Berkeley Lights (BLI)
Q3 2020 Earnings Call
Nov 12, 2020, 4:30 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Ladies and gentlemen, thank you for standing by, and welcome to the Berkeley Light's third-quarter 2020 earnings conference call. [Operator instructions] I would now like to hand the conference over to your first speaker today to Carrie Mendivil, investor relations. Thank you. Please go ahead.
Carrie Mendivil -- Investor Relations
Thank you. Joining me today from Berkeley Lights is Eric Hobbs, chief executive officer; and Shaun Holt, chief financial officer. Earlier today, Berkeley lights released financial results for the quarter ended September 30, 2020. If you've not received this news release or if you'd like to be added to the company's distribution list, please send an email to [email protected].
Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section entitled Forward-looking Statements in the press release Berkeley Lights issued today. For a more complete list and description, please see the Risk Factors section of the company's final prospectus filed with the SEC on July 17, 2020; the company's quarterly report on Form 10-Q for the quarter ended July 30, 2020; and in its other filings with the Securities and Exchange Commission.
Except as required by law, Berkeley Lights disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast, November 12, 2020. With that, I'd like to turn the call over to Eric Hobbs, Berkeley Lights' chief executive officer. Eric?
Eric Hobbs -- Chief Executive Officer
Thanks, Carrie, and thank you, everyone, for joining us this afternoon. I'm very pleased to welcome you to Berkeley Lights first earnings call to review our results for the third quarter of 2020. I'd like to start today's call by thanking the amazing team we have at Berkeley Lights. As many of you know, we completed our initial public offering in July, raising approximately $188 million in net proceeds.
This achievement is a testament to our team's collective dedication and passion. Of course, I would also like to thank our founders, Igor Khandros, Bill Davidow and Ming Wu, for their vision. And finally, I would like to thank our long-standing investors for their continued support and welcome all new investors. On today's call, I will start with a brief overview of Berkeley Lights for those who are new to the company.
Next, I will provide an overview of our progress during the third quarter, including some new workflow products we released. I'll then close with some thoughts on how we are approaching the future and where we are investing before turning the call over to Shaun for a more detailed look at the financials. Starting with our top-line performance. Revenue for the third quarter totaled $18.2 million, up $7.6 million or 72% for the second quarter of 2020 and up 16% year over year.
Now before we dive deeper into specifics on the quarter, I'd like to remind you of our vision here at Berkeley Lights. We are a leading digital cell biology company focused on accelerating the rapid development and commercialization of biotherapeutics and other cell-based products. We envision a future where cells are a scalable and sustainable way to manufacture the products that we need to live a long and healthy life. The Berkeley Lights platform is key to enabling this, and our goal is to become the industry standard across a cell-based product value chain.
The markets that can be addressed by cell-based products are varied and huge, particularly in pharma, new and sustainable foods, agriculture and industrial materials. We are initially focusing on three markets: antibody therapeutics, cell therapy and synthetic biology. Collectively, these markets accounted for end-market sales estimated to market sales estimated to be $148 billion in 2019, which are projected to grow to over $255 billion in the next four years, representing an estimated initial addressable market opportunity of $23 billion for Berkeley Lights. But there are some big challenges making cell-based products, namely, our customers must understand and assess how cells perform and behave.
In other words, they have to functionally characterize many single cells to find the best cells that make the products they need or display the function that they desire. Understanding the genomics of single cells is important, but it does not provide function. And without function, there is no product. Finding the best cells requires analyzing the functions of single cells at scale.
That's what we do. We find and deliver the best cells. That's our business. To find those best cells, Berkeley Lights has created what we believe is the most advanced environment for functional testing of live single cells.
Next, we capture and interpret the qualitative language of biology, and then we translate that into digital information. This is the information we use to select the best cells. This is what we call digital cell biology. Now nature has demonstrated that cells are both a scalable and sustainable way to develop and manufacture the products we need.
And although these cells are capable, they are also quite complex, and it's due to this complexity that we're just at the beginning of harnessing the capability of cells to produce these products. At this relatively early stage of commercialization, we have built an impressive customer list that includes industry leaders, including eight of the top 10 largest biopharmaceutical companies in the world as ranked by 2019 revenue. Our fully integrated end-to-end solution is comprised of advanced automation equipment; our OptoSelect chip technology, which allows our customers to isolate single cells; our proprietary assay reagents to perform these tests; and our advanced integration automation software that includes our operating software and our advanced analytics software. Our platform enables customers to perform standardized and automated workflows with precise control over the environment, which enables functional testing of tens of thousands of live single cells in parallel.
