(BLI) 2021 Q4 法說會逐字稿

Thank you for standing by, and welcome to the Berkeley Lights Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. (Operator Instructions) As a reminder, today's program may be recorded. I would now like to introduce your host for today's program, Carrie Mendivil, Investor Relations. Please go ahead.

Thank you. Earlier today, Berkeley Lights released financial results for the quarter and year ended December 31, 2021. If you have 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. Joining me today from Berkeley Lights are Eric Hobbs, Chief Executive Officer; and Kurt Wood, Chief Financial Officer.

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. For more information, please refer to the risks, uncertainties and other factors discussed in our SEC filings. 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, February 24, 2022. With that, I'd like to turn the call over to Eric.

Thanks, Carrie, and thank you, everyone, for joining us this morning. On today's call, I will provide details on the continued progress we're making across our business. I will then turn the call over to Kurt to discuss the fourth quarter and full year 2021 results and share our outlook for 2022. During the fourth quarter of 2021, we achieved revenue of $23.2 million, bringing total revenue for 2021 to $85.4 million, above our preannounced range in early January. Key revenue growth drivers were our strategic partnerships and services business, strong sequential recurring revenue, including consumables and direct placements.

At Berkeley Lights, our mission is to find the biology that cures disease. To achieve this mission, we have created the most advanced platform to access and understand live primary biology at an unprecedented speed and scale. Underlying our strategy, we will continue to focus on opportunities where our innovative platform can be applied to disrupt the market and unlock significant value. In the early days of Berkeley Lights, our platform was developed to solve high-value problems for customers by providing a significant improvement over existing solutions.

As we've continued to develop our platform, we are advancing opportunities where we believe the Berkeley Lights platform provides the only commercially viable solution. We have started to experience increasing levels of demand for these proprietary solutions, allowing for near-term revenue opportunities as well as longer-term participation in downstream economics such as milestones and royalties. In 2021, we significantly expanded our strategic partnerships and services business, growing revenue more than threefold from $5.8 million in 2020 to $19.9 million in 2021 which included transactions with future downstream revenue participation.

Total strategic partnerships and services contract value grew from $200,000 in 2020 to $42 million in 2021. During 2021, we announced 2 key partnerships with Thermo Fisher Scientific and Bayer Crop Science that demonstrated our ability to capture a deeper value through our technology. In Q4 2021, we signed 2 additional partnership agreements with contract values up to $8 million. One was with a top 5 pharmaceutical company and the other was with Aanika Biosciences, which includes potential downstream royalty revenue. In this partnership, Aanika will use our high-throughput functional screening services based on our proprietary cell-free expression technology to rapidly identify and optimize functional antimicrobial peptides capable of killing harmful bacteria, including those that cause outbreaks of foodborne illness.

In addition, our platform will be used to find peptides that are toxic to bacteria to create a new antibacterial tag that will then be applied to their bacterial spore-based barcoding technology to protect the food supply chain. An important aspect of these partnerships is a future transition into long-term services engagements and revenues. In this business model, we start with an R&D partnership to develop the required workflow and biology, which can span multiple years and is then followed by a distributed service offering at the customer site or internal service in our BioFoundry.

In 2022, we expect to continue to accelerate growth across our strategic partnerships and services business. In these engagements, our partners are leveraging the capacity of our BioFoundry to solve highly complex problems. To serve this rapidly growing part of our business, we recently completed the full build-out of our Boston BioFoundry which will provide additional campaign capacity as the business grows. We continue to see expansion opportunities for new and existing customers, driven by increased use cases enabled by our workflows.

Over the course of 2021, we announced several technology developments with 3 key standouts. The first was the ability to leverage our proprietary cell-free technology to enable the expression of specific proteins in each NanoPen, and then test the function of that expressed protein against live primary cells. We've expressed a variety of proteins from small peptides all the way to full-length antibodies and have tested their function to kill particular cell types or bind to desire targets.

