Pacific Biosciences of California, Inc. (PACB) Earnings Call Transcript & Summary

All right. Great. We're going to kick it off with our next company this afternoon, Pacific Biosciences. Before I turn it over to Christian, just a quick reminder if people have questions to submit them through the website. And with that, I'll turn it over to Christian.

Thanks, Tycho, and I'd like to thank JPMorgan for the opportunity to present in front of you today. But first, I want to go through our safe harbor statement to remind folks that you can get more information about our company on the website, and in fact, we might be making some forward-looking statements today. So please be aware of that, and refer to our website and the SEC website if you have further concerns or questions. I want to tell you a little bit about Pacific Biosciences. I joined the company in September of this past year, and we've made a lot of progress. So today, I'll talk a little bit about the history of the company and our technology. I'll spend some time discussing our fourth quarter results and looking -- I'll spend a little bit of time looking ahead into the future for the company. Pacific Biosciences is a global leader in long-read sequencing. We are fortunate to have technology that enables us to be the most complete and most accurate sequencing technology on the market today. We serve a broad array of customers, in areas such as human biomedical research, plant and animal sciences and clinical and molecular diagnostics. And as our platform scales and our costs come down, the opportunity to grow into a TAM of over $20 billion is right in front of us. We offer end-to-end solutions, from sample preparation through sequencing and data analysis. If you look at Slide #4, we have a complete technology, and some of the applications that we serve are de novo assembly. We are one of the leading platforms to assemble and basically create the initial sequence for species from bacterial and viral genomes to human and every other plant and animal in between. Our systems also offer exquisite variant detection. We have targeted sequencing capabilities. We're involved in RNA sequencing, and our systems are used at understanding the genetic basis of complex populations. We do this through an instrument and consumables. And so when you look at our revenues, we sell instrumentation and we sell consumables that are used exclusively on our instrumentation to scientists all around the world. One of the biggest breakthroughs -- if you look at Slide 5, one of the biggest breakthroughs that we've had in the last couple of years is the creation of what we call HiFi reads. And these reads are, in fact, we believe, transforming genomics. And what is a HiFi read? Well, our sequencing chemistry is extremely long reads. And so what we do is we take these extremely long reads and we're able to look at a single molecule multiple times. And this is unlike other long-read technologies that are, say, nanopore-based, for example. This is a technology that allows us to look at a single molecule multiple times at every single base. And what we're able to do is compile that information into a consensus accuracy or a consensus read that we call a HiFi read. And that HiFi read gives us incredible accuracy, which, in fact, gives us the best accuracy in genomics today. The system has -- these HiFi reads have very even coverage across the genome, from telomere to telomere. We can be very complete seeing the entire genome without a lot of biases or issues. And we are one of the only technologies that can give you very strong allele resolution and long-range phasing. So we provide information that other short-read technologies don't provide today. Recently, there was a study done by the precisionFDA that compared the error profiles of the different sequencing technologies out there. And as you can see down in the box, the PacBio HiFi reads were, in fact, the lowest -- the best performing, or called, the least amount of -- fewest errors of all of the other technologies that are out in the market. And this is really critical. This is what gives us our advantage over others in the market. In -- on Slide 6, in November of this year, we started shipping what we call the Sequel IIe system. This is a system that's really geared towards these HiFi reads, and it provides customers with a dramatic reduction in the cost of the data. The hallmark of this system is on instrument data processing, which reduces the storage requirements by up to 90%, and it reduces the data analysis time between 70% and 85%. And of course, it's enabled for the cloud. And what this really means is that the savings on a per genome basis can be as much as $700 for our customers. And this enables us to sell the system into labs that don't have the compute infrastructure or the budgets to be able to do sequencing with our prior generations of product. I'm happy to say that the launch went exceptionally well. And we shipped several of these systems during the quarter, and we expect the Sequel IIe to be the principal system that we'll be shipping in the foreseeable future. If you look at Slide 7, you can see that the Sequel II has been a very successful platform in the market, and we're seeing utilization of that platform accelerating. This is a chart that shows the cumulative terabases sequenced using the system -- and what you can see is, even in spite of the COVID-19 pandemic in 2020, we've had a dramatic increase in utilization. This is really important because we're -- we believe we're at this inflection point where the amount of utilization is increasing so quickly that we are -- as we grow this installed base, that more data is being generated, new applications are being discovered and this virtuous cycle, so to speak, will be beneficial to the company as we bring new applications to market down the road. Just to update you on some of our financial results from the fourth quarter. If you look at Slide #8, we had revenues of about $27 million, which was above our own internal expectation. And this was due to strength across the whole business. And one of the things we talked about on our Q3 earnings call was our concern with respect to the COVID pandemic and how that would impact our business. And in the fourth quarter, I'm pleased to report that we did not have a big impact from COVID, although we did have some sites that were difficult to install new systems in because of shutdowns and things like that. But we