Good afternoon, everyone. My name is Anna Snopkowski, and I am an associate on our Life Sciences Equity Research team led by Paul Knight. It is my pleasure to introduce you to the Rapid Micro Biosystems team, Rob Spignesi, President and CEO, Sean Wirtjes, CFO, and Mike Beaulieu, VP of Investor Relations. First of all, I want to say congratulations on a great year, and I'm looking forward to seeing what Rapid will do in the coming year. As a quick reminder, after the quick introduction, we will open it up for Q&A. You can either write in the chat or you can email me at anna.snopkowski@key.com. I will now turn it over to Rob for a short introduction. Thanks, Anna, and good afternoon, everybody. We look forward to our time today with you. So just by way of a quick background and context for Rapid Micro Biosystems, we're focused on a critical part of the global pharmaceutical quality control infrastructure called microbial quality control, which is a regulated high-volume testing process all pharmaceutical manufacturing environments go through to ensure the finished product is free of microbial contamination and safe for patients. The fundamental problem is that the methods haven't innovated or changed in about 100 years since Louis Pasteur invented them. So it's creating a cost and risk for the industry. As a solution, we've developed the Growth Direct platform, and we'll go into this today, which fully automates and replaces that legacy manual process and brings a critical process of microbial quality control into the 21st century where it really belongs. There are a number of reasons why we're very excited about our business and the opportunity in front of us. First, it's a large market. It's about $10 billion in size and growing and under pressure to change from both the regulators and the industry itself. We have strong barriers to entry, first mover advantage, which is especially important in this market, strong IP portfolio. We have the right credibility that we have the right product for this market, the Growth Direct platform. Again, I'm sure we'll go into this today. We're proud to count about 70% of the global top 20 pharmaceutical companies as our customers. Our value prop is clearly resonating. While we have installations within these top 20, there's significant runway to go. We're just getting started with our commercial opportunity. It's important to note that we address all manufacturing modalities globally, but we're especially strong in the more advanced modalities of manufacturing, such as biologics and cell and gene therapies. And importantly, our business model. We have a high-growth business model where we place capital equipment and pull through a high yield, a high rate of recurring consumable and services revenue inside these validated environments, which creates quite a sticky, recurring, and durable revenue stream. That's a bit of background about us, and we're happy to, Anna, open it up for any questions that you or the audience may have. Perfect. That was great. Maybe just starting on cell and gene therapy. I feel like there have been many catalysts recently, such as the first solid tumor cell therapy targeting advanced melanoma, as well as positive FDA panel voting for CAR T/Carvykti and Abecma. I just want to hear your thoughts on the overall space. How do you feel entering 2024 from a macro environment standpoint, and do you feel like these catalysts might be enough to get the funding environment up and running again? Yeah, so with regard to the cell and gene therapy environment, cell therapy in particular, we like the outlook. If you look at the what's in the pipeline for coming through the clinical trials, it's well over 1,000 kind of candidates in the pipeline. Some will make it, some won't. I think it's important to note for our business, we have systems placed on 100% of the commercially available CAR T therapies. So we're very strong there. Now, clearly, it's not as large as the biologics market, which is where most of our installations and placements are. But we, of course, are also focused on cell and gene broadly through directly the companies that were bringing these innovations to market and also through the broader CDMO network. So again, we're agnostic. So as cell and gene therapies come to market and are successful, our plan is to make sure that we are partnering with them and securing them as customers, but more broadly in the ecosystem, the biologics, and small molecule market as well. So I think we're well hedged, but also very well positioned to benefit from the growth in cell and gene therapies in particular. Yeah, and as you just mentioned, so you're involved with 100% of commercially available CAR T therapies. I just wanted to touch upon why that is and what makes your system such a good pairing with CAR T therapies. Yeah, sure. So the CAR T therapy manufacturing environment is a bit unique relative to other modalities, and it's got a couple of elements I'll walk through. First is it's a very high-volume test environment. Just given the manufacturing process itself, the chance for contamination, the implications of contamination are quite high. So the testing volume is quite high, relatively speaking. Number two driver is a turnaround time and the speed. So it's not uncommon to have a two week vein-to-vein time. So pulling blood out of the patient's veins, going to a manufacturing environment, and going back to the patient, two week turnaround time, incredibly fast. So the whole process needs to be sped up, the manufacturing process, and critically, the quality control process, which, as I touched on in the intro, the legacy processes can take a long time. The final element is accuracy. This is low tolerance for mistakes or, if you will, reruns or retests, just given the critical