This advancement to our technology is the basis for our high-throughput functional screening service. The second advancement was developing a scalable way to perform terminal assays without any significant loss of live biology. In addition to cloning and culturing cells in a NanoPen, we can now terminally differentiate or even [like] a subset of the cells while ensuring clonality of the surviving subpopulation. This allows us to perform terminal assays or capture internal components of a cell while maintaining the viability of a subset of the cons in the NanoPen.

Once the analysis of the terminalling differentiated or life cell has been completed, we can use our OEP technology to recover the viable subset of live cons. This opens a whole class of solutions for our customers, such as polyfunctional assays, polygene editing and precious cell interrogation. It is also a core technology, enabling the stable viral-vector line workflow that is currently under development.

The third development was in the application of our T cell characterization or killing assay to apply to patient samples. Our goal is to ensure our customers have access to the most relevant biology. There are a huge number of cell types, in particular, primary disease cells and PBMCs that come directly from humans that cannot easily be cultured and leveraged in therapeutic studies today. Access to primary biology can be achieved through speed enabled by nanofluidics and automation. With this capability, customers can discover new antigens and TCRs, answer questions regarding particular disease progressions and estimate the efficacy of a particular therapeutic solution.

At Berkeley Lights, we are committed to continuing to develop and deliver capabilities that were not previously thought possible through our technology and workflow advancements. As we look ahead into 2022, we are focused on 3 key areas to drive growth across our business. First, growing our strategic partnerships and services business to enable downstream economics to our differentiated offerings; second, continuing to release high-value workflows in our core antibody therapeutics market; and third, ramping up our high-throughput functional screening service workflows.

In terms of CapEx sales, we are experiencing cash conservation around large capital purchases where those customers are accessing our platform through CROs and CDMOs, and postponing or eliminating CapEx purchases. We believe this is in part driven by the current macroeconomic environment and a shift towards conservative capital allocation. While this pressure may cause some delays in the near term, we are confident that our differentiated access models, including tech access and strategic partnership and services, which are designed to better serve our customers' needs in this environment, we'll continue to see increased demand as we move into 2022.

Further, in 2022, we will continue to drive innovation and expand into new market opportunities. Starting with antibody therapeutics. We will continue to deliver and advance our core workflows in both antibody discovery and in cell line development. In antibody discovery, we will continue to expand the diversity of antibodies customers can evaluate on the Berkeley Lights platform.

This year, we plan to release a rabbit memory B cell workflow and a human memory B cell workflow. In addition to these new species, we will also continue to drive assays that help our customers find the highest quality product. Additionally, we plan to release the ability to understand and rank affinity on chip during the discovery process. Adding additional access to diverse antibody solutions and incorporating deeper understanding of how the antibodies will perform will further increase the probability of success that our customers will find treatments and cures against more challenging targets.

In cell line development, our customers face challenges manufacturing bispecific and multispecific antibodies. In these modalities, cells are edited to make the bispecific, but the cells also produce unwanted variants, leading to additional costs and time lines during manufacturing. Late last year, we presented data from a collaboration with a major pharma partner, showing we can measure the quality of bispecifics being manufactured by the cells at the time of clonal selection. In 2022, we plan to provide turnkey reagent kits, so our customers can include this level of understanding and characterization in our cell line development workflow.

Turning to our opportunity in cell therapy. We will springboard off the great work completed by our internal teams to accelerate the manufacturing and quality control of cell therapies. Additionally, we will continue to enable access and understanding of complex cancers by onboarding additional primary tumor types, which will further the understanding of the killing or inhibitory mechanisms using the Berkeley Lights cell killing assay.

In gene therapy, we expect to deliver our stable viral vector clone selection workflow to Thermo Fisher Scientific as part of our collaboration agreement and wrap up additional commercialization efforts with other partners. Related to synthetic biology, we anticipate releasing certain workflows to Ginkgo over the next couple of quarters to increase their production efforts. Over the course of the year, we plan to also accelerate our high-throughput functional screening capacity and move beyond Ag-Bio. We expect to see additional deal flow here in 2022.

