Thank you for attending the NanoString to host conference call on Monday, 22 May 2023 to comment on decision of the Munich Regional Court. My name is Alyssa. I will be your moderator for today's call. 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 your host, Doug Farrell, with investor relations. You may proceed. Thank you, operator. Joining me on the call today are our President and CEO, Brad Gray, as well as our CFO, Tom Bailey. During this call today, we'll make statements that are forward-looking, including statements regarding our intentions and expectations regarding ongoing litigation, including the anticipated timing of hearings and decisions and the ultimate disposition of pending and future cases, our expectations regarding the outcome of the nullity action we are pursuing in the German Federal Patent Court, the expected impact of any injunction on our business, our operations and business outlook, as well as our financial and operating projections, trends, and related factors. Forward-looking statements are subject to risks and uncertainties, including those described in our SEC filings. Our results may differ materially, and we undertake no obligation to update these statements. With that, I'd like to turn the call over to Brad. Good afternoon. Thank you for joining us today. Last week, there were developments in the Munich Regional Court in Germany and our ongoing patent litigation with 10x Genomics. The patent litigation is a complex process. We have fielded questions from many investors who are looking to understand the implications of these for the development of our business. Investors' confusion has been magnified by statements made by our competitor that seem designed to spark fear among our investors and customers in order to shift their focus from science to litigation. Our objective in this call is to clear up confusion and to describe how we intend to both provide scientists with distinctly powerful spatial biology platforms and prevail in the courts. Our prepared remarks will cover four main topics. First, we will cover what the Munich court decision is and is not. We will describe the status and the outlook for ongoing patent litigation in the U.S. and other jurisdictions. We will characterize our competitive momentum in the spatial imaging market, including customer feedback on the tactics being deployed by our competitor. CFO Tom Bailey will comment on the financial outlook and the balance sheet. After our prepared remarks, we'll be happy to take your questions. As I begin to discuss the German patent case, I wanna highlight that Germany employs a distinct and unusual approach to IP disputes that has two main differences when comparing to the U.S. and other European jurisdictions. Patent infringement and patent validity are evaluated in a two-step process rather than in a single step. Patent infringement is evaluated first by a regional court, while patent validity is evaluated in a separate process called a nullity action that typically culminates about one year later in a different court, the German Federal Patent Court. Second, German regional courts use injunctions as the default remedy in cases of patent infringement and issue injunctions without requirement to consider the impact on competition or the public interest. These unique aspects of the German legal system create what is referred to as the injunction gap, making Germany often the first jurisdiction in which companies seeking to reduce competition from smaller and more innovative competitors choose to assert IP cases. 10x first sued NanoString in Germany in March 2022. Last Wednesday, the Munich Regional Court issued its ruling on the question of infringement in favor of 10x and issued an injunction that will restrict us from selling CosMx RNA analysis in Germany. This injunction allows us to continue selling CosMx instruments and our portfolio of CosMx protein assays in Germany, along with the rest of our spatial biology solutions. Importantly, we see a clear path to invalidating the patent on the basis of multiple prior art references and the nullity action in May 2024. In the preliminary evaluation of the Harvard patent's validity by the German Federal Patent Court, the original claims, as well as six out of seven alternative formulations of narrower claims submitted as auxiliary requests by 10x and Harvard, are considered invalid. The federal court only accepted one auxiliary request of narrowed claims as potentially valid in its preliminary evaluation. Against this background, we are confident in our arguments that should lead to us to fully prevail in the nullity action. In the meantime, we remain constructively engaged with our German customers and will continue to support their science. Earlier this year, we contacted German CosMx customers to inform them of our competitor's effort to exploit the injunction gap. They appreciated our transparency regarding the risks and have worked with us to help ensure that German scientific progress will continue while we seek to invalidate the patent. Let me now discuss litigation related to the Harvard patents in the United States and other jurisdictions. In February 2022, 10x Genomics filed