patient needs. So again, the combination of high test volume, our system's been built for high test volume environments, high throughput, high capacity. That's one of the hallmarks of our system. Quick turnaround. We're a rapid technology, so we can give results in half the time or less. So we satisfy that very strongly. And accuracy. So we eliminate the human error associated with the current process, machine-driven, computer-driven systems. So the critical requirements for microbial QC testing in cell and gene therapy, cell therapy in particular, align extremely well with the core value prop of the Growth Direct platform, as do other modalities as well, but cell and gene resonates quite strongly. That's perfect. And then we have one question from the audience. So is your technology appropriate for GLP-1 production or fill-finish? And then going off of that, production in general or more later-stage fill-finish production? Yeah, it's a great question. So our technology is. This is important to know because you hear a lot about cell and gene therapy with us and biologics manufacturing. We're modality agnostic. So as long as the tests and all of them do comport to the USP and the international equivalents and the FDA regs and the international equivalents, our system was built to satisfy that. Again, we've designed the technology to automate the vast majority of daily routine use test volume in any manufacturing facility. That could be drug substance manufacturing. That could be drug product manufacturing. That can be fill and finish manufacturing. And this is a good segue into our product portfolio. So environmental monitoring, we have commercially available, which tends to be a high-volume test in all those modalities. You've got water testing, product bioburden test, and all that is currently available. But also part of the question touched on fill-finish, and that also gets you more into sterility testing. We announced the upcoming availability of our Rapid Sterility test that will be expected to be available mid-year this year, which helps us to fully address the daily routine use test volumes to include Rapid Sterility in a fill and finish environment. That makes sense. You've touched upon many of the benefits of automating your processes in labs, such as reduced time. I think you said two weeks, optimized scale, and then just reduced compliance issues, which I know is a big problem in labs. What is the competitive landscape? Why would someone opt out of using one of your systems when there's so many obvious benefits? Just maybe what are the biggest pullbacks you're seeing in the biopharma landscape? Yeah, so you touched on competition, and it varies a bit by application. But generally speaking, the biggest competitor we have is the legacy 100-year-old Petri dish method. That's just by definition because the market is not yet automated. So that is the most obvious competitor. And And generally, certainly within environmental monitoring, water, and bioburden testing, we consider it a generally low competitive environment. Sterility has got a bit more of the technology-enabled solutions out there, but we knew that. So we've developed a system to be highly differentiated against other options in the market. With regard to the customers, the challenges really kind of wrap around when we have them is just corporate priority. So we are implementing a system that changes workflow that needs to be validated. And clearly, we're successful at it because we have many, many top customers and we're growing strongly. But in those instances where it's, hey, it's not a no, but it's not no. It's not yes now. So what happens is projects can be delayed when the priority rises, the Growth Direct priority rises kind of higher in the target range. But that being said, we're typically prioritized. And the things we're seeing now is as we install more and more systems globally, we're becoming more of the fundamental fabric and infrastructure of these large companies. So our rollouts can tend to be higher prioritized because it's a thematic type of year-to-year process and budget allocation to the Growth Direct. Is that perfect in every case? No. But it's helping us become more durable as companies go through their, especially these large companies, prioritization projects. M&A could be a challenge, FDA audits, all these sort of facility buildouts. All these things are real-world priorities that could delay some programs and sometimes Growth Direct included. That being said, we know that. We've got a large funnel, a large customer base, and we work with our customers to continue to grow. That will be our plan going forward as well. Perfect. And I know you've mentioned that one of your goals is to move more downstream in the workflow. So I was wondering if you could touch upon any potential product launches either in the works or that you've thought about that could help you become more involved in these customer workflows. And then going off of that, what is kind of the revenue potential of moving more downstream? Yeah, so for context, for folks listening, think of the Growth Direct as a platform technology. It dovetails a bit to the previous comment about how we get prioritized. So we're fundamentally re-engineering a legacy workflow and creating a new workflow around more rapid, better data integrity, faster, higher quality data that we're providing to the customer to make decisions. So right now, what we do is we automate, as I touched on, the vast majority of daily routine use tests. And within that, we detect contamination, we find organisms that shouldn't be there. And then we enumerate it. Part of the regs require you to actually count, if you will, and enumerate the bioburden or the level of contamination. That's what our system does in a