Logo of jester cap with thought bubble.

Image source: The Motley Fool.

Singular Genomics Systems, Inc. (OMIC 2.72%)
Q3 2021 Earnings Call
Nov 09, 2021, 4:30 p.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Greetings, and welcome to the Singular Genomics third quarter results and business update call. [Operator instructions] This call is being recorded. It is my pleasure to introduce your host, Philip Taylor from Investor Relations. You may begin.

Philip Taylor -- Investor Relations

Thank you, operator. Presenting today are Singular Genomics founder and chief executive officer, Drew Spaventa; and head of finance, Dalen Meeter. Earlier today, Singular Genomics released financial results for the three months ended September 30th, 2021. A copy of the press release is available on the company's website.

Before we begin, I would like to inform you that comments and responses to your questions during today's call reflect management's views as of today, November 9th, 2021, only and will include forward-looking statements and opinion statements, including predictions, estimates, plans, expectations, and other information. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are more fully described in our press release issued earlier today and in our filings with the Securities and Exchange Commission. Our SEC filings can be found on our website or on the SEC's website.

10 stocks we like better than Singular Genomics Systems, Inc.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* 

They just revealed what they believe are the ten best stocks for investors to buy right now... and Singular Genomics Systems, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of November 10, 2021

Investors are cautioned not to place undue reliance on forward-looking statements. We disclaim any obligation to update or revise these forward-looking statements. Please note that this conference call will be available for audio replay on our website at singulargenomics.com on the Events page of our Investor Relations page. With that, I will turn the call over to CEO Drew Spaventa.

Drew Spaventa -- Founder and Chief Executive Officer

Thank you, Philip, and welcome, everyone, to Singular Genomics' first quarterly conference call as a publicly traded company. Today, I will discuss our recent accomplishments and progress as we approach our G4 commercial launch. Dalen will detail our financial results, then I will conclude and open up the call for a question-and-answer session. As you know, we completed our initial public offering in early June, listing on NASDAQ, and raising approximately $258 million in gross proceeds.

I would like to thank our team of employees, management, and shareholders for their dedication to our mission and everyone who supported us from inception through IPO. With the IPO complete, Singular Genomics is in a strong position to continue to develop, manufacture, and commercialize transformative life sciences tools that will empower research and clinical work in genomics and multiomics. We need better and more competitive solutions in the marketplace and Singular is a company dedicated to filling this void. To begin, for those who are newer to our story, I'll provide an overview of our market opportunities and progress to date.

The mission at Singular Genomics is to accelerate genomics for the advancement of science and medicine. The first sequencing of the human genome occurred more than 20 years ago and has substantially improved our understanding of biology and powered the development of novel therapies and advanced clinical diagnostics. Since then, genomic tools and technologies have gone through vast transformations, increasing in speed and power while lowering costs and expanding access to the technology. We view this expanding market as two separate but related opportunities, the existing NGS market, and a rapidly expanding multiomics market.

Currently, genomics provides a high-resolution view of DNA and RNA and is used in areas such as reproductive health, hereditary testing, cancer detection, treatment selection and monitoring, immunology, and infectious disease. As a foundational technology in life sciences sequencing is utilized throughout the entire sector and is a driving -- and is driving many of the precision medicine-based patient solutions across life sciences. As a result, we believe the current global NGS market represents an annual opportunity of $7 billion, growing at a 16% CAGR. Genomics tools are quickly expanding to offer insights into single cells and tissue and to look at DNA, RNA, and proteins in spatial context.

This wide-ranging multi-elements approach will enable increased insights into the function of both cells and tissues, allowing for better understanding of biology and disease. Right now, this next frontier represents a white space trying to enable the next generation of scientific discovery. This market is estimated to be $2 billion today, growing at a CAGR of 21%. Despite the technological advancements driving market growth, there remain real limitations preventing incorporation of these tools in practice.

