NanoString Technologies Inc (NSTG) 2015 Q1 法說會逐字稿

Good day, ladies and gentlemen and welcome to the NanoString 2015 First Quarter Financial Results Call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference is being recorded.

I would like to introduce your host for today's conference Ms. Lynn Pieper of Westwicke Partners. Ma'am, you may begin.

Thank you. On the call today with me is Brad Gray, NanoString President and Chief Executive Officer; and Jim Johnson, Chief Financial Officer. Earlier today, NanoString released financial results for the first quarter ended March 31, 2015, and a copy of the press release can be found on our website at nanostring.com.

During this call, we'll make a number of statements that are forward looking, including statements about financial projections, existing and future collaborations, future business growth, trends and related factors, interactions with third-party payers and the timing and outcome of any related reimbursement decisions, our strategic focus and objectives and the development status and anticipated success of additional product offerings.

Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings. Our results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward-looking statements.

With that, I'll turn the call over to Brad. Brad?

Thanks Lynn. Good afternoon, thank you for joining us today. We are off to a promising start in 2015. Our nCounter technology continues to gain momentum as a leading platform for tumor profiling with broad and growing acceptance in both research and clinical markets. Our customers have now generated over 720 peer-reviewed publications, validating our platform and impact.

On the call today, I'll provide more highlights and then review progress on our key strategic objectives. Jim will comment on our financial performance and outlook and I'll then make some closing remarks and open up the call for your questions.

Total revenue in Q1 was $11.6 million, with growth of 32% driven predominantly by strong instrument sales. We continue to substantially expand our installed base of nCounter Analysis Systems adding both research and clinical lab customers. Instrument sales were $4.4 million in the first quarter representing growth of 27% and bringing our worldwide installed base to over 280 systems. Consumable revenues, excluding Prosigna was $5.5 million for the quarter, reflecting 15% growth year-over-year. Fundamental consumable demand was strong. Orders from academic customers were robust driving consumable revenue from these customers up 50% year-on-year. Our PanCancer Panel products continue to grow in popularity, driving panel revenue to more than double versus last year setting a new record and accounting for more than 40% of all consumable sales.

Despite the fundamental strength in demand, three factors constrained the consumable revenues realized during the first quarter, resulting in an annualized consumable pull through below our historical and expected range. First, biopharma customers who made extraordinarily large consumable purchases in Q4 worked through those projects in Q1 before reordering. As a result, biopharma contributed less than 30% of consumable revenue compared to over 40% in the first quarter of 2014 and over 50% in Q4 2014. Second, severe weather in the Northeast [stole] ordering in the region with our largest nCounter installed base, delaying some consumable revenue to Q2. Finally, changes in foreign exchange rates reduced the amounts we realized for sales outside the US.

We expect that the pace of ordering from biopharma and customers located in the Northeast will increase in Q2, returning to annualized consumable pull through of roughly $100,000 per system. Collaboration revenue was approximately $680,000 in Q1. The robust study of pivotal Phase 3 clinical trial using Celgene's Revlimid to treat diffuse large B-cell lymphoma or DLBCL opened during the quarter with numerous sites now screening patients based on their DLBCL subtype as assessed by our investigational assay. We anticipate that the results of the study, if successful, will be used to support a PMA filing in the US and other international registrations several years in the future.

Turning to our Prosigna Breast Cancer Assay, sales were $381,000, again modest but trending upward. While the strong sequential growth is promising, we continue to expect that uptake will remain limited until additional reimbursement is secured.

Now I'd like to spend some time covering the progress on the four strategic objectives for 2015, which we highlighted in our last conference call.

First, we remain laser focused on oncology, where we believe our technology plays a unique role and provides us with a strategic advantage. Cancer was once again the primary driver of new instrument placements in Q1. At the recent AACR Annual Meeting in Philadelphia, our customers presented over 40 posters based on the use of our technology. As a result of this ever-increasing profile in oncology, we enjoyed record booth traffic that represented an approximate 30% increase over the prior year.

During the meeting, we showcased several important new products, including our third PanCancer Panel, this one focused on cancer progression. With this third addition to our line of PanCancer Panels, researchers now have the power to explore nearly any question in cancer biology. Today the most exciting area of oncology is immuno-oncology or IO for short, which looks to harness the power of the body's immune system to fight cancer. Because the immune response to tumor growth involves large changes in both RNA and protein expression levels, we believe our nCounter technology is ideally suited for biomarker profiling in this area.