a suit asserting these patents in the U.S. in Federal District Court in Delaware. Based on public comments already made by our competitor's executive team, we fully expect that they may also file lawsuits in other European countries in which the Harvard patents have issued. Few days, our competitor has stoked fear amongst investors by implying that the Munich decision is portable to other markets around the world. This is simply untrue. The suits in the U.S. and other countries will be decided separately based on the laws and procedures of each jurisdiction. None of these jurisdictions present the same injunction gap challenge that we see in the Munich courts. We believe that the litigation related to the Harvard patents should not result in an injunction on the sale of CosMx in the United States. U.S. courts consider the merits of validity and infringement in parallel. Our arguments in Delaware for the invalidation of the Harvard patents benefit from all the evidence we're presenting in Germany, while our arguments for non-infringement benefit from key facts that are different than in Germany. Injunctions are less common in the U.S. compared to Germany. This is because U.S. courts are required to consider a variety of factors in deciding whether to issue an injunction in patent infringement cases. In our case, the Delaware Court would weigh several factors, including the potential for limiting competition or reducing the universe of innovative tools available for life science research, factors that which were not considered relevant in Germany. Discovery in the U.S. case is ongoing and has recently yielded important evidence relating to the Harvard patents being asserted against us, and which we believe will further reduce the chance of injunction. The research cited in the Harvard patents was funded using taxpayer money under an NIH grant. In the grant application, Professor George Church himself stated that exclusive licensing of such patents could be damaging for scientific progress and committed to making the inventions broadly available to the scientific community. Despite these commitments to the NIH, Harvard exclusively licensed patents resulting from the grant to ReadCoor, a company founded by Professor Church and later acquired by 10x Genomics, and subsequently used the patents and lawsuits designed to reduce scientists' access to competitive technologies. The U.S. litigation of these patents will play out over the months and years ahead. A Markman hearing, in which the district court will determine how key terms in the patents will be defined for the jury, is scheduled for December 2023, and a trial is scheduled for September 2024. We look forward to updating you on our progress as these cases advance. In the meantime, we are vigilantly monitoring how 10x products may infringe our own patents. In October 2022, we filed a patent infringement suit against 10x in Federal District Court in Delaware. Unlike the 10x patents that have been in license from third parties, these two patents stem from internal research related to our products that was carried out by the founding scientists of NanoString. We contend that 10x's Visium infringes these patents, and we are seeking injunctive relief. Discovery is underway, and the trial is currently set for December 2024. Let me now transition away from litigation, turning instead to the product capabilities and the quality of science that determine market share in the single-cell spatial imaging market. Let me start over. We are extremely confident that CosMx remains the best-in-class imager and is driving groundbreaking scientific research. Our currently available 1,000-plex CosMx RNA assay provides more than twice the data per sample compared to the 400-plex assays currently offered for 10x's Xenium platform. CosMx also provides 64-plex protein assays, whereas Xenium has no protein assay in the market as of today. Our 6,000-plex RNA assays, which are already being used by a small group of customers and expected to be widely available in the first quarter of 2024, CosMx will offer 15 times as many RNA targets as the 400-plex assays currently offered by Xenium. These performance advantages of higher data per sample are straightforward and simple for customers to understand. In contrast, with Xenium in a lagging position on this key specification, it appears that 10x Genomics has turned to making deceptive advertising claims on secondary product attributes. On 3 May, during 10x's quarterly call, 10x highlighted and hyped a purported performance comparison between Xenium and CosMx, claiming superior performance for Xenium. 