We also have the ability to link the cell phenotype to the transcriptome, thereby creating what we believe to be the largest data cube for single cells in the industry. This data helps our customers select the best cells. Customers can gain access to our platform by buying or subscribing to an advanced automation system. Berkeley Lights is the only company commercializing a platform that can do this in a scalable way.
Our platform enables several key benefits for our customers. First, we increased our probability of success for making cell-based products by functionally characterizing highly biodiverse cell samples. Second, because our workflows are run early in the value chain, we believe we are the fastest path to value and revenue, potentially extending our customer cell-based product lifetime on the market prior to any patent expiration and increasing their return on investment. Third, we are an enabler.
Our platforms do things that are very hard to do otherwise, such as multiplex single-cell functional assays at scale, capturing rich data from precious cell samples, exploiting live cells or clonal cell lines and linking phenotype and genotype. And fourth, we offer the fastest path to significant capacity with replicable distributability, meaning we are able to qualify workflows in California then distribute these workflows globally and execute these workflows in a repeatable fashion in any suitable lab on the globe. For customers that already have a platform, deployment can be as rapid as a software update. For customers that lack a platform, we can deliver our platform and execute workflows in just days after install.
And for customers that have multiple platforms across multiple sites globally, they can be assured that the same workflow is being executed at all sites. Turning to our markets. We see two key tailwinds driving growth in our addressable markets. First, at the macro level, there is an increasing demand for cell-based products.
For these products, wherever there is a gene edit or a desired immune response, functional validation is required. Functional validation is at the core of our product offering. The growing requirement to drive design-build-test-learn cycles directly drives an increase in the number of workflows to discover, develop and manufacture cell-based products. And second, we are also seeing increasing complexity of the cell-based products.
Today, pharma companies are working to discover antibodies against hard-to-hit targets or other complex therapeutic modalities, including buy, try or multi-specifics for cell-based therapies. The cell characterization is getting more complex as hard-to-hit targets require more precise assays at higher resolution. With a growing product complexity, manufacturing complexity is also increasing. This means workflows are executed at a higher frequency, thereby further increasing the demand for our products.
As this demand for functional validation grows, our customers are looking to accelerate their capability to develop and discover cell-based products, and we are delivering. Additionally, the growing complexity for making cell-based products is being addressed in a scalable way by the existing and growing capabilities of the Berkeley Lights platform. Parameter optimization, which is required to identify and deliver the desired biology, requires trade-offs among the many functions being analyzed and optimized through the discovery and development process. The required data to achieve this optimization can be provided from the Berkeley Lights workflows.
Now looking more closely at the third quarter, we placed eight platforms of customers, which was up from four platforms placed in the second quarter. We saw an increase in recurring revenues, which were up 26% from last quarter and up 92% year over year. Growth over the prior quarter was seen across all geographical regions with Asia leading new platform placements, followed by Europe and the United States. Revenue was driven by strong demand for the discovery and development of cell-based products, especially for antibody therapeutic workflows.
We continue to see capacity expansion in the industry, led by strong investment activity in the CRO, CDMO space. In addition, the trend of increasing functional single-cell characterization continues to gain momentum, which is a key driver in our long-term growth strategy and core to our mission at Berkeley Lights. During the third quarter, we placed 50% of our Beacons at CROs and CDMOs, giving evidence to the global capacity expansion in our served markets and providing start-ups and smaller biotechs access to our technology. We were also excited to release Opto Cell Line Development 2.0.
This new workflow enables higher throughput; provides assays for complex proteins, such as multi-specifics; and acceleration of our customers' path to production cell lines. This was a timely response to the growing capacity needs of our cell line development customers, resulting in the placement of three platforms in the third quarter of 2020. We also saw an increase in activity around T-cell characterization with the release of several application notes to support our growing set of capabilities in this segment, resulting in the placement of three platforms in the cell therapy segment during the quarter. In addition to our progress in antibody therapeutics and cell therapy markets, we were also making great progress developing the multiple workflows in the synthetic biology market through our long-term partnership with Ginkgo Bioworks.
