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Bionano Genomics, Inc (NASDAQ:BNGO)
Q4 2020 Earnings Call
Mar 23, 2021, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good day, and welcome to the Bionano Genomics fourth-quarter and year-end 2020 earnings conference call. [Operator instructions] As a reminder, this conference is being recorded. At this time, I would like to turn the conference over to Amy Conrad, investor relations for Bionano. Amy, please proceed.

Amy Conrad -- Investor Relations

Thank you, Hilary, and good afternoon, everyone. Welcome to the Bionano Genomics fourth-quarter and year-end 2020 financial results conference call. With me today are Dr. Erik Holmlin, CEO of Bionano; and Chris Stewart, CFO of Bionano.

After market close today, Bionano issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2020. A copy of the release can be found on the Investor Relations page of the company's website. Before we begin, I would like to remind everyone that certain statements made during this conference call may be forward-looking, including statements about Bionano's business strategy and commercialization plans, sales pipeline, anticipated benefits or improvements to the Saphyr system, and the advantages of the Saphyr system over current technologies, our expectations regarding timing and content of study results and anticipated benefits of these studies in driving adoption of the Saphyr system. Such forward-looking statements are based upon current expectations, and there can be no assurances that the results contemplated in these statements will be realized.

Actual results may differ materially from such statements due to a number of factors and risks, some of which are identified in our press release and other reports filed with the SEC. These forward-looking statements are based on information available to Bionano today, and the company assumes no obligation to update statements as circumstances change. An audio recording and webcast replay for today's conference call will also be available online in the Investors section of the company website. With that, I'll turn the call over to Erik.

Erik?

Erik Holmlin -- Chief Executive Officer

Thank you, Amy, and good afternoon, everyone. I want to thank you all for joining us on our year-end 2020 call. And to open up today, I'd like to review our progress and updates, and then Chris will review the financials. I'll close it out, and then we'll open up the call for Q&A.

But let me begin by saying that 2020 was really a tremendous year for Bionano. And going into the year, our focus was on making it easier than ever for our customers to get access to Saphyr data. The objective was to really raise awareness about the unique and extensive insight that Saphyr and optical genome mapping provide into structural variations in the genome. And despite the start that 2020 brought us and the challenges that came along with it, we were able to successfully increase the installed base of Saphyr systems to 97, which was an increase of 24 systems from the prior year.

We shipped a record number of flow cells and removed a major roadblock for customers by expanding our services lab, which made Saphyr data available to customers for as little as a few hundred dollars. This concerted effort to seed the market resulted in a number of high-profile customer engagements. Numerous studies published in 2020 and fueled the presentations at our next-generation cytogenomics symposium in January. Globally, we saw a substantial increase in the interest in optical genome mapping for the power of genome analysis that it provides.

We announced reagent rental agreements focused on cytogenomic validation studies with three of the largest children's hospitals in Europe, in Spain, Italy, and France. We had agreements with cytogenetics labs in hospitals in Germany, Switzerland, Slovenia, Australia, and Canada. We also saw traction throughout Europe and in Australia and Canada, in part, we believe, due to the fact that their healthcare systems are single-payer systems and the path to reimbursement for novel technologies in healthcare is typically faster than in other geographies. In the U.S., we've noted that a path to reimbursement from third-party payers is going to be a necessary step to gaining widespread adoption of optical genome mapping with the Saphyr system, and that's something that we recognize can be a long and challenging process, but we're very focused on addressing it.

Now, to complement the expansion of our commercial efforts, the utility of optical genome mapping with Saphyr was validated through benchmarking, scientific publication of data, and, of course, clinical adoption. Throughout the year, numerous rigorous and extensive comparisons of Saphyr were conducted against traditional cytogenetic methods, long-read sequencing, and the results of these comparisons were published in several key publications presented in different presentations at industry meetings that were taking place and through a variety of announcements. All of these studies show that Saphyr is a superior alternative to traditional cytogenetics methods. Specifically, as you can see on this slide, we had growing excitement as more and more researchers got access to the breadth of data on structural variation in genome structural analysis in general that Saphyr can provide.