fully automated, walk-away, highly accurate fashion, which is a lot of the workflow. That being said, after we detect and enumerate, what many customers typically do is try to provide or try to gain more information on what we found. And the reason why that is part of the SOPs and their quality management system is because they want to be able to close out any kind of investigation of what happened. And if you know what kind of organism it is, for example, some organisms live in water and come out of a water contamination. Some come out of air, which could be an air vent problem. Others come off human beings, which could be a signal that more training is required for gowning procedures, that sort of thing. So what customers will endeavor to do is identify those organisms using a sequencer or a MALDI-TOF or an outsourced third-party ID service. So clearly, we own, if you will, that test, and we only give it up at that point because our system doesn't currently identify the actual organism. So a future potential enhancement to the Growth Direct could be the actual identification and speciation of the actual organism, providing that much more information in real time to the customer under the umbrella of our current value prop. So that is, I'll call that a potential future. What I can say, though, is a step in that direction. Last year, we launched our Mold Alarm software upgrade. And what this does is this provides enhanced data on the organisms to our customers. And this is available now. So what it allows the system to do is differentiate between bacteria and mold. And that's an important differentiation. It's not a final speciation, if you will, but it's really important differentiation because many customers get quite concerned when there's a mold challenge or mold outbreak. It spreads fast and it's hard to remediate. So that's a step in that direction. And finally, I'll talk broadly about data. We're producing an enormous amount of digital data for the first time for these labs and helping customers think about the data, especially multi-system, multi-sites, global. We're seeing more and more of our systems being adopted globally, and we're creating fleets of Growth Directs across these customer environments. So bringing all that data together and being able to present it back to a customer in a usable way to be predictive in nature and help them run a better quality management system is also a potential future product category as well from us. Thank you. That's very helpful. We have one from the audience. So of the 140 or so installations that you have, what do you think the per unit cost has been to get a customer win, get the customer to place an order? And could we say that 140 installed units represents $1 million of value each? Or is it more logical to put a value on the pull-through for each unit? Yeah, so we don't have it at our fingertips. I'm looking at my CFO, the per unit cost. Some of those have been higher cost because of sales cycle for the first so maybe I can answer this in context of our sales cycle. So we typically see a declining cost curve once we've acquired the first system. So maybe this is a qualitative way of answering what is fundamentally, and we understand a quantitative question. However, this may be able to kind of answer the question largely. So customers will typically adopt, call it one to three or four systems over one to maybe two sites at a time. They'll bring them in, and that can tend to be a higher cost of a sale. They'll bring them in, they'll validate them, and we do that globally. We have over 120 systems validated generally in GMP environments around the world. They'll start using them, get their ROI, and then they'll buy more systems from more locations and more applications. So the marginal cost of those follow-on systems is quite lower, for sure. I would also say in context of our evolution, cost initially when we didn't have a brand and we were just starting out several years ago, were certainly higher. But now with the global momentum we have, the cost again, I don't want to quote an exact dollar figure, but likely lower now too, that more and more of the industry is adopting and word-of-mouth spreads, customer forums are more, if you will, focusing on Growth Direct. And it's just more of a well-known product across North America, Europe, and Asia as well. So hopefully that gets you close to the answer. I think there's a part B of that. Yeah, I'll take that one. Yeah, so you also asked about pull-through. So the way we think there's two components to it for us. The way we think about it per system is once we've got a system up and running, validated in routine use, we expect an average customer to pull through somewhere between $150,000-$200,000 per year of consumables. But we also have an extremely high attach rate on service contracts as well. I think about those as $50,000 a year plus per system. Putting those together, we're upwards of $250,000 of overall recurring revenue pull-through per system on average. Now, today, we're a little bit below that. We're working our way up to that as we continue to build the installed base and expand customer usage of systems and continue to add to that number overall. But we're well on our way there. And we think that we've got a number of examples that are above that range, I would say, particularly in some of the high-volume areas that Rob talked about, some of the biologics and cell and gene therapy. So a lot of opportunity there for us to add to that, both in terms of new customers coming on with high volumes and increasing the utilization of other customers who may not be fully utilizing the systems right now. Great. That's helpful. I wanted to take a moment and turn to 2024 and your outlook. You talked about seeing positive gross