In summary, the markets for cell-based products and the activities to develop them are growing. The increasing complexity of cell-based products, especially in biotherapeutics, is driving further demand for functional validation at a high degree of precision and automation. Millions of gene edits drive countless design-build-test-learn iterations annually, all of which require single-cell functional tests. Overall, this has been a very eventful quarter at Berkeley Lights.
I'm very proud of the progress our team has made, and I am confident that we are well-positioned to execute on our strategy going forward. With that, I will now turn the call over to Shaun for more detail on our financials. Shaun?
Shaun Holt -- Chief Financial Officer
Thanks, Eric. Total revenue for the third quarter of 2020 was $18.2 million with $14.1 million in product revenue and $4.1 million in service revenue. Total revenue was up $7.6 million or 72% from the second quarter of 2020 and up 16% year over year. Looking at our three revenue streams, direct platform sales were $12.4 million in the quarter, increasing $4.9 million or 65% from the second quarter of 2020 and were in line with the prior-year period.
We placed eight new platforms during the third quarter of 2020. Recurring revenue was $3.7 million or 20% of total revenues during the third quarter of 2020. This represents an increase of $700,000 or 26% over the prior quarter and an increase of $1.8 million or 92% over the prior-year period. During the third quarter, in addition to the new platform placements, we saw a resumption in campaign activity at certain customers over the prior quarter when some activities were paused.
The year-over-year increase can be attributed to the growth of our installed base. Revenue from joint development agreements and partnerships during the third quarter was $2.1 million, up $2 million from the second quarter and $600,000 or 43% over the prior-year period The sequential increase was primarily due to prior-quarter revenue reductions related to a head-start payment we made to Ginko and also due to our Ginko program resuming at full capacity during the third quarter. Gross profit for the third quarter of 2020 was $12.8 million compared to a gross profit of $7 million in the second quarter of 2020 and $11.7 million in the same period of the prior year. Gross margin in the third quarter was 70% as compared to 66% in the second quarter and 74% during the third quarter of 2019.
The sequential increase in gross margin was primarily driven by the previously mentioned Ginkgo buy-down in the second quarter. The margin decline year over year was driven by the substantial completion of legacy milestone programs, which carried a higher gross margin in the prior year. Total operating expenses for the third quarter of 2020 were $21 million, a 32% increase from $15.9 million in the third quarter of 2019. The increase was primarily attributable to an increase in headcount and related stock-based compensation, as well as other expenses to support our continued growth and build-out of the infrastructure needed to operate as a public company.
R&D expenses for the third quarter of 2020 were $10.4 million, compared to $10.2 million in the third quarter of 2019. Sales and marketing expenses for the third quarter of 2020 were $3.3 million, compared to $2.6 million in the third quarter of 2019. And general and administrative expenses for the third quarter were $7.2 million, compared to $3.1 million in the third quarter of 2019. And finally, net loss in the third quarter of 2020 was $8.6 million.
We ended the third quarter of 2020 with approximately $237 million in cash and cash equivalents. This includes the net proceeds of approximately $188 million from our IPO in July 2020, net of underwriting discounts, commissions and other offering expenses. While we have not observed any recent negative changes in our business climate, uncertainty remains related to the pandemic. As a result of this uncertainty, we are not issuing any formal guidance at this time.
With that, I would like to turn the call back over to Eric for closing comments.
Eric Hobbs -- Chief Executive Officer
Thank you, Shaun. We are living in a fascinating time where biology, technology and information sciences have evolved to a point where we can edit cells at an unprecedented rate. Today, we can rapidly sequence cells and capture the program that controls life. We have the data and information infrastructure to process the large amounts of data that are being created.
And through advances in gene editing, we can edit cells with high levels of specificity to insert new instructions into the cell's program in an attempt to change the function of the cell. But because cells express genomic information in a variety of ways that we can't accurately predict, we have little certainty that our edits will result in a function we intend. The constraint that our customers face today is that they have to functionally test large numbers of single cells at scale to find those single cells that have the function they need to make the products they desire. But at Berkeley Lights, we're solving that problem by increasing our understanding of the behaviors of cells so that we can improve and accelerate this design-build-test-learn process as we move into the future.