As we shared at the beginning of this year, I will be transitioning from my role as CEO to President of the antibody therapeutics business. The Berkeley Lights' Board of Directors has initiated a search for a new CEO that is progressing well.

Before I hand the call over to Kurt, I'd like to again thank our team for their hard work and dedication towards making our vision a reality. We are at the forefront of something profoundly important, and we continue to push the envelope every day on what is possible through the cutting-edge fusion of biology and technology. As we have advanced the platform's capabilities, we increasingly hear from customers how our technology is enabling them to solve complex problems that were previously thought to be unsolvable.

I will now turn the call over to Kurt for more details on our financials. Kurt?

Thank you, Eric. Total revenue for the 3 months ended December 31, 2021, was $23.2 million, up 7% year-over-year. Regionally, North America accounted for 60% of total revenue in the quarter, followed by APAC at 33% and EMEA at 7%. Looking at a breakout across the 3 revenue streams. In the fourth quarter of 2021, revenue from direct platform sales totaled $9.7 million. These results included 6 platform placements in the quarter, including 5 CapEx Beacons and on tech access subscription, ending the quarter with an installed base of 111 platforms.

As a reminder, in Q2 of 2021, we launched a new tech access subscription offering tailored to the antibody discovery and cell line development customers with lower annual campaign capacity requirements. As of the end of the year, approximately 10% of our year-to-date placements for the tech access customers in North America and EMEA. We plan to begin offering the tech access subscription in the APAC region later in 2022.

Recurring revenue, which includes revenue related to consumable purchases, subscriptions and services and warranty was $6.1 million in the fourth quarter, an increase of 27% over the prior year and up 30% sequentially. The sequential growth from last quarter was primarily driven by the seasonal increase in consumable purchases normally seen in the fourth quarter. Strategic partnership and services revenue was $7.4 million in the fourth quarter of 2021, up $1.6 million from the prior year and up $1.9 million sequentially. These increases were driven by the first full quarter of activity on Bayer Crop Science initiative as well as revenue recognized on a newly signed agreement with a top 5 pharma customer that Eric mentioned earlier.

For the full year, we signed agreements with a total contract value of up to $42 million compared to approximately $200,000 in contract value in the prior year. These bookings include our agreements with marquee players like Thermo Fisher Scientific and Bayer Crop Science as well as $8 million in new deals signed in the fourth quarter. Of the $42 million signed during the year, approximately $11 million was recognized as revenue in 2021. Gross profit for the fourth quarter of 2021 was $16 million compared to $14.8 million in the prior year period. Gross margin for the fourth quarter of 2021 was 69% compared to 68% in the fourth quarter of 2020.

Excluding the impact from Ginkgo, gross margin for the fourth quarter was approximately 74%, above our long-term gross margin target of approximately 70%. Fourth quarter 2021 operating expenses were $33.8 million compared to $26.6 million in the prior year and included $5.1 million and $5.7 million of stock-based compensation, respectively. The increase was driven by $1.8 million in R&D, $2.7 million in G&A and $2.7 million in sales and marketing.

Net loss for the fourth quarter of 2021 was $17.7 million compared to a loss of $12.1 million for the prior year period. All net loss numbers are inclusive of stock-based compensation. Looking at the full year. Total revenue for 2021 increased to $85.4 million, up 33% year-over-year. Regionally, North America accounted for 48% of total revenues in the year, followed by APAC at 41% and EMEA at 11%.

For 2021, revenue from direct platform sales totaled $46.4 million. Recurring revenue was $19.2 million, an increase of 38% over 2020. Strategic partnerships and services revenue was $19.9 million, growing more than threefold over the prior year. Gross profit for the full year 2021 was $56.6 million compared to $44.6 million in the prior year. Gross margin for 2021 was 66%. Excluding Ginkgo, full year gross margin was 71.5%, which is well aligned to our long-term model.

