All right, good morning, everybody. Welcome to day three of the Stephens Investment Conference. I'm Jacob Johnson, the life science tools and pharma services analyst here at Stephens. Really happy to have you all joining us today. And what worked out good timing, really excited to have the team from MaxCyte with us here today. We have CFO Doug Swirsky and Sean Menarguez, who has the title Senior Director of Innovation and Business Development. So Doug, Sean, thank you for being here. We'll talk about the topic of the day in a second, but maybe, Doug, I'll turn it over to you or Sean first for any opening comments, and then we'll launch into Q&A. Thank you, Jacob. First off, during the course of this discussion, I'm sure we'll make a number of forward-looking statements within the meaning of securities laws, so please consult the risks in our filings to better understand you know where we're coming from. You know, first of all, I want to acknowledge Doug Doerfler would've loved to have been here today. He had a long-standing conflict. I think this is an important day for the company, seeing our partner receive regulatory approval. It's been something that the company's been working you know working towards for a long time, and we're very excited. I'm sure Doug would love to be here and personally, you know, begin the process of thanking folks that helped, you know, the MaxCyte along the way towards this, you know, towards this event. So I wanna thank you and your colleagues at Stephens who have helped us along the way. I also wanna welcome Sean up here with me, and I think Sean's been a long-standing member of the team since the IPO, since before the IPO, and as you noted with his title, is moving to a business or has already moved to a business development role within the company. And so he's up here to answer all the tough questions about the SPL partnerships. But we're really excited to be here. It's obviously a great day for us to be at a conference and talking about our platform, and, you know, congrats to Vertex and CRISPR for MHRA approval of exa-cel for transfusion-dependent beta thalassemia and, of course, sickle cell disease. So, looking forward to your questions. Perfect. Well, that's a good place to leave off and for me to start. So, you know, best plans, I come up with these great questions about the platform, and then I wake up this morning in Nashville and see what is good news, which is, to your point, U.K. approved. I think it's Casgevy, is what we're calling it now, but we'll call it exa-cel for this presentation because I at least know how to say that. So, it was approved in the U.K. this morning. And then you still have a December eighth PDUFA date here in the U.S. So you support this therapy. You were in the regulatory filings with the FDA. You have an SPL with both CRISPR and Vertex. So I wanna look at this kind of from the near term, meaning, I guess, I wanna look at this from 2023, 2024, and then the medium to long term. So I think the first question is kind of the 2023 term question is, I believe you have milestones for approval. Can you just talk about what this UK approval would mean for MaxCyte? This will trigger a milestone payment to the company. We're looking to determine whether or not we have to disclose a specific amount, but I think we've probably talked about, you know, milestone, approval milestones being, you know, low to mid-single low to mid-seven figures. And so we'll, we'll wait and see what we end up disclosing there, but it, it will trigger a milestone payment. Obviously, we're increasingly comfortable with the, the guidance we provided for SPL program billing and revenue for 2023. Got it, and then I think the more difficult question that we've started getting from some investors is... And I think it's difficult for you to even know, but you know, beyond the initial milestone, then there's back-end economics. There's you know, I think some form of milestone or royalties, plus consumable sales, leased instruments. You know, some of that's gonna depend on what the ramp looks like, but any kind of color about how we could think about the ramp of this drug as we look into 2024, realizing it's too early to discuss too much about 2024. Right. So I think you understand the basic economics as we've articulated it. You know, when we speak broadly about, you know, our programs in general with partners, where we're looking to participate on the downstream economic success of those programs, you know, in that low to mid-single digits, which includes the processing assemblies, it includes sales-based payments, and it includes the leased instruments. So in terms of what exa-cel approval means to the company, you know, we're not gonna get ahead of our partners and speak about, you know, what we think that ramp looks like. So we probably don't have a great answer for you there to say what this means for 2024 and beyond, but we're excited to be where we are today. Got it, and then I think maybe the more interesting one in some ways to me is the longer term. So I'm curious, what do you think this means for, like, broad efforts around gene editing? Because that's the other piece of this. This is the first gene-edited approval we've seen. So it's kind of a landmark from that perspective. So what do you think it might mean for your customers and maybe interest in those pipelines? And then two, for your commercial team, we've seen other cell and gene therapy companies do very well selling their support of a commercial therapy. So what does this mean for your business development people in going to