I think they're interested in the AMR surveillance and pandemic preparedness. So because this sequence data can be immediately transferred, not only for a clinical report, but it could be collated national and even internationally. So you have a real-time identification of the genetic AMR determinants. So even from a biosecurity or from a natural pandemic preparedness perspective, you can be sequencing novel things and get a really rapid view of what's happening. And of course, pneumonia, sepsis, antimicrobial resistance and surveillance pandemic preparedness. These aren't just in the U.K., these are global issues. So we are also sharing results and sharing our protocols with labs in Southeast Asia, in U.S., Europe and elsewhere. And they are working with us to do similar things. And I think what's going to be exciting now is to see how we can bring all that data together and see how at a sort of a national perspective, we can -- an international perspective, we can link all that data together to achieve those goals.

Before we take other questions, I think it's really interesting, we were talking earlier about both Mark and Jonathan hold post in industry and in academia. And it'd be interesting to hear why did you pursue an industrial career now after a long clinical career. What's the difference that, that makes?

Yes. So Genomic Healthcare is the future. And there is a limit, actually, frankly, to what you can do as a full-time clinician in a hospital network, even albeit 1 as proactive and innovative as Guy's and St Thomas' Hospital. If you really want to see that global impact and to spend time bringing people together, for example, this metagenomic service, we're looking at advanced stage of discussion with U.K. HSA, NHS England about rolling this out around the U.K. If you want to be able to do that and go globally and really see that industry multiplier. In fact, you have to bring industry and academia together, and that's why I've done that.

Fantastic. We've got time for 2 quick questions before we welcome you to the stage.

So I'm talking about the infectious disease market and the benefits of sequence fast, really, really high multiplex. This actually seems a lot like your BioFire platform. So how do you see that complement versus maybe cannibalize? I mean, like -- why did you go forward with that with this considering like it does seem to be a lot of the same exact kind of advantages?

Yes. It's actually not cannibalistic at all. We see it as very complementary and additive. So there are applications, and again, I think Gordon said it very well. I mean people find the value in the products when they come, and you'll see that sequencing has very specific applications, which are very high value. So epidemiologic typing of organisms for outbreak investigation and for tracking like with SARS CoV-2, but also there's -- you can see there's going to be a lot of sequencing involved in tracking other pathogens and global bio-preparedness, like dengue and influenza, et cetera, et cetera. But for routine testing or routine multiplexing PCR, which is extremely fast, we just launched the platform with 12-minute results multiplex it's good enough for that application, and you don't need to go to sequencing for that particular application. Sequencing is great for unknown infections by rare organisms. It's great for tuberculosis where it just takes too long with standard of care. So there are applications which become very apparent that sequencing is best, highly multiplex PCR is best, culture is best. And we see this as very complementary and additive.

And another one for Mark for me as a follow-up to the previous one. So looking at the multidrug-resistant TB assay that you're working on together, is there a number of targets, let's say, above 70, i.e. the make NGS cheaper than BioFire Multiplex? and on the previous point made, could we see a panel similar to yours, let's say, on the respiratory side using Nanopore Technology that could eventually come at a lower cost, even if it's at the expense of time.

Yes. I mean, that's a good question. And you have to ask for the particular application, which technology is best. And I was talking about that during the break is what is good enough -- good enough to help patients without doing too little and too much. I don't think that with multiplex PCR you were going to achieve the degree of confidence in tuberculosis and tuberculosis resistance that you will with Nanopore Sequencing. Nanopore Sequencing gives you a vast number of genes and mutations that are relevant for antibiotic resistance on the most commonly used drugs, most first-, second- and third-line drugs, which we cannot obtain right now with multiplex PCR and we are not going for. So again, it's very complementary, but no, I don't see them as competing a BioFire panel for TB resistance and Oxford Nanopore Sequencing. We've decided that -- this is the solution that labs need and the one that's going to benefit patients the most with that impact we're looking for.