saw strength across both instruments and the consumables, which really get -- makes our outlook look pretty exciting. However, I do want to caution people to consider the fact that COVID still is a big risk for us, and we are working to manage our business through that, but I do believe that we have to be thoughtful as we go forward. You see the $27 million, though, was 41% growth sequentially. Our installed base is now over 200 systems. And we ended in a very, very strong cash position for the company, probably the strongest in our history, with over $318 million in cash and investments. And what this does for us is it gives us the ability to invest and expand as we go forward into 2021. On Slide #9, we were very excited to see that LabCorp is expanding their sequencing work using PacBio with the CDC. LabCorp is doing COVID virus sequencing using our platform, and they were awarded a contract to study the different variants of COVID-19. And I think that surveillance is going to become an increasingly important area in the United States, in particular, so that we can understand how the COVID variants are mutating, and so that we can be ready if there's any issues. LabCorp has created a very strong sequencing pipeline, where they're looking at up to 1,000 genomes per SMRT cell using our CCS reads. The reason why they're using our technology is that it basically enables them to have a very complete genome with very high resolution, and they can be very confident in new mutations as they are set forth. So this is very exciting for us to see, and LabCorp has been a great partner of ours for a long time. In -- just recently, we announced, on Slide 10, that the Darwin Tree of Life initiative, through the Sanger Institute, is expanding their instrument fleet with 7 new systems that were purchased and will be installed over the course of the first half of the year. They're doing this -- this program is really excited, they are -- exciting in the sense that they're trying to sequence all 66,000 species in the U.K., so the entire diversity of life in the United Kingdom over the next 10 years. The first plan is to sequence about 2,000 additional genomes over the first 2-year phase of this program. And in order to meet that goal, they needed to scale up. And we've been very excited about that relationship, and we're happy to partner with them as they explore the diversity of life in the United Kingdom. And this is also one of the reasons why -- where PacBio clearly is one of the market leaders is plant and animal genetics, and that's because of our long-read and highly accurate technology allows you to do de novo sequencing effectively and easier than with other technologies. So now I'd like to look ahead into 2021. 2021 is going to be characterized -- if I had to characterize it in a word, the theme would be expansion. We are expanding across the board at Pacific Biosciences because we see an incredible market opportunity in front of us. And we have 3 core objectives. The first is expanding our commercial reach, improving our footprint. We're also working to expand and drive our product development pipeline so that we can accelerate the development of new products and bring them to market sooner. And finally, and perhaps most importantly, we're really trying to improve and drive our collaborations with key opinion leaders in -- so that we can bring whole genome sequencing into the clinic. It's very clear that whole-genome sequencing using HiFi chemistry improves diagnostic yield, and we're working hard to make sure that we can have those proof statements as we start to scale up. But let me talk a little bit more about each one of these particular objectives. First, we're aggressively expanding our commercial growth. In fact, we're going to expand our commercial footprint over twofold over where we were in 2020. This is across the board. So we're hiring sales force in all regions of the world, in the United States. We're expanding into -- further into China, and we're expanding our presence in Europe. In fact, we're also adding infrastructure into Japan, for example, Australia, so that we can reach more customers and help them see why our technology is so useful and drive those -- and build those customer relationships. We also recently announced some expansions of our executive team. And the reason why we've done this is so that we can grow -- not we can grow our commercial organization, but we can also improve how we drive and we take more on inside the company as we expand our opportunity in front of us. And I'm really excited that we've hired a new chief commercial officer, a new chief operating officer. We've also hired vice presidents in various marketing roles to drive our understanding and depth in the market and help us uncover new opportunities. Finally, with respect to expansion on the commercial side, we're increasing our digital presence pretty dramatically. As you can imagine, COVID has taught us how critical it is to have capabilities to reach all of our customers through digital channels, and we'll be investing heavily in our digital channel to make sure that customers have ease-of-use with and interaction with our products, they can understand why our products are so useful in their research and also order their products, get served from a technical support presence. All of these different capabilities we'll be investing in, in the course of 2021. On the research side -- research and development side, we are trying to accelerate our product development. And one of the things that is very clear is that the company has a hallmark of improving this incredible long-read sequencing technology. The first systems were launched in 2010, and we've increased throughput over 10,000 fold. We've increased our read lengths over 100-fold. And we've accelerated that development over the last few years with the launch of the Sequel II system in 2019; the launch of HiFi chemistry, which I've already spoken about; and also now the Sequel IIe system, which we started shipping, we announced it in October and we shipped it in November. All of this is leading to continuous improvement in the Sequel II platform in 2021 and beyond, but also the development of new platforms that will have even higher throughput and the ability for us to reach ultimately into the clinical space. On Slide 14, I want to talk a little bit about why this clinical impact could happen with our technology. And one area to look at is kind of this rare