Hello, thank you for attending today's NanoString First Quarter 2022 Operating Results Conference Call. My name is Selena, and I will be your moderator. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Doug Farrell, Investor Relations. Please go ahead. Thank you, operator. Good afternoon, everyone. Joining me on the call today is our President and CEO, Brad Gray, as well as our CFO, Tom Bailey. Earlier today, we released our financial results for the first quarter of 2022. During this call, we may make statements that are forward-looking, including statements about financial projections, the impact of COVID-19, future business growth, trends, and related factors, prospects for expanding and penetrating our addressable markets, our strategic focus and objectives, and the development status and anticipated success of recent planned product offerings. Forward-looking statements are subject to risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described in our SEC filings. Our results may differ materially, and we undertake no obligation to update these forward-looking statements. Later in the call, Tom will be discussing our financial results and 2022 guidance. We are prepared to supplement the GAAP financial measures, selected non-GAAP adjusted measures, the calculation of which are detailed in our press release. Throughout the call, all financial measures will be GAAP unless otherwise noted. You can also find reconciliations of GAAP to non-GAAP measures, as well as a description of the limitations and rationale for using each measure in today's press release. To aid analysts and investors in building their models, we have posted exhibits under the Financial Information tab of our Investor Relations homepage that include a presentation of our non-GAAP or adjusted measures and other selected financial data. I'd like to remind everyone that we'll be presenting at the UBS Global Healthcare Conference in two weeks. We look forward to having the opportunity to speak with many of you there. With that, I'd like to turn the call over to Brad. Thank you, Doug. Good afternoon, and thank you for joining us. Spatial biology is one of the most dynamic and rapidly growing fields in science. NanoString has established an early lead, and we are continuously evolving our product portfolio and commercial approach to remain at the forefront. Recently, changes in our commercial approach have temporarily reduced the effectiveness of our sales process and our revenue visibility. We have actions underway to address these challenges, and we're beginning to see some improvement. In time, we believe we will emerge even stronger in our leadership position. During the call today, I will review our recent challenges and outline our actions to address them. I will then review our continued progress towards our strategic objectives before handing the call over to Tom to review our financial outlook. At NanoString, we pride ourselves on being clear-eyed, analytical, and transparent about our performance. With the benefit of hindsight, we believe that we have developed a firm understanding of the challenges we encountered in Q1, and this understanding is guiding our path forward. As we described during our April 12th call, we believe that two primary factors drove our Q1 performance. First, uneven sales execution during the fourth quarter resulted in an imbalance between capturing Q4 revenue and developing our 2022 funnel of opportunities. Retrospective analysis shows that our sales reps spent relatively less time in Q4 cultivating long-term GeoMx instrument opportunities, instead focusing their efforts on capturing orders for a record 70+ spatial biology instruments. Tracing the impact into Q1 GeoMx instrument sales, we can see that those sales regions with the strongest Q4 performance delivered the weakest Q1 performance. Second, our commercial effectiveness was impacted by changes made in January to realign our expanded commercial team, which has grown by about 90 new positions over the past 12 months. Our new mini-team structure is the same approach that we believe is used by many of the largest and most successful companies in our industry and is well suited to commercializing a portfolio of multiple platforms and reflects the approach used by our top-performing districts last year. The disruption caused by this realignment was unexpected and can be traced through to several specific Q1 trends. For example, our retrospective analysis has shown that instrument sales opportunities transferred between reps during the realignment had much lower close rates than those that were not transferred. We also see that newly promoted account managers were less effective selling GeoMx instruments compared to their veteran counterparts. On the consumable side, the pace of quoting activity slowed relative to prior periods as reps transitioned between roles, and the more junior consumable reps were not as effective in selling to key accounts as their previous account managers had been. After further review of our Q1 results, we've identified two additional secondary factors that impacted our Q1 performance. One is that our sales team is still learning how to allocate their time and effort across three product lines. Since we transitioned from reactive sales of CosMx instruments during Q4 to proactive sales of CosMx in Q1, each individual sales rep has gravitated towards one spatial biology platform or the other, with those overachieving on CosMx underperforming on GeoMx. Another factor is that new GeoMx customers are taking longer than previously expected to reach their full consumable run rate, likely due to the strong uptake of the whole transcriptome app, which requires more sequencing capacity and informatics capabilities. The ramping consumable utilization from our most recently installed GeoMx