Phenomex Inc (BLI) 2020 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Berkeley Lights Third Quarter 2020 Earnings Conference Call. (Operator Instructions)

I would now like to hand the conference over to your first speaker today to Carrie Mendivil, Investor Relations. Thank you. Please go ahead.

Thank you. Joining me today from Berkeley Lights is Eric Hobbs, Chief Executive Officer; and Shaun Holt, Chief Financial Officer. Earlier today, Berkeley Lights released financial results for the quarter ended September 30, 2020. If you've not received this news release or if you'd like to be added to the company's distribution list, please send an e-mail to ir@berkeleylights.com.

Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated.

Additional information regarding these risks and uncertainties appears in the section entitled Forward-looking Statements in the press release Berkeley Lights issued today. For a more complete list and description, please see the Risk Factors section of the company's final prospectus filed with the SEC on July 17, 2020, the company's quarterly report on Form 10-Q for the quarter ended July 30, 2020, and in its other filings with the Securities and Exchange Commission.

Except as required by law, Berkeley Lights disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast, November 12, 2020.

With that, I'd like to turn the call over to Eric Hobbs, Berkeley Lights' Chief Executive Officer. Eric?

Thanks, Carrie, and thank you, everyone, for joining us this afternoon. I'm very pleased to welcome you to Berkeley Lights' first earnings call to review our results for the third quarter of 2020. I'd like to start today's call by thanking the amazing team we have at Berkeley Lights. As many of you know, we completed our initial public offering in July, raising approximately $188 million in net proceeds.

This achievement is a testament to our team's collective dedication and passion. Of course, I would also like to thank our founders, Igor Khandros, Bill Davidow, and Ming Wu for their vision. And finally, I would like to thank our long-standing investors for their continued support, and welcome all new investors.

On today's call, I will start with a brief overview of Berkeley Lights for those who are new to the company. Next, I will provide an overview of our progress during the third quarter, including some new workflow products we released. I'll then close with some thoughts on how we are approaching the future and where we are investing before turning the call over to Shaun for a more detailed look at the financials.

Starting with our top line performance. Revenue for the third quarter totaled $18.2 million, up $7.6 million or 72% for the second quarter of 2020 and up 16% year-over-year. Now before we dive deeper into specifics on the quarter, I'd like to remind you of our vision here at Berkeley Lights. We are a leading digital cell biology company focused on accelerating the rapid development and commercialization of biotherapeutics and other cell-based products. We envision a future where cells are a scalable and sustainable way to manufacture the products that we need to live a long and healthy life.

The Berkeley Lights platform is key to enabling this, and our goal is to become the industry standard across a cell-based product value chain. The markets that can be addressed by cell-based products are varied and huge, particularly in pharma, new and sustainable foods, agriculture and industrial materials. We are initially focusing on 3 markets: antibody therapeutics, cell therapy and synthetic biology. Collectively, these markets accounted for end market sales -- estimated [end] market sales estimated to be $148 billion in 2019, which are projected to grow to over $255 billion in the next 4 years, representing an estimated initial addressable market opportunity of $23 billion for Berkeley Lights.

But there are some big challenges making cell-based products, namely, our customers must understand and assess how cells perform and behave. In other words, they have to functionally characterize many single cells to find the best cells that make the products they need or display the function that they desire. Understanding the genomics of single cells is important, but it does not provide function; and without function, there is no product.

Finding the best cells requires analyzing the functions of single cells at scale. That's what we do. We find and deliver the best cells. That's our business. To find those best cells, Berkeley Lights has created what we believe is the most advanced environment for functional testing of live single cells. Next, we capture and interpret the qualitative language of biology, and then we translate that into digital information. This is the information used to select the best cells. This is what we call digital cell biology.

Now nature has demonstrated that cells are both a scalable and sustainable way to develop and manufacture the products we need. And although these cells are capable, they are also quite complex. And it's due to this complexity that we're just at the beginning of harnessing the capability of cells to produce these products. At this relatively early stage of commercialization, we have built an impressive customer list that includes industry leaders, including 8 of the top 10 largest biopharmaceutical companies in the world as ranked by 2019 revenue.

Our fully integrated end-to-end solution is comprised of advanced automation equipment: our OptoSelect chip technology, which allows our customers to isolate single cells; our proprietary assay reagents to perform these tests; and our advanced integration automation software that includes our operating software and our advanced analytics software.