and inherited disease diagnosis area. I've already indicated that our technology enables you to get a better diagnostic yield. But you might want to ask yourself, how big are these markets? Or how big is this capability? And what's interesting to note is about 1 in 10 individuals around the world are affected with some sort of rare disease. And there's over 8,500 Mendelian diseases. And with PacBio providing a more comprehensive and accurate genome, we believe that we can take advantage and really develop an application that will be essential for the success of the company in the future in the clinic. And we really do believe that by providing a more comprehensive view of the genome that we can push our technology into clinical whole genome sequencing and really help that become the future of medicine. Slide #15. We talk about a more complete detection yield -- more complete detection yields more diagnosis. And what we're trying to show here on this chart is that if you look through the history of biology over the last 20 to 30 years, you start with karyotyping, looking at craft chromosomal abnormalities, the actual solve rate or the ability to get a diagnosis when you see a disorder or a phenotypic problem was actually the solve rate was really quite small. And then came the age of arrays and short-read sequencing, which improves solve rates pretty dramatically from where they were. But now with long-read sequencing and a HiFi genome from Pacific Biosciences, we have the ability to be much more comprehensive, and therefore, increase the diagnostic yield pretty dramatically. Things like translocations and versions, repeat expansions, phasing, those kinds of areas of discovery are all really enabled by long-read sequencing using a HiFi genome, and other technologies really can't get there with that. One other opportunity we have, of course, is to consolidate some of these other testing methods because if you have the most complete answer with a HiFi genome by Pacific Biosciences, then what you can do is consolidate many tests into one, making the ability to diagnose and hopefully manage a disorder much easier. Slide 16 shows there are a number of partners that we're working with or projects that we're involved with that are pushing the technology forward and pushing the notion of improved diagnostic yield. For example, with Children's Mercy in Kansas City, they're working on pediatric rare and undiagnosed disease. There's a lot of different programs all around the world in this area, and we're just -- we're very honored and privileged to be serving these customers and helping in this desire to fundamentally improve health care for all. When I think -- when we look at -- on Slide 17, we are -- we want to kind of introduce the concept or the notion of the potential of a genome as a platform. With HiFi chemistry and our ability to improve diagnosis, we need to improve our fundamental sequencing platform so that we can create the scale required to create this notion of the genome as a platform, solving different disease conditions across different area -- parts of the one's life. In fact, we believe the whole genome will be critical to health care, much like medical imaging is today, we believe that will be the point in the future with whole-genome sequencing. In order to do this, we're focusing on all aspects of our workflow from automation to reducing our input amounts required, so we can access more samples on our more different sample types on our platform. We're working on the core sequencing technology, everything from how we load the samples onto our sequencer to the actual density of our platform so that we can more -- look at more single molecules simultaneously. And this is one unique aspect of our technology. We look at individual molecules of DNA with exquisite accuracy. And I think that's one of the key aspects of our technology that differentiates us from others. Finally, with respect to data analysis, there's a lot of opportunity to improve our data analysis capability, simplify the workflow, reduce cost, implement the reporting in the cloud. And you'll see us over the next several years, working all of these different areas to hopefully enable this concept of a genome as a platform. Finally, I'd like to talk about our collaboration that we signed yesterday with Invitae. This is perhaps one of the most exciting collaborations that we've entered into as a company, and we're thrilled to be part of Invitae's journey as they become the leaders in medical genetics. What we're trying to do is develop, and what we will do is develop a production scale, high-throughput clinical whole gene sequencing platform, leveraging our HiFi chemistry. We anticipate developing sequencer with a scale that's unprecedented for long reads and will enable us to deliver a medically relevant genome at prices substantially below $1,000. We believe that will help open adoption in routine medical care. And we also think that it will give Invitae the opportunity to dramatically scale their whole genome testing capability. The program will get underway immediately. And over the next few years, we will develop this sequencer together with substantial funding from Invitae, and then we will set up a supply agreement where we will supply Invitae with this technology so that they can implement it and really help change the future of medical genetics. And so we're thrilled to be part at that initiative, and we look forward to working with them. I'm sure we're going to learn a lot from them and contribute this incredible technology to their platform. So to summarize today, the hallmark of Pacific Biosciences is really our long-read sequencing capability. We are the leaders in the field, with the most accurate, the most complete sequencing technology. We launched the Sequel IIe system in the fourth quarter, and that's driving strong performance. It drove our strong performance in the fourth quarter, and we expect it to be a great product going forward into 2021 and beyond. Our collaboration with Invitae will help to deliver on the promise of routine whole-genome sequencing in medicine, and so we're thrilled to be part of that. And as I said, our commercial expansion will help us drive our growth in 2021 and really set the stage for a dynamic company as we look out into the future of long-read sequencing and genomics in health care. So with that, I'd like to say thank you for everyone's support, and I will open it up for any questions.