Furthermore, because we offer standardized workflows, the same workflow can be executed at multiple sites around the globe. And because the data was created with the same workflow, the data can be amassed in a large cloud-based storage system. When this data is combined with machine learning and artificial intelligence, we will have the best chance in human history of programming a cell to do what we want it to do. This is the power of distributed biological processing.
This is the power of digital cell biology. This is the power of the Berkeley Lights platform. We believe there's a great future in digital cell biology, and we're just in the beginning. With that, we will now open it up to questions.
Operator?
Questions & Answers:
Operator
Thank you, sir. [Operator instructions] I show our first question comes from the line of Tycho Peterson from J.P. Morgan. Please go ahead.
Tycho Peterson -- J.P. Morgan -- Analyst
Hey, good afternoon. Eric, you mentioned in the press release cell therapy drove about a third of the placements for the quarter. Can you just talk a little bit more about traction in that market and how you think about it going forward?
Eric Hobbs -- Chief Executive Officer
Yeah. We believe there's a significant opportunity to grow our -- for our customers to enable [Inaudible] attractive modality across many diseases, and we believe we can [Inaudible] in a standardized, repeatable and efficient way. We do envision an [Inaudible] integrated cell therapy development and manufacturing platform with embedded quality control. To control the function of the cellular product, I'd like to bring [Inaudible] process.
But mainly from [Inaudible] providing a creative digital record for each therapy that's manufactured. And as we're moving investments right now, the discussions are ongoing. How do we include that [Inaudible] that we design in that market. And so [Inaudible] is the place in the cell therapy [Inaudible] 2020?
Tycho Peterson -- J.P. Morgan -- Analyst
Great. And then thinking a little bit about just the portfolio, a couple of questions. I'm wondering if you could comment on Lightning, you know, how you're feeling about the rollout and any thoughts about just whether you could start to penetrate the academic market there.
Eric Hobbs -- Chief Executive Officer
Yeah, certainly. For those who are new to Berkeley Lights in the call, Lightning is our lower capacity, less automated way to access -- for our customers to access our technology. And really the key, Tycho, to the ramp in Lightning is our – some of the unique workflows that we have qualified on the system. In Q3, we released four application notes or kind of like sub-workflows that allow our customers to leverage the Lightning in the cell therapy -- key cell therapy relation space.
And so we'll continue to focus the Lighting placement into this segment to build a [Inaudible] that's driven by a secular demand and functional characterization of cell therapies.
Tycho Peterson -- J.P. Morgan -- Analyst
And then what's the interest on the subscription uptake for Beacon? And are you looking to kind of push that a little bit more aggressively given where we are with the pandemic?
Eric Hobbs -- Chief Executive Officer
Yeah, it's a great question. So I'm going to -- I'll hand this over to Shaun, so Shaun can talk about the subscription. Shaun?
Shaun Holt -- Chief Financial Officer
Yeah. Hey, thanks. Hey, Tycho, thanks for the questions. I think the way to think about subscription, it's really just one way.
Our customers can access our technology, right? And the benefits here to our customers are obviously more tailored access to capacity, more predictable and stable budgets and spend patterns and a lower entry fee for access. I think it's important to remember here, subscription for our type of product offering today is relatively new in the market, right? And so it will have a a certain adoption cycle that carries with it. As we engage with customers, we continue to evolve the subscription product offering. I think the answer is we're still at the early stages of this, but we continue to believe this model offers compelling advantages to to our customers, right? But I think it will take a little bit more time to gather more meaningful statistics here.
But we do see the pipeline developing, and we continue to push this offering. And we'll continue to update as we -- on these calls as we go forward.
Tycho Peterson -- J.P. Morgan -- Analyst
OK. And then before I hop off, Shaun, I know you don't want to give 4Q guidance. But is there anything in your view that has changed materially since the IPO as you think about kind of the setup for the rest of this year?
Shaun Holt -- Chief Financial Officer
Yeah. I think it's a great question. As we said, I think in our prepared remarks as well, just given the uncertainty that's out there, we're not really commenting today on 2020 full-year guidance. But what I can say, though, to that point is there really have been no changes in our view of the business since we spoke during the IPO.
Tycho Peterson -- J.P. Morgan -- Analyst
Perfect. Thanks, again. Take care.