10x doubled down on its false claims with promotional pieces that refer to a so-called comparison study that appeared to be cherry-picked data points placed on a graph rather than an actual study. Though 10x did not provide enough information to evaluate this comparison, it admitted that it was using theoretical data in places to illustrate its false claims. NanoString is working to ensure that customers have access to truthful information. We think it speaks volumes that just two weeks after hyping this marketing piece and after receiving a single letter from our attorneys outlining 10x's false and deceptive claims, 10x has pulled these marketing materials from their website as well as all social media sites where they had been posted. On 17 May, our competitor issued a press release extrapolating from the Munich Regional Court decision to other markets around the world and encouraging customers to cancel orders for their CosMx. Our competitor has been pestering customers with this offer in the days since. Scientists deserve access to the best technology available and react poorly to commercial sensationalism, hype marketing, and litigation. I think it is important for investors to appreciate just how off-putting scientific customers find our competitors' recent tactics. Scientists around the world have had negative reactions to both the confusing claims that our competitor has made regarding the global impact of the decision on infringement in the Munich court and the deceptive marketing claims. For example, social media posts from one independent and sophisticated scientist question the statistical literacy of those who co-authored the so-called comparison study. Other scientists have commented that the tactics being deployed by 10x are those of a company which is fearful of competing on the basis of science rather than a market leader. Let me now pass the call to CFO Tom Bailey for a few financial comments before we turn it over for questions. Thanks, Brad. Today, we are reiterating our financial guidance for both Q2 and for the full year 2023. As a reminder, our full-year outlook includes spatial biology revenue of $100 million-$105 million, more than doubling year-over-year. The possibility of an injunction in Germany was contemplated in our previously provided revenue guidance. In any case, Germany is a very small portion of the company's revenue, and CosMx order book, roughly 2%. In addition, for all of the reasons that Brad described, we view the possibility of CosMx order cancellations as minimal and unlikely to impact full year 2023 revenue. We remain confident in the strength of our CosMx order book, with revenue backlog exceeding $40 million as of the end of Q1. From a cost perspective, the ongoing spending on litigation is already reflected in our guidance. The fundamentals of our business remain strong, with our guided revenue growth range and reduced operating expenses expected to drive meaningful improvement in our bottom line through the course of 2023 and beyond. We now expect to end the year with approximately $100 million in cash and equivalents. With this backdrop, we are confident in our ability to reach EBITDA and cash flow breakeven utilizing our existing balance sheet resources and in our ability to refinance or retire our balance sheet obligations in advance of their maturity in 2025. Thanks, Tom. In closing, NanoString has a proud history of innovation. In CosMx, we have delivered the most capable single-cell imager on the market. We believe that CosMx does not infringe any valid claims of Harvard patents. We expect to prove this in the courts. We are collaborating with a network of top legal advisors that are confident in our case. We will not stand by idly while competitors use intellectual property to stifle competition and limit the options of researchers or make sensational and deceptive marketing claims designed to frighten and confuse customers and investors alike. This concludes our prepared remarks. We'd like to open the call for your questions. 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. Our first question comes from the line of Dan Brennan with TD Cowen. Your line is now open. Great. Thanks. Thanks, guys. Thanks for doing the call. I just have a couple. Maybe just to start off, in terms of the key tenets of your defense here, how much is resting upon the NIH exclusivity language versus you're questioning the validity of the patents and also non-infringement? I'm just trying to figure out the relative pecking order or strength of kinda where you guys see your best defense. Thank you for the question, Dan. We think we have strong arguments on all three aspects of the U.S. case. We, of course, believe we have prior art that will be found to invalidate the patent claims of the Harvard patent in the U.S. We believe the facts, when reviewed in a court in the U.S., will show that we do not infringe the claims. Finally, we believe that the NIH fact set, and in particular, the statements made by the Harvard professors who sought the grant funding, will reduce the probability of injunctive relief in the United States by demonstrating that even they believe science and the public good will be harmed by limiting access to spatial biology technologies. Got it. Okay. In terms of important timing, Brad, I know you mentioned, I know there was a June hearing coming up, and I know you mentioned, you know, some dates in terms of. Sorry, I'm just looking here what you have right. You have the Markman hearing in December, the trial. Just kinda what are the key dates and kinda what happens in June, just so we can kinda follow this? Yeah. The key dates on the patent trial that are well established for the Harvard case in the United States are a Markman hearing for claim