systems is impacting our overall average pull-through. We have put in motion a targeted set of actions that we expect to improve commercial execution over the next several quarters. First, we are increasing support for the sales team as they adapt to their new roles and structure, providing frontline reps and recently promoted leaders additional training and intense coaching, and taking additional steps to ensure customer accounts have been fully transitioned between reps. Second, we're focused on balancing sales efforts across platforms and time horizons. This involves closely monitoring individual sales rep activity via our CRM system, as well as specific incentives and programs to speed GeoMx site activation. Finally, we're refreshing our marketing and sales tools to do justice to the breadth and power of our spatial biology portfolio. We plan to better leverage our 115+ GeoMx publications and to clearly differentiate between the use cases for CosMx and GeoMx. The commercial team has rallied behind these actions, and we see some early indications that sales effectiveness is improving. Quarter to date, GeoMx instrument and consumable orders have improved relative to the same periods in Q2 2021 and Q1 2022. As we described during our April 12th call, we expect the recovery in our commercial effectiveness to take a couple of quarters, and this is reflected in our updated annual guidance. We have confidence that commercial performance will get back on track as the year progresses, and we remind ourselves that this is the same team that delivered record results in 2021. In parallel to improving our commercial execution, we continue to strengthen our team. We recently appointed Dr. Teresa Foy to our board of directors. Dr. Foy is Senior Vice President of immuno-oncology and cellular therapy for Bristol Myers Squibb, and is based in the Greater Seattle area. Terry is an immunologist with over 25 years of experience in the biotechnology and pharmaceutical industries, developing novel therapeutics in areas of oncology and inflammation. She brings deep experience in how life science tools are leveraged to advance biological discoveries, and I'll look forward to benefiting from her insights as a member of the board. Turning to near-term catalysts, we're looking forward to being back in person in Orlando for an action-packed Advances in Genome Biology and Technology or AGBT meeting in a few weeks. We'll be hosting our annual pre-AGBT Spatial Genomics Summit on Monday, June sixth, and we'll live stream the event for those who can't attend. Our summit will feature a keynote presentation by Chris Mason of Weill Cornell Medicine, as well as presentations from several of our customers illustrating the synergistic use of GeoMx and CosMx in spatial biology research. The summit will be followed by a briefing for investors, during which we will put the science into the context of our business. Now I'd like to provide an update on the strategic objectives for the year. Our first strategic objective is to drive GeoMx DSP further into mainstream research, broadening adoption across multiple areas of discovery and translational research. While we obviously did not sell as many GeoMx instruments as we had expected during Q1, we did increase adoption of our Whole Transcriptome Atlas in discovery research and demonstrate the value of GeoMx in the field of translational oncology. The key GeoMx trends during the first quarter were very similar to what we saw in Q4, suggesting that there is no fundamental change in customer demand or the competitive landscape. Academic customers continue to represent about 75% of GeoMx orders, with the balance going to biopharma companies. More than 90% of GeoMx instruments were sold for NGS readout. On the consumable side of the business, assays using NGS readout accounted for about 75% of pull-through. One highlight of Q1 was the continued penetration of the discovery research market using the Mouse Whole Transcriptome Atlas, which grew about 25% sequentially from Q4 to Q1. Oncology research remains the number one application area for GeoMx, and our impact in the field was on display last month at the American Association for Cancer Research, or AACR conference in New Orleans. We had a record showing with more than 120 scientific abstracts across our three platforms. The abstracts for studies performed on GeoMx alone outnumber the closest spatial biology competitor by a factor of 2:1. Our second objective for 2022 is to launch CosMx as the industry-leading molecular imaging platform. This was clearly a highlight for Q1, as demand for CosMx allowed us to capture more than 15 instrument orders. A majority of these orders came from existing GeoMx customers, with the balance of the orders coming from researchers who had used single-cell genomics technologies in the past, but who are new to working with NanoString. Approximately 90% of the instrument orders came from customers buying the system based on NanoString's reputation and the CosMx specs, manuscript, and public dataset without needing a test drive of CosMx through our technology access program for TAP. That being said, we've booked about 50 CosMx TAP studies to date and completed about 20 of them. We're ramping up our TAP capacity in order to give more customers the opportunity to test drive CosMx, a strategy that worked well during the GeoMx launch. CosMx instrument sales funnel is exceeding our expectations, and it is already twice the size of our GeoMx funnel at a similar stage of its launch. Other leading indicators of customer interest in CosMx are also strong. During the first quarter alone, the paper describing the technology was downloaded over 5,000 times, while the 500 GB lung cancer data set was downloaded over 300 times. Genentech's Aviv Regev recently incorporated this data set into a peer-reviewed