customers about MaxCyte and being able to point to the support of a commercial program? There's a lot there to unpack, but let me just say, I mean, clearly, this is a monumental day for a number of folks in our industry, right? So if you're looking at, you know, at CRISPR and that technology and seeing now an approved product, if you're looking at non-viral cell engineered cell therapy, big day there, if you're looking at MaxCyte, obviously it's a big day for us. I do think that from a business development point of view, and I mentioned, you know, Sean has already moved into that role, and I did say that, you know, his job I think has gotten a little easier now, because this is enormous validation. We've supported this program from early days, and have continued to you know, provide, you know, support in our platform, you know, all the way through regulatory support, you know, access to our, reference our master file, the FDA. There's a lot that I think we've done to contribute to this. It's their day, of course, and we don't want to, you know, you know, overstep, but we're excited to be where we are today. I think for potential and current partners, it's great to see somebody cross the finish line, and it gives them comfort. You know, we are a premium priced, you know, platform, and, you know, part of that is being able to demonstrate that we can take somebody really from, you know, concept all the way to commercialization on a program. You know, we're now seeing, we're now being able to articulate that obviously more strongly, that we have an approved partner with an approved product. Sean, do you want to add to this? Yeah, and it's important, and thanks, Jacob, for the question, 'cause I think, you know, as Doug said, you do have the first non-viral engineered, and then you also have the first CRISPR as well, so it's a huge validation for the field and specifically for non-viral cell engineering. But it's important to look back on the relationship we've had with CRISPR Vertex. CRISPR was our first SPL partner, first signed in 2017. We've been working with them for close to 10 years, originally when it was actually Casgevy, and working on that early, you know, proof of concept preclinical work. And to be able to scale from that preclinical to process development, to as they transferred the assets to Vertex, tech transferring that to CDMOs, setting up clinical manufacturing process, now commercial, is really the, you know, the epitome of a therapeutic platform. From really providing a proof of concept scale to commercial, which is, you know, a great marketing message from a business development front. And also the way developers look at, you know, when they evaluate MaxCyte too, is from an investor standpoint, it's, you know, always looking at our partner slide, right? And that's the way also partners look at it, as prospective partners look at it as well, is looking at the clinical data that's been shown on the platform. Now we're coming at the commercial kind of validation aspect of things, which is really important as they're evaluating options. You know, we're looking for the market to you know, attract more capital. I think, you know, we've talked about how the macro has impacted, you know, MaxCyte's business and, you know, seeing some successes out there, and this is, I think, a great event for the industry. Would love to see some additional capital, you know, flowing towards you know, cell therapy companies, which I think will benefit everybody. Maybe I'll pause there. I think we've covered a lot on this, but to see if there's any questions on this topic, and then, then we'll dive into kind of the business at a higher level. Higher level it is. Maybe first, you kind of mentioned, you know, it's a big, big day for non-viral delivery. Can you just talk about why cell and gene therapy developers would choose non-viral delivery versus, you know, viral vectors? So always a fun question for me to answer because, you know, my background, I was, you know, involved with viral-based gene therapy for many years at a few different companies. And you know, just sort of understand that there is still gonna be a role for virus, and we don't expect non-viral to completely displace virus. And certainly the early programs and early commercial programs in cell therapy are viral based. But things are getting more complex. You know, people are looking at you know, they're developing therapies with multiplex editing. They're doing more to that cell to create a more effective and safer therapeutic. This is where I think non-viral can shine, where you're dealing with, you know, trying to do a lot to a cell, and we can be part of it. We don't have to completely displace viral because, for instance, we see programs that are using multiple approaches to, you know, do everything to the cell. We've got a partner in the clinic with four edits to the cell. So that complexity and that growing complexity that we'll see is gonna benefit non-viral. Certainly, there are limitations. Using a virus, you run into packaging capacity issues. Sometimes there are safety concerns, integration concerns, depending on the specific vector used. So, we think that non-viral is going to continue to grow, particularly as the product concepts get more complex, and, you know, we're looking forward to participating in that. Sean, you want to add something? Yeah, and one of specific kind of market sizing as well, it's important as you look at cell therapy as breaking up between in vivo and ex vivo. You know, ex vivo is where MaxCyte plays in the end markets, and that's about 