Our platform enables customers to perform standardized and automated workflows with precise control over the environment, which enables functional testing of tens of thousands of live single cells in parallel.

We also have the ability to link the cell phenotype to the transcriptome, thereby creating what we believe to be the largest data cube for single cells in the industry. This data helps our customers select the best cells. Customers can gain access to our platform by buying or subscribing to an advanced automation system. Berkeley Lights is the only company commercializing a platform that can do this in a scalable way.

Our platform enables several key benefits for our customers. First, we increased our probability of success for making cell-based products by functionally characterizing highly biodiverse cell samples. Second, because our workflows are run early in the value chain, we believe we are the fastest path to value and revenue, potentially extending our customer cell-based product lifetime on the market prior to any patent expiration and increasing their return on investment.

Third, we are an enabler. Our platforms do things that are very hard to do otherwise, such as multiplex single-cell functional assays at scale, capturing rich data from precious cell samples, exploiting live cells or clonal cell lines and linking phenotype to genotype.

And fourth, we offer the fastest path to significant capacity with replicable distributability. Meaning we are able to qualify workflows in California, then distribute these workflows globally and execute these workflows in a repeatable fashion in any suitable lab on the globe.

For customers that already have a platform, deployment can be as rapid as a software update. For customers that lack a platform, we can deliver our platform and execute workflows in just days after install. And for customers that have multiple platforms across multiple sites globally, they can be assured that the same workflow is being executed at all sites.

Turning to our markets. We see 2 key tailwinds driving growth in our addressable markets. First, at the macro level, there is an increasing demand for cell-based products. For these products, wherever there is a gene edit or a desired immune response, functional validation is required. Functional validation is at the core of our product offering. The growing requirement to drive design-build-test learn cycles directly drives an increase in the number of workflows to discover, develop and manufacture cell-based products. And second, we are also seeing increasing complexity of the cell-based products.

Today, pharma companies are working to discover antibodies against hard to hit targets or other complex therapeutic modalities, including bi-, tri- or multi-specifics or cell-based therapies. The cell characterization is getting more complex as hard to hit targets require more precise assays at higher resolution. With a growing product complexity, manufacturing complexity is also increasing. This means workflows are executed at a higher frequency, thereby further increasing the demand for our products.

As this demand for functional validation grows, our customers are looking to accelerate their capability to develop and discover cell-based products, and we are delivering. Additionally, the growing complexity for making cell-based products is being addressed in a scalable way by the existing and growing capabilities of the Berkeley Lights platform. Parameter optimization, which is required to identify and deliver the desired biology, requires trade-offs among the many functions being analyzed and optimized through the discovery and development process. The required data to achieve this optimization can be provided from the Berkeley Lights workflows.

Now looking more closely at the third quarter, we placed 8 platforms of customers, which was up from 4 platforms placed in the second quarter. We saw an increase in recurring revenues, which were up 26% from last quarter and up 92% year-over-year. Growth over the prior quarter was seen across all geographical regions, with Asia leading new platform placements, followed by Europe and the United States.

Revenue was driven by strong demand for the discovery and development of cell-based products, especially for antibody therapeutic workflows. We continue to see capacity expansion in the industry, led by strong investment activity in the CRO, CDMO space. In addition, the trend of increasing functional single cell characterization continues to gain momentum, which is a key driver in our long-term growth strategy, and core to our mission at Berkeley Lights.

During the third quarter, we placed 50% of our Beacons at CROs and CDMOs, giving evidence to the global capacity expansion in our served markets and providing start-ups and smaller biotechs access to our technology. We were also excited to release Opto Cell Line Development 2.0. This new workflow enables higher throughput, provides assays for complex proteins such as multi-specifics, and acceleration of our customers' path to production cell lines.

This was a timely response to the growing capacity needs of our cell line development customers, resulting in the placement of 3 platforms in the third quarter of 2020. We also saw an increase in activity around T cell characterization with the release of several application notes to support our growing set of capabilities in this segment, resulting in the placement of 3 platforms in the cell therapy segment during the quarter.

In addition to our progress in antibody therapeutics and cell therapy markets, we were also making great progress developing the multiple workflows in the synthetic biology market through our long-term partnership with Ginkgo Bioworks.

