Standard BioTools Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. The audited results below are for Standard BioTools on a standalone basis and exclude SomaLogic. The company completed its merger with SomaLogic on January 5, 2024; subsequent combined-company figures are preliminary and unaudited unless stated otherwise.
Business context
Standard BioTools sells research-use-only life-science instruments, consumables, software and services built around mass cytometry and microfluidics, serving proteomics and genomics research. Its priorities are revenue growth, tighter operating discipline and strategic capital allocation. The SomaLogic merger adds a proteomics service business, including an assay measuring approximately 11,000 protein targets.
Financial performance
| Metric | FY2023 | FY2022 | Change |
|---|---|---|---|
| Revenue | $106.3 million | $97.9 million | +9% |
| Gross profit / gross margin | $50.5 million / 47.4% | $37.1 million / 37.8% | +36% / +9.6 percentage points |
| Operating expenses | $127.1 million | $153.3 million | -17% |
| Operating loss | $76.6 million | $116.2 million | Loss narrowed |
| Net loss | $74.7 million | $190.1 million | Loss narrowed |
| Net cash used in operating activities | $43.3 million | $89.4 million | Cash burn declined 52% |
- Revenue mix: Instruments rose 46% to $37.5 million; consumables fell 11% to $41.7 million; service revenue increased 10% to $26.0 million. Proteomics revenue grew 22% to $63.9 million, while genomics revenue declined 7% to $42.5 million.
- Profitability: The company remained loss-making, with an accumulated deficit of $1.0 billion. The smaller 2023 net loss partly reflects that 2022 included $73.8 million of losses on the Series B preferred-stock forward sale and bridge loans.
- Cash and liquidity: Cash, cash equivalents and short-term investments totaled $114.9 million at year-end 2023, versus $165.8 million a year earlier; working capital was $48.9 million. Management said standalone liquidity was expected to support operations for at least 12 months from the filing date.
- Post-merger liquidity: Management reported preliminary pro forma cash, cash equivalents, short-term investments and restricted cash of approximately $565.5 million at December 31, 2023, including SomaLogic’s unaudited $449.8 million balance. This is not the audited Standard BioTools year-end balance.
- Debt and obligations: Total debt carrying value was $63.5 million, including $54.5 million of 2019 convertible notes due December 2024 and an $8.4 million term loan, including end-of-term fees. The term loan has a potential accelerated maturity of June 1, 2024 if specified convertible-debt or note-extension conditions are not met. Net operating lease payments were $36.8 million; supplier purchase commitments were $9.7 million.
- Other: The company recorded $6.5 million of merger-related transaction expenses in 2023. It reported $2.7 million in sublease income for the year and expects further sublease income; the filing gives differing future totals in separate disclosures, so the precise remaining amount should be verified.
Material changes versus FY2022
- Growth was driven by instrument placements, including the Hyperion XTi launch; management views a larger installed base as a potential source of future consumables and service revenue.
- Gross margin rose to 47.4% from 37.8%. Management attributed the improvement to higher revenue, manufacturing efficiencies, cost reductions and the absence of substantial 2022 inventory and product-discontinuation charges.
- Research and development expense declined 31% and selling, general and administrative expense declined 14%, reflecting lower spending, workforce reductions and a narrower genomics focus.
- Genomics revenue weakened following portfolio rationalization and reduced commercial and development activity; management is focusing that business on selected niche markets and OEM opportunities.
Outlook, risks and unusual items
- Outlook: No specific consolidated revenue or earnings guidance is provided. Management expects instrument-placement variability and says installed-base growth may support consumables and service pull-through. It anticipates merger synergies and new revenue opportunities but cautions that benefits, timing and integration are uncertain.
- Merger: SomaLogic shareholders received 1.11 Standard BioTools shares per share; they held approximately 57% of the combined company on a fully diluted basis at closing. Management cited preliminary combined-company FY2023 pro forma revenue of $192.4 million, including SomaLogic’s unaudited $86.1 million. The filing estimates aggregate merger-related transaction expenses at approximately $34.8 million, subject to change.
- Regulation: SomaSignal clinical tests are marketed as laboratory-developed tests. The FDA proposed a rule in October 2023 to phase out its general enforcement discretion for LDTs. Any new requirements could increase costs, delay tests or require premarket authorization; the outcome was uncertain at filing.
- Execution and controls: Integration, realization of synergies, retention of employees and combined-company financial controls are risks. SomaLogic had previously identified material weaknesses in internal controls; its remediation had not been tested for remediation at merger closing. Standard BioTools management concluded its own controls were effective at year-end 2023, but the auditor did not attest to internal-control effectiveness.
- Other key risks: Continuing losses and cash use; near-term debt maturities and covenant requirements; reliance on single- or limited-source suppliers; customer and geographic concentration (China represented 15% of 2023 revenue); seasonality and variable instrument sales; competition; and exposure to privacy, cybersecurity and healthcare regulation.
- Contingencies: Merger-related shareholder claims remained pending, including non-injunctive claims in Delaware; the company said litigation outcomes are uncertain. It did not expect currently pending matters to have a material adverse effect, while noting litigation may incur costs and distract management.
Investor verification checklist
- Confirm actual post-merger cash, debt, purchase-price allocation, transaction costs and combined-company results in subsequent filings; the pro forma figures here are unaudited.
- Check the status and terms of the $54.5 million 2019 Notes due December 2024 and whether the term-loan maturity trigger was avoided, extended or accelerated.
- Track whether instrument growth converts into sustained consumables and service growth, particularly given declining consumables and weaker genomics revenue in 2023.
- Assess the pace and cost of merger integration, realized synergies, and resolution of SomaLogic’s previously identified control weaknesses.
- Monitor FDA LDT rulemaking and any resulting effects on SomaSignal tests, commercialization, clinical evidence requirements and costs.
- Review the rights and potential dilution associated with the $311.3 million Series B redeemable preferred stock, as well as the merger’s fully diluted ownership split.