Good morning, everyone in the U.S. Good afternoon, everyone in Europe. My name is Matt Sykes. I'm the Senior U.S. Life Sciences Tools and Diagnostics Analyst at Goldman Sachs, and today I have the pleasure of welcoming the management team from Olink here. I've got Jon Heimer, the Chief Executive Officer, and Oskar Hjelm, the Chief Financial Officer. Jon, Oskar, thanks for joining us. Good morning, Matt. Nice to be here. Good morning, Matt. Thank you. Jon, maybe I'll just let you start out and kind of set the stage first. You just recently reported your second quarter as a public company. Maybe you could reflect on that and just a brief history on Olink for those that aren't familiar and some of the trends you're seeing in the business and kind of what's driven the recent performance that you've seen. Absolutely. Yeah. Just start with a quick backdrop here for people that might be new to Olink. We continue to see the very same trend, the strong trend that we saw when we kicked the company off in 2016. The drug development and healthcare challenges we saw are still there. If you just look at the top 10 selling drugs, only have effect in one out of five patients. 20% of patients have good efficacy and 80% no efficacy or basically just side effects. Development costs are skyrocketing and failure rates are very high. What were the scientific strategies that we have adopted to try to overcome those? Obviously, been a strong focus on genomics over the past decade or so. Where we're at today, we know that we need to add more tools to the arsenal here. It's obviously extremely relevant as the next step to go to proteins, which we know dictate our phenotypes, they drive all the biological processes in the human body. Very importantly, they are dynamic between health and disease in real time, and obviously the target of most drugs. It's just that proteomics is so vastly more complex than genomics. We saw that we have basically the world's best technology to overcome those challenges, which I think we've shown very strongly over the past five years. We see a very strong tailwind now for proteomics and a great opportunity for Olink. If that was a backdrop and just looking at some of the more recent accomplishments, I think for Olink, it was a huge milestone for us with our quite recent transfer or addition, using NGS as a readout. Here, we can really scale in the number of proteins, the multiplexing, the throughput, and the cost efficiency. We launched our kit launch on NGS here in Q1, really allowing our researchers to complete the multi-omic perspective, which we believe is the core of the science here, on the same underlying instrument that they already have in-house. In parallel with that, our installed base that we can go after and target has gone from 500 to 5,000 instruments, which obviously presents a fantastic opportunity. In parallel with that, we have very rapidly expanding our protein library. Just going back to a bit over the past year, we've gone from just over 1,000 to 3,000 proteins. A very aggressive acceleration of what we're doing as we speak. The last but not least, we are super excited by being the chosen proteomics partner for the big U.K. Biobank project sponsored by 12 major biopharma companies. We now are plowing through those 53,000 samples as we speak. I think that's a fantastic opportunity for Olink and also for this scientific space. Yeah, those are the things that are happening as we speak and that we are very excited by, Matt. Great. Thanks, Jon, for that intro. Really appreciate it. We'll definitely get into the U.K. Biobank a little bit later. I think maybe starting out on sort of high level, I think one of the most common questions I get when I speak to investors about Olink and proteomics is just the level of competition. I think at times it seems to be probably overly exaggerated, just given the number of players and the potential size and growth of the market. We've seen a number of new entrants, both on the public and private side within proteomics. Could you talk about the competitive landscape for proteomics, how you think it's going to evolve, and what do you actually think will be the key durable competitive advantage, and how does Olink fit into that? Yeah. No, absolutely. Very good question. First of all, I really think one needs to take a step back, and the first technology that really solved to look at proteins in solid quality was the ELISA, and it came out in 1971. It's 50 years ago. We've obviously known since then all what I just said about how important proteins are for real-time human biology. It's just that proteomics is so vastly more complex than, for example, genomics. What I want to say with that, I think some of the newcomers here speak very loudly on what they're going to do. Honestly, it would be great to see more data on that. It's sort of very difficult to comment. I think proteomics is extremely complex. The challenges that a technology needs to overcome are several. You need to have the relevant sensitivity. You need to have very high specificity. You need to be functional across a huge dynamic range. You need to do this in a very high throughput and cost-efficient manner, and also being scalable. It's not like you can solve one or two of these aspects. You need to solve all of them simultaneously. Honestly, Matt, in