Our first IO product, the PanCancer Immune Profiling Panel introduced in September 2014, quickly gained the following few different customers, including researchers at about 20 different biopharma companies. Today, our customers have used nCounter technology to publish over 200 peer reviewed-papers in the IO field.

We've made IO the major theme of our new products, collaborations and strategy and as a result we're substantially increasing our impact in this area. At AACR, we introduced two significant additions to our IO focused product portfolio. First, in response to demand for biopharma customers, we introduced a Mouse version of our PanCancer Immune Profiling panel, which is designed for use with the immuno-model most commonly used in preclinical drug development. Second, we made IO the target of our first RNA:Protein Profiling Panel, a powerful new category of assay that enables simultaneous detection of gene and protein expression.

This new immuno-oncology RNA:Protein Profiling Panel can simultaneously measure the expression of 770 genes and 30 proteins especially important for understanding cancer immunology, including PD-1, PDL-1 and CTLA-4. We are focused on demonstrating the power of our IO panels to identify biomarker signatures that predict or monitor response to cancer immunotherapies and help identify which combinations of therapies may be best for an individual patient. As part of this effort and in response to interest we have received, we are deepening our relationships with leading academic groups in the field.

On April 1, we announced a multi-year collaboration with the MD Anderson Cancer Center to accelerate the development and adoption of our new RNA protein assays in the field of immuno-oncology and targeted therapies. The collaboration will involve the development of RNA protein assays (inaudible) select clinical studies being run at MD Anderson.

Just yesterday we announced the collaboration with the Cancer Immunotherapy Trials Network or CITN to identify biomarker assay for novel cancer immunotherapies. Under this collaboration, we will work with CITN to utilize our immuno-oncology panels and clinical studies of single agents and combination therapies. Together, our recent technology developments in collaborations with MD Anderson and CITN have thrust NanoString into the center of a dynamic field of immuno-oncology. Importantly, both of these collaborations are structured to generate data validating the use of our panels and to grant NanoString rights to resulting research and diagnostic content, potentially generating even more powerful IO products in the future.

With immuno-oncology becoming a major focus for the Company, we have recently added Dr. Robert Hershberg to our Board of Directors to help guide our strategy. Dr. Hershberg is an oncologist and Ph.D. by training and brings extensive experience in IO and translational medicine. He currently leads Celgene's research and early development efforts across its IO portfolio and oversees a newly formed Celgene Immuno-Oncology Center of Excellence here in Seattle. He'll be a true asset to NanoString and we welcome him to the team.

Our second strategic objective this year is to deepen our relationships with biopharmaceutical companies, including building a pipeline of companion diagnostics. During Q1, we continued to rapidly expand our biopharma-installed base and instrument sales to biopharma set a new record and sales to biopharmas and the CROs to serve them accounted for about 25% of new instrument placements.

In addition, biopharma response to our new RNA protein profiling capability has been enthusiastic. Since unveiling our vision for RNA protein assays at the ATP team meeting in 2014, we have discussed the potential for this technology with more than 20 biopharma companies. We have received tremendous interest and are therefore targeting our product access program to these new assays primarily at biopharma customers.

In parallel, we're continuing to make strides in advancing additional potential companion diagnostic collaborations in breast cancer, DLBCL and other tumor types and we look forward to providing updates in the coming months.

Our third strategic objective is to further penetrate the clinical laboratory market with FLEX Configuration of our nCounter system, our Prosigna assay and Elements reagents. We've made steady progress on this objective. The popularity of the dual-use FLEX Configuration of our nCounter system totaled approximately 70% of new instrument placements in Q1. Many of these systems are going to clinical laboratories, validating our strategies in finding cancer research and diagnostics on a single platform.

The number of Prosigna sites has increased to 42 clinical labs across 13 countries. In the US, 10 labs are now offering Prosigna services and another nine labs are preparing for launch. Outside the US, 15 labs are offering Prosigna services while another eight labs are preparing to come in line in the months ahead. Prosigna's profile continues to increase in Europe.

In March, Prosigna was included in the updated German treatment guidelines and a Government Committee recommended that qualifying breast cancer patients be eligible for government insurance coverage of gene expression test such as Prosigna. Then later in March, Prosigna received strong endorsement by panelists at the St. Gallen International Breast Cancer Conference. Specifically, Prosigna received highest number of votes of any test including (inaudible) for the prognostic power in years 1 to 5 after diagnosis and for years 5 to 10. Additionally, over 80% of the panelists indicated that they would spare women chemotherapy if categorized as low risk by Prosigna.