Shaun Holt -- Chief Financial Officer
Sure thing.
Operator
Thank you. Our next question comes from the line of Tejas Savant from Morgan Stanley. Please go ahead.
Tejas Savant -- Morgan Stanley -- Analyst
Hi, guys. Good evening. So just to follow up on Tycho's question there sort of on the forward-looking commentary here, can you tell us a little bit about just the momentum in the order book as well as on the consumer book exiting the second quarter as well as in October? And then are you seeing any impact, at all, around your ability to install or service your customers following the pickup in infections or related shutdowns or not really?
Eric Hobbs -- Chief Executive Officer
Hi, Tejas. It's Eric. Good to talk to you again. In the market, we continue to see two key tailwinds that are driving growth in the addressable market to answer the first part of your question, right? Those main tailwinds include an increasing demand for some of these products and also an increasing complexity of the cell-based products and also an increasing complexity of the cell-based products.
And we have [Inaudible] addressing the pool for being the fastest path [Inaudible] capacity expansion, which provides the functional assessment which our customers need to find themselves to make the complex of these products, so we feel like we're really well-positioned there on the first couple of questions. And related to COVID infections, right, the global shutdowns experienced in the first half of 2020 impacted many businesses, including ours. And although we can't predict the future of this pandemic and how governments are going to react, right, we have seen that our industry has shown a decent degree of resilience. We haven't seen any cancellations, but we have seen that uncertainty can [Inaudible] between quarters.
So what we've done is we have taken a few steps. Firstly, we [Inaudible] some of our customers how they can reduce the number of people in their labs using our advanced automation platform, so they can safely continue to move their therapeutic pipelines toward a benefit to our customers. Additionally, to guard ourselves against any issues with installations and training, we've hired additional resources in regions to minimize that risk. We also, through the enrollment called Berkeley Lights University, which is an online learning platform which we can send our customers, and also as we scale our new staff, we can do that training remotely.
Shaun, did you want to make any comments on rev rec to predict against the COVID – if there was any COVID issues in the ongoing quarters?
Shaun Holt -- Chief Financial Officer
Yeah, sure. Just a reminder, Tejas, as we exited Q2, we updated our revenue-recognition policy to enable revenue recognition on either shipment or delivery, depending on the nature of the the deals and the terms. So that's helped in terms of the issue around COVID and preventing us from actually installing and training. That's also actually a benefit for our customers as well as we're not out there being forced to install or train.
We're really doing that on our customers' time line, so it's actually a benefit to our customers as well.
Tejas Savant -- Morgan Stanley -- Analyst
Got it. That's helpful, Shaun. And just following up on that, was there a delta in between orders and units, I mean, on which you recognized revenue in the third quarter? Some of your sort of -- some of the platform players in the life sciences space have spoken about that dynamic where there's pretty meaningful delta here between the orders being placed and obviously the shipments or potentially the delivery. So maybe you can share some color on that.
Eric Hobbs -- Chief Executive Officer
Yeah. That's a great question. Oh, sorry. Go ahead, Shaun.
Shaun Holt -- Chief Financial Officer
Yeah, yeah. Tejas, great question. I think you're -- our business is really a turns business, right? I mean, with that, we actually see rapid order fulfillment as a sort of competitive advantage of ours. And I think from that perspective, backlog for us is really just a function of orders placed in the last days of a given quarter, like you just talked about, and therefore, it's subject to some fluctuation.
We talked about our revenue-recognition policy helping in that regard. But we're really a turns business. And that dynamic, we see, is going to continue. And then backlog, as such, will flux.
Tejas Savant -- Morgan Stanley -- Analyst
Got it. That's helpful. And then, Eric, in the past, you've spoken about some of your Asian customers leapfrogging to your platform versus some of the legacy approaches. Is that essentially a dynamic that you see sort of sustaining through sort of the next couple of years here as those customers sort of directly upgrade to the Beacon? And is that -- what is essentially driving the strength in placements you saw in the third quarter here?
Eric Hobbs -- Chief Executive Officer
So we continue to see very strong demand in the Asia-Pacific region for antibody discovery, and so we do see that our customers are deciding not to install some of these legacy platforms. I do anticipate that that will continue to grow in that region for the next several quarters. I'm not sure -- it's not clear to me that that will go on for years but certainly into the future.