In summary, the markets for cell-based products and the activities to develop them are growing. The increasing complexity of cell-based products, especially in biotherapeutics, is driving further demand for functional validation at a high degree of precision and automation. Millions of gene edits drive countless design, build, test, learn iterations annually, all of which require single cell functional tests.

Overall, this has been a very eventful quarter at Berkeley Lights. I'm very proud of the progress our team has made, and I am confident that we are well positioned to execute on our strategy going forward.

With that, I will now turn the call over to Shaun for more detail on our financials. Shaun?

Thanks, Eric. Total revenue for the third quarter of 2020 was $18.2 million, with $14.1 million in product revenue and $4.1 million in service revenue. Total revenue was up $7.6 million or 72% from the second quarter of 2020 and up 16% year-over-year. Looking at our 3 revenue streams, direct platform sales were $12.4 million in the quarter, increasing $4.9 million or 65% from the second quarter of 2020 and were in line with the prior year period. We placed 8 new platforms during the third quarter of 2020. Recurring revenue was $3.7 million or 20% of total revenues during the third quarter of 2020. This represents an increase of $700,000 or 26% over the prior quarter and an increase of $1.8 million or 92% over the prior year period.

During the third quarter, in addition to the new platform placements, we saw a resumption in campaign activity at certain customers over the prior quarter when some activities were paused. The year-over-year increase can be attributed to the growth of our installed base.

Revenue from joint development agreements and partnerships during the third quarter was $2.1 million, up $2 million from the second quarter and $600,000 or 43% over the prior year period. The sequential increase was primarily due to prior quarter revenue reductions related to a head start payment we made to Ginkgo and also due to our Ginkgo program resuming at full capacity during the third quarter.

Gross profit for the third quarter of 2020 was $12.8 million compared to a gross profit of $7 million in the second quarter of 2020 and $11.7 million in the same period of the prior year.

Gross margin in the third quarter was 70% as compared to 66% in the second quarter and 74% during the third quarter of 2019. The sequential increase in gross margin was primarily driven by the previously mentioned Ginkgo buydown in the second quarter. The margin decline year-over-year was driven by the substantial completion of legacy milestone programs, which carried a higher gross margin in the prior year.

Total operating expenses for the third quarter of 2020 were $21 million, a 32% increase from $15.9 million in the third quarter of 2019. The increase was primarily attributable to an increase in headcount and related stock-based compensation as well as other expenses to support our continued growth and build-out of the infrastructure needed to operate as a public company.

R&D expenses for the third quarter of 2020 were $10.4 million compared to $10.2 million in the third quarter of 2019. Sales and marketing expenses for the third quarter of 2020 were $3.3 million compared to $2.6 million in the third quarter of 2019. And general and administrative expenses for the third quarter were $7.2 million compared to $3.1 million in the third quarter of 2019. And finally, net loss in the third quarter of 2020 was $8.6 million.

We ended the third quarter of 2020 with approximately $237 million in cash and cash equivalents. This includes the net proceeds of approximately $188 million from our IPO in July 2020, net of underwriting discounts, commissions and other offering expenses. While we have not observed any recent negative changes in our business climate, uncertainty remains related to the pandemic. As a result of this uncertainty, we are not issuing any formal guidance at this time.

With that, I would like to turn the call back over to Eric for closing comments.

Thank you, Shaun. We are living in a fascinating time where biology, technology and information sciences have evolved to a point where we can edit cells at an unprecedented rate. Today, we can rapidly sequence cells and capture the program that controls life. We have the data and information infrastructure to process the large amounts of data that are being created. And through advances in gene editing, we can edit cells with high levels of specificity to insert new instructions into the cell's program in an attempt to change the function of the cell. But because cells express genomic information in a variety of ways that we can't accurately predict, we have little certainty that our edits will result in a function we intend.

The constraint that our customers face today is that they have to functionally test large numbers of single cells at scale to find those single cells that have the function they need to make the products they desire. But at Berkeley Lights, we're solving that problem by increasing our understanding of the behaviors of cells so that we can improve and accelerate this design, build, test, learn process as we move into the future.

Furthermore, because we offer standardized workflows, the same workflow can be executed at multiple sites around the globe. And because the data was created with the same workflow, the data can be amassed in a large cloud-based storage system. When this data is combined with machine learning and artificial intelligence, we will have the best chance in human history of programming a cell to do what we want it to do. This is the power of distributed biological processing. This is the power of digital cell biology. This is the power of the Berkeley Lights platform.