Total operating expenses in 2021 were $127.3 million, comprising of $58.5 million of R&D, $43.4 million of G&A and $25.4 million in sales and marketing. Stock-based compensation, including in operating expenses, was $21 million and increased $10.3 million year-over-year. Operating expenses were up $42.4 million from $84.9 million in 2020 due to an $11.3 million increase in R&D, $10.9 million increase in sales and marketing and a $20.2 million increase in G&A as we transition to a public company. Net loss for 2021 was $71.7 million compared to a loss of $41.6 million in 2020. We ended the year with cash and cash equivalent balance of $178 million. Our available liquidity is $188 million, which includes our revolving debt facility.

Turning to our 2022 outlook. As we shared at the beginning of the year, we expect revenue for 2022 to grow approximately 30% compared to 2021. Consistent with prior years, we expect revenue to be more heavily weighted to the back half of the year as more business development collaborations and partnerships come online, coupled with our typical seasonality. Embedded in this outlook are a few key assumptions. First, we expect strategic partnerships and services to grow at a faster rate than other areas of our business, similar to what we experienced in 2021. Second, we expect CROs and CDMOs to continue to be a growth driver. Third, we expect campaign capacity to be in line with 2021 campaigns. Fourth, we continue to see APAC as an important market for our antibody therapeutics business.

Before we turn it over to Q&A, I would like to echo Eric's appreciation for our team for their continued hard work. As we have advanced the Berkeley Lights platform's capability, we increasingly hear from our customers how our technology is enabling them to solve complex problems that were previously thought to be unsolvable. We look forward to continuing to provide revolutionary technology to our customers and to help them advance their discoveries. With that, we will now open the line up for questions. Operator?

(Operator Instructions) Our first question comes from the line of Julia Qin from JPMorgan.

I want to start on the organization. You mentioned that business segment alignment is a key near-term focus to drive revenue inflection at a conference. So could you maybe give us a progress update? And if you could give some color on the current morale and team stability, that will be great.

Yes. Thanks for the question, Julia. Great to hear from you this morning. As we continue to move into 2022, Kurt has mentioned that our growth drivers include growing our strategic partnership and services business for ensuring that we enable the downstream revenue; and second, to continue to release our high-value workflows in our core markets. And our team couldn't be more excited as we continue to deliver key capabilities in our antibiotic therapeutics market.

Our development teams continue to be motivated to deliver both the species expansion in antibody therapeutics plus an additional affinity assays and not only those things. But in selling development, we've got some very interesting capabilities that we're delivering in the bispecific space. So our team continues to be motivated to continue to move forward on our mission for helping our customers find the biology that cures disease.

Great. And then on the quarter specifically, 6 instrument placements, including tech access. I remember when you preannounced at the beginning of the year, there were 8 placements. So could you maybe bridge the gap for us? Has there been additional delays? And then on a related note, given the noise about biotech funding environment, are you guys expecting any meaningful change in the mix of capital versus tech access this year?

Julia, this is Kurt. I'll take that first part. I don't think we ever specifically said how many placements were in the year. We just gave a revenue number. So the 6 placements for the quarter is in line with where we were at the beginning of the year when we preannounced. And as you recall, we said we had a few that shifted out of the fourth quarter and into the first half of this year. So that kind of no change there. And those orders that have moved from the fourth quarter, not a matter of if they're going to hit is when. It's in the first half, we still feel confident about that. And then I'll let Eric address the second question there.

Julia, can you repeat the second question for me, please?

Yes. I was just wondering, in light of the noise around biotech funding environment, are you guys expecting any meaningful change in the capital versus tech access mix this year?