And through these studies, they demonstrated Saphyr's ability to go beyond the standard understanding of genome structure in a variety of clinically relevant areas. On the clinical side specifically, we are seeing Saphyr bring value to cytogenomic analysis by reducing the total reagent cost, turnaround time, labor cost and by simplifying the analysis of genomes in cancer patients and patients who are suspected of having genetic disease, all compared to today's workflows in cytogenetics. And we believe that Saphyr offers a truly better, faster, and more cost-effective tool that, overall, will accelerate the path to actionable results and improve patient outcomes. We believe that this path to widespread adoption of optical genome mapping with Saphyr in the U.S.

requires three main prerequisites. First, publishing multiple large studies that show concordance with the existing standard of care. There's a requirement for labs that adopt the Saphyr system across the U.S. to develop assays for clinical applications and validate those assays as laboratory-developed tests.

And lastly, a clear path for clinics and labs that are operating optical genome mapping assays, they need to be able to bill insurance providers and be reimbursed for their test before they'll comfortably convert over from the standard of care. Now, one of the most important areas of validation in 2020 was with the University of Iowa Hospitals & Clinics, who switched their method of molecular testing for patients presumed to have FSHD, which is a rare muscular disease with no approved therapy, to optical genome mapping with the Saphyr system. In addition, we had a very meaningful publication come out using Saphyr data from UC San Francisco in collaboration with Oakland Children's Hospital. Here, researchers and clinicians were able to diagnose additional 18% of children who were otherwise undiagnosed [Audio gap] standard-of-care testing using the Saphyr system.

Now, this kind of work and all of the studies that have gone on over the course of 2020 are truly groundbreaking in the scientific advances that they bring and showing how diseases can be diagnosed with new tools, but they really enforce why everybody of Bionano Genomics shows up for work every day. We are truly determined to revolutionize the way diseases are diagnosed, and in particular for children, where a diagnosis of a disease can have a profound effect on their lives, on their families' lives, and on the lives of the caregivers and the healthcare system overall. Our goal is to shorten the diagnostic journey and accelerate the path that these patients are on to managing their disease and, in many cases, the most effective treatment. Now, in 2020, we've also made significant advances in our technology and released the biggest upgrade to our software capabilities, which together have continued to improve the capability of Saphyr.

We introduced our newest DNA isolation kits, which allow for faster and much simpler isolation of ultra-long genomic DNA from smaller and smaller amounts of samples, including solid tumors, which has removed one of the most significant hurdles in the study of structural variation in solid tumors. We also saw our users conduct comprehensive structural variation analysis throughout oncology, where they're able now to detect rare variants that may be the drivers of different diseases, including genetic and inherited diseases, as well as being able to see off-target effects that may be occurring during CRISPR-based gene editing, all the while using the Saphyr system and telling us that it's easier to use than other genome analysis systems in their labs. And so this feedback and the progress that we're making makes us believe that our system is ready to serve the needs in what is an increasingly large market for structural variation analysis, both on the clinical side and on the research side. Expansion in the number of laboratory-developed tests, or LDTs, in the market is another driver of wider and wider adoption.

We announced last quarter the German accreditation of Saphyr for the detection of various types of structural variations that cause constitutional genetic disorders. And this is a prime example of how Saphyr can be an alternative to existing tools, getting to faster diagnosis but also reducing costs. Similar accreditation processes are under way for genetic diseases and leukemias in other parts of Europe as well. Here in the United States, labs, such as Praxis, have launched a menu of laboratory-developed tests and obtained reimbursement codes for them.

Augusta University is also developing a novel laboratory-developed test for cancer based on their results in heme malignancies and solid tumors, which have been presented at the Cancer Genomics Consortium meeting. And so for us, 2020 was really a spectacular year. And now that we've had a chance to cover many of the advancements, I want to turn the focus to 2021 and talk a little bit about what we see ahead. 2021 is truly shaping up to be another transformational year for the company.

Thanks to your support, our shareholders, we've taken major steps to secure the financial future of the company by raising a substantial amount of capital, which sets the stage for execution of our plan without the overhang of capital limitations. 2021 is going to be critical to the long-term growth. We are squarely focused on driving the global development of Saphyr-based assays for use in clinical testing of patients with genetic diseases and hematologic malignancies and on the adoption of Saphyr for use in larger clinical studies that will allow us to obtain a critical mass of data on Saphyr application across a number of key areas including prenatal and postnatal genetics; hematologic malignancies, including leukemias and lymphomas; and in solid tumors. These data are expected to expand the number of publications, including peer-reviewed ones, and support an increase in the number of laboratory-developed tests on the market with the goal of reimbursement of Saphyr-based laboratory-developed tests by third-party payers in the U.S.

and around the world. Now, a big part of our ability to drive adoption of Saphyr stems from the successful acquisition we made of Lineagen in 2020, which added important products and skills, including the content domain expertise required to build a reimbursed diagnostic menu on Saphyr. By combining these products and the services business, we believe that we can accelerate the broader adoption of Saphyr as a technology for clinical assay development throughout cytogenetics. Overall, 2020 was a great year and a challenging -- against a challenging backdrop, and we are continuing to gain traction in many important ways, and we are seeing evidence that this strategy is working.