We believe there's a great future in digital cell biology, and we're just in the beginning. With that, we will now open it up to questions. Operator?

(Operator Instructions) I show our first question comes from the line of Tycho Peterson from JPMorgan.

Eric, you mentioned in the press release, cell therapy drove about 1/3 of the placements in the quarter. Can you just talk a little bit more about traction in that market and how you think about it going forward?

Yes. We believe there's a significant opportunity to grow our -- to allow our customers (technical difficulty) cell therapy as an attractive modality across many diseases. And we believe we can address their needs from a standard -- standardized, repeatable and efficient way. We do envision an omnipotent integrated cell therapy development and manufacturing platform with embedded quality control. To control the function of the cellular product (technical difficulty) providing a full [digital] record for each therapy that's manufactured. And as we're moving into that space right now, the discussions are ongoing. How do we (technical difficulty) that beachhead that we design in that market. And so with the (technical difficulty) into cell therapy just (technical difficulty) through 2020.

Great. And then thinking a little bit about just the portfolio, a couple of questions. I'm wondering if you could comment on Lightning, how you're feeling about the rollout. And any thoughts about just whether you could start to penetrate the academic market there?

Yes, certainly. For those who are new, I can break that on the call, Lightnings is our lower-capacity, less-automated way to access -- for our customers to access our technology. And really, the key type onto the ramp in line with these are some of the unique workflows that we have qualified on the system. In Q3, we released 4 application notes or kind of like sub workflows that allow our customers to leverage Lightning in the cell therapy -- cell therapy [relational] space. And so we'll continue to focus the Lightning placements into this segment to build a beachhead that is driven by the secular demand and the functional therapies -- as you -- functional therapies.

And then what's the interest on the subscription uptake for Beacon? And are you looking to kind of push that a little bit more aggressively, given where we are with pandemic?

Yes, it's a great question. So I'm going to -- I'll hand this over to Shaun. So Shaun can talk about the subscription. Shaun?

Tycho, thanks for the questions. I think the way to think about subscription, it's really just one way. Our customers can access our technology, right? And the benefits here to our customers are obviously more tailored access to capacity, more predictable and stable budgets and spend patterns and a lower entry fee for access.

I think it's important to remember here a subscription for our type of product offering today is relatively new in the market, right? And so it will have a certain adoption cycle that carries with it. As we engage with customers, we continue to evolve the subscription product offering. I think the answer is we're still at the early stages of this, but we continue to believe this model offers compelling advantages to our customers, right? But I think it will take a little bit more time to gather more meaningful statistics here.

But we do see the pipeline developing, and we continue to push this offering, and we'll continue to update as we -- on these calls as we go forward.

Okay. And then before I hop off, Shaun, I know you don't want to give 4Q guidance, but is there anything in your view that has changed materially since the IPO as you think about kind of the setup for the rest of this year?

Yes, Tycho, I think that's a great question. As we said, I think, in our prepared remarks as well, just given the uncertainty that's out there, we're not really commenting today on 2020 full year guidance. But what I can say, though, to that point is there really has been no changes in our view of the business since we spoke during the IPO.

Next question comes from the line of Tejas Savant from Morgan Stanley.

So just to follow-up on Tycho's question there, sort of on the forward-looking commentary here. Can you tell us a little bit about just the momentum in the order book, as well as on the consumables, exiting the second quarter as well as in October? And then are you seeing any impact at all around your ability to install a service for your customers, following the pickup in infections or related shutdowns or not really?

Tejas, Eric here, good to talk to you again. In the market, we continue to see 2 key tailwinds that are driving growth in our addressable market, to answer the first part of your question, right? Those main tailwinds include an increase in demand for cell-based products and also an increase in complexity of the cell-based products.

And we have been addressing [the pool] of being the fastest path to significant capacity expansion which provides the functional assessment which our customers need to find the cells to make it complex cell-based products. So we feel like we're really well positioned there on the first part of your questions.

In regard to COVID and infections, right, the global shutdowns experienced in the first half of 2020 impacted many businesses, including ours. And although we can't predict the future of this pandemic and how governments are going to react, right, we have seen that our industry has shown a decent degree of resilience. We haven't seen any cancellations, but we have seen that in certain categories, (technical difficulty) timing between quarters.