Tejas Savant -- Morgan Stanley -- Analyst
Got it. That's helpful. And then final one for me. I mean, in terms of just your commercial expansion plans, can you just give us a quick update on where things stand today? And how much work that has to be done on that front heading into 2021? And are you sort of focusing on specific deals, perhaps given the strength you're seeing in Asia, to sort of staff a quicker cadence over there?
Eric Hobbs -- Chief Executive Officer
Yeah. I mean, over the past quarter and earlier this year, we've made some really nice adds to our commercial organization, in particular, in the sales – on the sales team. We brought on Mark Lasinski to lead our global sales, who has – continued to expand our efforts with you [Inaudible] and Asia Pacific. So we now have our wholly foreign-owned enterprises now up and running in the Asia-Pacific region.
Additionally, we just brought on Gareth Jones, who will lead our European region. So we continue to make investments. We have more work to do there but really, really strong progress in that space. Additionally, we've made some pretty big changes to our business development organization to continue to bolster that activity as we move forward, which is critical as it sits at the tip of the spear.
And in any case, Shaun, do you have any additional items you want to add to kind of investments we're making in the commercial organization?
Shaun Holt -- Chief Financial Officer
Yeah, I was just -- yeah, definitely. I was just going to say this is going to be a continuing theme, Tejas, as we go into 2021, expanding the sales force globally, like Eric just mentioned; supporting our key markets and release products, particularly in Europe and in Asia, which is -- which we've seen is our higher-growing region here. Dovetailing on the spend and looking forward into 2021, we're going to continue to invest in BD as well to drive adoption of new products and existing capabilities in new markets through the type of partnership, joint development deals that we've talked about in the past. And also, on top of that, we expect a bigger ramp in R&D, right, supporting the business development and the new deals they're going to bring to the table but also our new product development efforts and new market penetration next year.
Tejas Savant -- Morgan Stanley -- Analyst
Got it. Thanks very much for the time this evening, guys.
Shaun Holt -- Chief Financial Officer
Thanks for the question, Tejas.
Operator
Thank you. Our next question comes from the line of Doug Schenkel from Cowen. Please go ahead.
Doug Schenkel -- Cowen and Company -- Analyst
Hey. Good afternoon, guys. Thanks for taking my question. Sorry if you covered any of this.
The phone quality kind of went in and out for a little while there. It just -- it hasn't been perfect at least for me, so I do apologize in advance if you covered any of what I'm about to ask. Just tell me and we can move to the next one, if that is the case. So just starting on placements.
Looks like placements roughly doubled sequentially relative to Q2. Could you just break down in a little more detail, subscriptions versus direct? And I know you got the question on backlog heading into year end. I am just wondering if the Q3 placement number was at all a function of catching up from earlier parts of the year when maybe it was harder for customers to accept capital in the midst of the pandemic or if you think this is a normalized number?
Eric Hobbs -- Chief Executive Officer
Yes. So, hey, Doug. We certainly believe that we are in a normalized condition. And in the quarter, we placed the eight platforms and three were placed into cell line development.
Two were placed into cell line -- into antibody discovery and three into cell therapy. And regionally, that looks like we placed three into Asia Pacific, three into Europe and two into United States. In regard to subscription breakdown, I'll hand that off to Shaun, but I do think we see returning back to kind of a normal style of business as the world is coming back online. Shaun, anything to add?
Shaun Holt -- Chief Financial Officer
No. I think you hit it on all the key topics there, Eric.
Doug Schenkel -- Cowen and Company -- Analyst
And did I miss the subscription versus direct mix? Sorry, if you gave that in your prepared remarks or if I just missed that earlier.
Shaun Holt -- Chief Financial Officer
No. You didn't miss it, Doug. The placements in Q3 were all direct sales.
Doug Schenkel -- Cowen and Company -- Analyst
All direct sales, OK. And then just – I think I know the answer to this based on just what you guys just described, but I kind of felt like pharma was already holding up pretty well for you as your key end market for the first couple of quarters of the year in the midst of the pandemic, which I think we all appreciate was pretty impressive, given what we saw from some others in the space in terms of capital equipment demand. Heading into year end, would you say things are fine and you feel like you have some momentum given you just described this kind of being a normalized Q3 and I would suspect Q4 potentially could be better just given typical year-end budget flushes?
