Sri Ryali: So the current guidance does not contemplate additional milestones from Nestle, although that could be potentially in play. In terms of your question on the $7 million, both of those were upfront payments related to deals. So those are onetime payments that we don’t expect to continue because those deals don’t have additional milestones beyond those. Now with Aldevron, there are royalties that are tied to sales of HiCap and those should show up in our revenues over time as well as Aldevron launches that product.
Evan Stampler: Okay. All right. That makes a lot of sense. So the right way to think about it is that your guide for this year is at the midpoint, $20 million. I want to take the $7 million out from the upfront payments to kind of get my baseline. And then I can embed some sort of just growth plus potential for Aldevron royalties. Is that kind of the right way to think about it?
Sri Ryali: I think that’s fair.
Evan Stampler: Okay. Cool. I’ll pass it on. Thank you.
Operator: Thank you. Our next question comes from the line of Steven Mah with TD Cowen. Please proceed with your question.
Steven Mah: Great. Thanks for taking the questions. Just a few follow-ups here. On the T4 ligase deal with Roche, how much of the product guide is Roche product sales from their NGS kits? Or is just going to be all upfront?
Kevin Norrett: The deal is strictly upfront and structured in terms of an out license, it’s really much more of an asset purchase. So the deal was more upfront and technical – our tech transfer milestones associated, all recognized in 2024.
Steven Mah: Yes, sorry, I might have missed it. I would have some connection difficulties. But – so there’s no royalty rate with the Roche ligase deal? It’s just a basically out-licensing it?
Kevin Norrett: It’s just straight upfront, Steve. Yes. Yes.
Steven Mah: Okay. No, understood. I appreciate the color. And then last one. On the product revenue guide, can you remind us if there’s going to be a contribution from Aldevron in terms of royalties? I know there’s kind of an upfront component. And also, on the double-strand RNA ligase, if there’s going to be any product revenue contribution in 2024? And then also, can you remind us what the expected TAMs of each of these new opportunities are?
Kevin Norrett: Sure. So from a revenue standpoint from Aldevron in 2024, they are already selling in the marketplace in terms of an RUO version of the enzymes which we have today. So we’re expecting a – I think what we said before is the high double-digit royalty associated with that. And we’re just starting to see that come through in 2024. With regards to 2025 and beyond, we’re expecting them to move into a GMP version, where it’s also a very healthy royalty associated with that from a product revenue standpoint. And then the second part of it please. Double-stranded RNA ligase, we actually are getting very close to having some early customer orders associated with that ligase. We’ve been out there testing in the marketplace.
If you recall, we were talking about first half of this year with early access customer testing. Some of that has gone well. And we are looking to make that more widely available in the second half of this year. So we expect some contribution this year in terms of the double-stranded RNA ligase sticking on point with the second half of this year. And then in ’25 and ’26, certainly growth beyond that.
Steven Mah: Okay. Great. And can you remind us what the expected TAMs of HiCap and double-stranded RNA ligase are?
Kevin Norrett: The TAM for the HiCap RNA polymerases in terms of – it’s probably somewhere in the $200 million to $300 million range in our conversations with folks, the large players there have a good handle on that, and that’s sort of how we model the deal specifics. As regards to the TAM around the RNA ligase, it’s tied to where we are from a phosphoramidite chemistry standpoint and siRNA build-out. Remember, this has a significant impact in terms of cost reduction. You got phosphoramidite chemistry gets very inefficient in the longer strands of siRNA over time. So being able to stitch these together when you’re talking about 5, 6, 7 mers to be able to get to a 21 mer is very effective. So I don’t have a number to provide you around the total addressable market there yet other than to say it’s growing with the siRNA market and expanding precipitously.
Steven Mah: Okay. Got it. Do you have any sense right now for the phosphoramidite chemistry market right now for RNA?
Kevin Norrett: Well, we’re projecting that there’s – back to our projections, 400 products in clinical development, growing from somewhere around 1,000 kilograms today to 30,000 kilograms by the end of the decade. So that’s what we use in terms of our thinking around the RNA ligase fitting into that potential total addressable market, assuming all those move through clinical trials and will continue to come into the pipeline.
Steven Mah: Okay, great. Appreciate the call. Thank you.
Operator: Thank you. Our next question comes from the line of Jacob Johnson with Stephens. Please proceed with your question.
Jacob Johnson: Hi, thanks. Good evening. Congrats on the quarter and the outlook. Maybe just sticking with the modeling question, Sri, just if we kind of use 4Q expense trends as a jumping off point, anything to call out as we think about OpEx trends in 2024, I guess, specifically, maybe around the ECO Synthesis investments you’re making?
Sri Ryali: Yes. Jacob, I do think that the Q4 OpEx is a good barometer for how the run rate will look like in 2024. We expect that base to actually come down a bit, but then be offset by some incremental investments in ECO, including in the ECO lab later this year. So I think that’s a fair barometer.
Jacob Johnson: Got it. Thanks for that. And then maybe for Kevin, you’ve partnered off the DNA ligase, the Nestle stuff, the RNA polymerase. Anything else kind of major on the partnering front? Or was that the kind of heavy lift? And maybe just along the same lines, is there anything else contemplated in guidance this year from any additional partnering activities?