75% of that end market. When you look at ex vivo specifically, it's that viral versus non-viral. Non-viral, from our estimates from program level, is about 40% of the ex vivo cell therapy market. We do see that trend growing for the variety of reasons that Doug discussed, is the complexity of these edits, as you're seeing next generation products. The autologous CAR Ts that are commercially approved now have one viral vector insertion where they transduce the CAR. Now we're seeing next generation autologous CAR Ts. We're seeing allogeneic, where you have to do multiple edits, and instead of just the one step of the transduction of the CAR to express the CAR that goes after that specific antigen of the cancer, you have multiple folks that are working on additional edits to help with persistence so that, you know, T cells, for example, persist longer in the body or knock down a pathway to boost antitumor activity. And that's the increasing complexity, which really draws the non-viral approach. That's helpful. And then just on electroporation in general, you know, we've seen some other companies launch electroporation, which I think in some ways validates that, you know, there's growing interest in this space, but it also means competition. So can you just talk about how you differentiate yourself versus some of these other competitors? Yeah. So we've always said we have a healthy degree of respect for competition, and that means that we're not going to be complacent. You know, we pioneered this field, and we continue to invest in it with, you know, applications, with protocols for using our platform. Our platform is very comprehensive, right? So it's a range of instruments, a range of disposables. It's a very scalable process, and obviously, today's validation is a really important part of that, how we support our clients access to our FDA master file. So I don't think that we can completely rest on everything. I think we need to continue to invest and develop. I think we are a premium product. We deliver tremendous support through our field applications team to our partners. You know, yeah, it is interesting to see other folks come into it. I think a lot of times, you know, some of those instruments, you know, are focused on, you know, earlier stage. They're going to be tougher to scale. You know, we're monitoring this, and we're going to try to stay ahead of the curve. Got it. And maybe just kind of on staying ahead of the curve and the validation of today and I think what Sean said about the clinic. I mean, this is a space that's rapidly evolving and has seen really impressive growth the last couple of years. And the FDA is paying more attention, I think, bringing in resources to better support it. But the one thing they've highlighted is, you know, the importance of drug master files, and that eases, I think, the CMC process. So can you just talk about what you have done to ease the regulatory process for your customers? All right. So you mentioned the Drug Master File. That's an important part. You know, it's integral to the quality and regulatory support that we provide to our clients. We established our DMF in 2002. Since then, it's been referenced over 45 times for clinical trials. And you know, again, we think this is something that gives people comfort. They're using our system. There's a path to the clinic and now beyond. In terms of additional support, you know, we try to make it very easy. We try to make audits non-events. Yeah. One of the things, Jacob, too, is when you look at the competition piece, and it's good to have a healthy degree and, you know, you're seeing private companies that come into the space, but I think it's a testament to- Yeah ... to the, not to the trends that we've kind of discussed earlier. And one of the things, too, is, you know, looking at the platform itself with the high performance and scalability, but it's the support that comes with it, with the scientific and application know-how and ready to engage with customers. We have field scientists out in the field working with optimizing that cell engineering workflow. It's really critical, not only in the process itself, it's pretty reproducible as you run through the instrument, but the, you know, the pre-aspect and post-aspect of cell concentration and recovery, etc. And to your point on the regulatory, we provide the regulatory and quality support. You know, we did have a master file in place since 2002. It's been, we've had technical files in geographic regions as well across a variety of countries. And one of the things, too, is with the FDA guidance is, you know, they specifically mentioned, you know, locked-in electroporation protocols, which is featured in the instrument as well, kind of locking down that CMC. The FDA also said about how, you know, they recommended in their preliminary guidance a couple of months ago about having a scalable process before initiating the clinical studies. Yep. And that's something, and if Doug was here as well, as you know, he that's something that he's been, you know, shouting from the rooftops for the past, you know, a bad decade now. And even CRISPR has made public comments of how important it was with the exa-cel product to have a commercial-ready process from the get-go for those CMC discussions. Yeah. Yeah, that's certainly something Peter Marks harps on a lot. Mm-hmm. ... it's and especially how quickly some of these are getting approved. Sean, just one, can I just follow up on the lockdown electroporation protocols? Is that something you've mentioned? And I probably don't appreciate why that is important or what that is. Can you just help illuminate that? Yeah, absolutely. So, first off, with MaxCyte protocols, we have an applications team in-house that, you know, we've been working at this for over 20 years with building the application know-how. We have over 100 protocols based off of the cargo you're delivering the cell and the cell type. Customers have access to those protocols, and those protocols are locked in to be able to produce consistent results instead of, you know, ad hoc, you know, you know- Yeah ... monitoring and adjusting the different, you know, features of the instrument, whether it be pulsing patterns, etc. 