my opinion, today, the only platform that is solved for all of these aspects is the Olink PEA technology and platform. Great. It's a good segue into talking about PEA technology, how it helps you achieve a level of sensitivity and specificity from low all the way to high-plex. Is that accuracy and performance a durable competitive advantage that you have embedded in PEA? Yes, absolutely. Maybe we should just highlight what the technology is for everyone here. It's a disruptive and beautiful and simple, elegant technology in a sense. We're using what mother nature created, so antibodies, and we're using two of them to get a very high specificity. We have then conjugated those to short DNA tags, so to create a DNA barcode for every protein in a sample. That way we can also piggyback on all the fantastic evolutions that happen in the genomic space. In essence, we have a proteomics to genomics converter, so allowing us to look at many proteins across thousands of samples in a very high quality, high throughput manner. As we developed our products, we validate each and every of the 3,000 assays we have now through all of the aspects I just mentioned earlier. They all need to pass sensitivity, specificity, dynamic range, et cetera. We're developing a standard curve for every assay with upper and lower limits of quantification, the linear range, and so forth. Today, with the close to 600 publications we have already, with 700 customers and so forth, I think it's become an established fact that we have the best proteomics technology now providing for the cleanest, most robust data. Got it. One of the debates that we have with investors as well is sort of between, with Olink, you're leveraging the existing equipment that is already in most labs, or at least they have access to that equipment, versus some of the newer competitors coming in the market might require the customers to buy a separate instrument. How do you feel like the market will evolve in terms of the needs? Do you feel that leveraging what's already in the lab is going to be something durable, or do you think the budgets will allow for additional purchase of instrumentation for other types of technologies? How do you feel about that evolution there? Yeah. I think if you talk to our customers, I don't think necessarily they would say that they would love for another expensive, large, big box with a big CapEx item connected to it in their lab. Rather, what I think we hear and one of the beauties that we did, we're using, in NGS, we're using the Illumina platform as readout, and obviously our customers already have these instruments in their own lab. More importantly, on top of that, they're using those instruments today to look at DNA and RNA, and now they can complete that complete multi-omics perspective, adding proteins on that same CapEx instrument that they already invested in. I think that is a very strong and a very favorable proposition that the customers that we speak to really appreciate. Got it. I know it's different for low-plex and high-plex, but just focusing on NGS, do you think that will likely be sort of the preferred instrument going forward? What will the relevance of mass spectrometry and PCR be in sort of the future world of proteomics? Yeah. maybe a bit broader answer there as well. just looking, if I go to Olink and how we thought about this, because our technology is truly agnostic. We can use basically any readout there is there. We could use an array readout, we could use a mass spectrometry, we could use NGS or qPCR. We very carefully looked at all these alternatives. We looked at the use cases, what customers are trying to accomplish, and when we set out the strategies for our product portfolio. If we look at the more strategic use cases where customers want to cast a very broad net of a combination of known and novel biomarkers in a very high quality, high throughput, cost efficient setting, we believe that NGS is the preferred platform. If you move further in toward, for example, clinical development, now you maybe have honed in on a certain couple of pathways that you're looking at. Here, you also maybe don't want to generate data on thousands of proteins where you need to submit data to, for example, the FDA. Here, looking at fewer proteins, but could still be many samples, we still think that qPCR is more competitive, actually. In the last of our offering, where we custom develop products for every use case, it's the same, that qPCR now is more competitive than NGS. That might change and evolve over time, but as of now, that is how we constructed and designed our offering. Got it. As you move high-plex and you're expanding your library, you mentioned the move to 3,000 proteins. I know you have sort of a roadmap to 6,000. What's the perceived differences from customers between them looking at 3,000 and, say, 7,000 proteins? How important is it to expand rapidly into high-plex? Is it just more of a matter of trying to cover all the potential customers' needs as they move from sort of unbiased to targeted? Is it getting that incremental 1,000 proteins really helpful in developing new customer relationships? Yeah. No, great question. I think I'm going to answer your whole question, but just initially here, I assume that when you say the 3,000 and the 