These include long analysis times, labor-intensive protocols, complicated sample batching requirements, and high costs. To date, researchers and clinicians have largely been dependent on a very limited number of technology platforms for their sequencing needs. This is challenging for end users in terms of product choice, flexibility, cost, and supply. Reliance on limited suppliers for key technology can be a big risk for all businesses and researchers that rely on sequencing.

We believe both the substantial and growing NGS and multiomics markets are underserved by existing tools and technologies. We believe our technology offered through two distinct integrated solutions can address the major challenges in the NGS market today and foster the next wave of cutting-edge science and research in the markets of tomorrow. The first product we are planning to bring to the NGS market is our G4 integrated solution. This benchtop instrument is designed to leverage our novel sequencing engine comprised of unique and proprietary chemistry, including novel chemical compounds, polymers, and enzymes.

Coupled with advances in rapid imaging and fluids, we designed the G4 to deliver a combination of accuracy, speed, flexibility, and scale unmatched by any other instrument available today. We will offer our G4 instrument with standard sequencing kits that are plug and play with existing sample prep and library prep offerings. The G4 instrument will provide data output files an industry-standard digital format, enabling seamless integration with existing secondary analysis pipelines and bioinformatic workflows. We developed this front and back-end compatibility with existing workflows to enable customers to easily drop the G4 system into their current sequencing workflow with minimal changes.

We designed the G4 instrument to provide unmatched speed, flexibility, and scale, and I'll briefly touch on each of these. First, speed. The instrument is designed to enable run times ranging from five to 16 hours for typical NGS applications based on cycle times that are two to three times faster than systems on the market today. Second, flexibility.

The significant point of differentiation from any other sequencer available today, the G4 instrument contains four independent flow cells each with four independently addressable lanes. This allows for parallel runs, reduce sample batching, and enhanced scalability as researchers and clinical users can scale up or down. Coupled with faster run times, this configuration allows labs to increase efficiency from both a time and cost perspective. Currently, labs must batch many samples together, perform lengthy sample preparations, including sample input amounts and compatibility, and may be required to wait days or weeks to initiate a run in order to avoid wasting money on consumables.

This can delay time to results, which can be disruptive to productivity. And third, scale. The power and versatility of the G4 is unique. Consumable kits will be offered across the spectrum of lower and higher output in terms of number of reads and cycles.

At the low end, the G4 kit will provide speed and cost advantages for smaller runs, ranging down to a few gigabases and tens of millions of reads. At the high end, we designed a single G4 instrument running four flow cells in parallel to be capable of sequencing four human genomes in less than 16 hours. This capability surpasses any other commercially available benchtop sequencer with target data output up to 600 gigabases per day. In addition to these core attributes of the G4, we are also focused on developing specialized application kits consisting of proprietary assays that will take full advantage of the G4's unique capabilities.

We have talked about the development of two special application kits so far. The first is a technology and kit formerly referred to as synthetic long read that we will now refer to as extended rate sequencing or XRC. This is a technology and kit for targeted sequencing of extended read lengths in the range of 400 to 3,000 bases. This will provide high-accuracy, high-efficiency information about unique areas of the genome where existing solutions are not well-suited.

For example, current short-read sequencing solutions lack read length and traditional long-read sequencing solutions are overkill and too costly. An application of this is sequencing the diversity of human antibodies by reading out the full length of the VDJ region, which is 450 to 500 bases in length. The second specialized application kit we refer to as HDC. This technology is designed to drastically improve accuracy and efficiency in rare variant detection in cell-free DNA.

We are also developing additional specialty kits to leverage the instrument's capabilities to further unlock the potential of sequencing. We have been thoughtful with the development, optimization, and introduction of our initial G4 system to the market. There are three phases of our commercial launch plan. We have successfully completed the first phase, collaborating with select partners to conduct beta pilot programs.