Yes, we -- I mean, of course, we're all seeing cash conservation potentially happening in that market. But the wonderful thing about our offerings is we have not only the tech access model, but we also have strategic partnerships and services, which we saw triple from $5.8 million in 2020 to over $19 million in 2021. The additional backlog, we mentioned that we signed $42 million in contract value in 2020 -- 2021. That, of course, gives us a backlog into 2022. And I think the result of the market situation right now really gives credence to that strategic partnership and services business model, which is one of the pillars of our focus in 2022 to achieve and exceed our outlook.

Got it. Last one from me. You said you're expecting to deliver the sell and development workflow to Thermo around 2Q and 3Q, which I believe will kick start the subscription revenue stream for AU. How should we think about the pull-through? And how long do you expect that subscription revenue stream to last? I believe you also said in prepared remarks that you plan to wrap up additional commercialization efforts with other partners. So just wondering if you could be more specific. Are they for Ginkgo or Bayer and how to think about the associated milestones?

Yes. This is in regards of course, to the viral vector workflow. So yes, we will be delivering cell lines through the partnership agreement in Q2 and Q3 to Thermo Fisher Scientific. The team continues to develop the workflow and it's progressing quite well. We are entertaining discussions into additional customers participating in that market with us. So that -- we'll keep you updated with additional announcements as we do with our strategic partnerships and services business as those materialize.

And Julia, like we talked about it before, embedded in that contract is on the delivery of that workflow to Thermo. They will have a subscription on the back end that last a couple of years. That's not a tech access subscription, obviously, it's a significantly higher-priced quarterly type payment aspect that last multiple years.

Our next question comes from the line of Tejas Savant from Morgan Stanley.

So maybe one for you, Eric. On the 5 direct placements of the Beacon that you talked about in the quarter, can you just give us some color on new versus existing customers? And any color on sort of application mix there?

Yes. We continue to see additional -- new customers and additional customers with mix in CRO business, Tejas, and really driven by the workflow applications in antibody therapeutics antibodies (inaudible), but also the road map of adding additional species in 2022 and also the affinity assay. I think as we continue to move forward, as we briefly talked about before, we do see the rotation of the business towards more of the strategic partnership and services business for us as we move into the future.

As we talked about in Q3, we had GSK acquiring their third Beacon and also Genovac acquiring their third Beacon. So we continue to see great pull from existing customers, but we also have new customers who are understanding that without the technology, they are left with older methods to find antibodies, which are proving more and more difficult to find the hard-to-hit targets.

Got it. That's helpful. And then on the subscription side of things, Eric, I think, you guys talked about on subscription this quarter, that's sort of a bit of a step down versus the 3% you saw in 3Q. Can you just sort of help us sort of contextualize that a little bit, particularly given your commentary on a little bit of conservatism or caution among your customers on CapEx purchases?

In 2021, we saw our subscription business be about approximately 10% of our overall placements on the year. And you know that we felt that, that was pretty good in the first year of us going out here. As we move forward, I do believe that we will likely, as cash conservation continues to move forward, that we can -- we will see more of that subscription business. That being said, pay to us, right, our customers also look at longer-term ROIs and which is better for them to purchase the equipment rather than work through the subscription. And so we'll continue to let our customers decide what, of course, is best for them in regards to their financial situation. But we do provide both offerings to our customers to support them in the decision that they need to make, which would be best for their business.

Tejas, this is Kurt. If I can just add one thing in there. You also see, as we talked about in the last call and again on this call about the increased demand coming from CRO and CDMOs. So we have seen their campaign usage be slightly higher than what we would anticipate, and that would tell me that some folks are going that route, which, again, as we said before, we're in different because that means the technology of Berkeley Lights is being used, and we're getting that campaign market share.

Got it. And a couple of quick ones for you, Kurt, to follow up. I mean on that sort of cash conservation mode comment, I mean, how are you thinking about your OpEx cadence through this year? I think you talked about sort of doubling your commercial team in '21 and obviously, R&D investments as well. Just walk us through what your expectations are for OpEx and the cadence through the year?