'Cause it's really important when, you know, you're doing a cell therapy manufacturing run in Chicago, it's very similar to the one that's being done in London, and that consistency is really important. Got it. Maybe question. As we think about, you know, future approvals, SPLs, can you tell us how many you have in phase III, phase II, phase I? Just for the webcast. The question is kind of as people are thinking about the pipeline, can you just discuss how many customer products are in phase I, II, III, etc.? And maybe along those lines, Sean, I think you can highlight the great slide you have in your deck. Sure ... of like the upcoming, potential approvals. Yeah, I think that's where we were going to start. Sure. You know, in response to that question, trying to understand, you know, what is the heart of that question really is, you know, where do we think we're going to see additional approved products? And I think, we've got a slide that we introduced into our corporate deck earlier this year that Sean put together. It talks about the waves of potential approvals. And Sean, maybe highlight a few things from that. Yeah, there's. It's a great question of kind of what's, you know, the, the what's behind ExPERT question, and that's why the purpose of putting the slide as well is we are building a portfolio that's in the clinic. We do have a slide on corporate deck. We call it the wave slide. I believe it's slide 13, and it shows seven potential approved therapies between a launch date between 2025 and 2027, according to Evaluate Pharma, and then the third wave of potential approved therapies between 2028 and 2030. We also include the indications that are set within those waves. The second wave is, you see lymphoma, leukemia, your blood cancers, sickle cell, and beta-thalassemic diseases, and then also solid tumors as well. And as the waves go on, too, you're starting to see the expansion of indications now. We're starting to see, you know, a lot of work in autoimmune disease, for example, which opens up addressable patient populations for these, you know, CD19 CAR-Ts. And then the fourth wave that's building is the preclinical programs, so we disclosed over 20 preclinical programs that span from neurodegenerative disease, genetic disease, rare diseases, solid tumors, and autoimmune. ... seven potential approvals. 7, 8, and then 23 preclinical. Over 20 preclinical. Over. So for the record, it was like seven hours after you got your first approval that people asked what's next, so maybe just for me, moving to the macro, it's been topical this week, it's been topical this year. You know, you pre-released three key results, introduced guidance. I think you're the first to do it, and perhaps as an ominous warning sign of what was to come this earnings season to some degree. So can you just talk about, you know, the softer PA demand you're seeing, and maybe the macro demand trends in general? Yeah. I mean, I think the financing market has been very tough for a lot of cell and gene therapy companies. You know, we're coming off sort of really boom times, right? In 2020, 2021, and clearly, you know, financing had gotten scarcer for some of these companies. So we saw softer demand earlier this year from those types of companies, in particular, the early-stage companies, the folks that had completed a Series A and were working towards that Series B and finding that financing cycle had elongated. Really in the third quarter is where we start to really see its impact across our entire business, particularly on the PAs, where you know, a lot of that shortfall came from. So, I think, you know, the continued portfolio rationalization, which in general we've had been buffered against because we're working generally with the lead or number two product for our partners, and so, it hasn't impacted us that much. I think customers did build up inventory in 2022, and have started to take that down. It's more than covered their needs. I think the selling, you know, when they're ordering now, I think they're more carefully managing their cash, and so those orders have been, you know, slightly smaller than they have been in the past. You know, but we're optimistic that things will rebound, and we don't think that... Everything we see about the macro, we think is somewhat transient, and we also do believe that, you know, additional, you know, clinical and regulatory success in this industry is hopefully going to attract more capital and helps. We've always talked about being a little bit of a play in cell therapy, right? You don't have to take the binary risk of one program. Yeah. You can invest in MaxCyte and have broad exposure to that industry, and you know, that's great, but it also means when you know, there's less you know, financing available and things are developing slower for those companies, you know, that is gonna impact us. So that was the shortfall. We've tried to take a real conservative view