Well, thank you very much. Now for the second half of our panel, I'd love to welcome Danny Miller and Andrew Beggs to the stage. Danny Miller as he appears now is pioneering human genetics at the University of Washington and Seattle Children's Hospital. And Andrew Beggs has joined us from Birmingham for one of the U.K.'s biggest cancer hubs, where he is a Professor of Cancer Genetics and of course, surgery as well and do some really, really exciting projects. So welcome. Thank you very much for traveling from [indiscernible] Seattle to be with us here today. So Danny, we'll start with your work as a clinician and a researcher in the human genetics space. So you see a lot of children with really hard diagnosed disease. And obviously, those families are going on a very difficult journey. Could you share with the audience perhaps what that generally looks like and how Nanopore's solutions can start answering some of those really difficult questions.

Yes, of course. So as a clinician, I see the world of clinical testing from the clinic room, right? And that -- it's really a broken system where we do a test, if we get a result back, we do another test, we get a result back and that can take years to do. The basic idea is to use a new technology, long-read sequencing Nanopore sequencing to replicate everything that we do over that 2- or 3-year period in a single test. It increases access for patients. It reduces barriers to accessing comprehensive testing and it gets kind of those treatments to those families to those individuals much quicker. So everything that we do now in clinical genetic testing can be replicated with a single test with Nanopore sequencing. That's really the vision.

And how does that make a difference to the whole patient journey and perhaps the sort of some of the economics of the system as well?

Yes. I often like to say that the future, what I see is that you could actually offer all other types of clinical testing for free. You could do short-read sequencing for free, you could do an array for free. You would still choose to do long-read sequencing because it's so much more information rich. You save money in the lab. You save money as far as clinical visits go that make up for that difference in cost, right? Because the complexity of analyzing short-read data of analyzing methylation data, things like that as it's complex, right? So when you simplify it with long reads, it saves cost to the system.

Can you see the diagnostic odyssey that long pathway shortening in the future with that then?

Yes, I can see it shorten into the couple of hours after the kid that was born and they may have symptoms with some disorder. You sequence them basically in real time, you get an idea of what's going on very quickly. That 6- to 9-hour window in the NICU becomes accessible.

In fact, your paper showing a 3-hour diagnosis recently was really quite well received within the scientific community, wasn't it?

Yes. We sequence at 3 hours from birth. We knew what he was at risk of having -- so we did a whole genome sequencing and targeted analysis to show they didn't actually inherit the variance, it was at risk of having.

3 hours, quite something. So A lot of your work that you're really famous for, especially within the people who work for Oxford Nanopore, who think it's just fantastic, is around adaptive sequencing at a sampling when we're able to because we've uniquely got this real-time data streaming, we're effectively able to zoom into either a molecule of interest or genetic region of interest through electronics rather than through sort of pre kits that pulled down those regions. So, how has that impacted your research in human genetics?

A couple of ways. I'll say, first off, I always think about long-term just whole genome sequencing is probably the easiest simplest way to go. But in the short term, how can we get Nanopore into the clinical testing environment. I think adaptive sampling as a way to do that because we can replicate some of these panels, cancer panels, immunology panels, things like that. And we can see the entire gene, and we can get an idea of what structural variance look like. So these complex rearrangements that were talked about that make up a large fraction of disease-causing variants that we really can't see using short-read based approaches. I think that gets the technology into the clinical lab. And then once it's there, we can build on that and expand into things like whole genome sequencing and analysis. And then I could see ideas like methylation profiling, identifying diseases, viral diseases, things like that, just kind of as an aside, when you have this technology. I don't think you need adaptive sampling for that, but I think it would be helpful in that regard, too.

So you've mentioned methylation. You've obviously Rosemary and Gordon and Rich have all spoken about methylation being a key differentiator for Nanopore because you get the methylation data in real time for free. And whereas with other technologies, there are other sort of complex procedures that you have to go through. And I think Andrew, you've been doing a lot of work in pediatric cancers with methylation, haven't it'd be really interesting to hear about that.