margins in 2024, and you got pretty close in Q4. So I was wondering if you could just provide any information on this, specifically any updates, how you're viewing gross margins play out in 2024, maybe the cadence as we enter Q1. Yep. Yeah, I'm happy to take that. This is one of the most important focus areas for us in the business. We're on a journey. We've made really good progress in 2023 at moving into 2024. As you mentioned, we got pretty darn close to break even in the fourth quarter, which is a good milestone for us. We've guided the full year 2024 to being positive on gross margins. In terms of cadence, we typically have seasonality where Q4 is our biggest quarter. The following Q1 tends to step down. We expect that again this quarter. That'll have a temporary dampening impact on margins. We think they'll go a little bit backward from Q4 to Q1, improve, but still be negative in Q2, but then flip positive in Q3 and Q4. Effectively, we expect a bit of a stairstep as we work our way through the year, with the overall year being a positive gross margin year for us. Perfect. And then staying on the same 2024 topic, you guided to 20 Growth Direct Systems. Maybe just touch on your confidence on these system placements and some of your assumptions going into this number. Yeah, so our confidence is driven by a couple of different factors heading into 2024. As you touched on, we had a strong 2023, so momentum coming out of 2023, which is important. A fully staffed sales team in all three regions, fully up and running in North America, Europe, and Asia. We serve customers in all three of those major regions. Our sales funnel looks like we wanted to look, which is important, which is basically the opportunity funnel of customers and systems within that. As it touched on earlier as well, our customer growth is getting us into multiple sites and multiple locations around the world, which is elevating the criticality of the Growth Direct and Rapid Micro Biosystems inside these large enterprises, which in turn is giving us access to more senior-level conversations. And those conversations can tend to, not always can tend to, lead to better visibility with regard to strategic intent. And then finally, I would say sterility. Launching sterility mid-year, we have not assumed any material impact from sterility in 2024. That being said, we're not going to rule out the chance for upside. So we stand by the guide. We think it's a prudent guide. And those are some of the I would propose as the reasons that give us confidence. I would say the offset against that continues to be, which is consistent with our previous comments, just the funding environment is I wouldn't characterize it as free-flowing, but I certainly wouldn't characterize it as a budget freeze. It's just we're seeing a bit more scrutiny as capital projects kind of work their way through the system, even sometimes repeat purchases. So that's the offset to a lot of the pros and tailwinds I mentioned with regard to the guide. Perfect. And then one more from the audience. What is the TAM in terms of units? How much does sterility increase that TAM? Yeah. So with sterility, if you converted all the it's about 350 million microbial QC tests conducted on planet Earth every year. Interestingly, roughly split a third, a third, a third across North America, Europe, and Asia. So if you converted all that volume by the actual applications that they're conducted around the world, again, across environmental monitoring, water, bioburden, and sterility, you have somewhere between upwards of 10,000 Growth Direct systems, minimally between 8,000 and 10,000 systems. That's why I say when we have 140 or so systems, 140+ systems placed, we have significant runway to go for growth in our existing customers. And of course, we're always endeavoring to attract new customers as well. But it's important to note that we're in, again, 70% of the global top 20, which is a fantastic place to be, and also many of the large global CDMOs as well. Great. That's helpful. Since you just mentioned CDMOs, I wanted to quickly mention Samsung Biologics, who recently selected the Growth Direct system to automate their critical microbial quality control system. This is definitely an important milestone given they're one of the biggest CDMOs. I just wanted to know how this plays into your revenue going forward and if this was kind of built into your 2024 guide and assumptions. Yeah, so I mean, we're very happy with the Samsung win. Samsung placed a multi-system order back in 2023, and we expect to grow with Samsung in the coming quarters and coming years. So we're quite excited about it. And Samsung is a fantastic company, does its homework, discerning company. And the fact that they chose the Growth Direct, I think says a lot. But I would also say we have other fantastic companies too. As I mentioned, we have the vast majority of the global top 20 pharmaceutical companies. So Samsung is joining that stable of what we consider the world's best at what they do. So as I mentioned, we assess the demand and opportunity against all of our customers, and we put that into a funnel based on our conversations with Samsung included. And that's what creates our sales funnel. And then from that, we create our business plan and our guidance. Can any year, could one or more of these customers have upside associated with it? Sure. But our guide is based on our history and kind of what we understand and the visibility that we have to these rollouts per my previous conversations. Perfect. That makes sense. And then I was wondering if we could get an update on maybe the cash runway and your confidence in that. Yeah, so we updated our outlook on cash runway back in January. We ended 2023 with just under $100 million in cash. We expect to