construction in December 2023 and a trial in September 2024. I think what you're referring to with respect to the June hearings coming up on 2 June relates to what we call the bifurcation of the trial. We are presenting arguments that call into question the ability of 10x to take an exclusive license from Harvard University and in the same breath-Harvard's obligation to provide non-exclusive licenses to this technology, an obligation we believe they committed to at the time that they received the NIH grant. Whether what we are seeking is for the court to separate out that specific question related to the obligation to issue non-exclusive licenses into a separate hearing or trial that would happen on a faster timeframe than the broader infringement trial. Got it. Okay. Maybe just maybe one more because I'm sure there'll be a bunch of questions after me and I can always get back in the queue. Just in terms of the balance sheet, obviously you guys are reiterating guidance this year, which is great. I know you've talked about a pathway to profitability. Just kind of remind us, since that question does come up, just how are we thinking about, you know, just your kind of financing needs over the next couple of years? Obviously, you have to convert in 2025. Just give us some color on that because I think it's important. I think as we've mentioned on the Q1 call, Dan, we expect our cash flow and EBITDA to show some significant improvement throughout the year, and especially in the second half. With respect to cash flow, the working capital component of that is important, which we discussed on the Q1 call. In the first half of the year, we're investing a lot of cash in both inventory as well as in financing customer receivables, which reverses in the second half. Putting all of those things together and seeing that improvement and that flip in working capital, improvement in EBITDA in the second half, an improvement in working capital in the second half, that's why we feel confident in making the statement around we'd end the year with approximately $100 million in cash and equivalents. When extrapolating forward, as we've talked about, in the past, and most of the analyst models, I think in the out years are starting to reflect this, if we grow the business in the twenties and keep our operating expenses, you know, flattish up a bit as we talked about, we'll continue to show improvement in subsequent years as well. I think, you know, with those statements, we feel confident in the overall tenor of the balance sheet, and I think with those fundamentals of the business also, sitting underneath the refinancing question, as well, right? Our confidence in our guidance and the fundamentals of our business hasn't changed since the Q1 call, and I think that ultimately that directly relates to the financing question. In the short term, we have inexpensive capital on our balance sheet, and the holders of our converts are very sophisticated and well-versed healthcare investors, that have dealt and understood issues like this before. I think all of that together, we feel confident both in the trajectory of our business and cash as well as in our ability to refinance our obligations, in the time that makes sense. Great, Tom. All right. Well, I have a few more, but I'll jump back in the queue, and maybe I'll jump in afterwards. Thank you. Thank you. The next question comes from the line of Dan Arias with Stifel. Your line is now open. Hey, guys. This is actually Evan on for Dan. Thanks for the questions. I guess first, I hear you've had some discussions with customers already. I don't know if that was before. I guess it was after the announcement from 10x and from Germany. Can you give any more like kind of feedback you've gotten from your customers? Have you gotten any cancellations at all yet? Just in general, what have your customers said about this and do you sense any sort of hesitancy on their part, in terms of, you know, receiving the shipments that maybe they ordered considering, you know, the offers that 10x is apparently giving to them? Thanks for the question, Evan. 10x has been contacting NanoString customers about canceling their CosMx orders for many weeks and months, going back to preceding the Munich ruling. We estimate that about half the people who have ordered CosMx had been contacted by 10x even ahead of last Wednesday's Munich court announcement. That was originally on the basis of the marketing study that we've described, which has now been removed from the 10x's website and social media accounts. You know, I'm not up to date in kind of real time, but, you know, as of Friday afternoon, we had not received any order cancellations. We had received a number of inquiries regarding first the comparison study and then more recently the litigation, and our sales team is equipped and prepared to deal with those inquiries. The statements we're making publicly now, I think, will help them continue to do so in a way that's consistent with what, you know, we're sharing with investors. Gotcha. That's helpful. I guess one other one, I mean, I guess, have you guys been had a chance to talk to your technical team and, you know, are there any potentially