paper in Nature Biotechnology, using it to demonstrate the ability of new algorithms to identify multicellular programs marking immune activity and tissue remodeling. Keep your eyes peeled for additional data releases in the months ahead, each of which will underscore the unique capabilities of CosMx. CosMx remains on track to ship commercial instruments in Q4, and we expect CosMx to hit several key milestones during the second quarter. Our beta systems have begun to arrive in Seattle, and we're putting them through our paces internally before shipping the first beta units to customers in June. In addition, next month's AGBT conference will have numerous CosMx updates, including 10 abstracts and three oral presentations. Our third strategic objective for the year is to launch our cloud-based spatial informatics portal. Spatial experiments are data-intensive, creating up to 1 TB of data per sample. By moving data to the cloud, customers gain access to massive computing and storage capabilities that enable seamless collaboration across institutions for global consortia. Our spatial informatics portal remains on track for launch later this year and will be compatible with both GeoMx and CosMx. We will be showcasing this portal at the AGBT meeting in June, and we invite you to join us there to learn more. Our fourth objective for 2022 is to sustain our nCounter franchise. At the AACR conference, we introduced our new nCounter Pro, and customers were impressed with the enhanced functionality. Customers need robust data security, and the Pro provides a comprehensive enterprise-wide cyber solution. This is a critical requirement for our biopharma customers. Along with this new version of the instrument, we have relevant gene expression panels used to monitor stem cell manufacturing, vaccine production, and CAR T biotherapeutic development. We're also co-promoting the launch of the Pro with ROSALIND to provide the most advanced collaborative bioinformatics platform, one that harnesses the power of the cloud based on cloud-based computing for complex multi-omic analyses. We've expanded our pharma sales team under a manager with a great track record of success, and we see these changes starting to pay off. nCounter remains a foundational platform for the company and that supports our global commercial channel and our innovation engine. With that, I'll hand it over to Tom. Thanks, Brad, and thanks, all, for joining us today. For the first quarter of 2022, product and service revenue was $30.8 million. For our spatial biology business, Q1 GeoMx revenue was $9.7 million, approximately flat year-over-year. GeoMx instrument revenue was $4.8 million. Consumable revenue was $4.9 million. Q1 annualized GeoMx consumable pull-through was $76,000 per installed system. For CosMx, we secured over 15 new system orders in Q1, bringing our total to over 35 orders. For our nCounter business, which includes all service, Q1 revenue was $21.1 million, a year-over-year decrease of approximately 3%. nCounter instrument revenue was $4.3 million, and consumable revenue was $12.6 million. Q1 annualized nCounter consumable pull-through was approximately $48,000 per installed system. Service revenue was about $4.3 million, representing 16% year-over-year growth and driven primarily by increased service contract revenue from our growing instrument installed bases. At the end of Q1, our nCounter installed base was approximately 1,070 instruments, with 20 new instruments installed during the quarter, and our GeoMx installed base was approximately 295 instruments, with 40 new instruments installed during the quarter. Turning to margins and expenses, I'll provide results on a non-GAAP or adjusted basis, which removes the impact of stock-based compensation, depreciation, and certain one-time items. Please refer to our press release as well as the exhibits we have posted to our investor relations webpage for detailed information on how our non-GAAP or adjusted measures are prepared. Q1 adjusted gross margin was 55%, an increase of 300 basis points as compared to Q1 of last year. Margins were positively impacted by growth in GeoMx DSP consumables and by initiatives we have undertaken to improve our manufacturing efficiency. These impacts were partially offset by investments we continue to make in manufacturing capacity for GeoMx and CosMx. Adjusted R&D expense was $15 million, an increase of 19% year-over-year, primarily driven by increased personnel and product development costs related to CosMx and by investments in software and technology that will support data storage and analysis for customers across our spatial biology platforms. Adjusted SG&A expense was $29.4 million, an increase of 40% year-over-year, and driven primarily by investments made in our spatial biology-related commercial initiatives, including investments to expand our sales force, service and customer support groups, as well as costs related to licensing and implementation of new information technology solutions. To support our commercial operations and finance functions. Our adjusted EBITDA loss was $27.3 million, and our cash and cash equivalents were $312.1 million as of March 31st. Turning to guidance, for the second quarter, we expect revenue to be in the range of $31 million-$33 million. This range includes $11 million-$12 million of GeoMx revenue and $20 million-$21 million of nCounter and service revenue, with the bottom end of the range reflecting sales performance similar to Q1 and with the upper end reflecting improvement in the aggregate performance of our sales team in the latter half of Q2. For the full year, we are updating our product and service revenue guidance to a range of $150 million-$160 million. For GeoMx, we are updating our full year revenue guidance range to $60 million-$65 million, representing annual growth