NEW YORK – Singular Genomics Systems said after the close of the market on Tuesday that it has let go roughly 10 percent of its workforce as part of cost-cutting measures.
In a conference call discussing the company's third quarter financial results, Singular CFO Dalen Meeter said the layoffs, which occurred in October, impacted roughly 30 employees across the company and was more heavily weighted toward R&D.
As of Sept. 30, San Diego-based Singular had 284 full-time employees, according to the company’s most recent filing with the US Securities and Exchange Commission (SEC).
According to Singular management, the workforce reduction was based on a more narrowly focused list of priorities and projects for the company as a result of its strategic replanning. Besides organizational restructuring, the firm also adjusted its product roadmap and commercial strategies moving forward, the management team said.
"Macro and market conditions do present challenges," Singular Chairman and CEO Drew Spaventa told investors. "We are being thoughtful and adapting our strategy in light of both internal and external factors."
Spaventa said that in Q3 the company focused on streamlining and scaling the consumable manufacturing processes for its newly launched F3 flow cells while enhancing the G4 sequencer's usability and reliability.
To that end, he said the company has implemented steps in the production processes around consumables raw materials and introduced intermediate quality control steps "to increase the quality and consistency of consumables and reduce assay variability."
Still, Spaventa acknowledged that the firm's sales cycle and its ability to convert qualified opportunities to orders "have progressed slower than expected," and the management recognized that the company is "not where we expect it to be at this point."
To address these challenges, Spaventa said Singular will implement several new strategies. For one, Spaventa said the firm will prioritize G4 scale-up "above all else." This includes a "more focused effort across the organization" to accelerate G4 shipments, grow the installed base, and increase consumable demands.
Second, he said the company will leverage the recent launch of the F3 flow cell and Max Read flow cell kits for single-cell sequencing. "We are working diligently to deliver these kits to as many customers as possible," he said. "We will also double down on our communications to potential customers, highlighting the benefits of these new kits and encouraging sample testing and system evaluations."
Additionally, to address the challenging market conditions, Spaventa said Singular will shift its commercial and product strategies. On the commercial side, he said the company will become more flexible with deal and pricing structures while pushing harder on reagent rental or alternative deals to drive downstream conversions.
Meanwhile, on the product strategy side, Spaventa said the firm plans to launch "a couple of new differentiated high-value kits" next year, though he did not offer more details other than noting the company will "share more on the product strategy and roadmap in early 2024."
Similarly, Spaventa said the company has also become "highly focused" on developing and introducing its spatial sequencing offerings and will share more details about this in early 2024. He said Singular currently has started a technology access program for spatial sequencing, where the company is performing sample testing in-house for researchers from "key academic institutions."
Lastly, Spaventa said company management recognized the need to manage its cash and resources "prudently" in order to extend its cash runway into early 2026.
During the call, Singular also reported that its Q3 revenues were essentially flat sequentially and missed the consensus Wall Street estimate. For the three months ended Sept. 30, Singular booked $462,000 in revenues, versus $505,000 in the second quarter of 2023, and below analysts' average estimate of $1.3 million.
Q3 revenues were predominantly made up of revenue recognized on one instrument during the quarter, Meeter said. The firm did not report revenues in the year-ago period.
During the quarter, Singular shipped five G4 sequencers, which Spaventa said was "the highest quarterly total yet," increasing the platform's installed base to 16. Of these, four instruments were shipped to academic core labs and one to a commercial clinical lab, he noted. Company management said they expect the number of G4 placements in the fourth quarter to be "slightly higher" than in Q3.
Third quarter R&D expenses were $11.2 million, down 12 percent from $12.7 million in Q3 2022, driven by a decrease in research and development materials and other general lab supply costs, the company said. Its SG&A expenses were $13.3 million, up 11 percent from $12.0 million a year ago.
Singular’s Q3 net loss was $22.4 million, or $.31 per share, compared to $23.8 million, or $.33 per share, in Q3 2022, beating the consensus Wall Street estimate of a $.38 loss per share.
As of Sept. 30, Singular had $33.3 million in cash and cash equivalents and $157.4 million in short-term investments.