technical workarounds you guys could put here that would totally get you around any of this litigation? We wouldn't wanna comment specifically on any changes in our products that aren't already outlined on our public roadmaps at this stage, Evan. Of course, that is something that we will consider and evaluate. For the meantime, I think we're focused on winning in the courts, where we are very confident in our case and, you know, committed to prevailing. Got it. Thanks. Thank you for your question. Our next question comes from the line of Catherine Schulte with Baird. Your line is now open. Hey, guys. Thanks for the questions. I guess first, you know, it sounds like you haven't seen any cancellations thus far. Have you seen any customers delaying an order? How do you prevent customers from fearing that they might not be able to use CosMx for RNA in the future, just depending on the outcome of the U.S. case? Yeah, I think, you know, it's to the best of my knowledge, so far, and it's only been a few days, the announcement of the Munich decision has not delayed customer decisions about the potential ordering of a CosMx system. Time will tell whether it does, but it's only been a few days. You know, I guess what I would say is the reaction of the scientific community that we have seen to the sort of unprecedented and sensational statements that our competitor has made, and their very unique offer and encouragement for the cancellation of orders has been generally negative. It is not a good look for a company that markets to scientific customers to be celebrating a reduction in choice of what those customers have to work with, especially when the products that, you know, is in question and is trying to be removed from the market is one with simply understood areas of superior performance. Our sales reps are engaged in real time with customers. They're helping them understand the same thing that we're helping you understand, which is the fundamental differences between the U.S. and the German application of intellectual property law and, you know, why we are confident that we will prevail in keeping CosMx on the market in the U.S., you know, free from any kind of injunction. Okay. Got it. I would imagine this is not the first technology to receive funding from the NIH. Do you have any precedents that you can point to where non-exclusive licenses were a stipulation of an NIH grant, and the enforceability of those? What's unique about this case, Catherine, is, and sets it apart from other examples of where NIH-funded research has been licensed to commercial entities, is that the grant application itself advertised that the commercial approach that would be undertaken for any resulting inventions would be to make those inventions broadly available so as not to reduce the choice that scientists have. As to make the resulting inventions as broadly available as possible. In addition, you know, the award letter that the NIH sent back to the scientists awarding them the grant cited that provision as important in their decision to grant the many millions of dollars that they received. That is the key facts that set this aside from other more typical NIH grants that, you know, I've been aware of in the past. It's the reason that we believe, you know, the very inventors of this technology have made a strong argument against injunctive relief in the United States and, you know, have committed to the NIH to make non-exclusive licenses available. Okay, great. Thank you. Thank you. The next question comes from the line of Kyle Mikson with Canaccord Genuity. Your line is now open. Hey, guys. Thanks for taking the questions and appreciate you doing this call. Wanted to ask you, Brad, just to kind of, maybe just explain something that I'm not quite certain on right now, and that's, you know, if you're confident that the NIH-funded Harvard patents were not exclusive to ReadCoor and that the exclusive license agreement was invalid, I guess, why didn't that logic and the available evidence prevent that outcome that ultimately happened with infringement in the German regional court? The evidence that the Harvard scientists made this representation to the NIH and that their grant funding was conditioned upon it, you know, the conditioned upon the commitment, came to life and discovery relatively late recently, unfortunately. That evidence was not before the German court during most of the proceedings that led up to the ruling that came down on Wednesday of last week. That's really why, you know, we believe we did not aver the situation that we experienced in Germany. Okay. All right. That's helpful. On the customer response, it sounds like orders in backlog are cancelable. If that's the case, what are the terms? What is the mix between RNA and protein consumable orders for CosMx both currently and then how you think that's going to evolve over time? Not just in Germany, I'm talking about like globally. Thanks. Yeah. I mean, the terms are that, you know, in the simplest term, that a customer can cancel an order prior to our delivery of the system. On the second question, it's a little early for us to know what the relative mix of protein and single-cell imaging and