We are in progress with the second phase, expanding collaborations with additional selected partners in an early access program. We will advance to the third phase, a broader commercial launch where we plan to begin accepting orders by year end with the intention to ship instruments during the first half of 2022. As mentioned, we have completed beta pilot tests and validation activities for our G4 at both the genomics research organization, Sanford Burnham Prebys; and a clinical-stage biopharma company, Fate Therapeutics. Utilization at these sites provide the first external performance validation in the field.

In line with our plan, we are now executing our early access program with collaborators across our target markets, representing research centers and commercial companies. G4 instruments are placed at third-party sites in their labs and run by their technical staff as would occur in the field for commercial use. These users were selected based on their ability to demonstrate the power and utility of the G4 system across a number of applications, such as immunology, oncology, and biomedical research, and their ability to scale as a potential customer. In the third quarter, we advanced our early access program with six partners.

Two sites are now complete, one site is ongoing, and three more are under contract. We are encouraged with these results of the program thus far and are excited to share more details now. At Harvard's Beth Israel Deaconess Medical Center, an academic core lab, the G4 integrated solution was used for spatial transcriptomics research. They achieved an average of 136 million reads per flow cell with an accuracy of 99.6 to 99.7%.

At site two, targeted sequencing panels required 150 cycle kits were run. The G4 achieved average recounts of greater than 150 million per flow cell with an accuracy of 99.6% to 99.8%. Site three is currently ongoing and includes targeted panels as well as exome libraries requiring 200 cycle kits. Initial results appear to be meeting expectations with average read counts above 170 million per flow cell and accuracy at 99.8%.

These results achieved at these EAP sites are demonstrating performance on par with existing commercial offerings across a diverse set of applications. We intend to further advance the performance for our commercial offering and are pleased with the consistent improvement demonstrated so far in read length, read count, and accuracy. In short, these results are in line with our EAP objectives at this stage and position us well for our next step commercial launch. Our commercial launch remains on track to be initiated by year end.

Leveraging the success of our application lab, beta pilots, and early access program, we are prepared to launch in coming weeks. At launch, we will be accepting orders from thought-leading organizations who are positioned to demonstrate the capabilities of our solution and educate peers through data publications. We will soon announce pricing and specs for the instrument and our initial consumables, publish a technical report, and provide data sets to prospective customers for their thorough evaluation. To maximize the value offered through our transformative solution, we aim to provide a premium customer experience beyond that, which has become standard in the marketplace.

We believe this will help assure the success of early placements, build customer loyalty, and enhance our competitive position. This requires a team of quality professionals across sales, technical support, field applications, field service, and marketing. We are actively building this team to scale and meet demand. While we are incredibly excited about the upcoming launch of G4, we have a second platform that we are developing to transform the field of multiomics.

This is our PX integrated solution. The PX instrument leverages the same novel sequencing engine as the G4, which means that much of our investment to date supports both systems. The PX instrument is an integrated system for high-throughput analysis of RNA, DNA, and proteins by direct sequencing readout from intact single cells isolated or in tissue. The high-powered imaging system provides subcellular resolution enabling cell morphology as well as spatial context of cell markers and cells in tissue.

The PX has been designed to significantly reduce costs on single-cell experiments by integrating the self-prep and sequencing readout into a single instrument by adopting a novel, well-placed sequencing format, a 96-well plate can profile 96 independent samples with 30,000 to 100,000 cells in each well that is a single consumable capable of roughly 3 million to 10 million cells. Not only can this lower the cost, shorten the workflow, and increase the number of samples for RNA transcription, but we also plan to offer combinatorial assays, including cell protein expression, in-situ cell sequencing, and spatial context of single-cell profiles and tissue. We believe our PX integrated solution will facilitate systems consolidation and streamline workflows while lowering costs and enabling new capabilities to help researchers achieve the vast potential of multiomics. We are currently in advanced development with the PX and expect to begin an early access program in 2022 with a full commercial launch in 2023 through a targeted and phased commercial strategy similar to the strategy we are employing for the G4 integrated solution.