So what we've done is we (technical difficulty) take steps. Firstly, assuming our customers how they can reduce the number of people in their labs using our advanced automation platform so they can safely continue to move their therapeutic pipelines forward, so a benefit to our customers. Additionally, to guard ourselves against any issues with installations and training, we hired additional resources in regions to minimize that risk. We also [created a training room] called Berkeley Lights University, which is an online learning platform, which we can train our customers and also as we scale our new staff, and we can do that highly remotely. Shaun, did you want to make any comments on the (technical difficulty) against the COVID downturn, if there was any COVID issues in ongoing quarters?

Yes. Sure. Just a reminder, Tejas, as we exited Q2, we updated our revenue recognition policy to enable revenue recognition on either shipment or delivery, depending on the nature of the deals and the terms. So that's helped in terms of the issue around COVID and preventing us from actually installing and training. That's also actually a benefit for our customers as well is we're not out there being forced to install or train, we're really doing that on our customers' time line.

So it's actually a benefit to our customers as well.

Got it. That's helpful, Shaun. And just following up on that, was there a delta in between orders and units, I mean, on which you recognize revenue in the third quarter, some of your sort of -- some of your platform place or the life sciences space have spoken about that dynamic, where there's a pretty meaningful delta here between the orders being placed and obviously, the shipments or potentially the delivery. So maybe you can share some color on that?

So that's a great question. Sorry.

Go ahead, Shaun.

Yes, Tejas, great question. I think, here, our business is really a terms business, right? I mean with that, we actually see rapid order fulfillment as a sort of competitive advantage of ours. And I think from that perspective, backlog for us is really just a function of orders placed in the last days of the given quarter, like you just talked about, and therefore, it's subject to some fluctuation. We talked about our revenue recognition policy helping in that regard. But we're really a turns business, and that dynamic we see is going to continue. And backlog as such will flux.

Got it. That's helpful. And then, Eric, in the past, you've spoken about some of your Asian customers leapfrogging to your platform versus some of the legacy approaches. Is that essentially a dynamic? Or do you see sort of sustaining through sort of the next couple of years here as those customers sort of directly upgrade to the Beacon? And is that what is essentially driving the strength and placements you saw in the third quarter here?

So we continue to see very strong demand in the Asia Pacific region for antibody discovery. And so we do see that our customers are deciding not to install some of these legacy platforms. I do anticipate that that will continue to grow in that region for the next several quarters. I'm not sure -- it's not clear to me that that will go on for years, but certainly into the future.

Got it. That's helpful. And then final one for me. I mean in terms of just your commercial expansion plans, can you just give us a quick update on where things stand today? And how much work that is to be done on that front heading into 2021? And are you sort of focusing on specific geos? I mean perhaps given the strength you're seeing in Asia to sort of [stop at] a quicker cadence over there?

Yes. I mean over the past quarter and earlier this year, we've made some really nice adds to our commercial organization, in particular, in the sales -- on the sales team. We brought up Mark Lasinski to lead our global sales who has continued to expand our efforts with Yue Geng in Asia Pacific, so we now have our wholly foreign-owned enterprises now up and running in the Asia Pacific region. Additionally, we just brought on Gareth Jones, who will lead our European region. So we continue to make investments. We have more work to do there, but really, really strong progress in that space.

Additionally, we've made some pretty big changes to our business development organization to continue to bolster that activity as we move forward, which is critical as it sits at the tip of the sphere.

And in any case, Shaun, do you have any additional items you want to add to kind of the investments we're making in the commercial organization?

Yes, I was just -- yes, definitely. I was just going to say, this is going to be a continuing theme, Tejas, as we go into 2021, expanding the sales force globally, like Eric just mentioned, supporting our key markets and release products, particularly in Europe and in Asia, which is -- which we've seen is our higher growing region here. Dovetailing on the spend and looking forward into 2021, I mean, we're going to continue to invest in BD as well to drive adoption of new products and existing capabilities in new markets through the type of partnership, joint development deals that we've talked about in the past. And also, on top of that, we expect a bigger ramp in R&D, right? Supporting the business development and the new deals they're going to bring to the table, but also our new product development efforts and new market penetration next year.

Our next question comes from the line of Doug Schenkel from Cowen.