We look forward to seeing how these votes are reflected in the St. Gallen guidelines when they are updated later in the year. Meanwhile in the US, we remain focused on gaining additional reimbursement. Despite the fact that the NCCN guidelines have not been fully updated we have continued to engage with payers, including the leadership of the MolDX program sharing our expanding body of clinical data. We have been encouraged by these discussions and are optimistic that we may be able to gain coverage independent of NCCN guidelines. However, the pace of our payer discussions remain deliberate and the timing of coverage decision is uncertain. Therefore, we are maintaining our guidance assumptions that any (inaudible) MolDX covered for Prosigna will not impact 2015 revenues.

Our fourth strategic objective is to expand our addressable market by launching products with broad affordability and appeal. Of the launches so far this year, we would highlight the new RNA protein assay capability as the most potentially transformative. We believe that this new application will broaden the appeal of our technology to researchers who are traditionally focused more on proteomics and provide another distinctive capability not generally available from other technology platforms. The IO RNA protein assay will be available under limited product access program during the next several months with a broader release expected late this year. Meanwhile, we are working to add other RNA protein assays to the menu building on our popular PanCancer Gene Expression panels.

Our single most important new product of the year, our lower cost nCounter instrument remains on track for a mid-year launch. The new instrument is designed to meet the needs of individual researchers and a smaller footprint and at more affordable prices. This instrument will be compatible with our entire menu or research-based assays, including our new RNA protein capability. We estimate that the availability of this system will increase our addressable market by two to three times what it is today, accelerating the growth of our installed base.

Together, we expect the launch of our lower-cost nCounter and RNA protein application to broaden our addressable market, further differentiate our technology and build our strategic advantage in the field of tumor profiling.

Now I'll turn the call over to Jim to review our financial results and provide financial guidance.

Thanks Brad. The Company had a solid quarter with total revenue of $11.6 million, up 32% versus the first quarter of 2014. Instrument revenue for the quarter was $4.4 million, up 27% over first quarter 2014 and system sales were particularly strong in US and Europe among both academic and biopharma customers.

Consumable revenue was $5.5 million, 15% higher than a year ago. As we described in our last quarterly call, Q4 2014 reflected more than the typical volume of large orders from biopharma customers and represented more than 50% of our consumable business in that quarter. This resulted in reduced order flow from these customers in Q1 as they digested these Q4 purchases.

Aside from this one dynamic, all other customer segments showed strength. The purchases from academic customers is up 50% year-over-year and significant momentum in sales of panels and element reagents, both of which more than doubled year-over-year. As Brad mentioned, our consumable revenues for the quarter were also negatively impacted by adverse weather in the Boston area, which represents our largest region of installed base and strengthening of the US dollar versus foreign currencies.

Prosigna test kit revenue grew to $381,000 a significant step-up from the previous quarter. We are seeing increasing momentum in the demand for Prosigna kits, but there may be some variability from quarter-to-quarter.

As you know, we calculate pull through per system each quarter based on total research in Prosigna consumable revenues in relation to our total installed base of systems at the beginning of the quarter. In the first quarter, we fell below our $100,000 per system annualized benchmark for the first time. However, we believe that other than the foreign exchange impact, factors responsible are temporary. We recorded $761,000 of collaboration revenue for the quarter and most of this relates to our Celgene collaboration with a modest contribution from a small exploratory research collaboration that was initiated in the fourth quarter.

Gross margin on product and service revenues for the quarter was comparable for the first quarter of 2014 at 51% and gross margin during the first quarter was impacted by the same factors that caused reduced consumable pull through per system.

R&D expense was $5.9 million compared to $4.7 million in the first quarter of last year. The increase reflects costs related to diagnostic development, including the Celgene collaboration and investment in the development of new nCounter products and technology.

SG&A expense was $14.1 million for the first quarter, up from $10.7 million a year ago. The increase reflects the impact of personnel hired in 2014 to support Prosigna commercialization as well as incremental G&A costs to address the company's growth. Stock-based compensation expense was $1.3 million for the first quarter of this year compared to $1 million a year earlier.

Our GAAP net loss for the quarter was $14.9 million or $0.81 per share, compared to $11.4 million or $0.68 per share in the first quarter of last year.