7,000, that you're really referring to Olink and SomaLogic. I just want to point out what I see and think is a very key difference there to start off with. As we talked a little bit about on how we develop each and every of the 3,000 assays we have and the very robust validation we do, developing that standard curve and all the details around how a protein researcher looks at and evaluates technologies. Basically, how you would validate an ELISA is how we develop each and every PEA assay. If you go to SomaLogic, they have a different approach. They're using an aptamer instead of a matched pair of antibodies, and they're looking at epitopes. An epitope could be part of a functional protein, but it can also be a part of a protein or just the epitope that is no longer having any function. Our customers are very interested in understanding mechanistic biology, looking at functional proteins. If you use the SomaLogic platform here, it comes hence with quite a lot of downstream validation of your findings. First of all, is this part of an epitope or is it a functional protein? Since the assay is not as specific across, is it a relevant hit or not? Okay, I think their library today, if you look at the actual proteins or epitopes that they are covering, maybe it's the unique ones that are measured in plasma is maybe 5,500. Yes, you will get more epitopes, but it comes with more downstream validation. Just to set that as a background. Yeah. To your question, I think it's super important, and what we are extremely focused on is to expand the coverage, because this community and this science wants to get an extremely holistic and complete perspective on first, what goes on in circulation. We are marching extremely aggressively towards that. Is it 5,000, 6,000, or 7,000 proteins? That's where I hope that we will be in the next couple of years to continue to be the front runners here. Got it. Maybe getting a little more specific now, the Explore launch. It's a critical product launch for you. It's a very important part of the incremental growth in our model. Could you talk a little bit about the customer interest? I know you launched it, I believe, in mid-March, so you've had a little over a quarter or so to see what the demand is like. How is that going and from a go-to-market strategy, are you looking for sort of a high quantity of customers with lower throughput or fewer customers with higher throughput? What's the more sustainable strategy as you think about your go-to-market for Explore kit launch? Yep. Thanks, Matt, and great question. As you mentioned, the kit offering was launched in early March from a broad perspective, and we launched the service offering of Explore in June of last year. Already in 2020, we had some early access customers coming online in Q4 and in Q1, but then really opening up the gates in June Q2. We ended up Q2 with a total of 16 installations that we've accumulated throughout basically this last year. What's really encouraging to see is we both see academic institutions in that mix and biopharma adopters. I think we're really pleased to see a broad adoption across our customer segments and also across our geographic regions. Looking at in the U.S., in Europe, and in Asia. When it comes to the kit strategies, I think we are focusing on getting high-quality institutions in the mix, and we are prioritizing customers with higher pull-through, over just running up a large number of installations. I think we saw that to date. We are tracking ahead of our expectations for the average pull-through. We are also seeing a very good buildup of our pipeline for the years to come and the quarters to come. Really very pleased about the first couple of months with the Explore kit launch. How has the mix of new versus existing customers gone with the Explore kit? It's a relatively stable mix of existing customers adopting the kit product. We also see new customers going directly to Explore and to the kit product. That is also very happy to see both existing and new in that mix. Got it. One thing that I really appreciated, and I like the fact that you launched the Explore kit within analysis services. You actually get a very good view of what the incoming demand would be without you having to necessarily proactively market it. You get a real good sense for what the demand is like out there. Do you plan on using analysis service in that way for future types of kit launches and things like that, so you can sort of assess demand? Do you feel that's a really good gateway, kind of intro to Olink for customers to start with analysis service and then eventually develop their own capabilities in their own labs? Maybe, Matt, I'm not sure. I think as we took a very dramatic sort of step going from qPCR to NGS, I thought it was a very sound strategy to get some internal mileage. We also had some early kit adopters to vet the process of setting them up, getting them robust, and so forth. If we would take drastic sort of technology leaps like that, I definitely think that's a solid value. Got it. Just on U.K. Biobank, you mentioned briefly at the beginning. They recently moved to the 3,000 protein library, which is a nice validation of the technology. Can you just give us a sense of the size and kind of durability of this relationship in the context of your overall