burn roughly $40 million this year. So we think that gives us enough runway to make it at least into the second half of 2026. I think as we look out over that timeframe, we do expect to have meaningful ability to reduce burn annually as we go forward out of 2024. We'll drive the business to achieve that. So I think that's a big focus for us within the business. We have a number of levers, not just top-line growth, but margin expansion, cost control, a number of different things that we can and plan to do to drive the cash runway out and keep that where we need it to be. We'll continue to focus on those going forward. Perfect. And then maybe could we just touch upon CRISPR and how your technology fits with these accelerated technologies such as the CRISPR and the solid tumor? I know that well with CAR Ts, but maybe how you fit with this new era of cell and gene? Yeah, so we're well positioned. So as I mentioned before, when it comes to the manufacturing process, the R&D upstream processes, it can vary. And we, of course, stay close to the pipelines and what's coming through on any notable changes to how microbial QC testing is conducted. But generally, they'll comport with the U.S. Pharmacopeia and the European Pharmacopoeia and the global equivalents and the regs around it. As I mentioned before, we tend to be agnostic with regard to either how the therapy was discovered or its process around it, assuming they're comporting to the pharmacopeia, which we obviously watch, and they tend to update those over longer periods of time. So that's sort of the beauty of our system is, generally speaking, we're agnostic. We don't anticipate any challenges with new drug types coming through unless there's a change to the USP, and we, of course, would comport with that. That's helpful. And I'm sure that stricter regulatory environments would help your business. So one of the questions we got was, does Annex 1 regulations help Rapid? So maybe you could touch on that. Yeah, Annex 1 in the European context, I would say it's Annex 1 is not a huge win or a huge loss. It's just something that will make sure we comport with our European customers or all our global customers watch that quite closely. We talk about it all the time. We are involved in those processes. So I would say it's generally neutral to the company. Whenever these come through, there's always pros and cons. I will say generally, though, I think the larger takeaway is that the regulations generally we view as a tailwind to the adoption and uptake of automation. So just the focus on we haven't touched on this much today, but it's important to note that generally speaking, Annex 1 notwithstanding, generally speaking, the regulations and the regulators are focused on data integrity and, as always, patient safety. The current methods are known, in some cases, not to have strong data integrity, a lot of human error associated with that. We do anticipate over time regulations we'll see what happens. We anticipate the regulations continuing to encourage, if you will, indirectly and potentially directly, the adoption of technologies like ours that create a much more robust data integrity environment. That's helpful. I'm sure the strict FDA environment, increased FDA hirings, would also be an additional tailwind to your industry. Right. And then, maybe with the time we have left, just your long-term outlook. I think it would be helpful for us to understand maybe your dream growth rate with all these new customers onboarding and just the future of Rapid. Yeah, I guess I'll focus in on, I think, what we think is realistic for the business going out over the next several years. I think if you look at the guidance we just initiated for 2024, it's at least 20% growth on revenue. It's based on our current view of the environment coming out of the gate for this year. If you look at last year, we grew 30%. And I think as we look out over time and you factor in a fully ramped sales team, you factor in new products like sterility and some of the things that we're seeing in our Asia market, which was a relatively recent investment, I think that number that we generated in terms of growth last year is probably more along the lines of what we'd expect to see over the next several years going forward with this business. Then I know you have not been historically in the China region. Do you view yourself going into there, or is your plan to just stay local? Maybe your thoughts there. Yeah, so we haven't been overly exposed to China. And clearly, last year, that was certainly a theme of many of the large tools companies. We do have a country manager in China. So that market, we do strategically plan on developing, but it's more that it's a strategic approach to the market, just given how that market works and how it would work with our technology. I would say our core up-and-running markets right now in Asia are Japan, South Korea, and Singapore, and to a certain extent, Australia, New Zealand. Do you view those markets kind of growing in line with the overall 20% growth or above or below that? Yeah, so I think I can tell you what they have been growing at. It's been a higher growth. It's been a newer market, so a smaller base. We'd anticipate Asia continuing to grow within the ranges that at least within the regions that Sean laid out. Yeah, and the 20% is our guidance for this year, I think, just to make sure my comment was clear. We think that the opportunity is more than that. It's more like last year where we did 30% growth going forward beyond 2024. Right. Perfect. So I think that's all for questions. I want to thank you all for joining us and everyone in the audience for listening. So thank you so much, and have a good rest of your day. Thank you, Anna. Thank you, Anna. Bye-bye. Thank you. Bye. Bye.