In prior quarters, we provided a schedule of non-GAAP financial information to adjust for the impact of preferred stock that was outstanding prior to our IPO and certain other items. Because our historical comparisons are no longer impacted by this preferred stock, we discontinued the non-GAAP presentation.

We ended the quarter with approximately $56 million of cash and investments. And I'd also like to highlight that we've extended the period for borrowing the remaining $15 million available under our term loan agreement by six months. We now have until November 30, 2015, to access this funding fully at the company's option.

Now I'll turn to financial guidance. We are not making any revisions to our full-year 2015 guidance at this point in time. We continue to expect total revenue of $58 million to $61 million for the year, which includes $2 million of Prosigna revenue and $2.5 million of collaboration revenue. Based on our visibility year-to-date, we would like to provide some thoughts on quarterly revenue trends. Regarding instrument revenue, we just reported a relatively strong first quarter and as a result we expect Q2 instrument revenue to be roughly flat versus Q1. In Q3, consistent with our previous comments, we expect our initial revenues from the new Gen 3 system and we expect instrument revenue growth versus the prior year to moderate while the funnel for the new system builds.

With respect to consumable pull through, which includes both research consumables and Prosigna IVD kits, we expect to be at roughly $100,000 per system annualized in the second quarter. This implies a step-up of $1 million to $1.5 million in Q2 as compared to Q1. For the full year, we expect to be at or above the $100,000 per system we generated historically.

Collaboration revenue in Q1 was higher than the $625,000 per quarter run rate, adjusted by our annual guidance and we currently expect an offsetting reduction in Q2 that will put us at approximately half of our annual guidance as of mid-year. And as a reminder, any potential new companion diagnostic collaborations represent upside to this guidance.

For the full year, gross margin on product and service revenue is still expected to be in the range of 53% to 55%, and ignoring the impact of revenue mix, we expect gross margin to trend upward over the course of the year, consistent with the expected growth in scale of our consumables, manufacturing, operation and as a reminder, collaboration revenue is excluded from our calculation of gross margin.

For operating expenses, we continue to expect a total of $77 million to $81 million for the year, including approximately $5 million to $6 million of stock-based compensation expense. Our operating loss for the year is still expected to be in the range of $42 million to $49 million. We continue to expect interest expense of approximately $4 million for the year and capital expenditures of $4 million to $5 million, approximately half of which will be funded by our landlords as leasehold improvements.

So with that, I'll turn it back over to Brad to wrap up.

Thanks, Jim. So far in 2015 we are successfully executing our strategy to place our company and technology at the center of cancer research and diagnosis. We made solid progress on our four strategic initiatives and then particularly are poised to play an important role in the dynamic field of the immuno-oncology. We believe that successful execution of our strategy will drive growth and value creation not just in 2015, but over the long term. We look forward to updating you on our progress during future calls. I would now like to open up the line for questions.

(Operator Instructions) Tycho Peterson, J.P. Morgan.

Hey guys, this is Tejas on for Tycho. Can you help us quantify the impact of timing versus FX versus weather in terms of your consumable pull through number? And what exactly was that number in the quarter?

Sure. This is Brad. The actual pull through number in the quarter including Prosigna was $85,000 to $90,000 per system, per year, so slightly below the $100,000 per-year benchmark that we've talked about often in the past. Parsing that, the three factors that I described, the difficult -- probably the easiest part to understand is the biopharma revenue. So in the first quarter of 2014, biopharma revenue accounted for over 40% of our consumable revenue and in the first quarter of 2015, it was less than 30%.

So that 10% swing implies that consumable sales would have been over $0.5 million dollars higher if biopharma ahead consistently showed up for 40% of our consumable sales. It's worth remembering that in the fourth quarter of last year we had an extraordinary biopharma quarter where they accounted for over 50% of our consumable sales.

The impact of weather on FX, I'd say was less overall than the impact of biopharma but about equal in magnitude.

Got it. And then, just a quick follow-up on NCCN guidelines, I thought I heard you say Brad, that you are now optimistic about coverage independent of that decision. Can you just share some of your thoughts on, what's driven the ships, because earlier, you had spoken about coverage being contingent on those guidelines?

Yes. So we had the opportunity over the last year since we first put our (inaudible) in front of the NCCN to generate substantial additional clinical evidence. And so in many ways the NCCN guidelines when they are fully updated will be lagging by about a year on the (inaudible) clinical data. We've had an opportunity to remain engaged with payers, especially the MolDX team regarding our new clinical data that include things like decision impact study results that demonstrate clinical utility and five other abstracts that will be presented at ASCO, so some of that has been shared confidentially with payers and the reaction has been positive. And that's been encouraging to us that some of these groups will be able to move forward with decisions that may be independent of the NCCN guidelines.