business and growth contribution? Absolutely. First, I think, representing Olink as an organization, we are extremely proud to have been selected by these 12 major biopharma companies after a very solid vetting process of various technologies to run such an important and strategic project. Also, going back to our earlier discussion, they're really showing strong evidence as well about the multi-omics perspective we talked about and what they're really trying to accomplish. As you know, they've generated a lot of genomics data on these UK Biobank samples and now going to proteins to complete that multi-omics perspective, which we all think will very likely drive science moving forward here. Maybe just as a reminder for everyone as well, that that approach is sort of now how modern drugs are developed, using that proteogenomics perspective to identify these new and novel causal drug targets, truly reducing risk in drug development. With all of that said, it's a very strategic and important project for us. On the financial perspective, it roughly would represent maybe 10% of our business this year. It's much more of strategic nature and for marketing purposes for Olink, which already now very much paid off. We are super excited to be part of this consortium. Great. Really helpful. Now as you kind of move your business towards kits being a larger portion of your revenue mix, how do you think about the investments you'll be making in the analysis services business? Will it remain a key part of your offering? As I talked about before, a good way to launch new kits, you do with Explore or gain access to new customers. How are you thinking about the level of investment in analysis services as we start getting a little bit more kit heavy over the next few years? Yeah. I think clearly the strategy is to drive the kits part of the business and accelerate that growth. That being said, I think there will always be some level of service activity in the business. I think, for one reason, as you mentioned, when launching new products or it's good to have that, being able to run that in our own service labs. There are, quite frankly, customers that don't want to internalize the technology. Of course, the service lab is a good way for us to run that business. I think the final part, and I think that's been sort of a part of the historical growth journey, is that I mean, a lot of our kit customers today have sort of come through the service lab. We've onboarded them. They start out quite small, and they grow their spend, and then they're ready to internalize the technology. It will always be a part of the business, but the focus is on the kit side, and that's where we'll put most of our efforts and investments. Got it. You launched your Signature PCR instrument. Can you talk about the decision to launch your own instrument? How critical is it to growing your installed base for the target kit specifically? Absolutely. As we talked about a little earlier on how we see our portfolio with NGS for the more strategic uses and then the qPCR or target portfolio here for the bit more targeted. In this space, for the past couple of decades, it's basically been two technologies that has been the market leaders. It's Meso Scale Discovery, MSD, and Luminex. We have been compared to them over and over and over again, and we just simply see that we have this next-generation proteomics technology that outperform these decade-old technologies across key performance criteria. To be able to really win that market, we thought it was really important to come with a next-generation qPCR instrument. It's a nimble, bench-top, modern, cost-effective version of that. A very small investment to be able to get access to this next-gen proteomics technology. From all of those perspectives, we think it was, or it is a very important piece of the whole offering. Got it. Maybe I'll take a break in, Michael. I did get a question from one of the audience members. I'll try to paraphrase here. I think they're talking about Google. Will the DeepMind AI breakthrough on protein folding be a positive, medium, long-term driver for your markets, or is it a non-event for you? Difficult to say. I guess everything proteomics is good for proteomics, right? I think it's very early days in that type of research as well. Our customers, when you look at Explore, and if you take the U.K. Biobank example and the tremendous amount of data that is going to be generated in that cohort, those tools are definitely applied in how you sort of approach the data mining here. Will those type of tools be important for the work that we do in the space? Absolutely. Got it. In your early years, you actually generated EBITDA and were profitable, which kind of ends up being a rarity sometimes in the sector, but for people who don't have the history. Talk about your decision to kind of reinvest in the business and how you see your path to profitability as you balance that with the potential growth in your business. Basically, how are you balancing your top-line growth with probably the eventual goal of generating EBITDA and profits moving forward? Yeah. No, sure. I think, the background to the company and from its foundation, b asically, we sort of funded the company organically. There was no choice really than to build a company with