Look, OpEx will grow. We don't give guidance on OpEx in general, but what we're anticipating is obviously OpEx will grow at a lower rate than what it did in 2020 and obviously, at a lower rate than what we're anticipating our revenue to grow when we said revenue would go up about approximately 30% obviously, and particularly with some of the geopolitical uncertainty that unfolded overnight, we remain cautious and prudent where we're going to invest.

Last year, obviously, the first year being a public company. You have expenses like year 1 SOX. We obviously had some litigation expense and some other things that were going on in the P&L that we expect to be nonrecurring. So we expect some scale there. But we do believe, like we said with any company, there's a certain amount of critical infrastructure that you need and that scales pretty nicely thereafter. And we will continue to be prudent. And when the new CEO comes in, we'll -- I'm sure one of the first things on their mind is going to be, hey, what do we need to do to ensure we preserve as much cash as possible to give us as much optionality as possible and focus on the critical items that matter and continue what Eric has put into place here.

Got it. And then one final one for me on supply chain. Are you seeing any signs of sort of disruptions there? And anything you're doing proactively to just stock up on inventories here, perhaps like chips and other components? I mean to what degree are you sort of future-proofing your manufacturing here given some of the volatility?

Yes. I think you hit the nail on the head there. Obviously, some of the supply disruptions are particularly in the microchip and semiconductor shortages that you see impacting auto and others. It's certainly not immune to us. We have semiconductors that are put into our tools, particularly around the optics. We have gone around and try to secure those types of items as much as possible in some cases, buying components that have those chips embedded in them so that we can have as much optionality and flexibility. It's a very low-cost chip that's used, but it's obviously a critical chip. So buying as much as we can on there. But we, obviously, have enough demand or enough supply to meet what we believe our demand is for at least through 2022.

Got it. Very helpful. Appreciate the time.

Our next question comes from the line of Brian Weinstein from William Blair.

There's probably not much you can say on the CEO transition, but I am curious if you have any kind of thoughts on transition timing. And also, what the Board is focusing on as far as qualities that they're looking for in the new CEO?

Yes, absolutely, Brian. Thanks for the question, right. I mean as we discussed at the beginning of January and now that the Board has initiated the search we've got Russell (inaudible) doing the search for us, and we've been seeing some very interesting candidates. I think, of course, we can't disclose where we are throughout the process. But in regards to the characteristics that the Board is looking for, right, having a deal with a proven track record and experience to drive our type of business, right, around a business segment strategy is going to be important to support the next level of growth. And so the Board is diligently looking for a person with those characteristics. And I'm confident that we'll find that person. And as I said, in regards to timing, it's not tomorrow and it's not in the year, right? And so there's some time in between there. And I know that's a large range, but that's where we're at.

Okay. And then on the guidance to 30% growth, I think that gets you to about $110 million, $111 million or so in revenue. Are you guys able to give us any kind of direction as to the makeup that you expect that revenue to look like in terms of partnership recurring revenue in direct in 2022? And then longer term, how do you see that mix playing out? Have you guys been able to better refine what you think that longer-term breakout looks like between the various categories?

Yes. Brian, thanks for asking the question. Obviously, when we say approximately 30% for the year, we gave a few nuggets in the script with saying that we expect the strategic partnership and services business to grow at a faster clip. We had about $7.4 million, $7.5 million of partnership and services revenue in Q4. I would expect that to be kind of flattish as we go into Q1. And then we expect similar to what we saw in 2021, that to accelerate a little bit in the back half of the year. We're, obviously, going to grow that business. And if you look at what we did last year, we signed up to $42 million of new contracts last year.

In addition to that, some of them now start to have additional upside in the form of downstream revenue participation, whether that be milestones in the case of there, BCS or if it's the royalty that we saw with Aanika that we announced and signed as part of the $8 million in deals we signed in Q4. So we're seeing good progress there. So I think that's going to be, call it, in the mid-20% to 30% of total revenue. Recurring revenue is going to be pretty well predictable. And then the fallout of that is going to be your direct placements. But we do anticipate it being more back-end loaded. And historically, we've been in that 60-40 split. And I think that's probably what you're looking at this year as well.