Jeff Elliott, Robert W Baird.

Good afternoon guys. Thanks for the question. First one is really just a follow-up to the last question on the pharma consumable spending or purchasing. What do you see in the second quarter so far in terms of pacing there?

Jeff we're not going to provide specific Q2 results at this time. But I won't say that we're seeing a recovery in ordering patterns from some of those customers that had seen a slowdown in the first quarter. So we're encouraged overall that we'll see the recovery of biopharma ordering in this quarter that will drive our consumable pull through back in aggregate to roughly a $100,000 per system.

Got you. In terms of Prosigna coverage, either in terms of covered lives or percent of market covered?

Sure. So in the US today we believe we have about 50 million covered lives which represents just over 20% of the relative intended use -- the relevant intended youth population. Encouragingly through our Prosigna Patient Support Program, which does benefit investigations for patients who enroll in that program, we've had an opportunity to understand the benefits that are being provided by private payers, who don't have formal written policies yet about Prosigna. And a majority of those cases where we've done benefit investigations private payers are providing coverage for Prosigna. So your effective coverage may be slightly higher than the 20% or so that have verified positive coverage decisions.

That's great. And then one last one here, any idea of when NCCN will update the guidelines?

We really don't have a lot of visibility in NCCN process. We were -- as you know from the last call, expecting that the April issue of the Journal of the NCCN would include an article describing the full guideline including the discussions section. When that article did appear it focused only on local, regional testing, things like surgery and radiation and didn't speak to the question of genomic testing at all. So we haven't yet seen the full update to the guideline included in discussion section. We're sure that eventually it will appear, but we're not in position to provide you any guidance about when to expect to see that and only for that reason that we've been moving forward with dialogs with payers independent of the NCCN timeline.

Luis Garcia, Morgan Stanley.

Good afternoon Brad and Jim. I am on for Steve today. I was just wondering if you could maybe discuss the protein expression testing functionality and give us a little clarity about how we should think about financial impact on the consumables and products side and timing for that?

Yeah, we'd be happy to. So, we believe that the RNA protein application is potentially transformative. What it allows the researcher to do is out of a single -- effectively a single slice from a tumor biopsy get up to 770 genes of -- gene expression data and 30 protein expression markers. So it allows researchers in the field of cancer to get just unparalleled value from their very precious tumor biopsy samples. We know that cancer researchers want that, 80% of cancer researchers who we had spoken to look both at nucleic acid like RNA and protein, but they typically do so in two different experiments on two different pieces of equipment, and what we offer them the chance to do is take just one sample of that tumor and get all the information at once increasing their productivity and importantly the information out of the tissue.

The way we're bringing RNA protein assays to market is by first building protein capable version of our very popular PanCancer Gene Expression Panels. And we'll be releasing those product access programs over the course of 2015. We are starting with the immuno-oncology version that we released at AACR and then with a pathway version to follow later this year. We'll expect this new capability to be under our product access program for most of 2015 with commercial version beginning to appear late this year. We will be charging mostly biopharmaceutical companies and to a lesser extent researchers for access to that program, so there is some modest contribution to revenue in 2015 that baked into our guidance, but we really expect the substantial growth driven by this product to come in 2016 and beyond.

Okay. And so you're seeing probably more, what I understand, a consumables -- increasing share of consumables rather than product sales. Would you, -- for example, would you see additional product sales traction maybe on the Gen 3 instrument with a protein testing functionality?

We absolutely think that the protein functionality that we're offering increases the appeal of our instrument and will help drive instrument uptake. Of course the participants in our product access program that will be working with the new [app is] our -- first our current owners of the nCounter system by and large. But over time, we do expect this to increase the appeal of our technology and further differentiate it from alternative offerings and therefore drive more instrument sales.

Great. And if just shifting focus, sorry to the companion diagnostic platform. If we assume no incremental collaborations, how should we be thinking about cash burn in the balance sheet in the next two years?

Well you make a good point, why does that companion diagnostic activities are important to our financing strategy. Consistent with our net loss guidance for the year, we believe we've got sufficient cash investments to take us well into next year. And we also have $15 million of additional borrowing capacity that's available to us that would add to that. But clearly our strategy is to augment these funds with cash flow from additional companion diagnostic collaborations. And by successfully executing on that, we think that that will reduce the need for us to raise funding through other means, like equity.