of the rest of the year in revising that guidance, and you know, happy to answer questions around that. Yeah, maybe just one kind of follow-up on, you know, the segments. Yeah, so you talked about cell therapy, and I think people understand, you know, the funding in that space. But the other segment is drug discovery, which, you know, you would think would be maybe more exposed to earlier stage and more exposed to biotech funding. So can you talk about why drug discovery is actually holding up a little bit better in that kind of customer base, in that segment? Yeah, I mean, drug discovery, a lot of that is... It's larger companies, and it's, you know, well-funded, you know, academics, and or relatively speaking, less- Yeah ... impacted by, you know, the markets. So I think I'll let Sean talk about the use cases and provide a little bit more detail on how that's used in drug discovery. But this is a group that's gonna have a little bit more, you know, resilience during times like this, and it's a good thing that we've got sort of a little bit of a diversified business. Maybe, Sean, some of the use cases that gives us, you know, helps us with drug discovery and helps people understand that business more. Yeah, no, absolutely. And when you look at the cell therapy side, it's really when the cell itself is the drug, right? You're, you're inserting a cargo, whether it be a gene editing tool, and that's the therapeutic product. On the drug discovery side, it's when you look at the cell as the transfected cell is the producer cell. The cell's acting like a factory to create something. So whether it be small-scale protein production of transient proteins, whether it be a monoclonal antibody or recombinant protein, you're inserting a, a plasmid into a producer cell, call it a HEK or CHO cell, that produces that antibody. You know, you could have small-scale viral production. Other use cases are small molecule screening, cell-based assays, and the breakdown of those customers are mostly large pharma and academics, as Doug discussed. Got it. And then just kind of going back to guidance, Doug, you mentioned, you used, I think, the word conservative. I think visibility has been difficult for most everybody this year. So can you talk about how much visibility you have in the customer demand trends in general? And then, have you made any changes, you know, to how you approach, you know, understanding your customers' demand? Sure. So there's 6 weeks left in the year. We're not gonna talk about 2024 today, but I think we can provide a little bit more clarity on how we see 2023 shaping up. We talked on the earnings call about, you know, why we were confident in that number that we provided, the revised guidance for 2023. We talked about the visibility we had into our business. One, the lease revenue being relatively stable. Two, taking a conservative view on PA orders. I think in the past, we've looked at a lot of data, and, you know, regression analysis by customer and trying to predict what that demand would be. I think given how challenging the market was, particularly in Q3, we decided to take a very conservative view and just assume, you know, what that daily run rate looked like. We would just extend through the end of the year, and then, of course, instrument sales being another piece of that. And, you know, instrument sales, you know, that sales cycle has elongated a little bit for some folks. It's just the bar is raised in making, you know, capital allocation decisions for some of these folks, but we've got good visibility into what that book of business looks like. So I think one thing I do want to say today is that, you know, you know, looking at things in real time, you know, we are... Increasingly confident that we will meet or exceed the 2023 guidance that we provided both in terms of core revenue and in terms of SPL program-related revenue. Thanks for that, Doug. Maybe just quickly, you mentioned kind of lease revenue is a little more dependable, which I guess, you know, lease revenue is recurring revenue, probably helps. But why is that holding up relatively better than PA sales? I think it has to do with, you know, what's triggering that. When people are getting into those SPL arrangements, that includes the leased instrument, they're doing that, you know, as they embark on their clinical development. And those are the programs that tend to be, you know, more resilient because, you know, the companies typically have the appropriate amount of capital going into a clinical plan, right? And if people don't want to fund, you know, half a trial- Yeah. Right. So there's just a little bit, you know, less likely to sort of be impacted by, you know, the... As the winds change. Yeah, I'll pause there if there are any kind of macro-type questions. All right, so we, you've mentioned SPL multiple times, it's come up a bunch, but we haven't talked about what it is. So for those who are less familiar with MaxCyte, can you talk about the mechanics of these SPLs and why you have this kind of business model? Yeah, so, yeah, thanks, Jacob. And it is an innovative business model, and it's rather unique to be able to capture the value of the platform and the support that we provide. And it's the goal is, you know, a win-win approach for a sustainable business model that's based off value inflection events. So if you go through even before the SPL, before a customer becomes an SPL, the customer journey is we'll primarily sell an instrument, primarily the ATx, that's lower scale, and they'll do their preclinical work. As they and provide that