All right. Thanks, Christian. When we were talking before the presentation, you said the Invitae deal was the biggest in the history of the company, which says a lot. You had the Roche deal. I remembered you had the Gen-Probe deal back in the day. So maybe talk a little bit about how did this come about. Why are they the right partner? Are there things you can leverage from them to drive down costs further? I know they have singular bio in some of these businesses they've acquired, and they're paying a lot of the costs here. So just talk a little bit about that dynamic. What are they getting out of it at the end of the day?

Yes. Look, this is -- when I joined the company, I was introducing myself to some of our customers, and I met with the Invitae team, and they share the same vision we do that whole genome sequencing and clinical applications is really the path forward. And I think for PacBio, this could be our killer application, where we're uniquely positioned. Our technology is uniquely capable. And I think they saw the same thing. They have been working with us on an epilepsy cohort, so they're seeing how our sequencing technology works. And so they got excited about the notion of, "Let's do something really big together." And that was where their team and our team kind of say, "Yes, this is the right time." We believe we have -- we've had technology in development that's ready to get commercialized that enables us to be confident that we can develop a sequencer that allows us to operate at ultra-high throughput. And so the combination of those 2 things said, "Let's put this partnership together and we'll deliver this technology to you and give you the opportunity to really productionalize." We'll get from -- they will get an incredible sequencer that they can implement and hopefully move many of their different assays onto the platform. So they get whole genome sequencing capability at prices that are affordable and enable them to offer whole genome sequencing with 2 payers and others at prices that are hopefully reasonable for the market. And we'll also get access to learning about how to really operate in a highly productionalized laboratory. And so we -- I'm sure we will learn a lot from how to process samples in a high throughput sort of way. I'm sure there'll be opportunities for us to learn a lot on the informatics side because they have so many samples that they're already processing. And so I think there's -- that both parties bring a lot to the table and create this great opportunity. We both share the same sort of vision for where we believe the criticality of genomics in medicine going forward. And so that's why it made it an ideal time. And of course, for us, also, we have the opportunity to commercialize broadly -- more broadly over a period of time the platform that we develop. And so it's an exciting time for us, and we're thrilled to be working with them. They are an engaged, motivated team. And they inspire us, and I believe that we inspire them too. So really, really, really excited about it.

Can you talk more about the time line? Still a couple of years out to break that $1,000 price point. So how do you think about that, especially in the context of some of your competitors, Oxford, PromethION, I think, is below $1,000 now? So how do you think about the time lines and the competitive nature of breaking that $1,000 price point?

Well, I think the $1,000 -- I mean, I think the $1,000 price point it's just a number that we've all kind of said is sort of the beginning of the threshold where these technologies make sense in productionalized applications. And my expectation is that we will -- that this -- over the next couple of years, we will get that product -- these products into the market. And I believe that this scale that we're going to be working with Invitae on that will be able to drive prices substantially below $1,000. And so I think we said that in the press release, and my belief is that we will be competitive. But of course, one of the things I want to make sure people understand is that we want to start talking about the notion of the value of the genome, not just the price. And because our -- what we're bringing to the table is really a clinical-grade genome that others can't provide. And so the value of that genome will be different, I believe, than others in the market. How much different? That time will tell, and we will see. But I'm confident that we can deliver a product with high value at a competitive value proposition in this kind of time horizon, and that's what gets me so excited.