of 16%-25% at an updated full year estimated pull-through range of $90,000-$95,000. For nCounter and service, we are updating our full year 2022 revenue guidance range to $90 million-$95 million, reflecting annual revenue that is flat over the prior year at the midpoint of the range and pull-through that would trend to the conservative end of our $50,000-$55,000 full year estimated range. The ends of our total updated range are driven primarily by potential differences in GeoMx instrument revenue. The bottom end corresponds to a conservative scenario in which the close rate on opportunities in our GeoMx instrument funnel remain at the lower level experienced during Q1 through the balance of 2022. The upper end corresponds to a scenario in which actions underway result in improvements to close rates in the second half of the year. Turning to margins and expenses, we are affirming our previous full year guidance for adjusted gross margin, which we expect will be in the range of 56%-58%, and we are making no changes to our previous full year adjusted operating expense guidance ranges. With our updated revenue guidance and these gross margin and expense ranges, we are updating our expected 2022 adjusted EBITDA loss to a range of $65 million-$75 million from the previous range of $55 million-$65 million. Our balance sheet remains strong, and we are confident we have the resources to sustain our key investments through the current period challenges, grow our revenue, and to achieve cash flow breakeven. Now I'll turn the call over to Brad for closing comments. Thanks, Tom. NanoString's market opportunity is compelling, and we're confident in our ability to capture it. Spatial biology is going to be a critical technique in biological research over the next decade, and laboratories are steadily building out their capabilities. NanoString is poised to remain the leading provider of spatial biology solutions based on our company's strengths such as brand reputation, commercial reach, and financial strength, as well as the unparalleled breadth and quality of our product portfolio. We invite you to join us at the AGBT meeting in June, where you can see the power and synergy of our spatial biology product portfolio for yourself. We're ready for questions, operator. We will now begin the question-and-answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered. The first question comes from Daniel Brennan with Cowen. Please proceed. Great. Thanks, Brad. Thanks for taking the question, guys. I guess the first one would just be trying to look at the quarter itself. You placed 40 GeoMx. You did $4.8 million in instrument revenues. If my math serves me, it implies an ASP somewhere in the $120,000. Maybe we're doing something wrong. Can you just walk us through the pricing on GeoMx in the quarter since if that number's correct, it's well below what you guys have been tracking at? Hey, Dan. Thanks for the question. Let me clarify the difference between revenue recognition and installation of GeoMx systems. During the quarter, we installed 40 new GeoMx systems, many of which had been sold and revenue recognized during the fourth quarter. You know, the revenue recognition associated with Q1 GeoMx instruments was on a smaller number of additional orders, and our ASP for GeoMx was stable in Q1 relative to prior periods. Got it. Okay. Thanks, Brad. See, I thought you guys had caught up in terms of, you know, placements were equal to shipments, but okay. For Q2 on the guide, just what's being assumed on GeoMx given we're kind of in line with you on the full year, but your Q2 guide's definitely below us overall, nCounter a little bit above, but GeoMx below. Within the $11 million-$12 million, what are you assuming for placements and pull-through? Yeah, we typically don't give that kind of detail on a quarterly basis, Dan, but I think I would say two things. Per my comments, the bottom end of the range assumes close rates consistent with Q1, the top end a bit of improvement, and it would also be reasonable to assume that you'd see sequential growth in both instruments and consumables relative to what we did in Q1. If you're modeling Q2 within our guidance range, those would be good guideposts for you to use. I'll add one thing on top of that, Dan. If you look at our historical consumable pull-through for GeoMx, it tends to strengthen seasonally over the course of the year. It's fair to assume that Q2 consumable pull-through for GeoMx will be closer to the bottom end of the range, strengthening over the course of the year, and near the top or the higher end of the range in the second half. Got it. Then I'm sure you know, Brad, you talked about throughout the call a few times where, you know, some of the incremental data points that you're seeing that suggests everything's in order, and it's just kind of working through these Salesforce realignment issues. Can you just maybe speak to kind of what was communicated or give us a little more color on anything related to pacing? Because I think folks are, you know. There's a heightened awareness towards, you know, is there something going on in the competitive landscape, or is it really just a Salesforce realignment? What can you say regarding April and then even May to date and anything about the sales funnel that would reflect that you feel good about kind of what's in front of you in terms of demand basis? Yeah. Maybe I'll break that question into two parts, Dan. First, you know, what gives us confidence that the reasons we outlined on the call are in fact the reason for the Q1 underperformance and that there's not something going on at a macro or competitive level. Well, it's really the traceability of our Q1 trends back to very specific changes that we made in our commercial approach. You know, those correlations are just too strong to be