60-40, meaning 60 in the back half, $40 million in the front half, just to be clear?

Yes. Yes. Thanks for that clarification.

Our next question comes from the line of Mark Massaro from BTIG.

Thanks for the questions here. I guess -- so recognizing that you had 6 placements in Q4. I think that took you to 36% for the year. I know earlier in the year, you had guided for at least $40 million. But one thing I haven't heard is what your expectation is for capital placements in 2022? I haven't heard any outlook on that. And I guess, help me think about that in the context of your commentary of how some of your customers are postponing or eliminating CapEx purchases.

Yes. We haven't even -- we're not giving guidance on particular unit placements in 2022, Mark. But what we are providing that '22, we expect to continue to grow, and we pegged the number at approximately 30%. And as we were just discussing right now with Brian, right, the 60% on the back end and 40% on the front end.

Although we have our strategic partnerships and services, we've mentioned that will grow at a faster rate. But we do see campaign capacity in the market to be in line, if not higher than 2021 campaigns. And when we say companion capacity, that's the number of campaigns that are running for both therapeutic antibodies and reagent antibodies. So we continue to see the CROs and CDMOs continue to be a growth driver as customers get into that cash conservation mode that we -- that creates demand at CROs and CDMOs. And we feel that we're really well positioned both with the tech access model or even direct placements with those customers into that market.

So expect to see additional placements in 2022 in both tech access and direct placements. And I do believe that Asia Pacific is going to continue to be an important market as that is an emerging and growing market for us in our antibody therapeutics business.

And Mark what are the (inaudible) find there is we are seeing customers the trend of them accessing the technology through CROs and CDMOs, who aggregate demand, obviously, for multiple customers. They run at a much higher utilization and therefore, use higher consumables. We are seeing that particularly in the capital constrained type of environment. So like Eric said, we're not giving specific guidance on the placements. We'll give colors that unfold throughout the year.

That's helpful. And then can you provide some clarity around the $42 million that you had in your total contract value? It looks like you recognized $11, got $31 million left. I mean how should we think about that backlog playing out in 2022? And just walk us through some of the mix of that.

Yes. If you recall what we said on the last call is that we had secured -- we're entering 2022 with about $20 million of firm kind of backlog of partnerships into -- from this partnership and services, and that's up pretty significantly, and that's a nice starting point. That's up significantly from the prior year. We continue to sign new deals, including the $8 million that we signed in the fourth quarter of last year.

So from that aspect, we're not giving the exact cadence as that goes out into 2023, 2024, et cetera. But I think you can look at our total backlog, including what was on the books at the beginning of 2021, we believe about $20 million of that is going to be recognized in this fiscal year 2022. And then, obviously, we expect to continue to sign new deals and that will add to the revenue of the business development, or I should say, the strategic partnership and services will have for the year. And again, as you mentioned, of the deals we signed within the calendar year last year 2021, $11 million materialized out as revenue. And so obviously, there will be some deals that are signed in 2022 that have meaningful revenue contribution in 2022.

Understood. Okay. And then my last question, Eric, you talked about some new assays, some turnkey reagent kits and some other new products. I assume these to be maybe product enhancements, if you will, as opposed to like significant new capital -- sources of capital purchases or the like. Can you maybe just expand on the value of these new products? And what -- how should we think about the contribution of them to the top line?

Yes. I think it's important to put that in context of the overall position we are in the market as we're still a new and emerging player, right, with the ways to go as we cross the chasm into the early majority, right? And so as we continue to add these new capabilities and whether it's the additional species in rabbit or human, the affinity assay and antibody discovery, the bispecific assays with the kids in cell line development. All of these things not only enhance the product experience for our customers, our current customers, but also lead us to additional new customers to move on to the platform.

