NanoString Technologies, Inc. (NASDAQ:NSTG) Q3 2022 Earnings Call Transcript

Dan Brennan: Great. Thank you. Thanks for taking the question guys. Maybe just starting off with the updated guidance for the year, fourth quarter arguably still looks a little steep. Just walk us through the visibility, particularly in GeoMx and we’re getting to like 12 million to 13 million in revenues versus 9 million, a little over 9 million this quarter. Just give us a sense, it looks like placements are expected to double sequentially. Is that about right? Just anything on what’s implied for GeoMx in fourth quarter and kind of what’s the visibility there?

Tom Bailey: Yes. So, I would €“ the fourth quarter Dan, that $12 million to $13 million range also is inclusive of the 5 to 10 COSMIC systems that we expect to ship that Brad mentioned in his scripts. You have to consider that when looking at that range. I think when you do that, you’ll see that the range that we’ve established for GeoMx is a conservative range that assumes that the bottom-end of the range that pulls through, it’s about the same as we saw in Q3. And at the top end, what you would characterize as a typical sequential improvement, which for GeoMx has been about a 15% sequential improvement in pull-through. That will be the top end of our range, which is still lower than the old range that we had before. So, I think that the new guide that we’ve set up incorporates those factors and we feel confident in the place that that for Q4.

Dan Brennan: Got it. You guys talked about China and emerging biopharma in some of the remarks. Just can you remind us like how did China do in the quarter? And how big is that emerging biopharma business for you since you’re, kind of citing that as a weak point?

Brad Gray: Yes. So China underperformed its plan during the quarter. Tom may have the exact year-on-year numbers. China represents about 5% of our overall revenue for the company. Small biopharma represents about 15% of our overall revenue for the company, but we also cited that large biopharma, at least on the consumable side, has also underperformed and that makes up about another 10% of our business. So, I think we €“ this was not the only factor that impacted our performance, but we do have €“ when you add those together, 25% to 30% of our business exposed to markets that are, you know, facing the challenges.

Dan Brennan: Got it. And then when you think about CosMx going into 2023, obviously really strong order book, a lot of momentum there. Like how do you see, I guess maybe since you put throughout the 40% to 50%, how much does that assume additional CosMx orders in the first half of the year they can install? Just wondering, you got a lot of momentum right now, which is great and hopefully that is sustained, but obviously, there’s a lot of Xenium’s coming out and you’ve got vision that’s on the market and you have others that are coming, just wondering kind of what you baked in for kind of additional order conversion as we look ahead into 2023?

Tom Bailey : Yes, I got it. I’ll repeat that we’ll guide in February, but I think that we built that 40% to 50% range, Dan, not a conservative assumption on what we would expect orders to be for CosMx next year. So, you do not have to make a growth assumption on CosMx’ orders to get to the revenue range, growth rate range that we articulated in 40% to 50%.