908 Devices - $MASS
The future of democratized mass spectrometry
The Market and Opportunity:
Mass Spectrometry or MS is:
Kevin J. Knopp, CEO and Co-founder. “Our vision is to break mass spectrometry out of the confines of a centralized laboratory and bring it to the point-of-need.
The best methods of analysis today run in centralized labs using the gold-standard technology of Mass Spec. It is highly regarded for its ability to provide an exquisite amount of detail across a wide variety of samples— from small drug molecules to massively large and complex proteins. Conventional Mass Spec is the supercomputer of the centralized analytical lab. They are extremely powerful analytical tools, but they are also large, expensive, and pretty complex.
At 908, we are seeking to reimagine where Mass Spec technology can be used if it is sufficiently small in size, low in cost, and simple to operate. We are driven to bring Mass Spec to the masses
Application Use-Cases:
Narcotics Detection
Drug Discovery , Research, (Proteomics - analysis of proteins)
Explosive Tracing - Diagnostics and identification of trace amounts of explosives, chemicals and drugs using field confirmatory Mass Spectroscopy
bioprocessing, industrial biotech , etc.
Products:
ZipChip: The ZipChip platform radically improves sample separation and MS workflow efficiencies for both small and large molecule analysis in biopharmaceutical labs. The platform’s expanded reach lets even more MS researchers take advantage of its rapid, high-resolution separations. The company also introduced new extended-life chips and a Native Antibody Assay Kit to their ZipChip consumable line up.
The ZipChip platform lets scientists consolidate a host of time-consuming biotherapeutic, metabolomic and proteomic applications typically run on multiple instruments or configurations onto a single platform. Running more than one application in any given day with traditional chromatographic/liquid chromatography (LC) techniques isn’t always practical as the changeover can take several hours. With ZipChip, researchers can be up and running new applications in under 30 minutes with a simple chip switch. Anything from large complex proteins to small molecules can be run with 3-minute separations and direct electrospray into the MS for analysis, resulting in in better separation quality than most LCs in a fraction of the time. The new ZipChip Native Antibody Kit utilizes a simple prep process and gentle conditions to separate charge variants, resulting in high-quality, fully-native mass spectra, and clean resolution of glycoforms. New extended-life ZipChips maximize MS efficiency allowing up to 250 samples per chip, compressing a typical 5-day process into less than 24 hours.
Increased the installed base to 1,361 devices with 390 devices placed in 2020
Management:
Competition:
Thermo Fisher Scientific’s Fusion™ Lumos™ and TSQ mass spectrometer (MS) product lines, and the SCIEX Triple Quad and QTRAP® series instruments.
Financials and Highlights:
Financial Highlights
2020 revenue increased 50% year over year to $26.9 million
2020 gross margin increased to 55% from 45% in prior year
Completed initial public offering in December 2020, raising approximately $150 million in gross proceeds
Expect full year 2021 revenue to be in the range of $38 million to $40 million, representing 45% growth over full year 2020, at the midpoint of the range
Revenue was $26.9 million for the full year 2020, a 50% increase from $18.0 million for the full year 2019. Product and service revenue was $24.8 million compared to $15.3 million in the corresponding prior year period. License and contract revenue was $2.1 million compared to $2.6 million in the corresponding prior year period.
The install base grew to 1,361 in 2020, with 390 devices placed in 2020, compared to 248 devices in 2019. This was driven by an increase in MX908 devices due to progress on pilots and deployments, as well as the first full year of selling Rebel.
Gross profit was $14.9 million for the full year 2020, compared to $8.1 million for the corresponding prior year period. Gross margin was 55%, as compared to 45% for the corresponding prior year period. This increase was mainly due to scale and pacing of investments with COVID uncertainties in 2020.
Operating expenses were $20.7 million for the full year 2020, as compared to $20.3 million for the corresponding prior year period.
Net loss attributable to common stockholders was $12.9 million for the full year 2020, as compared to $13.5 million for the corresponding prior year period. The increased gross profit was primarily offset by the non-cash $6.1 million preferred stock warrant charge. Net loss per share attributable to common stockholders was $2.35 for the full year 2020, as compared to $2.70 for the corresponding prior year period.
Cash, cash equivalents and marketable securities were $159 million as of December 31, 2020. This included approximately $150 million in gross proceeds, including the full exercise of the underwriters’ options to purchase additional shares, from the Company’s initial public offering in December 2020. In addition, the Company has approximately $15 million of debt outstanding.
Stock Metrics and Decision
Market Cap: 1.44 B
EV/Sales FY2021 (Revenue of $40M expected) : 36X
TAM: MS market $7.8B by 2023. Point of need MS solutions a fraction of it, even at 1/2 of total TAM for MS. Still quite a significant market cap of total TAM.
TAM s are always fluid, and speculative. This could indeed be much larger TAM , and could expand to adjacent markets like proteomics.
Given the current huge biotech valuations, I will bide my time and pass on this for now.
Investment Decision - PASSRecent News:
U.S. Army multi-year contract (until 2025) of $25M (delivered by 2023)
Looking forward to and beyond 2021 - blog
Other Resources:
Miniaturization: Mass Spectrometry
About 908 Devices (From their Site)
908 Devices is democratizing laboratory mass spectrometry with its simple handheld and desktop devices, addressing critical-to-life applications. The Company’s devices are used at the point-of-need to interrogate unknown and invisible materials and provide quick, actionable answers to directly address some of the most critical problems in life sciences research, bioprocessing, pharma / biopharma, forensics and adjacent markets. The Company is headquartered in the heart of Boston, where it designs and manufactures innovative products that bring together the power of mass spectrometry, microfluidic separations, software automation, and machine learning.