With 2020 showing us that Saphyr is ready to serve a significant need in a substantially large and growing market, we see that our customers are ready to adopt the new technology. And I believe our goal of establishing Bionano as the next great genomics company is greater than ever. And with that, I would like to turn the call over to Chris for an overview of financials. Chris?

Chris Stewart -- Chief Financial Officer

Thanks, Erik. Let me start with a review of our financial results for the fourth quarter and year ended December 31, 2020. Revenue in Q4 was approximately $4 million, consistent with the preliminary results that we issued back on January 7. This represents an increase of 43% compared to $2.8 million in the same period of 2019.

The increase was primarily driven by a $1.1 million increase in service revenue, largely from our Lineagen subsidiary acquired in August of 2020. Revenue for the year came in at $8.5 million, down $1.6 million or 16% from 2019, largely due to restrictions on our customers' lab operations related to COVID-19. Whilst activity is picking up, we do believe that COVID-19 restrictions will continue to affect revenue across our business. Our gross margin came in at 30%, down 9% from the same period last year due mainly to lower instrument selling prices and some year-end accounting entries related to inventory value cleanup.

As Erik mentioned at the beginning of the call, we ended the year with an installed base of 97 Saphyr systems, an increase of 24 from the year-end 2019. Our reagent rental and our services programs are doing well, reflecting an increasing interest in Saphyr and the incredibly novel and meaningful data that the system can produce. We are actively trying to make it easier for potential customers to obtain and use Saphyr data, which we believe will lead to instrument and consumables revenue down the road. Operating expense for the fourth quarter of 2020 was $12.3 million, an increase of approximately $3.4 million, compared to $8.9 million in the same period of 2019.

The increase is primarily due to an increase in salary expense. During 2020, headcount increased by 49, including 33 that joined us as a result of the Lineagen acquisition. Operating expenses for the year ended December 31 was $41.3 million, an increase of approximately $11.4 million from the $29.9 million in the same period of 2019. The increase was comprised of about $4.5 million of salary expense, $3.4 million of legal and other outside services related to the Lineagen acquisition and other corporate activities, $2.6 million of Lineagen expenses, and just under $1 million of various other net changes.

Finally, our cash balance as of December 31 was $38.4 million. So clearly, 2021 is off to a great start. Since the beginning of the year, we've raised about $335 million through two underwritten public offerings, sales on our ATM facility, and the exercise of outstanding warrants for our common stock, driven by the increase in our share price. Our strong balance sheet allows us to shift our focus to achieving our long-term vision of disrupting genomics and thereby contributing to advances in healthcare through the global adoption of Saphyr.

Our main objectives for 2021 revolve around clearing additional barriers to widespread adoption through the execution of our clinical studies, continuing to build on the number of published studies showcasing the power of Saphyr and Saphyr data, supporting the development of LDTs, and building on the market momentum that we started to see through the course of 2020. With that, I'll turn the call back over to Erik to discuss some of our upcoming milestones, then we'll open the call up for Q&A. Erik?

Erik Holmlin -- Chief Executive Officer

Yes. Thanks, Chris, for that summary. And what I think is clear here is that 2020 has really set an incredible foundation for us. And our fundraising here in 2021 has cleared the path for us to really focus on execution going forward.

What we've put together here is a summary of important milestones and what we see as the timing for each of them. And the key takeaway from these milestones is that while we are focused on the commercialization and commercial adoption and utilization of Saphyr and optical genome mapping very broadly, we want to make sure that we really emphasize the importance of clearing the path to truly significant adoption overall. And so a lot of these milestones are based on that aspect. And so beginning with the second quarter, we expect to see important accreditations for the capabilities of Saphyr in certain European markets.