Great, thank you so much.

Yes.

Dane Leone, BTIG.

Hi, thanks for taking my questions. So, as this kind of quarter played out and you're thinking about the rest of the year in regards to the NextGen system, within the scope of guidance what's kind of contemplated in revenue contribution once you hit the market with the NextGen system, I guess, around mid-year?

Thanks for the question Dane. We haven't broken out our instrument revenue guidance for the year into Gen 3 system versus our current Gen 2 and FLEX systems. We have said that the first revenue from Gen 3 will come in the third quarter and then of course we would expect it to grow into the fourth quarter as that's the largest quarter of the year for capital purchases and we'll have had, -- our sales team will have more time to build a Gen 3 focused funnel. So we do expect it to be an important contributor to instrument revenue growth in the second half of the year, but we haven't quantified that specifically.

So when you think about the launch of the NextGen system, I think you guys have kind of skipped the beta testing period, does that mean Q3 is kind of quasi beta testing for some initial adopters before you're really able to go out to the broader target customer? And then, when you think about 4Q expanding the commercial effort, the target accounts that you plan to hit, are these accounts that you currently have relationship that don't really think that current Gen systems are appropriate for them and are looking for this NextGen System to kind of be optimized to their needs or is this -- or lot of these accounts going to be new relationships that your reps are going to (inaudible)?

Yes. So first, the clarification on the launching in Q3. We are going with a full commercial launch right out of the gate. And then that's the way we've actually launched -- the last two instrument systems launch, both the Gen 2 RUO system and then the FLEX system were extensively validated and put through extensive reliability testing internally, so that an early access or a beta launch period was not required. Our sales force will be trained to sell the technology and will be selling it as a full commercial launch at around the mid-year timeframe.

The customers we'll be targeting will be people who are very similar and the similar or even the same institutions as many of our current nCounter users. The difference will be that these will be individual researchers rather than just the core labs. And we collected over time a long list of potential customers who are intrigued by the capabilities that our nCounter chemistry provides, but who could not afford the $235,000 to $285,000 that the systems that we sell today list for. And so we'll be going back first to customers who previously expressed interest in nCounter that haven't been able to afford their own system.

In addition, we've begun a substantial lead generation program focused on individual cancer researchers who do the type of biomarker discovery and developments that our technology is most popular for. We've begun to engage them once again about the capabilities that our chemistry provides. And we look forward to unveiling to them a more affordable option that's suited to their needs.

So I think, to summarize, we'll be coming with a full commercial launch mid-year and we do expect, you know, to get a running start based on customers we've been engaged with in the past and institutions that are already familiar to us.

Okay, great and one last one from me. When you think about the launch of the Multi-Omic Assay, this of course seems like a bit of abnormality in terms of pull through per instrument. But with the launch of the Multi-Omic Assay where -- what's kind of the thinking you go through, when you say okay, this is something new, interesting and different versus what anyone's been able to do before, where can this kind of pull utilization rates of the current nCounter systems on the market. I guess we're trying to think of, it is cannibalistic to experiments that are currently going on with our nCounter machines and just getting a better utility function out of them or do you think this raises -- is more additive and raises the actual utilization levels of the machines?

I think it's a little early for us to know for sure, since we're just entering the product access program, what the RNA-protein capability will do for our pull through. But we expect that it will -- for existing customers drive them to get more information per sample and therefore potentially spend more on a Multi-Omic Assay for that sample than they would have on a gene expression measurement alone and that could provide increased pull through at the margin. We'll be watching that carefully as we move towards a full commercial launch of the RNA-protein assay.

I think just as importantly it makes our technology appeal to more cancer researchers and it effectively can increase our installed base by driving people to adopt our technology where they'd adopted a less capable technology otherwise. I think it's great that the RNA-protein capabilities coming along at the same time approximately as our lower cost system, because it can increase the appeal and at the same time that we're increasing the affordability of that system. And so I look forward to seeing what it can do for installed base growth.

Thank you. And at this time, I'm showing no further questions in the queue, I'd like to turn the call over to Brad Gray, CEO for any closing remarks.

Thank you all for joining us on the call today, and your interest in NanoString. We look forward to seeing you at upcoming investor conferences and non-deal road shows.

Ladies and gentlemen, thank you for your participation on today's conference. This concludes the program. You may now disconnect. Everyone have a great day.