technical support to them and scientific support, as they progress to that late-stage preclinical, that's when a customer will engage with us typically for an SPL license to be able to enter the clinic. The economics associated with that would be a clinical license fee of $250,000 per instrument per year, plus the sale of the single-use consumables. And then additionally, there would be clinical milestones that's based off of value-generating events, you know, getting into the clinic, you know, a pivotal, you know, and then obviously approval milestones that we thought. And that's really based off of, you know, a win-win approach that we're able to find, you know, the short-term and medium-term value of the technology, and then there's the long-term value of the technology as well as the commercial piece. So outside of the clinical and approval milestones, you know, we share... We have a revenue-sharing process that will have commercial revenues associated with the approved product, whether that be in the form of a royalty or sales-based payment, in addition to the instrument leases and consumables. As Doug spoke about earlier when we started, the way we look at a representative SPL agreement, because it does vary from indication, the number of consumables you're using, manufacturing sites, geographic regions, is as we look at these deals, we attempt to garner low- to mid-single-digit as a percentage of the partner sales. That includes the three economic components: the royalty or sales-based milestone, which we call blanket-term sales-based payments, and then the instrument leases, and then the consumables. Got it. Then maybe just on, you know, it's been a difficult year for the space, but you've added five SPLs this year. Right. Despite the kinda headwinds in the business, the SPL kind of onboarding's gone well. Can you talk about how, where the SPL pipeline stands today? So we think the SPL partnership pipeline is really strong. That's why we've continued to add resources, you know, to our business development effort. That's why Sean's now a full-time member of that team. We see a lot of opportunities out there. So we got five done this year. We're not providing guidance on what we think 2024 looks like, but we think the pipeline's very strong. And the fact that we got five done in a tough year, I think, speaks to, you know, the value of what we're offering. It speaks to sort of the value of what we're offering versus competition, to be able to continue to move these relationships forward in a tough market. Has there been any impact on the macro on that pipeline and what you're seeing there? And then also, maybe similarly, any... Has the macro impacted the terms of those agreements? We look at the pipeline, and I think that in general, whether you're talking about the pipeline for SPLs or you're talking about the pipeline for instrument sales, I think in many cases, most cases, we don't look at things as coming off of the tracker, if you will. I think it's a matter of that sales cycle has been longer. And frankly, the SPL relationship, as Sean mentioned, is a journey with that customer, where we're probably spending time with them, you know, a year or two before it gets to the point where they're looking at entering into that SPL agreement. So we, you know, we're seeing those mature over time. So again, very strong pipeline. We're not... We don't think those opportunities have gone away. The good news is, if the market gets stronger and more capital flows back in, I think that, you know, there's some pent-up demand here that we could realize. How many customers have purchased or leased equipment that have not signed an SPL yet? The question is, how many customers have purchased or leased an instrument that have not signed an SPL yet? We haven't quantified that pre-SPL pipeline. At the end of last year, I think we had 600 instruments placed. I don't think we've broken that out between SPL and non-SPL related, you know, clients. We're up to 23 SPLs. and for what it's worth, leased is only SPL, correct? Or do you lease- Yes. Okay, yeah. And that's the only way that they can take the product into the clinic. Yeah ... or take the platform, rather, into the clinic, is through a license agreement that includes the lease. Yep. 600 includes leased and sold? Yes, sir. Yes. That was as of the end of last year. Well, maybe you could just in a big picture, without naming names, do they fit they adjust to 25? Give us a ballpark. So the question is kind of: How does instrument demand, and I'll throw in consumable demand while we're at it, trend as people go from kind of preclinical to phase I, phase II? And I already tried on the commercial side- Right. Maybe we'll just stick with the clinical. Yeah. Obviously, you know, one of the benefits of this platform, and Sean talked about this, is this scalability, and people are starting with a smaller scale instrument and then working their way up to our, you know, flagship, GTx for clinical use. In terms of the number of instruments, I think it's gonna also depend on what their application is. Are they doing... Is this an allogeneic? Is it an autologous product? So there's probably not a one-size-fits-all answer to that question. I don't know if there's something we can add to that, Sean. Primarily, and just as in a customer journey, it'll be an ATx sale and then maybe a GTx for process development. And we highlight this in the corporate deck of, you know, a couple of instruments for early clinical and then a, you know, a ramp-up from there as they get to late-stage clinical. But the standard