These accreditations lower barriers for other labs in other markets to adopt more broadly. We'll be expanding the commercial release of assays and capabilities on Saphyr, including prenatal assays for the first time in the third quarter, as well as expanding additional pediatric assays around different sample types that can be adequately handled for optical genome mapping. And then what we'll begin to see in the fourth quarter is a number of the key programs that are under way in clinical studies starting to show results. So we are expecting to see the interim publication of results from our pediatric clinical studies.

We expect to see a validation of additional laboratory-developed tests and other reimbursement codes emerging from these clinical study sites. We're going to have a prototype of a next-generation high-throughput Saphyr, which will expand capabilities of optical genome mapping even broader than what they are today. And importantly, we expect the installed base of Saphyr systems to grow by as much as 50% on a year-over-year basis to 150 systems as a key step in just increasing the amount of utilization of Saphyr that's taking place in the market. And so when we look at this progress, we see it as being very important.

And we see it also in the context of a much larger vision, and that vision is really about what is the future of genome analysis. And to understand that vision, we look to the past, and what we see is that the first 20 years in this century have focused on genome analysis that's based first on microarrays and then on next-generation sequencing. And the impact that these technologies have had on healthcare broadly defined has been simply incredible. And for investors, the value creation has been remarkable as well.

But it's clear that innovation in these technologies is leveling off. And so when we look to the future, what we see is that the era of big biology in genomics is going to be driven by new technology. And certainly, we see optical genome mapping and the Saphyr system at the center of the next big wave, which is going to be focused on genome structure analysis. And so we think that we are really at the beginning of this incredible journey.

We're pleased with the progress that we have, but we're very focused on what the future brings. And we couldn't be more excited about where we're positioned. And so with that, operator, I'd like to turn it over to you for Q&A.

Questions & Answers:


Operator

[Operator instructions] Our first question comes from Kevin DeGeeter of Oppenheimer. Please state your question.

Kevin DeGeeter -- Oppenheimer & Co. Inc. -- Analyst

Thank you, guys. Thanks for taking my questions. Just a couple from me today. First, with regard to the next-gen optical imaging platform and the target to have a prototype by 4Q, can you just walk us through a little bit in terms of the target product profile there? And incrementally, what are the primary operational challenges to meet that 4Q timeline?

Erik Holmlin -- Chief Executive Officer

Sure. So what we're focused on is building a platform that can serve the substantially higher-throughput operating labs compared to your traditional community cytogenetics lab. The community cytogenetics labs represent the vast majority, but these higher-volume labs take a significant amount of the volume. And so we are anticipating by the time the system is launched and up to full speed that it will represent an increase of approximately fourteenfold over the current throughput of the Saphyr system, which is roughly 5,000 human genomes per year.

And so that's a pretty substantial overall increase in throughput. When you talk about the milestones and work that needs to be done, it's relatively straightforward in that we've built these instruments before and the principles of operation are not changing, but we are adapting a completely novel optical imaging platform, which is, of course, off-the-shelf, available today, and we need to implement it in the configuration that's useful for optical genome mapping. But there's really no substantial invention involved, and so we believe that the program overall is relatively low risk.

Kevin DeGeeter -- Oppenheimer & Co. Inc. -- Analyst

And I get a fair number of questions from investors with regard to the addressable market for Saphyr in the pediatric and prenatal markets. Can you just comment on how you see the addressable opportunity in those two segments?

Erik Holmlin -- Chief Executive Officer

Sure. I mean, we typically look at it from the perspective of the number of labs that are out there, and if those labs were to adopt Saphyr and convert their menus over, what would that look like? So in cytogenetics, broadly speaking, there's roughly 2,500 labs worldwide. Probably somewhere between 2 million samples per year being processed for this type of molecular pathology. And overall, that represents somewhere in the neighborhood of a $3 billion to $3.5 billion market for us.

That includes some of the research market as well. But it's something that I would really emphasize for these investors who are asking questions is that that's the market that is right in front of us today. And with the technology accelerating capabilities as quickly as it is, being used in research to discover new applications, the total market opportunity for optical genome mapping goes well beyond that low single-digit billion number, and it's substantially larger. It's harder for us to quantify it specifically because some of the applications haven't even been developed, others are still on the come.

So think about when optical genome mapping is used more broadly in prenatal testing and throughout pediatric testing. Think about, more broadly, a situation where genome analysis is conducted on every newborn, so not just the idea of doing sequencing and looking at SNPs but starting to look at gene mapping and structural variation as well. So the potential, we believe, is really very significant, but some of these proximal markets add up to being in that range.