coincidental. Furthermore, we just don't see any changes in the competitive environment that would account for the slowdown we saw in Q1. Our competitive loss rate was low and consistent with prior periods. Our transition rate from GeoMx to CosMx was low and consistent with prior periods. The weakness that we experienced was across all parts of our business, which would not be consistent with a competitive threat. That may be my first point. On the question of sort of Q2 quarter to date trends, I mean, things are off to a good start. You know, as I described in my prepared remarks, both GeoMx and instrument and consumable orders are moving through the quarter at a pace that's materially improved over both the prior year period and the way that the year started in Q1. We're only about five weeks into the quarter, so it's too early to declare victory. Some of the commercial changes that, you know, that we're growing into are still going to take time, and I think you see that reflected in both our Q2 and full-year guidance. Got it. Okay. Then maybe last one with just Dan, I'll get back in the queue, would just be, you know, as we think about GeoMx and CosMx, I think you talked about just there that you're not seeing anything abnormal in terms of, you know, the CosMx orders vs detracting from GeoMx, I think that's something we'll learn more about at AGBT. What, you know, what could you speak to, again, giving us more factoids, whether from customers or, you know, anything you're seeing in terms of publications or drawdowns that would reflect that these two products are complementary and not cannibalistic? Well, you know, I think the strongest evidence of the complementary nature of GeoMx and CosMx comes from the nature of the orders for CosMx to date. About three-quarters of our orders have come cumulatively from customers who either already owned GeoMx or bought CosMx and GeoMx together in a bundle. I think you would not see customers doing that if they did not believe that these were complementary solutions. I'd also invite you to come to AGBT. All three of our oral presentations on CosMx will also include GeoMx data, and they'll show in real scientific experimentation how these two technologies are going to be used together. You'll also have the chance at our Spatial Genomics Summit to see four customers talk about their dual synergistic use of these two platforms together. I think the order trend supports the complementary nature, and you know, if you come to Orlando, you'll have a chance to speak to a number of scientists who are finding these two technologies complementary in their real experimentation. Great. Okay. Thanks, Brad. Let me get back in the queue. Thank you. The next question comes from Dan Arias with Stifel. Please proceed. Good afternoon, guys. Thanks for the questions. Brad, just to put some context maybe to the scope of the changes, what percentage of the sales force, roughly speaking, is now in a new role? Can you just expand on what you meant by some reps not cultivating the long-term spatial relationships and instead focusing on the near-term sale? Does that mean that once the purchase was made, the follow-through just wasn't there in order to drive the recurring revenue stream? Yeah. Let me take the second question first, Dan. When we talk about the imbalance in the sales effort in fourth quarter, here's really what we mean. Our instrument sales reps were frequently visiting and cultivating those customers who were due to purchase instruments during the fourth quarter, but they were not spending time with customers who were early in their evaluation of GeoMx and were due to purchase their instruments during 2022. Remember, the sales cycle for a GeoMx system is between six and nine months. Our sales reps need to be in contact continuously with customers over that period length. If they focus only on those customers who are purchasing instruments in the current quarter, they'll under invest in the long-term cultivation of future quarters instrument purchases, and that will come back to haunt them. That is what we saw take place in the fourth quarter. On the question of the fraction of sales reps in new roles, you know, I think the answer is that the majority of our sales reps have had their roles changed. Now, it doesn't necessarily mean their title changed, it doesn't necessarily mean their customer list changed materially, but it does mean that what we're now asking them to do has evolved. The reason is we moved from an overall structure where individual sales reps interacted with the same customer. Multiple individual sales reps interacted with the same customer in an uncoordinated way to a mini team or account management structure where a single account manager coordinates the way that our sales reps interact with a customer in a way that makes that customer's life simpler and allows us to deliver better service. It impacted almost everybody in terms of the way that they work. You know, that's part of what is gonna take some time to grow into. Yeah. Okay. Helpful. Maybe just as a follow-up, you were pretty clear last quarter about the belief that the full commercialization of CosMx would not take place until the fourth quarter. Do you see that being mid-fall or more like the holidays? I'm not trying to splitting hairs here on an eight-week period, but I am wondering about the ability to just use system availability as a competitive strength, just in the sense that you can say, "Hey, there are a bunch of new instruments out there to look at, but here's one that you can be installing and using meaningfully before year end. It's too early for us to parse the fourth quarter and determine what week we'll be actually shipping those instruments in. I do feel confident we'll have instrument availability, but you know, we will meter out the shipment of