NEW YORK – Nautilus Biotechnology is pushing back the release of its proteomic platform as developing and sourcing the affinity reagents required by the system have proved more difficult than the company initially anticipated.
During a conference call following release of its Q2 2022 financial results, Nautilus CEO Sujal Patel said the company now planned to launch its proteome analysis platform in mid-2024, with early access beginning at the start of 2024. The company previously planned to launch early access for the platform this year with a broad commercial release slated for 2023.
Patel said that given the delayed launch and the larger macroeconomic environment, Seattle-based Nautilus is scaling back its operating expenses to extend its cash runway. He added that the company believes it currently has enough cash to operate "well into 2025."
The pre-revenue company reported a net loss of $14.7 million in the second quarter of 2022, up 37 percent from a net loss of $10.7 million in the year-ago period. Nautilus noted that figure was down sequentially from a net loss of $16.8 million in Q4 2021 and $16.0 million in Q1 2022.
Loss per share was $.12 for the quarter, beating the consensus Wall Street estimate of $.17. Loss per share was $.19 in Q2 2021. The company used roughly 124.5 million shares to calculate the loss per share figure in Q2 2022 compared to 55.1 million in Q2 2021.
Nautilus has developed an array-based protein analysis platform combining machine learning and iterative rounds of affinity reagents that the company believes will ultimately enable single-molecule measurements at proteome scale. Its technology uses multiple rounds of probing with relatively nonspecific affinity reagents, analyzing the binding patterns of these multiple affinity reagents to identify the proteins present in a sample.
Nautilus has projected that it will be able to analyze roughly 95 percent of the proteome with a set of 300 binders. However, lining up these binders has been a challenge, with the company missing several other milestones prior to this week's announcement that it was pushing launch of its platform to 2024.
The company had set as an intermediate milestone measuring 2,500 proteins on its platform by early 2022. Patel announced in February that it would not meet this goal. In May, he said that while Nautilus still anticipates launching the platform in 2023, it would no longer provide firm timelines for hitting intermediate milestones on the way to the planned launch.
Nautilus has inked deals with outside firms, including affinity reagent provider Abcam, to develop binders for its platform. Patel suggested during this week's call, however, that these relationships had not been as productive as hoped and indicated the company could end them or otherwise scale them back.
"We previously sought to augment our internal probe development efforts with external partnerships," he said. "Many of those partnerships have not yielded the volume or quality of probes we have seen from our own internal efforts. So … we expect to put resources where they will yield the results we want in the most capital-efficient manner."
Speaking of the external development deals, Patel said that the company anticipated mixed results but that "frankly, we've underperformed even those expectations."
"With that in mind, we struck all of these deals with the ability to adjust and terminate those investment dollars and redirect them back internally," he said.
Patel noted that one of the company's internal probe development approaches has proved more successful than others and that it plans to focus its efforts on that strategy.
In addition to pushing back the project launch date for Nautilus' platform, Patel also said the company was postponing the analyst and investor day it had scheduled for September.
"We want our first analyst day to be marked by presenting the type and volume of data that will clearly demonstrate our strong value proposition," he said. "We believe we will be better able to do that at a better date."
CFO Anna Mowry said on the call that while Nautilus had previously projected expenses to increase 75 percent in 2022 versus 2021, it now expects that increase to be closer to 40 percent as a result of tighter spending by the company. She said that part of those spending decreases would come from delaying plans to ramp up Nautilus' commercial infrastructure. She also noted that while the company has increased headcount modestly over the previous two quarters, spending per employee has declined.
Nautilus's Q2 R&D spending was $8.9 million, up 39 percent from $6.4 million a year ago, while its SG&A costs were $6.6 million, up 53 percent from $4.3 million in Q2 2021.
The company ended the quarter with $211.2 million in cash, cash equivalents, and restricted cash.
In Tuesday morning trading on the Nasdaq, Nautilus shares were up 9 percent to $3.13.