Kevin DeGeeter -- Oppenheimer & Co. Inc. -- Analyst

Very helpful. And then lastly for me, with regard to the fourth quarter, what was the consumable revenue? And can you just comment on the relative split between cytogenetics and other applications?

Chris Stewart -- Chief Financial Officer

Yeah. So consumable revenue was, let's see, got it right in front of me here, about $4 million -- no, excuse me, sorry. Give me one second here, I have multiple things going on. Consumable revenue was about $1.3 million in Q4.

Kevin DeGeeter -- Oppenheimer & Co. Inc. -- Analyst

And qualitatively, how do we think about the split between cytogenetics and other end markets?

Erik Holmlin -- Chief Executive Officer

Yes. Outside the United States, it's 75-25, 80-20. And I would say it's not quite 100% human, but it's almost entirely human. And then within that, it's 75-25.

A lot of the nonhuman is still focused on drug development. So we've really shifted from a basic research tool that's used throughout genome analysis to one that's primarily used in human applications. And outside the U.S., 75-25 cyto versus research. In the U.S., it's more balanced.

We see increasing cytotypes of applications, but it's closer to maybe 60% research, 40% cyto.

Kevin DeGeeter -- Oppenheimer & Co. Inc. -- Analyst

OK. I'll get back in the queue. Congratulations on your progress. Thank you.

Operator

The next question comes from Jason McCarthy of Maxim Group. Please state your question.

Jason McCarthy -- Maxim Group -- Analyst

Hey, guys. Thanks for taking the questions. As opposed to kind of thinking about the revenue last year or even this year, can you talk a little bit more broadly about not the shortcomings, but I'll just call it the shortcomings of NGS, whether it's long reads or short reads, and where that missing component, the genomic interrogation, really matters? And maybe in the context of 50% of cancers don't get the proper diagnosis and genomic diseases are even worse, and how Saphyr completes that puzzle if you would? And that's the story, I think, investors need to here over this year.

Erik Holmlin -- Chief Executive Officer

Yeah. No, I mean, I appreciate that sort of opportunity, Jason, because I think that's really where the focus should be. We have labored hard to develop the product and make it relevant in some really, really important end markets. And what we're seeing now is that those markets are adopting.

And so, sure, it's important that we're selling the product and that people are paying for it, that sort of validates that it's a viable commercial product, but our focus is on really clearing the path to seeing this much, much wider adoption to fill these critical gaps. And on a regular basis, publications are appearing, showing that sequencing, as powerful as it is for detecting small variants, really underperforms when it comes to detection of large structural variations. And if you just read through, and I know you're a kind of guy who would read through the medical guidelines, not everybody would, but if you look at the medical guidelines for testing in genomic diseases, hematologic malignancies, solid tumors, they all recommend as the first line of analysis some form of structural variation detection, whether that's karyotyping, microarrays, fluorescence, in situ hybridization. And as much as there is an interest in having sequencing address those markers, the publications show that sequencing cannot.

And furthermore, to really get next-generation sequencing, in particular, to work well in the clinic, it still requires extraordinary depth of coverage, which means that to make it work reliably, consistently at high throughput and at low cost, it's not possible to do a whole-genome analysis. That's with next-generation sequencing, I'm not even talking about long-read sequencing. And so it really leaves an opportunity for optical genome mapping to come in and be the go-to solution to look at structural variation that's, let's say, 500 base pairs and bigger, so where would that matter? Well, that's what all the medical guidelines are calling for, so it clearly matters there. But let's talk about drug development in cancer where fusion genes, for example, are incredibly important.

And of course, there are many known ones out there that are the target of different therapeutic development programs. But for every fusion protein that's known, we believe that there are many, many that have yet to be discovered because a tool like the Saphyr system is not being used broadly yet. And so think about an environment where, essentially, every genome that's being analyzed is run through maybe sequencing, fine, to look for small variants, but also through optical genome mapping to look for large genomic variation because it's definitely complementary to single nucleotide variance and maybe the more impactful story. And optical genome mapping on the Saphyr system is the only one that's capable of doing that at a throughput that matters, a cost that matters, and at a turnaround time that matters.

And so that's really where this technology is positioned. And so the opportunity is really significant. And I've said this in my prepared remarks, but I think it's really important, which is that we're at the very beginning of the story. We're just writing the introduction right now.