those new systems in an orderly fashion. I don't believe that system availability in the fourth quarter is a critical competitive factor. I believe customers are evaluating the imager class, you know, based on the reputation of the company who stands behind that imager, the publicly available data sets and description of how the technology works, and you know, the data that's being presented in real time in meetings like AGBT. I'm not worried about you know, feeling compelled to ship a large number of instruments in the fourth quarter on a competitive basis. Okay. Just lastly, Tom, no change to CosMx revenues not really falling into the back half of the year on that note? That's correct, Dan. Yeah, no change as we did. No, no CosMx revenue in 2022 in our guidance. That's correct. Okay. Very good. Thanks. Thank you. The next question comes from Tycho Peterson with JP Morgan. Please proceed. Hi. Good afternoon. Thanks for taking a question. Looking at the GeoMx guide for the full year, it looks like you're not assuming much benefit from instrument recapture in the second half of the year. I wonder if you could give an update on the GeoMx order funnel. You know, has any of them been lost to competitive placements? And would any instrument recapture in the second half of the year represent upside to your guidance? Hey, Julia, this is Brad. First, you know, we do not see an increase in competitive loss in GeoMx. The number is low and consistent with previous periods. We do actually, when we look at our guidance, imply a substantial step up in the growth rate of GeoMx revenue in the second half. You know, I believe if you take our Q2 guidance and our full year guidance, you can infer that our first half growth rate on GeoMx is relatively flat, as implied by the guide, but then it steps up to between, I think, 11% and 35% growth rate in the second half, at the, you know, bottom and top end of the range, respectively. you know, we are expecting that these actions we have underway will have an impact on our commercial execution after a couple of quarters, and that is built into our guidance. Got it. As you push GeoMx beyond the early adopters, obviously, you know, generating peer review publications like those expected at AGBT will create a flywheel effect. I wonder, you know, do the next tier of potential GeoMx customers require any tweaks in your sales and marketing approach? Do you expect any differences in the sales cycle from the six to nine months that you've typically seen with previous customers? I do think that we need to tweak our sales approach to reach the mass market with GeoMx. You know, I think I don't believe that requires any structural changes. Obviously, we've added a large number of sales reps to be able to reach them. I think the number one thing we can do to help this maybe early majority segment understand where GeoMx fits is to improve the way that we communicate the relative use cases of GeoMx vs the imager class, including CosMx, and the way that we use the large number of peer-reviewed papers to illustrate specific use cases that appeal to each individual researcher. This simplification of the way we describe the spatial biology platforms and their relative uses, and what I'll call the weaponization of our, peer-reviewed papers, is a major focus for our marketing organization today that I believe will have an increasing impact over the second half of the year. Got it. Very helpful. Lastly, on the sales team, I believe you mentioned in the prepared remarks that, you know, some reps are dedicated to GeoMx and others focus on CosMx. Given where the products are in their respective life cycles, I assume most of the sales team is focused on GeoMx now. As the CosMx franchise grows, does that mean you would need to shift GeoMx reps over to CosMx? And how are you thinking about the potential transition down the road? Let me clarify my earlier remarks, Tycho Peterson. We do not separately dedicate sales reps to GeoMx vs CosMx. We have spatial sales specialists, who are able to describe the entirety of our portfolio for spatial biology. What we have observed is that sales reps tend to have a favorite. Some of them, you know, feel most comfortable, selling GeoMx systems, which they've been doing successfully for some time. Other sales reps have gravitated to the excitement of the CosMx systems. Part of what we're doing with our training and our coaching and our monitoring of sales force activity through our CRM system is helping our sales reps find a balance, the appropriate balance of selling both of those instruments, you know, targeting each one to the applications and the customers for which it's most appropriate. Got it. That's helpful. Thank you. Thank you. The next question comes from Kyle Mikson with Canaccord. Please proceed. Great. Hey, guys. Thanks for taking the questions. Just on the GeoMx guidance, like you were saying a moment ago, Brad, you know, the second half kind of guidance implies, I think it's like 2/3 of the total year revenue for GeoMx. Last year that was 60%. Could you just kind of walk through what gives you confidence that you can kind of, you know, drive that growth? I think you mentioned 11%-35% growth year-over-year in the second half of the year. I mean, it's going to be competitive obviously in the second half. There's other factors too. You're just coming off the sales force realignment. Could you just walk through what gives you confidence in that growth? Yeah. I think, if you look at the first half to second half split, implied in our updated guidance, you get a total revenue split of about 40% in the first half and 60% in the second half. Pretty close to that. If you look back at 2020, which because of the COVID-19 pandemic, was a year where we similarly had a slow start to the year with an acceleration in the second half, that's