Now I'd like to provide a quick update on our manufacturing and operations. To maintain the highest quality of production for both our instruments and consumables, we recently completed the buildout of a state-of-the-art manufacturing facility. We are now scaling up our manufacturing infrastructure and beginning assembly of our first production units. Manufacturing of both instruments and consumables is progressing according to plan and gives us confidence we will be able to ship the first commercial instruments and kits during the first half of 2022.

We are incredibly excited with our progress to date, and we look forward to providing more insights into our commercial launch over the coming quarters. With that, I will now turn the call over to Delan to go over the details of our third quarter financial results.

Dalen Meeter -- Head of Investor Relations

Thank you, Drew. We continue to invest across all areas of our business to scale and support the upcoming G4 launch anticipated growth and progress the PX integrated solution. Operating expenses for the third quarter of 2021 totaled $17.5 million, compared to $7.8 million for the third quarter of 2020. These totals included noncash stock-based compensation expense of $2.9 million in Q3 2021 and $0.3 million in Q3 2020.

The year-over-year increase in total operating expenses was driven primarily by our headcount growth, investments to support the G4 commercial launch, continued investment in the PX development and our R&D road map, and the costs associated with being a public company. Our third quarter expenses were slightly more favorable than planned due to the timing of certain investments shifting to the fourth quarter of 2021. Net loss for the third quarter of 2021 was $17.6 million or $0.25 per share, compared to $7.9 million or $0.74 per share in the third quarter of 2020. Ending cash, cash equivalents, and short-term investments, excluding restricted cash, totaled $357 million as of September 30th, 2021, compared to $26.9 million as of December 31th, 2020.

Our weighted average diluted share count for the quarter used to calculate net loss per share was approximately $71.7 million. We expect share count to remain fairly consistent through the end of the year. Looking ahead through Q4, we expect total operating expenses, including stock-based compensation to continue to increase as we add headcount, invest in our operations and commercial infrastructure, and build up related support functions in anticipation of the G4 commercial launch. As a reminder, we do not expect to recognize any revenue until after we commence shipping instruments and consumables, which is on track for the first half of next year as Drew previously discussed.

In summary, we are very well-capitalized heading into 2022, excited about the synergies and resulting leverage between the G4 and PX systems and the commercial plan we are putting in place to capture these large market opportunities. Thank you, and back to Drew for closing remarks.

Drew Spaventa -- Founder and Chief Executive Officer

Thank you, Dalen. Health care and personalized medicine are at an inflection point, largely driven by advances in science and research enabled by NGS. We are excited not only to play a role in this transition, but to help propel it forward by bringing superior solutions to market. At Singular, we are creating and developing unique and proprietary chemistries, including novel chemical compounds, polymers, enzymes, and other aspects of the molecular machinery of DNA sequencing.

We believe that our engineering capabilities across optics, mechanics, electronics, fluidics, physics, software, and bioinformatics are unmatched for a company of our size and age. Our ability to integrate and leverage this broad range of scientific and engineering disciplines is what sets us apart. Driving this technology engine is a unified focus and dedication to making products and solutions that will advance science and medicine while serving customers. We are on track with our commercial plan.

Our early access program is accomplishing its objectives. The G4 instrument is delivering high performance for a diverse set of leading institutions. Interest levels from early discussions with customers are high, and we are excited to take the next steps to bring the G4 to market. Joining me for Q&A, we have Eli Glezer, founder and CSO; Dalen Meeter, head of finance; and Dave Daly, president and COO.

Now let's open it up to questions. Operator?

Questions & Answers:


Yes, sir. [Operator instructions] Our first question comes from the line of Mr. Matt Sykes from Goldman Sachs. Your line is now open.

Unknown speaker

Hey, all. This is Nick on for Matt. Thanks for the time. So it looks like you guys are getting strong results from the early access program partner labs.

So just wondering how these early results are affecting the customer feedback loop, any potential to generate early demand uptake faster than you initially expected? And then one follow-up maybe for you, Dalen. I think our total expected opex spend was right about in line with what you reported, but our split was weighted a bit more heavily toward SG&A versus the roughly 50-50 split you had this quarter. So any commentary on what to expect in terms of that split between sales and marketing versus research and development as commercialization ramps up in 2022? Thank you.