a robust and financially sustainable business model. Following our Summa Equity sort of investment and leading up to the IPO, we saw a lot of room to invest in the business, to build out our organization, to accelerate the expansion of our library, and then made a very conscious decision to drive down profitability to invest in the business. I sort of framed that as looking as the 2021, 2022, that type of timeframe as being sort of investment years. Over time, climbing back towards historical levels of profitability. I think that's really supported by the strong unit economics of both the service and primarily the kit business, with close to 90% gross margin. Now, having gone through an investment phase, adding commercial R&D and general corporate capabilities. From that point, being able to gain more operating leverage, basically. Got it. Maybe sticking with you, Oskar, just on the gross margin side, you guys talked about, during the IPO and since then, about the level of gross margins and how there's actually room in terms of pricing if you were ever so to need it, to be able to absorb some, be able to be more competitive on price and without really impacting the gross margins. Could you talk about how you're thinking about gross margins, in the context of maybe not necessarily being more competitive, but just further democratizing proteomics with your expanding customer base, and maybe what impact price could have on that, and then, how you think about the gross margin impact and balancing those two? You know what I'm saying, I think there's a strong desire for you guys to democratize proteomics. There's also a cost involved, and if you were to lower cost, you might be able to see broader acceptance, but at the same time, you want to earn your gross margin. Maybe just talk a little bit about those trade-offs as you think about it. Yeah, sure. You're rightly so. There is clearly a need to make proteomics more available. At the same time, not want to harm our gross margin. Looking at our, especially our kit side of the business, where we have a 90% gross margin effectively around a 10% cost of sales, a large chunk of that is royalty payments. We can be quite flexible on pricing without driving down the percentage of gross margin. It's really for us to balance that pricing strategy to just take as much volume as possible out of the market and create an opportunity for researchers to do proteomics experiments. Then to add to that, last year we acquired an antibody production company. When we look at basically from the 1,500 proteins that were launched on Explore, largely externally sourced. When we look at sort of the 3,000 and beyond, those antibodies are produced and sourced in-house. There is no royalty burden on that part of the library. That also creates further capabilities for us to play an active part in democratizing proteomics without hurting the gross margin. Great. This is actually a good segue, something that I've talked to you guys about in the past with your acquisition, Agrisera, and building that antibody library. I know, Jon, you've talked about it. It was a very small acquisition, and it's going to take time to build that. You do see a real competitive advantage in the vertical integration of antibodies. Jon, could you maybe talk a little bit about that strategy, and would you want to add more? Is it something that you think that you can develop organically with what you've bought to create that competitive advantage over the long term? Just walk through your thought process on that. No, we're extremely excited and happy of the acquisition of Agrisera. Just, I mentioned earlier, going from 1,000 assays to 3,000 assays, and now as we can scale this in a very accelerated fashion, driven by our own hands, so to say. Super excited and happy about that. Right now, we also have grown and invested in the business very aggressively, being front runners on this market, capturing this great opportunity we see in front of us. We are definitely also keeping a very close eye on various M&A opportunities, for example. I would probably see that a bit further out, that with the funds we have, what we've invested in, first things first, so to say. Definitely keep an eye open, but nothing in the real short term as I see coming. Okay. You had a goal of significantly expanding your commercial team. How are those plans going? Are you on track, in your view, to help support the growth of your business? How have you found hiring, cost of hiring? I know it's a tight labor market globally. How are those commercial hiring plans going? Yeah. Clearly one of the biggest investment areas in terms of our organization. We've expanded that, I would say, according to plan, if not somewhat ahead of plan. We ended up, I think end of Q2, we had a commercial team consisting of 120 heads. That's a big increase compared to the prior quarter and the prior year. We are making good headway in terms of expanding that team. In terms of cost of hiring, clearly it's a competitive market. It's not a huge issue from a company perspective, and I think we all can recognize that, finding right people is the number one priority, and I think it's about getting talent to the platform. We can also see, I think, a lot of people working in the field from the commercial perspective, I think