Jason McCarthy -- Maxim Group -- Analyst

Right. And then also just one more broad thought that maybe you can help out with is microarrays kind of got rolled up with next-gen sequencing, right? Next-gen took them out. Western blots got rolled up in digitized proteomics. And then the natural progression for cytogenetic is not if, it's when.

It's going to move on to something else, and it should be something like structural variation. Can you kind of give your view of that view if you would?

Erik Holmlin -- Chief Executive Officer

Yeah. I mean -- so thank you for pointing out two examples in history where a technology has consolidated other platforms into a single, streamlined workflow. So NGS did it not only to microarrays but completely revolutionized Sanger sequencing. And so next-generation sequencing is an amazing example of that.

Western blot is another amazing example of that. And that was done by companies and industry. So Illumina, we know, and others around next-generation sequencing, Ventana, around the cell surface marker analysis. And so it's really, I think, a very clear and obvious path for optical genome mapping to streamline and industrialize the cytogenetics workflow.

And something that's very interesting about this cytogenetic space is that laboratory directors there and people who work in cytogenetics see the technology revolution that optical genome mapping provides as something that they've been waiting for, in many cases, their whole career. So as you know, Dr. Alka Chaubey joined us as our first chief medical officer last August, and she sees the Saphyr system as that thing she's been looking for her entire career as a cytogeneticist and cytogenomics professional, and she's not alone in that view. And so we really see Saphyr industrializing this workflow and becoming something that's used incredibly broadly.

And for that reason, we actually call the sort of euphoria that Saphyr brings cytopia because it's like utopia for cytogeneticists. And it not only improves patient outcomes, but it positions cytogenetics at the center of drug development and other areas of important discovery research where it just isn't used today because it's so laborious and time-consuming. So we're about to see truly a revolution in genome analysis around structural variation detection that Saphyr brings.

Jason McCarthy -- Maxim Group -- Analyst

OK. Thank you.

Erik Holmlin -- Chief Executive Officer

Welcome.

Operator

Our next question comes from Jeffrey Cohen of Ladenburg Thalmann. Please state your question.

Jeffrey Cohen -- Ladenburg Thalmann -- Analyst

Hi, Chris. Chris are you there?

Chris Stewart -- Chief Financial Officer

Hi, Jeff.

Jeffrey Cohen -- Ladenburg Thalmann -- Analyst

So just a few questions. One follow-up to Kevin's questions earlier. It's sounding like you're going to have two SKUs as far as the platform, one more for high-throughput facilities and the current one to continue with kind of the R&D side of things. Is that a safe assumption?

Erik Holmlin -- Chief Executive Officer

Yes, and which is to say that we'll offer both platforms and that will enable us to serve the market as broadly as possible. But we don't see the current platform going away.

Jeffrey Cohen -- Ladenburg Thalmann -- Analyst

Got it. OK. And then secondly, could you talk about revenues and placements by geography, at least kind of in a macro standpoint for 2020? And maybe give us some sense of how that may look for 2021?

Chris Stewart -- Chief Financial Officer

Yeah. So we're seeing strength in Europe. They're moving forward faster with getting systems validated into their workflow. U.S.

is lagging a little bit behind, though we've been stronger in the research market in the U.S. than we have been traditionally, but we're starting to see an uptake in clinical revenue. And then China has been pretty quiet. Obviously, I think last year, for a lot of reasons, it was a quiet year.

But we see that picking up but lagging still behind Europe and North America. So we expect to see the most growth in Europe next year, followed by North America and then the Far East.

Jeffrey Cohen -- Ladenburg Thalmann -- Analyst

Got it. OK. And then lastly for me, Erik, if you could talk a little more about some of the developments that are going on or expect to be going on as for psychiatric disorders and other neurological conditions, that would be super helpful.

Erik Holmlin -- Chief Executive Officer

Sure. So through our Lineagen business, we are providing services to physicians who are managing patients with a variety of neurodevelopmental disorders, including autism spectrum disorder and other disorders that span that space. And our focus is to continue to serve them with the existing standard-of-care tools. But over the course of this year, we'll begin developing those applications on the Saphyr system and making them available through our own CLIA lab, working with payers to cover those assays.

And so that's one area where we'll be focused on neurodevelopmental disorders. Our customers in the research side of the market had been applying optical genome mapping to other neurodegenerative diseases, such as Alzheimer's and ALS. And their results are simply spectacular. And we expect those programs to continue.