Are payers ready to pay for whole-genome sequencing in the clinic?

Well, I think it comes down to price first, right? I think -- and so I do think the prices will get to that point. I think there's a lot of structural issues that we -- that are still being worked through, everything from privacy and ethics to utility. And so I think that's why working with Pacific Biosciences and the accuracy and the completeness and all the richness of the genome that we provide gives us a unique position where the value proposition all of a sudden is different than history. The improvement -- the increasing diagnostic yield of the demonstration of increased diagnostic yield. In fact, if you can diagnose someone who's -- take a rare undiagnosed disease patient, who goes on a multiyear odyssey, the cost of the health care system is dramatic relative to the cost of a DNA -- complete whole-genome DNA sequence. And so for us, we have 2 things that we have to do. One, we have to develop the technology to get to the price point; but two, we also have to continue with these diagnostic yield proof statements showing the value of a PacBio genome versus others. And that's why you see us have all these other collaborations that are ongoing, for example, with Children's Mercy, to drive those proof statements. And I think that's going to be really important part of our strategy in '21 and beyond.

One of the other questions we got after the announcement is, is this kind of where the focus of all of your instrument development efforts are going to be? Or is there a different path for Sequel III? I mean how do we think about whether you'll have multiple systems in development over the next couple of years?

Yes, this is completely incremental. And so this is what's so exciting is that -- when I took the job, I talked to a lot of folks about, we need to develop a multiproduct portfolio so that we can provide the right product to the right customer in different parts of the market. And so this Invitae program, it will leverage our core technology, of course, and I'm sure we'll get benefits in both directions. But this is a completely separate product than the other products that we already had in development, and there's no plan, at this point, to slow any of that stuff down. And so that's why I -- Mark Van Oene, who's on the line here, he's our new Chief Operating Officer. And Mark is going to be responsible for ensuring that all of these products get developed efficiently and with a customer viewpoint in mind. And I think that's so essential having that customer focus with this advanced technology.

How do you think about the competitive dynamic with short read? When we asked Francis the question, he's responsible as where they're using a lot of AI and machine learning to start to fill in the gaps, and we'll have much better short-read technology that will basically make long reads not competitive. How do you think about that as a response?

Well, I think that they are an incredible company, with incredible technology and very deep resources. So there's no question about their -- they will improve their short-read capabilities over time, and I'm sure AI will contribute. However, we continue to push the envelope and push the ball forward too with increasing our accuracy. And then it comes down to the notion of, wouldn't you rather have a native read? Economics aside, wouldn't you rather have a native read versus a computed read? And if we can provide economics that get us in that same area, I suspect we'll be somewhat competitive with them, if not very competitive with them. And so I do expect them to continue improving. They're an amazing group of people. And I believe that our capabilities are really good. And I also believe that there are many complementary aspects of the 2 companies and the technologies. So for example, I believe that our clinical whole-genome capability will be -- give us the opportunity to really grow and develop that market, which doesn't really exist today. And of course, they have their own strengths where we don't really compete. So I think there's -- I think the notion of direct competition is -- I can understand why people think about that, but I do think there's a lot of complementarity. And if you look at our -- we're concentrating on our own business on how we grow from where we are today. So I appreciate that they're going to get better, but I like our chances.

One that came in on e-mail was just a question about technical breakthroughs that you may need to achieve to dramatically lower the price point, to speed up the polymerase, slow down the polymerase, for ZMWs. Can you maybe just talk to some of the technical hurdles?

Yes. Well, we keep improving all aspects of the technology. And the biggest increase -- the biggest improvements need to be around increasing the density or increasing the number of ZMWs, right? That's really where you get massive gains. And so we've got those projects well underway already, well before the Invitae deal. And so you'll see -- and that's really development, not so much innovation. You'll see us, at the same time, continuing to improve dye performance, polymerase performance, which will allow us to increase read -- allow us to potentially increase read lengths even more and so -- but still with the same HiFi accuracy. You'll also see us focus on us Poisson loading. That's always a big issue. How do you get every sensor with one molecule so that each molecule is sequencing properly and you get the most utilization as possible. That's a big -- that's a continuous improvement program is how I would think about it.