Eric Hobbs -- Chief Executive Officer
Yeah, Doug. We continue to see the capacity expansion happening in the market, and there is a copious amount, which includes antibody discovery and cell line development. And we are – operationally, we've organized ourselves to be able to rapidly respond to our customers' request to provide that fastest path to capacity expansion possible. And so, again, due to the COVID wave, we haven't seen cancellations.
We have seen things move in and out, and we've also seen that our customers are able to continue to accelerate and move their pipelines forward using our advanced automation system. So I do believe we are moving back toward into a normalized kind of business cycle.
Doug Schenkel -- Cowen and Company -- Analyst
OK. And then kind of asking the same question but just flipping from capital over to consumables. With a few logical leaps, it seems like consumable revenue per box seem to increase by about 35% to 40% relative to Q2. Again, those are our numbers not yours, but I'm guessing we're in the right neighborhood.
Of course, just correct me if we're not. But again, is that just a normalized run rate? Or do you think there was some catch-up or inventory builds given what's going on in the world? Just -- or is this, as you guys have answered a couple times already, this is just the norm?
Eric Hobbs -- Chief Executive Officer
No. There's definitely a considerable increase, and so I'll let Shaun speak to the exact numbers. I'll let Shaun check them out there. But we did see increase in -- and we believe we saw an increase in utilization associated with our customers coming back online in the quarter.
And so I think we're – like I said, we're ramping back up to the normal or standard business environment.
Shaun Holt -- Chief Financial Officer
Yeah, Doug, and just to add to that. We did see a bit of the pull-through in Q3 come from some late-in-the-quarter Q2 order flow, but the majority of the recurring revenue growth was due to the increase in the install base.
Doug Schenkel -- Cowen and Company -- Analyst
OK. Last one for me. In your prepared remarks, you referenced the collaboration with Ginkgo. At what point do you think that those SynBio applications that you're in joint development with might be available more broadly for other commercial customers? If I remember correctly, going back to Q2, there was a revenue impact associated with you essentially, I think, putting yourself in a position where you could accelerate those timelines.
I'm just wondering if there's any update on that.
Eric Hobbs -- Chief Executive Officer
Yes, certainly. I mean, the opportunities in SynBio, Doug, that we've spoken before, right, are substantial, but they also require clear market segmentation. And in Q3, we released some pretty compelling data in the advancement of those workflows in the space. First, we showed that the measurements made in the NanoPen is correlated up to half-liter fermenters.
This was data that we published at the SynBioBeta conference. And as everybody's aware of this market scale, it has been a big challenge in this space, and this capability would help our customers lock in their production economics early in the process. And second, we showed that we can perform enzyme kinetic measurements in the NanoPen. The significance here is that we are moving to measurements that are happening inside of the cell to help our customers accelerate, not only enzyme engineering, but the manufacturer of the proteins that those enzymes can create inside of the cells.
And so these two capabilities, as you understand, are broadly applicable, not only in SynBio, but particularly back into our biopharma market. So our strategy in this market continues to be to segment the market and focus on high-value end products and/or other applications which drive high-frequency gene editing validation via the design-build-test-learn iteration cycle driving high consumable consumption. And so as we continue to make great progress on SynBio Discovery 1.0 Workflow and SynBio Development 1.0 Workflow, we're going to plan to – our plan is to announce those in 2021.
Doug Schenkel -- Cowen and Company -- Analyst
OK, that's great. Thank you, guys. I really appreciate all the detail on all those questions.
Eric Hobbs -- Chief Executive Officer
Thank you, Doug.
Operator
Thank you. Our next question comes from the line of Brian Weinstein from William Blair. Please go ahead.
Brian Weinstein -- William Blair and Company -- Analyst
Hey, guys. Thanks for taking the questions. Just to go back to your comment on the business development team that you guys added in the quarter, can you give us a little bit more about what that team looks like now? But more broadly, can you talk about kind of relationships, partnerships, JV opportunities, both inside and outside of the traditional markets that you're in, and what we can expect from the organization and sort of the pace of these opportunities coming through, and how you're thinking about these things as you evaluate them?