And it's expanded beyond the diseases that I mentioned, like ALS and Alzheimer's, which affect primarily older adults, to include now applications and discovery, research in pediatric populations. And so what we expect to see as a result of this research is that there can be novel content discovered that could be the basis of future laboratory-developed tests. And so we'll just have to see how that research plays out, but it's an incredibly interesting area. And it's an area where structural variation is already known to play a significant role, and so the Saphyr system almost certainly is going to amplify that.

Jeffrey Cohen -- Ladenburg Thalmann -- Analyst

Got it. And then lastly for me, it feels like you broke through kind of the 1% TAM area on the research side of things. It feels like perhaps 2021 may be the year that you break through, through that 1% TAM on the commercial side. Is that a good way of depicting the size of the platform out there and the capabilities and the growth anticipated for the coming year?

Erik Holmlin -- Chief Executive Officer

Yes. I mean, the numbers that you're citing, I would need to get out my slide rule and verify those calculations but breaking through barriers is clearly what has been happening for us. And it's really been around awareness and understanding and appreciation. And what anybody, I think, in the company would relay to you is that the amount of inbound interest in our target end markets is higher than it's ever been, and it'll be higher tomorrow than it was today.

But we have certain structural barriers. You have to call them barriers, you have to call it what it is. We have certain structural barriers that we need to address. And the reimbursement one is a big one here in the U.S., And we have great programs that are designed to address that.

And the most fundamental and foundational aspect of addressing that is building an incredible war chest of data that supports the utility of optical genome mapping in these settings and really validates it. And that's the basis of these clinical trials, which our CMO has designed, and we're in the process of getting under way. And you'll see them progress significantly over the course of 2021 and 2022. And it's that foundation of data, like when we start climbing on top of that, that's when we're going to keep bursting through the next thresholds if you will.

And so yes, we've broken through in many respects, and that's given us the opportunity to do more work. And those commercial breakthroughs will be -- we'll see them over the course of this year. But it's really after we get some key work done this year that those commercial breakthroughs will really start to take off.

Jeffrey Cohen -- Ladenburg Thalmann -- Analyst

OK. Got it. Thanks for taking the questions and congrats on the readout there.

Erik Holmlin -- Chief Executive Officer

Thank you.

Operator

Our next question is from Scott Henry of ROTH Capital. Please state your question.

Scott Henry -- ROTH Capital Partners -- Analyst

Thank you. Good afternoon and congratulations on quite a year so far. Just a couple of questions. And first, I don't know if you gave this, but did you mention how many Saphyr placements, whether it be a lease, a sale, were made during the quarter?

Chris Stewart -- Chief Financial Officer

Yeah. It was approximately 12. Yes, go ahead.

Erik Holmlin -- Chief Executive Officer

Yeah, ballpark 12.

Scott Henry -- ROTH Capital Partners -- Analyst

OK. All right. And just checking my numbers, so there were 96 installed, I had, at the end of Q3. So a lot of those, I would assume they're out there ready to install in Q1.

Is that the correct way to think about it, or whenever it may be in the future?

Erik Holmlin -- Chief Executive Officer

Yes. That's right, yes.

Scott Henry -- ROTH Capital Partners -- Analyst

OK. Great. Thank you. And then when we look out to 2021, how should we think about the quarters? I don't know how much COVID is going to impact the first half of the year.

Just trying to get a sense on Q1. Obviously, there's only eight days left in the quarter, but just trying to get a sense of how that trajectory may look throughout the year.

Chris Stewart -- Chief Financial Officer

Yeah. So typically, Q1 is a little seasonally soft for us as the labs spend their budgets in Q4 and then are working on saving money in Q1, but it won't be dramatic. And then we expect to see modest growth through the year quarter on quarter. For the full year, we expect to see like substantial double-digit growth, but we don't think it's going to be triple-digit growth, but we'll see year-on-year growth by the end of the year in the substantial double digits.

Scott Henry -- ROTH Capital Partners -- Analyst

OK. Great. And I haven't seen the 10-K yet. Could you give me a sense of where the real-time shares outstanding are given a lot of levers in there?

Chris Stewart -- Chief Financial Officer

Yeah, exactly. So we ended the year with 189 million shares outstanding. And right now, we've got about 280 million shares outstanding with all the work we've done this year.