recognizing the proteomic opportunity. They are quite keen to join Olink. Got it. One thing that we've done a lot of KOL calls in the proteomics space during the IPO and post that, and one thing that we found is that there seem to be a number of customers who were doing both unbiased, high-plex and targeted low-plex work, and they were bar belling it with maybe SomaLogic on the high-plex and Quanterix on the low-plex, and shifting technologies as they moved down. Your plan is to be able to cover that entire spectrum. From a commercial go-to-market strategy, how do you approach those customers? What's the value proposition, to go with Olink versus separating out the two technologies? Yeah. That's actually exactly right, Matt, how we constructed and designed our product portfolio going from Explore, Target, down to Focus. What we hear and see on the market is, it's not super simple to change technologies in proteomics. It will be much faster and simpler and cheaper if you can go with the same technology. Hence, I think that is actually a quite important aspect when we talk to new customers, that they see that they can grow and scale with the company. Casting that broad net with Explore, targeting down to Focus and into clinical decision-making is really what the customers want to do, and that they can do it with one single provider. I think it's very much appreciated and an important part of our offering. Got it. You touched on a little bit about M&A and capital allocation, but, could you just talk a little bit about buy versus build, how you're thinking about things here today, and as you think about M&A, likely bolt-ons is probably where you would start, but just want to get your sense for how you're thinking about things from the buy versus build trade-off. Yeah. No, we come with a very strong history of building, right? The buy we did was with Agrisera, which was a vendor to us for quite some time, so we knew them very well. They was a perfect fit into our organization. As we developed the Signature product, for example, we did that in a partnership. I guess we're quite careful and considerate, and it really must be a very clear strategic fit with what we do. Obviously if you look longer term consolidation and stuff in the industry, I definitely think we will be open to that. As I said earlier as well, we're in the air now, we're building it organically, but being opportunistic, definitely keep an eye out, but not something I see perhaps in the very near term. Got it. Are valuations impacting some of your decision-making as you look out across the different opportunities, the sense that you're taking time to do that? Yeah. Maybe, but, I mean, everything has a value, and if it's something that is very important, it should be valuable as well, and then, I guess you need to digest that. Got it. From a geographic standpoint, where do you think some of the best opportunities are for Olink, or for just for proteomics in general, and how do you think you'll capitalize on those trends? Are there levels of under-penetration where you feel like, from a geographic standpoint, you can really make some inroads? Yeah. I think if you just look at the global market, it's led by North America. It's our most important market. We have a very strong presence there. It's definitely our most important market. Very clearly followed by EMEA, who is also a very research-intense region. Then you have the emerging markets like APAC, where we also dip our toes into the water, are building out our organization. We probably see the fastest percentage growth out of APAC, but obviously starting from small levels. I would rank them like that, North America, EMEA, and last, APAC. Got it. Maybe as we finish up, what do you feel is most misunderstood or underappreciated by the market about Olink today? Just maybe a couple of things and putting in perspective in the broader sense. First of all, we are a real company today. We have more than 700 of the most prestigious biopharma and academic institutions, us, very sticky and repetitive customers. The technology platform comes with a very strong scientific validation with more than 600 publications and so forth. You have some newcomers to this to say, speak a lot of loud words, but I have a huge respect myself for how complex proteomics is. We talked about, these are very careful and picky scientists choosing technologies, and you really need to overcome all of these tremendous challenges. In my mind, just looking at the facts and the data, and I would love to see some more facts and data, from some newcomers there to really know what's going on. I have a huge respect for the challenges and obviously super happy and proud to have PEA that has overcome those. That, I think we already touched upon it and something that we tried to communicate through the roadshows and so forth as well, but that we really designed the whole library, as we talked about in this discussion as well, from actually being that go-to proteomics company where you can stay from the broad discovery into a more most targeted diagnostics setting. Yeah, maybe those aspects. Hopefully, those have come through, if not earlier in this discussion here. No, it definitely has. Jon, Oskar, thank you so much for your time. Really appreciate it. Great discussion and thanks again.