Eric Hobbs -- Chief Executive Officer
Yeah. Hey, Brian. It was clear to us that there are opportunities beyond the scope of our current market segments. And to make sure that we can access those opportunities, we made some significant changes to our business development organization since the IPO.
And the goal of making these changes was to enable new and existing customers access to some of the new emerging Berkeley Lights capabilities. And we realized that to do that, we needed to create a best-in-class BD organization, which we have now done. So the team that we've assembled is making great progress on developing those high-value partnerships that you referenced which will enable Berkeley Lights to develop in concert with great market leading partners enable new capabilities to current and future customers in existing and adjacent markets. So I'm really excited about the potential of the team.
Things are moving forward in a great direction and hope to be able to report out on some of that activity within the next several earnings calls.
Brian Weinstein -- William Blair and Company -- Analyst
Great. Thanks for that. And then on the funnel, and to use that term here, as we think about the willingness and opportunity that you have with your customers, how do you see that funnel build right now and the visibility that you have? How would you characterize that? And is it corollary to that? What do you expect to see as far as the sales cycle across end markets? Is there an opportunity for that to accelerate?
Eric Hobbs -- Chief Executive Officer
Yeah. In regards to the funnel, right, we continue to – Berkeley Lights continues to provide our highest probability of success and getting through their products. And we're operating in these very large markets and antibody therapeutics and bio and cell therapy. And as I mentioned previously, we do see those two increasing demand for cell-based products and the increasing complexity of those cell-based products.
And because we address both of those, by being the fastest path to capacity expansion and also providing the functional assessment they need, we continue to see things build in the way that is in line with our expectations for the business.
Brian Weinstein -- William Blair and Company -- Analyst
OK. Thanks, guys.
Eric Hobbs -- Chief Executive Officer
Thanks a lot, Brian.
Operator
Thank you. And our last question comes from the line of Paul Knight from KeyBanc Capital Markets. Please go ahead.
Unknown speaker
Hey, guys. It's Mike on for Paul. Thanks for taking my questions.
Eric Hobbs -- Chief Executive Officer
Hi, Mike. Welcome.
Unknown speaker
In the prepared remarks, you mentioned about 50% of Beacon were placed with CROs and CMOs. Can you provide some more color around the strength in that end market? And then do you think this kind of provides another avenue to expand awareness to some of maybe your smaller biopharma, biotech customers? Thanks.
Eric Hobbs -- Chief Executive Officer
That's spot on. A large majority of the new biopharmaceuticals that are coming out, right, are really created by these smaller biotechs and start-ups. And so enabling CROs with access to our technology-enabled access to these smaller entities, and we believe that it is in line with the CRO markets business model to bring up that capacity rapidly. And so the higher levels of demand for cell-based products that we're seeing an increasing complexity really falls in line with their need to bring on this capacity as a function of time.
Unknown speaker
Great. Thanks. And then my last one is just regarding where you guys are investing for growth, specifically around your proprietary workflow offerings, kind of what's the cadence there? And how's the trend with some of the workflows that you've added with customers?
Eric Hobbs -- Chief Executive Officer
Yeah. So since we've started, we've released seven – we have seven commercialized workflows. And so the first workflow we released was in late 2016, early 2017. That was our cell line development workflow.
And we released our antibody discovery workflow, the first of our antibody discovery workflows in mid 2018. And we released five workflows so far this year. And the wonderful thing about our platform-based technology is that you can reuse the components of these workflows to create new workflow solutions, either within a market or in an adjacent market. So we continue to release more workflows and we do see uptake.
The cell line development work – sorry, cell therapy development 1.0 workflow which we released earlier this year is really at the nexus for kind of the activity in cell therapy that we saw in Q3. So we continue to see a higher cadence release of workflows as we move forward into the future.
Unknown speaker
Great. Thanks, guys.
Eric Hobbs -- Chief Executive Officer
Thanks a lot, Michael.
Operator
[Operator signoff]
Duration: 44 minutes
Call participants:
Carrie Mendivil -- Investor Relations
Eric Hobbs -- Chief Executive Officer
Shaun Holt -- Chief Financial Officer
Tycho Peterson -- J.P. Morgan -- Analyst
Tejas Savant -- Morgan Stanley -- Analyst
Doug Schenkel -- Cowen and Company -- Analyst
Brian Weinstein -- William Blair and Company -- Analyst
Unknown speaker