Seer, Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021; this is an annual report, not a standalone fourth-quarter filing. Seer is an early-stage life sciences company commercializing its Proteograph Product Suite, an RUO proteomics platform. Broad commercial release began in January 2022.
Financial and operating performance
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | $6.6 million | $0.7 million |
| Gross profit / gross margin | $3.4 million / approximately 51.6% | $0.7 million / not meaningful for product comparison |
| Research and development | $29.1 million | $18.9 million |
| Selling, general and administrative | $45.8 million | $15.4 million |
| Operating loss | $71.5 million | $33.6 million |
| Net loss | $71.2 million | $32.8 million |
| Cash used in operating activities | $46.3 million | $20.8 million |
- Revenue rose 909%, primarily from initial Proteograph instrument, consumables and platform-evaluation sales. FY2021 revenue included $3.6 million of product sales to non-related customers, $2.3 million of related-party revenue, $0.5 million of service revenue and $0.2 million of grant and other revenue.
- Two customers accounted for 35% and 12% of FY2021 revenue. PrognomIQ, in which Seer held approximately 19%, generated related-party sales and services revenue.
- At year-end, cash and cash equivalents were $232.8 million and investments were $260.4 million, totaling approximately $493.3 million. Current assets were $411.7 million and current liabilities were $13.4 million.
- No borrowings are reported on the balance sheet. Operating lease liabilities totaled $23.3 million; additional expansion-lease commitments had not yet been recognized at year-end.
- Financing cash flow was $116.6 million, including $103.0 million net proceeds from a February 2021 stock offering and $11.4 million returned as short-swing profits by a beneficial owner. Investing cash use was $170.9 million, largely reflecting purchases of available-for-sale securities as well as $6.9 million of capital expenditures.
Changes versus FY2020
- Product revenue commenced in the second quarter of 2021; total revenue increased from $0.7 million to $6.6 million.
- Net loss more than doubled, and operating cash use increased, as the company expanded product development and commercial operations. R&D rose 54%; SG&A rose 198%, including higher compensation, stock-based compensation, public-company costs and insurance.
- Cash and investments remained substantial after the follow-on offering, although cash and cash equivalents alone declined from $333.6 million to $232.8 million as funds were invested in securities and used for operations.
Outlook, commentary and risks
- Management expected significant losses and no positive operating cash flow for the foreseeable future, while projecting that available cash and investments would fund operations for at least 12 months from the filing date. The filing gives no specific revenue or earnings guidance.
- Management expected expenses to increase as Seer scales commercialization, manufacturing, sales and support, and product development. Success depends on customer adoption of a new platform; the company had only recently entered broad commercial release.
- Key disclosed risks include market acceptance and uncertain market size; COVID-19-related customer access and supplier delays; reliance on Hamilton as the sole SP100 instrument manufacturer; manufacturing scale, quality and consumable shelf-life risks; and competition.
- The Proteograph is labeled and sold for research use only. If regulators determine it is intended for diagnostic use, additional clearance, approval and compliance costs or delays could result.
- Seer remediated previously identified internal-control material weaknesses and management and Deloitte concluded controls were effective as of December 31, 2021. The financial-statement audit opinion was unqualified. Deloitte identified revenue recognition judgments as a critical audit matter.
- There were no material legal proceedings reported. Seer adopted lease accounting under ASC 842 effective January 1, 2021; prior-year figures were not restated.
Important facts for investors to verify
- Whether broad commercial release converts into repeat instrument placements, consumables usage and diversified customer revenue.
- The significance and collectability of related-party sales, including PrognomIQ revenue and year-end receivables; also monitor customer concentration.
- Actual cash burn and liquidity against management’s stated 12-month runway, including expansion costs and unrecognized lease commitments.
- Hamilton instrument lead times, supply-chain resilience, manufacturing quality and consumable stability as volumes scale.
- Whether RUO status remains appropriate as customers use the platform and whether future diagnostic applications trigger regulatory requirements.
- Progress on scientific validation, customer publications and adoption, compared with the company’s stated performance claims and market assumptions.