Sorry if you covered any of this. The phone quality kind of went in and out for a little while there. Just it hasn't been perfect, at least for me. So I do apologize in advance if you covered any of what I'm about to ask, just tell me and we can move to the next one, if that is the case.

So just starting on placements. Looks like placements roughly doubled sequentially relative to Q2. Could you just break down in a little more detail subscriptions versus direct? And I know you got the question on backlog heading into year-end. I am just wondering if the Q3 placement number was at all a function of catching up from earlier parts of the year when maybe it was harder for customers to accept capital in the midst of the pandemic? Or if you think this is a normalized number?

Yes. So Doug, certainly, I believe that we are in a normalized condition. And in the quarter, we placed the 8 platforms and 3 were placed into cell line development, 2 were placed in the cell line -- into antibody discovery and 3 into cell therapy. And regionally, that looks like we placed 3 into Asia Pacific, 3 into Europe and 2 into the United States.

In regard to subscription breakdown, I'll hand that off to Shaun, but I do think we see returning back to kind of a normal style of business as the world is coming back online. Shaun, anything to add?

No, I think you hit it on all the key topics, Eric.

And did I miss the subscription versus direct mix? Sorry if you gave that in your prepared remarks or if I just missed that earlier.

No, you didn't miss it, Doug. The placements in Q3 were all direct sales.

All direct sales. Okay. And then just -- I think I know the answer to this based on just what you guys just described. But I kind of felt like pharma was already holding up pretty well for you as your key end market through the first couple of quarters of the year in the midst of the pandemic, which I think we all appreciate was pretty impressive given what we saw from some others in the space in terms of capital equipment demand. You're heading into year-end, would you say things are fine? And you feel like you have some momentum, given you just described this kind of being a normalized Q3. And I would suspect Q4 potentially could be better just given typical year-end budget flushes?

Yes, Doug. We continue to see the capacity expansion happening in the market, and there is a focus on antibody discovery and cell line development. And we are -- operationally, we've organized ourselves to be able to rapidly respond to our customers' request to provide that fastest path to capacity expansion possible. And so again, due to the COVID wave, we haven't seen cancellations. We have seen same things move in and out. And we've also seen that our customers are able to continue to accelerate and move their pipelines forward using our advanced automation system. So I do believe we are -- we are moving back towards into a normalized kind of business cycle.

Okay. And then kind of asking the same question but just flipping from capital over to consumables. With a few logical leaps, it seems like consumable revenue per box seemed to increase by about 35% to 40% relative to Q2. Again, those are our numbers, not yours, but I'm guessing we're in the right neighborhood. Of course, just correct me if we're not. But again, is that just a normalized run rate? Or do you think there was some catch-up or inventory builds, given what's going on in the world? Just -- or is this -- as you guys have answered a couple of times already, this is just the norm?

No, there's definitely a consumable increase. And so I'll let Shaun speak to the exact numbers, Doug. I'll let Shaun check

(technical difficulty) there. But we did see an increase in -- we believe we saw an increase in utilization associated with our customers coming back online in the quarter. And so I think we're -- like I said, we're ramping back up to the normal or standard business environment.

Yes. Doug, and just to add to that, we did see a bit of the pull-through in Q3 will come from some late in the quarter, Q2 order flow, but the majority of the recurring revenue growth was due to the increase in the installed base.

Okay. Last one for me. In your prepared remarks, you referenced the collaboration with Ginkgo. At what point do you think that those syn bio applications that you're in joint development with might be available more broadly for other commercial customers? If I remember correctly, going back to Q2, there was a revenue impact associated with you essentially, I think, putting yourself in a position where you could accelerate those time lines. I'm just wondering if there's any update on that.

Yes, certainly. I mean the opportunities in syn bio, Doug, as we've spoken before, right, are substantial. But they also require clear market segmentation. And in Q3, we released some pretty compelling data in the advancement of those workflows in the space.

First, we showed that the measurements made in the NanoPens correlated up to 0.5 liter fermenters. This was data that we published at the SynBioBeta Conference. And as everybody is aware of this market, scale up has been a big challenge in the space, and this capability would help our customers lock in their production economics early in the process.