Drew Spaventa -- Founder and Chief Executive Officer

Thanks, Nick. Maybe I'll take the first part and have Dave weigh in on the question on commercial. We're very pleased with the results the early access partners are seeing. The early access partners are really there to serve a few things.

The most important is validation of our technology in third-party hands. And so far, the program has done exactly that. And to provide a bit more color on what we mean by that, our partners are preparing samples, running the instrument, and doing their own bioinformatic analysis. So it's really an end-to-end validation.

So beyond the early access program, separately, we are seeing very strong demand. And I'll let Dave talk a little bit about what he's seeing. I will make a note as of yet, we are not sharing the confidential nature of the data from early access beyond, but we are engaged with a number of customers, and I'll let Dave talk a little bit about the demand.

Dave Daly -- President and Chief Operating Officer

Yes, Nick. Thanks, Drew. We're really confident in the demand. I think the feedback from the early access partners.

And in fact, if you go beyond that, our early target customer engagements are confirming a real strong desire for alternatives. And so we're focusing on building out our commercial infrastructure. And Dalen will touch a little bit on some of the financial components, Nick, relative to the questions you asked. But really the focus here, given that demand in hand is to really create a differentiated customer experience.

And what our early access partners are indicating to us is the importance of providing that best-in-class service and support. So we're building partnerships. We're understanding how to execute those partnerships, and that's really where our commercial build-out emphasis is at this point in time. Dalem, do you want to comment on a couple of financial components?

Dalen Meeter -- Head of Investor Relations

Yes. Hey, Nick. Thanks for the question. In regards to the split of opes between R&D and SG&A going forward and how to think about that, the bulk of our expenses right now on the R&D side are personnel related.

The total headcount at the end of the quarter was 200. I think we filed our 10-Q in there. We talk about the R&D headcount total being about 116. I think going forward, we'll be growing the R&D team to keep up with the PX development and the product roadmap.

But I think you can expect us to see us growing the commercial team and the operations team a little bit more aggressively here going into the first part of the year as we near launch and first customer ship.

Unknown speaker

Got it. Thanks. That's helpful.


Our next question comes from the line of Mr. Michael Ryskin from Bank of America. Your line is now open.

Michael Ryskin -- Bank of America Merrill Lynch -- Analyst

Great. Thanks for taking the questions, guys. One, I want to just ask for a little bit more clarity on timing if we can get for the next couple of quarters. You indicated you plan to start accepting orders '08 and 4Q.

When should we anticipate initial shipments after that? Is it about a quarter delay? Just sort of talk me through getting the initial boxes out the door as you ramp manufacturing. How much time do we going to start working through those? And also, are you going to recognize revenues on the instrument as shipped or when it's installed and brought online by the customer?

Drew Spaventa -- Founder and Chief Executive Officer

Thanks. Yes. So for timing, we're talking about a commercial launch later this year. And what that means is we're going to provide specs pricing and initial kit offerings.

Right now, we're looking at orders consistent with what we've communicated so far first half likely in Q2. And we'll also be working on additional upgrades and additional kit offerings over time. So consistent with kind of what you've seen in the progress so far and matching -- marching up the KPIs in terms of accuracy, read length, number of reads. We plan to continue to improve on this ongoing.

So we'll launch with a set of specs and kits, but we will also guide to additional kits that will be released over time as well to really see the full capability of the G4, and I'll let Dalen talk about revenue recognition.

Dalen Meeter -- Head of Investor Relations

Mike, in regards to revenue recognition, I think longer term, the revenue recognition policy is going to follow the terms and conditions of the specific order with the customer. I think as we develop a history of instruments in the field and running at targeted specs, I think we would recognize revenue upon shipment. In the initial quarter of launch and ship I think there's likely going to be some conservatism baked into our approach there, and we'll make sure that we're obtaining customer acceptance prior to recognizing revenue.