And so we continue to see increasing demand from customers who are not currently using the Berkeley Lights platform to come on to the platform as we continue to reduce these things. So it's not just reagent pull-through increases, Mark. It's additional placements as we move into that early majority segment of the overall market.

(Operator Instructions) Our next question comes from the line of Gaurav Goparaju from Berenberg Capital.

So I guess, for Q3 earnings, I remember you guys had mentioned that you expected the codeveloped workflows with Ginkgo to be completed by 2021 year-end. Just wanted to get some more color here. Was there a slight delay? Was it externally driven or internally driven? I know you mentioned that you're expecting them to be delivered in the upcoming quarters. I just wanted to get some more light on that.

Thanks, Gaurav. Great question. We were always targeting Q1 to deliver that. And of course, we'd finish them internally, but we needed to transfer them in Q1 and Q2 to Ginkgo Bioworks and so continue to work on those overall workflows and make sure that our customers have a very functional and reliable workflow that they can operate in their overall BioFoundry. So on track to delivering those this and next quarter, and we'll continue to work with Ginkgo to make sure that they ramp those into production.

Got it. And then are you able to disclose the end market of that second partnership that you mentioned from Q4 that wasn't from Aanika? The one with the top 5 pharma that you mentioned? Or is that on disclose?

No. Happy to talk about that. It is in the antibody therapeutics market as we continue to move that forward with a top 5 pharma customer and looking forward to really bridging -- adding additional capabilities that bring our antibody discovery closer to our selling development workflow.

So then you're basically open to signing these new partnerships in the antibody space, right? Because I remember you guys had mentioned that you mostly or majority look for -- use these partnership opportunities to enter into new end markets. So it's fair to assume that you guys will still, I guess, address the antibody therapeutics market through these partnerships.

Absolutely. I mean when we started out as a company in 2013, 2014, we signed the Amgen deal, which was one of the first deals that we signed at the company, but that was followed by BMS, Roche, Pfizer, several others that we did business development deals or strategic partnerships and services deals in the early days of the company, and that's continued as we work to add additional capabilities, whether it's in a market that we're already participating in or into new markets. We do these deals to develop new capabilities and help our customers achieve results that they can't achieve other ways than with the Berkeley Lights platform.

Thanks for the color. And then last one for me. I'm just trying to get an idea of the capacity of the partnerships that you could currently effectively handle, especially looking into subsequent years 2022, 2023. Should we expect the amount of new deals to exponentially increase year-to-year? Or is it more of a slight step up from flat each year? Just trying to think about how to look at that moving forward.

Well, I think, there's a couple of components to that. One, if you think about how these deals are embedded like we've talked before, they generally start out to where we're doing kind of a little bit more of the R&D workflow and kind of a fixed set of capacity driving to a number of gains or seeking utilization that they can get, then moves into somewhat of a development to fine tune that. And then when you release the workflow, it enters into a separate thing like, for example, with BCS, we will always run the screens on our -- in our BioFoundry.

So when that workflow goes into production and they want to run it in a production environment, they drive to -- and it's embedded in the contract to a separate contract production screens and then you're still continuing development and other (inaudible) developing new proteins and things like that.

To answer your question in terms of the capacity, et cetera, generally what it is in the BioFoundry is for us to be able to get another Beacon and then, obviously, lab technicians to be able to run the tool. We keep with our supply chain pretty ample demand like that we can get something installed within a few weeks and we make sure we have ample space in our various facilities to make sure we can accommodate that. And we do expect that over time, the amount of activity and campaigns run through our BioFoundry will increase.

And I think you saw the growth that we exhibited last year was signing up to $42 million of deals. And then, obviously, there's back-end royalties on some of those, in addition to that or milestones. And then this year, we said that we were going to grow at a faster pace than what the overall 30% -- approximately 30% growth rate that (inaudible). So the company was doing the strategic partnership and services would grow at a fast rate.

Thank you -- this does conclude the question-and-answer session as well as today's program. Thank you, ladies and gentlemen, for your participation. You may now disconnect. Good day.