RNA single-cell imaging will be on the CosMx. We've estimated in the past that protein analytes represent about 30% of the spatial biology market opportunity in dollar terms. I think our experience is that that is a pretty good estimate for GeoMx. You know, we'll see what it will turn out to be on CosMx. You know, 64-plex protein imaging is a very unique capability of the CosMx today. As you know, Kyle, we'll be pushing that to 120 plex-Protein imaging early next year at the same time that we introduce our 6,000 plex RNA assays. I think that will be, in its own right, a very exciting application of this technology that will get some uptake. Perfect. Thanks, Brad. If I could just squeeze another one. You know, obviously, you know, you could ultimately kind of end up doing a settlement or a royalty agreement. Why would that, you know, possibly not be the case for this type of a, like, a suit, both, you know, either in Germany or in the U.S.? Yeah, I think, Kyle, we probably won't speculate about future developments in any kind of settlement agreement in this case. You know, I think for now, you know, we're focused on winning in the courts where we feel very confident in our ability to ultimately prevail. Yeah. All right. Appreciate it, Brad. Thanks, guys. Thank you. Our next question comes from the line of John Sourbeer with UBS. Your line is now open. Hey, good evening. Tom, appreciate you reiterating guidance earlier. I don't know if I missed it, but would you wanna quantify or do you have German orders in the current backlog, or have you actually made any placements in Germany? We remarked during the prepared remarks, John, that Germany represents about 2% of the total CosMx order books and revenue, and therefore, we don't feel that that should impact this year's guidance at all, which is why we reiterate it for both Q2 and for the full year. Got it. you know, I know it's early in the launch cycle, but just any additional color on just some of the early, you know, CosMx users that are out there on what type of applications, you know. It seems that, you know, the RNA panels aren't widespread, but just can you talk a little bit about some of the user feedback so far? Yeah, I'll take that, John. User feedback from folks, people who are both accessing CosMx through our Technology Access Program and the first customers to get access to CosMx instruments in their own lab has been positive. You know, on those who have received their systems, you know, they many find that the training and workflow of CosMx are simpler than the GeoMx systems that many of them own. I'd say since the earnings call and commentary we gave earlier in the month, we've had a large number of customers gain access to the AtoMx Spatial Informatics Portal, and they are positive about their first use of that capability and grateful that we've made the investment in anticipating and solving some of the informatics challenges of the large datasets they will produce. I'd say, you know, CosMx feedback continues to be very strong. Got it. Then, you know, last one here. Oh, in terms of s orry, John. I realized I didn't answer the second part of your question. You had asked about applications. You know, oncology still remains the number one scientific area of focus for our spatial biology customers, followed by areas of immunology and neurology. Those who are, you know, working in oncology are often looking at how the immune system is responding to a tumor and, you know, looking for biomarkers that could be useful in selecting patients for various therapeutic treatments. Got it. Then, you know, I know you provided the dates of the upcoming hearings, but I guess just, you know, under the best-case scenario, would you willing to provide a timeline on when you think you could potentially have the injunction in Germany removed? You know, the nullity action, which is the major hearing on invalidity, is scheduled for May of next year. That would be the time at which we would expect to prevail in removing the injunction. Got it. Thanks for taking the question. Thank you. The next question comes from the line of Tejas Savant with Morgan Stanley. Your line is now open. Hey, guys. Good evening. Thanks for the time here. Brad, I want to go back to that earlier point you made around sort of order cancellations. Are there any clauses in the contract, such as a deposit or a down payment, that discourage customers from canceling CosMx orders? Or can these customers really sort of cancel without penalty? We do not have penalties in our contracts for people who would cancel an order prior to the instrument's delivery. You know, we believe that scientists are usually good for their word and, you know, when they make a commitment to a platform, they have in the past maintained that commitment. Just to remind you with GeoMx, we took a very large number of orders prior to the delivery of that system, and not a single order was canceled during that launch. You know, we believe that by engaging with our customers and talking them through to all the reasons we believe that, and we are confident that they'll be able to continue to use their CosMx system, regardless of where they are in the world, we