deviation is high because it's dependent on the autologous and allogeneic, and decentralized or centralized manufacturing. It's also going to be highly dependent on how many geographic regions they're going after, because they'll have different manufacturing sites and indications as well as we're working in rare and genetic diseases to, you know, solid tumors, which obviously is going to have a different instrument placement for that. So you mentioned GTx flagship. We haven't mentioned the VLx, and so I think that's kind of the newest product you have. Maybe, one, what is it? Two, kind of where does it stand in its journey? Sure. So the VLx is, you know, a much larger scale. I think it's 10 times versus the GTx in terms of the quantity of cells that we can deal with. You know, this is a program that we're very passionate about. Earlier this year, we announced that we had hired Ali Soleymanasab to come in and run that business, and we've continued to invest in the VLx. We're excited about it. I think it's fair to say that one, this has taken a little bit longer to really get moving than we anticipated. We've been talking about it for a while, so I understand the questions. But I can also say that we're more excited than ever about the potential use cases and the size of the market that we're going after. You know, I think it might be helpful here just to pause and let Sean talk about some of, you know, the markets and use cases for the VLx, 'cause, again, we remain very excited about that opportunity. Yeah, the primary use case would be the production of monoclonal antibodies for recombinant proteins and vaccines. A lot of the addressable market's gonna be in the preclinical development stage. As we talked about kind of the drug discovery segment, that includes that small-scale protein production. Kind of the industry standard right now is. Well, first is that to be able to produce that antibody, as we discussed, is inserting the DNA plasmid, transfecting the DNA plasmid into the producer cell to produce that transient protein. The industry standard or traditional approach right now is to use small-scale preclinical production of proteins. That's whether in the means of chemical transfection or smaller scale electroporation. Since the volume, you only can get to a certain amount, developers have to make that choice to be able to convert to a stable cell line, which takes about six to 12 months to develop up, develop, and there's time and cost associated with that. The value prop of the VLx is to be able to produce larger amounts of transient protein, so you're able to do your late-stage preclinical, your tox studies, your in vivo studies before you make that commitment to that stable cell line, and that's very important as you're evaluating a portfolio of preclinical leads. What's the most promising assets that I want to move forward with? And that allows a developer to be able to evaluate more preclinical lead needs through the larger volume of transient protein and commit to that stable cell line for the most stable... for the most promising assets, instead of having to blanket, you know, if they have 20 assets, that they're looking at, that they commit to a stable cell line for all 20. Got it. So Doug, you kind of mentioned this is something we often ask about, but something that's maybe slower to ramp than initially expected. You know, from a CFO seat, how do you think about this becoming a more meaningful piece of the revenue base? And maybe what is Ali focused on right now? Yeah. So I think over time, you know, we're. And it, it's hard to answer that question in the without sort of drifting into what our expectations are for 2024. I want to completely cop out. I think this is a. We think this is a very large opportunity, and we're working towards realizing that opportunity. You know, as I said, we're optimistic that in general, the macro is gonna be improving and that, you know, we're hoping we'll be able to have, you know, a reasonable guidance this year when we get on the phone with everybody in no later than March of next year. But in terms of what, you know, what Ali's focused on, I mean, his mandate is to grow this business. This is everything he's focused on is, you know, working towards making sure that we've got, you know, the data, the collateral to support, you know, strong performance of that VLx platform. Got it. Maybe pivoting to the margin side of things. So I guess from my seat, you guys have kind of gotten lumped in, you know, the unprofitable small cap trade, where there's been headwinds this year for the stocks. And we'll talk about OpEx and that, but I... Before we get there, I think it's worth touching on gross margins, which I'll let you, you know, talk about how what they are, because it's pretty impressive. So can you just talk about, you know, the gross margin profile you have, and why you're able to get that kind of value? Yeah. So our margins have been, you know, in the upper 80% consistently. The margin that we talk about is gonna be influenced by what the product mix is between instruments and consumables and, of course, program-related revenue, which comes in without any associated additional cost. We think the margins really is an important part of the story that people should understand. I think we're able to have these high margins because we've got a great platform, and we're delivering a lot of value to our clients with this platform and all the support we provide. I think that's, like I said, you know, people have been talking about competition, and this is a year where we've been