about the same first half to second half split that we would have seen in 2020. You know, I think it's not without precedent in a year where you experience challenges in the first half that relieve in the second half. I guess that's the first statement. you know, the second is, you know, a confidence that, you know, GeoMx remains a tremendously powerful spatial biology platform. you know, the peer-reviewed papers and evidence for how powerful it can be are coming out at a very rapid pace. you know, we do believe that we'll be able to continue to distinguish GeoMx from the imager class of products that's coming out, and that many customers will feel that they eventually need both capabilities as so many of ours already have, and that, you know, this will allow us to have a good recovery in the second half. Great. That's helpful. You were mentioning, Brad, the GeoMx pull-through was slower due to WTA. I think I heard that dynamic. Can you just kind of walk through that one more time and, you know, the higher price point, but the workflow is more complex, I guess. Importantly, do you expect that's going to be the new normal as customers shift towards WTA? I think that's obviously a trend that you would like to see. Would you view this, you know, the full year GeoMx pull-through guidance as conservative? It doesn't seem that far off from the original guidance for 2022. Yeah. Let me clarify my prepared remarks again, Kyle. In the long term, we expect customers using the whole transcriptome atlas assay to have strong consumable pull-through on GeoMx. That being said, we've observed that it takes multiple quarters for customers who are adopting WTA to reach their revenue run rate. The reason is setting up a laboratory to run WTA is complicated. It involves gaining access to an appropriate sequencer, you know, creating a data pipeline that, you know, goes from that Illumina sequencer back into the GeoMx system, and then in many cases, setting up auxiliary servers with extra storage space or processing capability to handle the large data sets. As a result, those new customers who are embracing WTA take multiple quarters to slowly drill up their consumable pull-through, and that dilutes the overall average pull-through of our install base, and that's the effect that we've begun to see and to quantify and reflect in our guidance. None of this changes our long-term expectations about what GeoMx pull-through can be over time. In the periods where we're placing large numbers of instruments, we're going to continue to see that dilutive effect. Got it. Okay. Thank you for the clarification. If I could just ask a really quick follow-up. I know utilization was soft in Q1 for GeoMx, and I heard that 75% of the pull-through was for NGS readout. Could you just talk about recent trends for protein-based and RNA-based spatial biology research. I guess what are you seeing in the current kind of genomics installed base, and how do you anticipate that kind of evolves throughout the rest of the year? Yeah. Our estimation of the overall total addressable market for spatial biology is that it's about, you know, 1/3 protein, 2/3 RNA. Most of our customers who were the early adopters of genomics acquired it for use with nCounter readout and protein-based assays. Those still account for about 25% of our overall consumable pull-through. I would expect it to stay at that level in the quarters to come, as you know, protein will remain an important part of what people do on the system. Okay. Thanks so much. Thank you. The next question comes from Catherine Schulte with Baird. Please proceed. Hey, guys. Thanks for the questions. I guess first, you mentioned in your prepared remarks that for genomics instruments, sales regions with the strongest Q4 performance delivered the weakest Q1 performance. I guess now that you've had time to dive further into the results, you know, how much of the genomics instrument miss was driven by those regions underperforming vs a broader impact that was perhaps the result of the January realignment? It's a great question, Catherine. I'd say that the underperformance of those regions that failed to cultivate long-term opportunities in Q4 was really only part of the explanation for the Q1 weakness in genomics. It does not fully explain the shortfall relative to our expectations. Clearly the change in our commercial organization further reduced our ability to capture and close on the opportunities that we had there. Okay. Got it. In terms of the actions you're taking, you mentioned specific incentives and programs to speed genomic site activation. Can you just talk through what those incentives and programs are specifically? Sure. Well, you know, in terms of incentives, we have special pricing in place for new genomic sites who are able to get activated and get up and running on whole transcriptome assays early. We're providing them a motivation to get their workflow set up and their informatics in place, in terms of, you know, pricing we can offer the customer. In parallel, we formed kind of a tighter team of internal management people who are helping more closely coordinate the efforts to bring sites up quickly and to make them more effective, all the way from the shipment of the instrument, the installation of the instrument, the training of the users on the instrument, and importantly, the planning of those first critical experiments to help get people experience on the system quickly and to build their momentum. Got it. Thank you. Thank you. The next question comes from Tejas Savant with Morgan Stanley. Please proceed. Hey, guys. Good evening. Brad, appreciate all the color here that you've provided on the GeoMx order funnel. I was wondering if there's any sort of like quantitative metrics that you can share in terms of the vintage of that funnel, right? If you