One of the most common questions I think we get is just about elasticity and what new markets are going to open up as you drive down price. Can you talk on that a little bit? You were talking about rugged. Obviously, the things like transplant diagnostics were as well established. But as we think about the next couple of years, what clinical markets do you think are going to start to get more interesting?

Yes. Peter, do you want to take a stab at that? Or do you want me -- I can go ahead back -- I thought I give you guys a chance.

Sure. Yes. Just, I mean, Tycho, you hit a couple of the -- I think the present killer applications that are either on market or new market today, we see further application -- or further expansion in terms of rare and inherited disorders. Unquestionably, that market really is a legacy technology market today between chromosomal microarrays and exome. So we see a huge potential for the market overall to shift to genomes. Once that starts to happen, looking at more whole-genome capability within reference labs, within large medical facilities, in general, gives a further opportunity, particularly as more long reads start to hit the market and draw more -- and elucidate more clinical utility, to think about building up menu on a whole-genome backbone. So that's still a bit out in terms of a couple of years in terms of realizing some of that utility. But I think for some of the areas around more common diseases like cardiovascular disease and various metabolic disease as well as neurological disorders, and Christian mentioned, I think, epilepsy collaboration that we've got with Invitae. So we see all those areas definitely representing some potential for us in the near future.

Awesome. I got 1 or 2 that came in for Susan. Starting to get myopic, but question on the fourth quarter. Can you talk to any sort of stocking component for consumables? And then how are you thinking about pull-through? And the 7 Sanger instruments that were called out, did those get recognized in the fourth quarter? Or are they going to come through in the first quarter?

Great question. So the fourth quarter was great for us. The revenue overall exceeded our internal expectations, and it was across instruments, consumable. In terms of consumable performance, it did exceed internal expectations. Some of it was due to higher utilization, as Christian had mentioned in his presentation, and some of it was stocking orders. So in terms of the consumable pull-through, it is higher than the normalized rate, averaging around 180,000. So in Q3, we talked about 160,000. So it is higher than that, but not -- there was some stocking up in Q4. And then you're right, we had a couple of customers with multi-tool orders in the quarter, which was great. It was a great quarter. We were able to recognize revenue at the level that we did around $27 million without draining the swamp with respect to our backlog. And then in terms of the Sanger order, there were a couple that were recognized as revenue in Q4 and the remainder in the first half of the year.

And then are you able to say how many Invitae placements there were? Was it kind of in the 4 to 5 years range? Or...

In terms of...

We probably don't want to say.

Okay. Okay. That's fair. Christian, can you just talk a little bit more about kind of the commercial scale-up? Are there still kind of key roles to fill in? And how is it going building out the sales force?

Yes. You know what, I'm thrilled. We've started building the executive team, as you see Mark and Peter here. But under Mark -- under, and particularly in Peter's organization, we've hired 3 other vice president level individuals in commercially focused roles who will help really drive us forward. We've also hired several of the sales force that we were talking about on the third quarter call. And so I think we're off to a really good start of more than doubling our commercial footprint in '21. So I think we're making progress. There's been a lot of excitement about the company. And so recruiting is -- has been easier maybe than in the past. But we still have work to do. And to get all of these sales folks productive, remember, it does take a couple of quarters to get everyone up to speed. And so our objective is to try to hire -- to front-load the hiring to the extent we can and -- but do it in a responsible way so that we hire the best. We give the tools they need to be successful. We train them properly, and then we're responsible about driving the business forward. And so you'll see hiring throughout 2021 in the commercial organization, probably more front-loaded on the sales force side in particular. So yes, it's off to a pretty good start, Tycho.

And you've done a great job signing commercial partnerships. You obviously had the Invitae deal before the deal this week and you've got a couple of others, Children's Mercy in Kansas City. Can you just talk to -- are these going to start to be revenue contributors over the course of this year? Or how do we think about any sort of financial impact?

They actually already are revenue contributors. So although they are collaborations and they probably get favorable pricing, they're still revenue contributing. So I would expect us to do more of these, and I think it's really important for us. So we'll be very focused on building great relationships with these people and giving them the opportunity to really push this technology forward. And -- but -- and I suspect they'll be scaling as well. And so we'll see that throughout '21.

Awesome. Well, I'm getting the signal from the tech guys. We got to wrap it up. I appreciate you taking the time. It was a great overview, and I hope you enjoy the conference. We'll talk to you on the earnings call.

Thank you so much, Tycho, and thanks to JPMorgan and thanks for all the support.

All right. Thanks.

Thanks, Tycho.