believe that we will minimize any trend towards order cancellation. Got it. Then just as a follow-up to that, Brad, I mean, I guess the question is, you know, given that CosMx was, you know, first out in the market, and there are sort of no penalties. Even putting all of this litigation stuff to the side, is there a risk in your mind around, you know, people just saying, you know, what's the harm in getting in the queue to begin with, given that, you know, as other platforms emerge, whether it's 10x or somebody else, they can evaluate and always sort of renege on their initial sort of purchase order without sort of any consequence? Or in your mind, is, you know, what you just mentioned about scientists being good for their word, really such a powerful dynamic in the field that you don't feel there's risk of that? I believe that no one of our customers would frivolously submit an order just to reserve a place in line, and then later renege for, you know, on that order for any reason that wasn't very important to them. You know, these are institutions who are making commitments of multiple hundreds of thousands of dollars. They are consensus-driven processes where many different people have to sign off in order to submit those orders. You know, I don't think that they are submitted, you know, in any circumstance other than one where there's a real commitment and excitement for the platform. I think our experience on GeoMx, you know, where we did not have a single order cancellation despite, you know, up to a year-long wait to receive the instrument from the time of order, demonstrates that powerfully, as does the real clamoring for most of our customers who are still waiting to receive their CosMx unit. It speaks to the fact that these people, you know, are serious about the science that a CosMx allows, and they're eager to get their hands on a system that can enable that science. I think the risk outside of, you know, some of the competitive tactics that have been deployed recently is low. Got it. That's helpful. One last one for me here. Brad, what gives you the confidence. I know you mentioned sort of the language from Dr. Church and from the NIH when they awarded the grant, but what gives you the confidence that that rises sort of to the standard of a binding contractual requirement of non-exclusivity? Are you contemplating any sort of pricing or incentive changes as you look to, you know, basically do hand-to-hand combat on some of the inbounds that your CosMx ordering customers are getting from 10x at this point? Yeah. Whether or not the language in the NIH interactions between, you know, Harvard Church Lab and NIH is a binding commitment is for the courts to decide, and we'll hear from them on 2 June. I think I wanna make it clear, that is just one of many parts of NanoString's defense against injunctive relief in the United States for CosMx. We believe that we do not infringe the patents as granted. We believe that those patent claims are invalid as granted. We believe that injunctive relief, even in the circumstance in which we're found that the court does not rule with us on injunction and validity, injunctive relief would do damage to the public good in a way that does not make injunctive relief appropriate in U.S. courts. Those are the primary sources of our confidence that a customer who acquires a CosMx today in the United States will be able to continue to use that in the years ahead. You know, I wanna make that point clear. In terms of pricing strategies, you know, we have not at this point in time planned any changes to our, you know, our commercial pricing for CosMx. It's the most capable instrument on the market by more than two-fold today and soon to be 15-fold when the 6K RNA assays become available in the first quarter. We believe it's worth every penny and that people should choose it for the best because it's the best to support their science. We'll continue to market it in that way. Got it. Thanks for the time, guys. Appreciate it. Thank you. Our next question comes from the line of Dan Arias with Stifel. Your line is now open. Hey, guys. Thank you a lot for the follow-up. I wanted to circle back to one of the earlier questions, just about the, I understand you kind of your forecast for, I guess, kind of getting to break even next year. You talked a little bit about, you know, your investors that you have with the convert. Have you had initial conversations with them and has this, like, kind of accelerated those conversations? Do you have any kind of initial thoughts of how you're going to, I guess, shore up the balance sheet with those converts being due in 2025? Yeah. I'd say two things. One, I wouldn't want to speak explicitly about dialogue we'd have with any investor. I would just say that we've got a very good relationship with the two holders, building relationship with the two holders of our converts who happen to be long only sophisticated, healthcare-focused investors who understand, I think, some of the nuances and subtleties of both businesses in our space as well as these types of patent cases. I think that all sets up very, very well together with the fundamental business momentum we have, to have