And second, we showed that we can perform enzyme kinetic measurements in the NanoPen. The significance here is that -- is that we are moving to measurements that are happening inside of the cells to help our customers accelerate not only enzyme engineering, but the manufacture of the proteins that those enzymes can create inside of the cells. And so these 2 capabilities to understand are broadly applicable not only in syn bio, but particularly, you're back into our biopharma market.

So our strategy in this market continues to be to segment the market and focus on high value-add products or other applications, which drive high frequency, gene editing validation via the design, build, test, learn, iteration cycle, driving high consumable consumption.

And so as we continue to make great progress on Opto SynBio Discovery 1.0 workflow and SynBio Development 1.0 workflow, we're going to plan to announce those -- our plan is to announce those in 2021.

I show our next question comes from the line of Brian Weinstein from William Blair.

Just to go back to your comment on the business development team that you guys added in the quarter. Can you give us a little bit more about what that team looks like now? But more broadly, can you talk about kind of relationships, partnerships, JV opportunities, both inside and outside of the traditional markets that you're in? And what we can expect from the organization and sort of the pace of these opportunities coming through, and how you're thinking about these things as you evaluate them?

Brian, it was clear -- that was clear to us that there are opportunities beyond the scope of our current market segments. And to make sure that we can access those opportunities, we made some significant changes to our business development organization since the IPO, right? And the goal in making these changes was to enable new and existing customers access to some of the new emerging Berkeley Lights capabilities. And we realized that to do that, we needed to create a best-in-class BD organization, which we have now done.

So the team that we've assembled is making great progress on developing those high-value partnerships that you referenced, which will enable Berkeley Lights to develop in concert with great market-leading partners, enable new capabilities to current and future customers in existing and adjacent markets.

So I'm really excited about the potential of the team. Things are moving forward in a great direction, and hope to be able to report out on some of that activity within the next several earnings calls.

Great. And then on the funnel, to use that term here as we think about the willingness and opportunity that you have with your customers. How do you see that funnel build right now and the visibility that you have? How would you characterize that? And as a corollary to that, what do you expect to see as far as the sales cycle across end markets? Is there an opportunity for that to accelerate?

Yes. In regards to the funnel, right, we continue -- Berkeley Lights continues to provide our (inaudible) with the highest probability of success in getting to their cell-based products. And we're operating in these very large markets and antibody therapeutics in bio and cell therapy. And as I mentioned previously, we do see those 2 [tailwinds] increasing demand for cell-based products and increasing complexity of those cell-based products. And because we address both of those by being the fastest path to capacity expansion and also providing the functional assessment they need, we continue to see things build in the way that is in line with our expectations for the business.

And I show our last question comes from the line of Paul Knight from KeyBanc Capital Markets.

It's Mike on for Paul. In the prepared remarks, you mentioned about 50% of Beacons were placed with CROs and CDMOs. Can you provide some more color around the strength in that end market? And then -- and then do you think this kind of provides another avenue to expand awareness to some of maybe your smaller biopharma/biotech customers?

Yes, Paul, that's spot on. I mean a large majority of the new biopharmaceuticals that are coming out, right, are really created by these smaller biotechs and start-ups. And so enabling CROs -- CROs with access to our technology and able to access to these smaller entities. And we believe that it is in line with the CRO markets business model to bring up that capacity rapidly. And so the higher levels of demand for cell-based products that we're seeing an increasing complexity really falls in line with their need to bring on this capacity as a function of time.

Great. And then my last one is just regarding where you guys are investing for growth, specifically around the -- your proprietary workflow offerings, kind of what's the cadence there? And how is the trend with some of the workflows that you've added with customers?

Yes. So since we started, we've released 7 -- we have 7 commercialized workflows. And so the first workflow we released was in late 2016, early 2017. That was our cell line development workflow. And we released our antibody discovery workflow -- the first of our antibody discovery workflows in mid-2018. And we released 5 workflows so far this year. And the wonderful thing about our platform-based technology is that you can reuse the components of these workflows to create new workflow solutions in -- either within a market or in an adjacent market.

So we continue to release more workflows, and we do see uptake. The cell line development work -- or sorry, Cell Therapy Development 1.0 workflow, which we released earlier this year, is really at the nexus for kind of the activity in cell therapy that we saw in Q3. So we continue to see a higher cadence release of workflows as we move forward into the future.

Thank you. This concludes our Q&A session and today's conference call. Ladies and gentlemen, thank you for attending. You may all disconnect. Everyone, have a good day.