able to maintain our margins, sign five additional SPLs, in what's a challenging market. I think the ability to maintain those margins says a lot about the value that we're able to provide. Maybe just to tie together a couple comments you made today, you just said competition, but earlier you mentioned we're a premium price solution, and we're getting the value we deserve. Can you just talk about your, your philosophy around pricing and then, you know, unique macro backdrop right now? Yeah. I think what we talk about with being a premium product, it has to do with what else we're providing. You know, we don't just, you know, ship them an instrument. We've got tremendous support that goes into that relationship, and we want to support them and benefit from the downstream economic success of their program. We participate in the value creation along the way through milestone payments, and, you know, as somebody who's come from the developer side of things, I think people are, you know, willing to pay to buy down risk, and that's why they're, we're able to go out there with this business model, which I think is a little unique for a platform like this. Got it. And then kind of on the macro and cash burn, you know, despite reducing revenue expectations this year, you haven't changed your expectation to end the year with $200 million of cash, which is a nice cash balance to have, in this macro. Can you just talk about where you have continued to invest, and where you have worked to manage expenses? I think a lot of the investment that we've made is certainly leverageable going forward, right? So last year, it was about the facility and building that out. You know, we're able to support the launch of multiple commercial products from that facility in Rockville, Maryland. We've invested in, you know, sales and marketing and in our field applications team. We've invested in automation. We've, you know, built out the team in many ways. So, I think that we're we do expect that the rate of increases over time in our operating expenses, you know, will go down. We've been able to take a look at the environment. We don't want to overreact to it, and this has been really important for us as a company to say, "We're in this for the long haul." We really believe in cell therapy, and, you know, we don't want to overreact to what we think are, you know, market conditions that we do not believe are permanent. So while we've, you know... Around the margins, we've taken down expenditures, that we could have done in the second half of the year, really just to maintain, you know, our expectations for 2023 end-of-year cash balance. I think we've done it in a way that doesn't really endanger sort of the long term, which is, you know, focused on continuing to invest, to be able to support our growing list of partners. That $200 million in cash is really important to us. You know, people ask, "What are you doing with that?" You know, we've got... That runway is significant, and it really helps us, you know, not overreact to, you know, what we think is temporary market downturns, right? We're able to be in this for the long haul because we have a lot of cash, you know, thanks to, you know, a very good IPO and, and thanks to the Stephens team for helping with that. And the other thing we want to do with that is look at corporate development opportunities, and so that balance sheet is there to, you know, help us stay in this for the long haul, also think about ways to potentially expand our leadership in cell engineering through, you know, an appropriate corporate development transaction. Although, you know, that money's not burning a hole in our pocket. We've been very disciplined in how we've evaluated potential ideas. Got it. I guess two more on kind of expenses, in the last couple minutes. Just one, if we were to see the macro deteriorate further, do you think there's other areas of spend you could look to manage? Again, you know, we have a multiyear runway. Yeah. And so, yes, if you tell me that the market is not going to improve for, you know, years, you know, at some point, we have to look at this business and say, "Okay, we have tremendous margins. There's no reason why we can't be a profitable industry." But we're just not at the point now where we're saying, "Okay, you know, this is a mature industry, and we should just be harvesting, you know, from where we are now." We think this is still early innings in cell therapy, so there will come a time if, you know, the macro doesn't improve or that the market, for some reason, is smaller than we think it is, at some point, you do have to try to run a profitable business. We're very focused on using the resources we have to capture the long-term opportunity in cell therapy. Got it. And then kind of conversely, you know, the way we opened this is, you know, perhaps you have some additional revenues coming in the door due to a commercial approval. Does that commercial approval and the associated revenues themselves, is that something you want to reinvest, or does that make you more likely to spend more? I don't think it does because I think we're already, you know, we're already managing our business to capture what we think is a growing opportunity in cell therapy. So I don't think that, you know, our spending is going to be as influenced by, you know, what's coming in, as that, as that question would imply. Any other questions? All right. Well, Doug and Sean, thank you so much for being with us today. Congrats on the, the news this morning, and, and if the other Doug's listening in, congrats to you.