dialogue with those investors as well as with other similar types of investors about potential solutions for our balance sheet, which, you know, despite all the conversation about it, is still maturity in March of 2025, and is still a very, very good from a cost perspective instrument for the company. As I've mentioned on prior calls on this topic, we'll be prudent about addressing the convert, and we look forward to dialogue with both our current convert holders and other investors in that respect, but we won't be impatient about it either. We wanna do what's right for the, for the shareholders and also what we believe reflects the fundamental value of the business, which we don't believe is reflected in today's stock price. Gotcha. Does that mean, would that preclude any kind of, I mean, given that last comment, would that preclude any potential equity raise then? I think I could confidently say we have no interest in raising equity at today's prices. All right, great. Thanks a lot for the questions, guys. Thank you. The next question comes from the line of Dan Brennan with TD Cowen. Your line is now open. Hey, guys. Maybe just a couple of quick ones. When would we see the briefs for, like, the non-infringement and validity arguments? That's coming up later this year. You haven't put anything out yet on those, have you? Or do we not see that until the court? I think, you know, your ability to see the specific arguments that we're making in the United States will be based on the timing of when those arguments are filed with the US court, Dan. We do not plan to put out anything, you know, in advance of or in addition to our court filings. That would be sometime in the fall, I guess, ahead of the Markman hearing, and then the trial's in 2024, so it would be more 2024 or 2023? I'm just trying to get a sense. Well, some of the documents would be filed in 2023 ahead of the Markman hearing and more in 2024 ahead of the trial. Got it. Then, ultimately, if the trial is in 2024, assuming you win, I assume 10x would appeal, you lose, you would appeal. Like, I guess I assume the decision will be appealable, and then when do you think ultimately this will be decided? Yeah, I think, you know, these cases can drag on for a very long time, as you know, Dan. You know, typically an appeal could take up to a year or a year and a half to play out after the initial trial. Got it. Okay. Maybe just, I mean, the George Church stuff, you know, it's very thick and, you know, the language in there is w e're not patent attorneys, so it's hard to dig through it. I know 10x makes the point that the grant terminated in 2016 and that you're not an intended third-party beneficiary. It might be too much for this call. We could always do it offline. Any comments to those arguments? I think we're gonna let the court rule, you know, coming up soon. I don't think we wanna litigate here on this conference call, Dan. You know, I think the important point that I wanna hit home is, I guess, 2. 1 is this effort to bifurcate the question of the commitment of Harvard to license the patent is separate from the question of infringement validity and then the injunction. I don't want those to be confused. We think we're strong on invalidity, non-infringement, and the injunction would be in no way an appropriate form of relief. Two is, you know, the very important points that Church made in his grant application about the potential negative impact to science from exclusive use of intellectual property of the type that seems to have resulted from his grant is the exact reason that we think injunctive relief would not be appropriate or probable in the United States. Got it. One final quick modeling. In terms of pacing on the quarter, are shipments usually ratable? I know you have a great backlog for CosMx. Are they ratable through the quarter? Are they typically made more in the final month of the quarter, or does it really depend quarter to quarter? Well, for CosMx, they're back and loaded, and the reason for that is, Dan, that we're expanding our instrument manufacturing capacity every month. Our capacity to ship is larger in June than it will have been in May, and it'll be, you know, which will be larger than it was in April. You know, for now, on the way that you kind of look at CosMx instrument orders, you have to look at them as quite back and loaded. That's not typical of our other products. Our other instrument products are typically shipped in more of a ratable way if we're carrying backlog. Because instrument manufacturing is scaling, they tend to be back and loaded. Great. Okay, guys. Thanks a lot. Thank you. There are no additional questions waiting at this time. I would like to pass the conference back over to Doug Farrell for closing remarks. Again, thanks very much for joining us today. If anybody did miss any portion of the call, there will be a replay posted in the next couple hours. To access that call, investors can dial 866-813-9403. Outside the U.S., please use 929-458-6194. The access code is the same for both, 487847. Thanks very much. That concludes our call. Goodbye. That concludes today's call. Thank you for your participation. You may now disconnect your line.