Scott Henry -- ROTH Capital Partners -- Analyst

OK. That's helpful. And then I guess just kind of a big-picture question for Erik. Obviously, it's a different company today than it was even four months ago, both in terms of market cap, in terms of cash balance.

So given that change in those dynamics, how do you think about managing the company today versus then? I mean, will there be any changes to the business model, perhaps growing faster, being able to invest more in SG&A and R&D? Just trying to think of how you view it today versus four months. Maybe you don't view it differently at all, but my guess is you probably do.

Erik Holmlin -- Chief Executive Officer

Yeah. No, it's a great question. And I think that that's -- I thank you for asking it. It's probably a question on a lot of people's minds.

And we've sort of allowed that question to hang around for a while and haven't gone for an immediate answer, but we're very definitive. The company is positioned in an absolutely exciting, substantial market, genomics, with a very differentiated technology that serves an unmet need, which, by the measurements that we can make on that unmet need, is really substantial, like the end-user markets are in the billions. But we're pretty sure that the total opportunity is bigger than anybody expects today and that only time and more discoveries is going to open that up. And so we don't think that it makes sense to change the business model at all.

What makes the most sense is to take advantage of the resources that investors have made available to us and put that money to work behind the incredible story of optical genome mapping and Saphyr system in helping patients, in making new discoveries that are going to transform different diseases and really advancing the overall healthcare objectives of genomics broadly defined in this new era of big biology driven by structural variation analysis. And so the capital is there to help us really double down on this plan. It's not there to help us change the plan. It doesn't mean that we don't see the need for tuck-ins and different technologies that are out there in the space that would accelerate our plan, but the capital is there for us to double down on the original vision and make that happen sooner than we might have been able to make it happen without the capital.

Scott Henry -- ROTH Capital Partners -- Analyst

OK. Great. Thank you for the color on that. Congratulations again and thanks for taking the questions.

Erik Holmlin -- Chief Executive Officer

Thanks.

Operator

Our next question is from Kevin DeGeeter of Oppenheimer. Please state your question.

Kevin DeGeeter -- Oppenheimer & Co. Inc. -- Analyst

Just a follow-up on Scott's point, just to clarify for financial modeling. How are you thinking about the split between reagent rental and capital purchase on that, kind of, call it, 53 or more units you have to place this year?

Chris Stewart -- Chief Financial Officer

Yeah. So right now, we see it as roughly 50-50. And then it gets a little bit interesting because we're starting to see some early reagent rentals that are now converting to sales. So what I think we're going to end up seeing going forward is a little bit -- 50%-plus reagent rentals.

And then some of those -- a lot of those will transition to sales over the course of six months to a year.

Kevin DeGeeter -- Oppenheimer & Co. Inc. -- Analyst

Got it. And recognizing you don't provide guidance as such on operating expenses, I think we all expect opex expenses to accelerate pretty meaningfully this year. Any parameters you would provide as to how to think about either over the course of the next 12 months or longer term, the trajectory of spend? Thanks.

Chris Stewart -- Chief Financial Officer

Yeah. So the biggest things we're investing in this year are, first, headcount. We're adding headcount across the sales and marketing organization and in R&D. And we're also spending on these clinical trials.

That's where, as you heard from Erik, where our focus is, is on getting those clinical trials going as fast as we can get them going. So yes, so opex is going to be up in this year. I don't think it's going to be staggering. I'd say somewhere in the 20% to 40% range this year.

And then I would probably keep it in that range for the next couple of years' growth, that range.

Kevin DeGeeter -- Oppenheimer & Co. Inc. -- Analyst

That's all for me. Great. Thank you.

Operator

We have reached the end of the question-and-answer session, and I will now turn the call over to Erik for closing remarks.

Erik Holmlin -- Chief Executive Officer

Yes. Great. Thank you, operator, and thank you to everybody who attended the call today. And we look forward to seeing you soon for our first-quarter 2021 call.

Thank you very much.

Operator

[Operator signoff]

Duration: 81 minutes

Call participants:

Amy Conrad -- Investor Relations

Erik Holmlin -- Chief Executive Officer

Chris Stewart -- Chief Financial Officer

Kevin DeGeeter -- Oppenheimer & Co. Inc. -- Analyst

Jason McCarthy -- Maxim Group -- Analyst

Jeffrey Cohen -- Ladenburg Thalmann -- Analyst

Scott Henry -- ROTH Capital Partners -- Analyst

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