Yes, that's correct. So -- we serendipitously discovered that Nanopore is not only good to long-read, it's also good a short-reads. And it's also very good at methylation on short reads. And so we have developed an assay system where you can profile circulating tumor DNA from patients, in this case, children. And it's as part of a larger collaboration, cancer research in care funded what's called the National Stratified Medicine Pediatrics Project, 1 and 2. And the latest version of the project will mean that every child eligible with cancer in the U.K. will undergo whole genome sequencing of their tumor, but also my lab sequencing of their circulation [indiscernible] DNA. Now the reason methylation is important is because it allows us to distinguish being tumor types. It allows us to do disease monitoring. It allows us to look at drug resistance as well interestingly. And we can do that by looking at the pattern of methylation. So in the past, we would have had to biopsy children very in especially brain tumors in order to get a diagnosis of what the brain tumor actually is to treat it. And now we can do a liquid biopsy and get a brain tumor type. We could see CSF as well [indiscernible] fluid, which although other technologies can do, it's just not as fast, we can go from getting the sample from a patient, and we can generate a library within -- I mean as we said 1.5 hours, actually, we think [indiscernible] quicker than that, probably like 30 or 40 minutes in our lab. And we can get on to the secrets and we can have an answer usually by the end of the day. And the other key thing about it is the volumes of plasma commercial methylation assays. I'm going to mention it GRail, they need 30, 40, 50 mL of plasma our assay can use 2 or 1. And we can put 2 or 3 milligrams of input into the assay and generate just as good data. And unlike assays like the one I just mentioned, it's not as broad. Those assays aren't as broad. They've got a limited panel, the Nanopore assay is a shotgun assay. It covers everything that's in the DNA sample. And so the amount of information we get from it, we don't just get methylation, we get structural variants. We get motive analysis. We get fragrantomics. We get copy-number variance, and it mirrors what we see in the tumor. So it's really exciting. And actually a final thing that I presented at Children [indiscernible] last week their national conference is we can detect mutations and structural events, so we can detect neoantigens in plasma to design tumor vaccines for children with cancer mRNA vaccines like Pfizer, and that's all come from this Nanopore assay. For us, it's been an enormously transformative technology, and it's really gotten limited potential.

Well, methylation, Danny , I think it's not just of methylation is very associated with cancer. We get a lot of information, but it's also important in human disease, isn't it? So how is that influencing your work?

Yes, many human diseases have biplation signatures. So you can look genome-wide and you can say, is this pattern consistent with other cases that I've seen before. There was a slide about the Epic array, which has about 800,000 CPG sites there's 44 million in the human genome.Why aren't we using all of those? So using Nanopore we can actually see all those, and we can build better classifiers for methylation.

Fantastic. And how will that play out into -- potentially into future practice as we move from that sort of that bench to the bedside process.

I think I see it in a couple of ways. The first is it increases confidence in a call. So you see a variant in the gene that may not -- you may not have enough evidence to call it pathogenic or likely pathogenic, but then you have the methylation model that supports that diagnosis, so it can help elevate that variant to the category that you want. I could see it as lower coverage genomes get you to an answer quicker. So you can imagine a situation in which a newborn is having symptoms of a disorder within an hour. So you have enough data at the methylation level to actually get an idea of what the diagnosis is or could be. So it kind of supports this earlier return of results for families and for clinicians.

So thinking about turnaround time and Andrew, you've spoken about this in your research about how important having those answers quicker is -- what does that -- how are you thinking about turnaround time and part of that whole clinical pathway. It's obviously not just about the sequencing, but it's about where the device is and how the workflows are and what the skills are to use the technology. So the work that you're doing, how does that build foundation for sort of easier access to cancer diagnostics?

So we do tumors as well as plasma. And one of the advantages we found of Nanopore is a conventional alumina-based prep and one where you need to do methylation with by sulphide conversion can take you all day. The Nanopore is the same assay. We don't really need to do anything, which is use the ligation kit. We put it in. I mean, we do have a few tweaks and you add it to the flows just works. The other advantage is, yes, you can get a massive P24 which is not that massive. I mean we just had a NovaSeq installed in our lab and react to had floor reinforced, whereas the P24 sits on the bench. And it's very -- but we've just bought a P2 solo. And it's extremely useful. We can put it on our arm. We can take it to places. We can bring it to the patient. Others have used in the operating theater. But we -- I mean, one of the other things we can use it for is we could take it to pediatric clinics is cancer diagnosis. There's really no limit to it, and it's the portability, but it's also the speed of reagent preparation, analysis that's advantageous for us.