Michael Ryskin -- Bank of America Merrill Lynch -- Analyst

Got it. And a follow-up question on sort of the early access program. Any learnings you can take from that in terms of what exactly those potential customers are looking for in terms of the kits. You mentioned the longer read and some of the other HDC or whether it's particular customer class that you're targeting? Sort of anything you can take back in terms of how they're using the instruments and how that might tweak your commercial launch.

Drew Spaventa -- Founder and Chief Executive Officer

Yes. Absolutely. So I mean we've had a ton of learnings. Maybe I'll touch on a couple and then I'll have Eli talk about any learnings he has since he's heavily involved.

One of the surprise learnings for us, I think, has been -- the -- and this is seen in the EAP, but also with other prospective customers as we started having more conversations, is the attractive and desirability nature of being able to scale down your experiments. So one of the really unique things about this system is that it has four flow cells and four individually addressable lanes. And what we found is that a lot of these customers and some of these EAP partners are actually running NovaSeqs, NextSeq, and they have MiSeq. And the reason they run the MiSeq is because they have a single sample experiment or they can't batch samples.

And a lot of times that's a run that only requires a few gigs or tens of millions of reads. And the fact that you can load a single sample in one lane of our flow cell provides a tremendous cost advantage. If you're on a MiSeq, you're spending $100 plus per gig. And one of the big pieces of feedback we've gotten is that these customers love the fact that on our system, you're essentially paying a much different price point more in line with a mid-market system or you will be.

And that's a huge advantage. So it's really being able to scale up and down. Initially, we thought we just need to be able to scale up, scale up, provide more reads, lower cost per gigabase. But surprisingly, there's a tremendous amount of interest at the lower end, doing single sample experiments in individual lanes.

So that's kind of changed our thinking a little bit in terms of product roadmap potentially. And it's also kind of changed our thinking a little bit in terms of who the target market is. I think there's -- of the 8,000 or so MiSeqs out there, there's probably a good subset of those that would actually really benefit and use the G4 system. Beyond that, I'll turn it over to Eli on any of the specific learnings since he's directly involved with these EAP partners.

Eli Glezer -- Founder and Chief Scientific Officer

Yes. Thanks for the question. I think it's been a really useful experience for us in terms of both validation and refining what we're going to have in the product. So when you're asking about what are the customers looking for, all the core performance, number of reads, the accuracy, and so on.

And equally important is the ability to tie into their existing library prep methods. So that's something that's best demonstrated in their own hands that they can use their established methods, repairing the samples, run the sequencer, and then put it through their specific bioinformatic pipeline. That's been very useful for us to go through that. And in terms of applications, we really are covering in broad spectrum.

We mentioned use in spatial biology at the first site, and we mentioned oncology, immunology at the other side. So kind of the full range of our kits. And as you noticed also in the numbers that Drew provided, we're kind of working our way up to longer-read demonstrations as part of the EAP.

Michael Ryskin -- Bank of America Merrill Lynch -- Analyst

Great. Thanks so much. If I could squeeze in one follow-up, just because you mentioned it sort of the price component. I'm curious, with only a handful of customers so far in the EAP program, how are you arriving at a price point, both for the instruments, but more importantly, for the consumables.

Or like what are the inputs that go into your calculations on price sensitivity and elasticity of demand, especially given we know where the competitors are.

Drew Spaventa -- Founder and Chief Executive Officer

Yes. Absolutely. I mean, I think your last point is the valuable and we know where the competitors are. So it's actually very easy for us to look at the various offerings and look at essentially what you're getting in terms of throughput or number of reads and what that translates to in terms of cost.

What we've said consistently from onset is we want to be cost competitive. We don't want to raise the bottom on costs. We think there will be a number of ways that people see huge cost savings through the flexibility of the instrument. What we've -- what we're -- how we're thinking about costs, again, if we look at our system, we, in a lot of ways, consider it four NextSeqs in a single box with the four flow cells.

