Nautilus Biotechnology, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. Unaudited results; comparisons are with the three months ended March 31, 2023. Amounts are in U.S. dollars.
Business context
Nautilus is a development-stage life sciences company developing a proteomics platform comprising instruments, consumables, and software. It has no products available for commercial sale and has generated no revenue. The company is currently working with a small number of research customers in a collaboration and product-validation phase.
Key financial metrics
| Metric | Q1 2024 | Q1 2023 / comparison |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $12.9 million | $10.9 million; up 19% |
| General and administrative expense | $8.7 million | $7.2 million; up 21% |
| Total operating expenses | $21.6 million | $18.1 million; up 20% |
| Interest income | $2.9 million | $3.1 million; down 7% |
| Net loss | $18.7 million | $15.0 million; loss increased 25% |
| Net loss per share, basic and diluted | $0.15 | $0.12 |
| Net cash used in operating activities | $16.3 million | $12.5 million |
Gross margin and product margins are not applicable because Nautilus has no revenue. Q1 expenses rose mainly due to higher compensation and headcount, laboratory supplies and equipment, facilities costs, and professional fees.
At March 31, 2024, cash and cash equivalents were $25.7 million, short-term investments $155.6 million, and long-term investments $66.3 million—$247.7 million in cash, cash equivalents, and investments combined. Cash, cash equivalents, and short-term investments totaled $181.4 million. Current assets were $185.1 million and current liabilities $9.2 million. Total liabilities were $39.2 million, including $33.6 million of operating lease liabilities; the filing reports no borrowings or other funded debt.
Cash and cash equivalents plus restricted cash increased $6.3 million to $26.7 million during the quarter. Investing activities provided $22.4 million, primarily from maturities of securities; operating activities used $16.3 million. Accumulated deficit was $221.0 million.
Changes, outlook, and risks
- Management expects cash, cash equivalents, and short-term investments to fund planned operating expenses and capital expenditures for at least the next 12 months. It also expects significant losses and negative operating cash flows to continue, and says additional capital may be needed.
- The commercial plan has three phases: collaborations and validation, early access, then broader commercialization. Management anticipates early-access engagements and associated revenue in 2025 and expects broad commercialization in 2025; neither timing nor revenue is assured.
- Based on customer feedback, the company is refining initial launch specifications, including sample input and proteome coverage. Management believes later consumable releases could enable previously announced specifications.
- In February 2024, Nautilus established an at-the-market equity program allowing sales of up to $125 million of common stock. No shares were sold under the program in Q1. Future sales could dilute existing shareholders.
- Key risks include successful technical validation and commercialization, customer adoption, manufacturing scale-up, dependence on single-source suppliers and third-party partners, competition, and the need for future financing.
- Nautilus is pursuing a declaratory judgment against Standard BioTools (formerly SomaLogic) and the California Institute of Technology concerning alleged infringement of a DNA-origami patent. The company says it believes it will prevail but notes litigation may be costly and unpredictable.
- The filing reports an unauthorized-access incident involving an employee account in January 2024. The company says it did not materially disrupt operations or materially affect financial or operating results.
- Open purchase commitments were $2.4 million, of which $1.8 million were expected to be received within 12 months. Future minimum operating lease payments were $44.6 million before $11.0 million of imputed interest.
Important facts for investors to verify
- Whether platform validation, launch specifications, and the stated 2025 early-access and commercialization plans progress as expected.
- Quarterly operating cash use and whether the stated liquidity runway remains adequate as development and commercialization spending grows.
- Any future ATM share sales, other financing, and resulting dilution.
- Supplier and manufacturing readiness, customer adoption evidence, and the outcome and potential costs of the patent litigation.