think about the split between the near-term opportunities vs the longer-term opportunities, it sounds like it's skewed heavily towards longer-term opportunities earlier in the first quarter. To what extent has that balance now been restored to perhaps where it was in 3Q last year? I think you're asking, Tejas, about what we would call the maturity of our sales funnel, meaning how Yep. You know, where are those opportunities and customers in their overall sales cycle? I would say some of the immaturity in our sales funnel that we had exiting 2021 continues to persist in our sales funnel in 2022, and that is reflected in our guidance. We're continuing to try to advance those customers through their purchase process. It's not as mature as I want it to be yet. You know, one other comment on sort of sales cycle, though. I recently, you know, just this morning took a look at the overall sales cycle for those instruments that we have taken orders for quarter to date, and there continues to be no evidence that the sales cycle for GeoMx is extending. It's really just a question of getting our sales team in balance between cultivating long-term opportunities, including the ultimate current opportunities and, you know, letting those purchase processes play through as they do. Got it. That's helpful. Then in terms of, you know, helping new reps ramp on new accounts, are there any specific changes that you've instituted just to help them stay on track, and get through that process? I remember, you know, after the pre-announcement, you'd sort of mentioned to us, things like sort of a day one, week one, month one, you know, target and plan and making sure they stay on track. Any further details around these formalized processes for handovers that you can elaborate on? No, you know, I think it's obviously not rocket science, Tejas, but it is hard work that someone has to stay on top of and make sure happens in a timely fashion. You know, we have you know revised our onboarding approach for all new sales reps and the ways that the incumbent reps will help them come up to speed. You know, those processes have been completed and kind of embodied in a territory planning tool. And you know, that's being actively used today. Again, that's a sort of starting point that'll help our consumable reps get to know their accounts and you know, we believe that over the next several quarters, that will improve their overall sales effectiveness. Got it. And then in terms of, you know, what you just mentioned earlier on the call, Brad, around, you know, training and monitoring of reps to make sure that there is a balanced focus across, you know, all three of your platforms. Is that translating into any sort of new incentives you're putting in place as well to optimize for that behavior? Or is it mainly just a push around, you know, monitoring and training? Our sales reps are paid on a quarterly basis, so their incentive compensation plans should over the long term reward them for a balanced performance over time horizons. That being said, you know, many reps need coaching and management and cajoling to help them stay on track and not overinvest in near-term opportunities and under-invest in long-term. The primary mechanism for achieving that balance is providing clear visibility to both the individual rep and their manager on how they're spending their time and, you know, how active they are with certain instruments and opportunities at different stages of the funnel and, you know, and then just, you know, helping them find the right balance by coaching. Got it. Super helpful. One final one on the guide for me for Tom. Tom, can you just elaborate around just assumptions around, you know, a biopharma, not so much a budget flush, but just health of the biopharma spending environment in the back half of the year. There's been some concerns around some cracks in the mirror there, you know, on the broader landscape. Of that $7 million that you shaved off on the nCounter side of things in the guide, was that essentially all related to the sales restructuring or was there any incremental downside from Omicron as well? On the nCounter piece, Tejas, I think it's all related to our execution issues on the guide. There's no incremental impact from any macro factors that we assumed into the nCounter guidance. Got it. On the biopharma point? Oh, pardon me. Yes. On the biopharma point, so on biopharma is, you know, any given quarter at around, you know, 10% or a little over of our total revenue. Most of our revenue comes from academic and large pharma and other institutions outside of kind of the small biopharma that are most impacted by the current capital markets environment. We don't think that plays a significant factor into where we'll land for the year. That's not factored into our guide either, nor is there any budget flush type of behavior that's layered into our guidance. The quarterly pattern, as you recall when we gave guidance for the year back in March, we expect to be consistent through the quarterly progression as we saw in 2021, albeit at a lower starting point for this year than we originally expected. Got it. Very helpful. Appreciate the color, guys. Thanks. Thank you. That concludes the Q&A session, and I would like to pass the conference back to Doug Farrell for additional remarks. Thanks, everyone, for joining us today. If you did miss any portion of the call, I expect a replay to be posted in the next 2 hours or so. That'll be up through the 17th of May. To access the replay, please dial 866-813-9403. Callers outside the U.S., please use 929-458-6194. The conference ID is 221442. Thanks again for your time. That concludes our call. Goodbye. That concludes today's NanoString First Quarter 2022 Operating Results Conference Call. Thank you for your participation. You may now disconnect your line.