Each one of those, depending on which kit you're using is essentially a mid-throughput sequencer itself. And if we look at the way the NextSeq price is at the high end, they're high teens. At the low end, very low throughput kits and 100-cycle kits, they're up into the $40 to $50 per gigabase. So we're kind of thinking about that range in terms of the consumable pricing.

And then we've talked about allowing people to scale up either with multiple G4s or with a four by four. And if people are going to scale up and use the system in higher-volume environments, we're thinking about where the NovaSeq price is. And if you look at the SP or the S1 or even the S2, you're into mid- to low teens and high single digits if you're doing super high volume. So we're definitely thinking about making sure we can provide a solution that meets a cost point that makes sense and adds in flexibility, speed, modularity, and other benefits.

And then from an instrument price point, again, I think we don't want to change any buy behavior by ticking into a different bucket from a purchasing decision. So, again, we're thinking about this as a mid-throughput sequencer, and we'll probably price at a slight premium to that given the superior capabilities of the benchtop sequencer.

Michael Ryskin -- Bank of America Merrill Lynch -- Analyst

Really helpful. Really appreciate the color. Thanks.


Our next question comes from the line of Mr. Tom Stevens from Cowen. Your line is now open.

Unknown speaker

Hey, all. Thanks for taking the question. So I want to focus more on the manufacturing scale-up. So my first question is how do you guys feel about the readiness to execute a full commercial launch out to '22 and '23? Are there any hiccups you see in your kind of manufacturing process? And kind of what's your confidence in being able to meet your sales funnel as you kind of ramp up? Is there -- Are you currently capacity constrained if you have a bumpy year in '23? That kind of color will obviously be useful.

Thank you.

Drew Spaventa -- Founder and Chief Executive Officer

Awesome. So I'll give kind of the brief answer, and then I'll let Eli talk about manufacturing day sales. I mean, the high-level answer is, right now, we're right where we expected to be. We're on plan.

And that feels very good. In terms of specific manufacturing readiness and scale-up, maybe I'll let Eli talk a little bit about kind of where we are and his comfort with being able to stay on plan.

Eli Glezer -- Founder and Chief Scientific Officer

Yes. So new product introductions are hard, and they're particularly hard when it's your first product in this complex of a field. And so we're not just approaching this from scratch. We went through multiple rounds of design revisions throughout the stages, through beta stages, taking through the early access program.

So all these measures give us confidence in the platform that we're building both the instruments and the reagent. And so now we've been scaling up to be ready for production. And that's going very well. It's on an ambitious time line, but we feel that it's realistic.

And we're also looking far enough ahead in terms of procuring parts and making sure we have a good supply of components so that we're not caught flat-footed as we ramp up the manufacturing. So I think that's actually paid off for us. We had that strategy even before some of the supply chain issues came up. And I think it's been particularly important in this time period.

Dave Daly -- President and Chief Operating Officer

Yes. And, Tom, this is Dave. I think now when you couple our preparedness from an operations perspective, one of the things that we really spend a lot of time on is, as we develop and work our sales funnel really qualifying early on, we're confident in our demand. And at the same time, we're communicating that with our operations colleagues to ensure that we can flex and manage that demand as we create it, generate it, and bring it to fruition.

So I think as we continue to move forward, that cohesive harmonization across both operations and commercial will allow us to manage that demand, satisfy that demand, and service that demand.

Unknown speaker

Great. Great. Thank you. And if I could ask one follow-up on your longer read.

Do you have any plans to get that into your access partnerships? Or is that still pretty nascent?

Drew Spaventa -- Founder and Chief Executive Officer

I think you're referring to what we are calling now the extended range and formerly called synthetic long read. So we are developing it internally, and we are also partnering with academic groups right now to demonstrate it in their specific applications.

Unknown speaker

Great. Thanks. I'll hop back in the queue.


Our last question comes from the line of Mr. John Sourbeer from UBS. Your line is now open, sir.

John Sourbeer -- UBS -- Analyst

Thanks for taking my question. Just maybe building on the last question there previously. Can you just talk a little bit more on the ramp in the commercial team and what areas have there been a focus on? And any additional key hires to be made there as you're preparing for the G4 launch.

Drew Spaventa -- Founder and Chief Executive Officer

Sure. So, I mean, in terms of the commercial team, most of our senior leadership is in place. And now it's really a matter of hiring field application scientists, field support, and sales. And I can turn it over to Dave to talk about anything additional in terms of the need.

But really, that's the focus right now. We have leadership in place. We feel good about that leadership, and we're now just building out the team. Dave, I don't know if you have anything to add.

Dave Daly -- President and Chief Operating Officer

Yes. No. John, I think as we've mentioned a couple of times, we're really confident in the demand. I think our focus really does need to be as Drew just described on building out our service and support infrastructure.

So that as we launch, as we begin shipping, we remain confident in creating a really differentiated customer experience. What we've learned through early access and what we've learned through working our current funnel, these partners have told us what's important to them. And as we intend on delivering a best-in-class science and technology, we need to wrap that in an extraordinary service and support infrastructure. So as Drew described, our focus today is building out our field service team and our field applications team.

Importantly, both of these groups are working alongside our development partners as part of the early access program to both develop and refine our support program in a manner that we really do believe is going to create a differentiated customer experience. So our commercial emphasis is really on ensuring that as we satisfy the demand, we're doing it in a way that's truly differentiated.

John Sourbeer -- UBS -- Analyst

Got it. Thanks so much. And just maybe just a follow-up on the early access program. It looks like there was a steady improvement there in recounts in accuracy across the three sites that were listed.

Can you maybe just talk on any enhancements that you made to the G4? Or is this difference in analysis that was at the three sites? And just a clarification on that. Have any of the early access sites, are they actually committed to commercial launches yet? Or are you able to share any information on that?

Drew Spaventa -- Founder and Chief Executive Officer

Yes. Maybe I'll take your second question first and then let Eli talk about what he attributes to the improvements. We're not yet taking orders at this time. We will be soon.

So far, the EAPC back has been really strong, and I think we're really looking forward to continued relationships with our partners and our supplier-customer relationship, but we can't comment on anything beyond that at this point. And then on the improvement, Eli, maybe you want to cover a little bit.

Eli Glezer -- Founder and Chief Scientific Officer

Yes. So we are continuing to make improvements, and we will stay on that path all the way through commercial launch and certainly beyond commercial launch as well. So the improvements have come from improvements in reagent formulations. So it's a complex system, everything from clustering through to sequencing, and we're continuing to find opportunities to optimize the performance as we continue our development efforts.

We really feel good about where we are, but we feel we can do even better in time for commercial launch.

John Sourbeer -- UBS -- Analyst

Got it. Thanks for taking my questions.

Drew Spaventa -- Founder and Chief Executive Officer

Thank you.


This concludes our question-and-answer session. I would like to turn the call back to Drew Spaventa for closing remarks.

Drew Spaventa -- Founder and Chief Executive Officer

Yes. I want to thank everybody who's listening in for taking the time. I want to thank the analysts for the Q&A. I want to thank the Singular team for a really strong quarter.

We're really excited about what we have ahead of us. And again, thank you to everybody for tuning in, and we really look forward to sharing more information as we progress down this journey. That's all. Thank you.


[Operator signoff]

Duration: 41 minutes

Call participants:

Philip Taylor -- Investor Relations

Drew Spaventa -- Founder and Chief Executive Officer

Dalen Meeter -- Head of Investor Relations

Unknown speaker

Dave Daly -- President and Chief Operating Officer

Michael Ryskin -- Bank of America Merrill Lynch -- Analyst

Eli Glezer -- Founder and Chief Scientific Officer

John Sourbeer -- UBS -- Analyst

More OMIC analysis

All earnings call transcripts