10-K: Seer Inc. Reports FY24 Results: Revenue Declines Amid Strategic Realignment

Seer Inc.'s 10-K filing reveals a decrease in revenue for fiscal year 2024, alongside ongoing efforts to commercialize the Proteograph Product Suite and manage operating expenses.

Summary

• Seer Inc.'s 10-K filing reports a net loss of $86.6 million for 2024, slightly higher than the $86.3 million loss in 2023.
• The company's accumulated deficit reached $392.4 million as of December 31, 2024.
• Revenue decreased by 15% to $14.17 million in 2024, compared to $16.66 million in 2023, primarily due to lower related party product sales and a lack of grant revenue.
• The cost of revenue also decreased by 13% to $7.11 million, mainly due to fewer instrument sales.
• Research and development expenses saw a 5% decrease, while selling, general, and administrative expenses decreased by 4%.
• The company's cash, cash equivalents, and investments totaled $299.5 million as of December 31, 2024.
• Seer believes its current financial resources are sufficient to fund operations for at least the next twelve months.
• The company is focusing on commercializing the Proteograph Product Suite, expanding its installed base, and growing its service offerings.
• A share repurchase program was approved, authorizing the repurchase of up to $25.0 million of Class A common stock.
• The company is managing its manufacturing strategy to ensure continuity and quality of supply, using both in-sourcing and outsourcing.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While the company highlights its technology and strategic initiatives, the financial results indicate a decline in revenue and continued net losses. The company's belief that it has sufficient resources for the next 12 months provides some reassurance, but the need for potential future capital raises introduces uncertainty.

Positives

• The company believes its current financial resources are sufficient to fund operations for at least the next twelve months.
• Cost of revenue decreased by 13% to $7.11 million, mainly due to fewer instrument sales.
• Research and development expenses saw a 5% decrease, while selling, general, and administrative expenses decreased by 4%.
• The company is expanding access to the Proteograph through direct sales, service centers, channel partners, and commercial partnerships.
• The Proteograph has detected over 36,000 proteins across multiple species, and its performance and capabilities have been demonstrated in over 33 peer-reviewed publications, preprints and reviews.
• In the first quarter of 2025, Seer announced a new supported application on Proteograph XT for cell lysate proteomics.
• In November 2024, Seer announced a co-marketing and sales agreement with Thermo Fisher Scientific.

Negatives

• Seer Inc. reported a net loss of $86.6 million for fiscal year 2024.
• Revenue decreased by 15% to $14.17 million, primarily due to lower related party product sales and a lack of grant revenue.
• The company's accumulated deficit reached $392.4 million as of December 31, 2024.

Risks

• The company faces risks related to commercialization, market acceptance, competition, and dependence on key personnel.
• Health epidemics and unfavorable economic conditions could adversely impact the company's business and operations.
• The company relies on single suppliers for some components of the Proteograph Product Suite, including a single contract manufacturer to manufacture and supply its instruments.
• The company may need to raise additional capital to fund commercialization plans for the Proteograph Product Suite, expand its investments in research, and develop and commercialize new products and applications.
• The company may acquire other companies, or their assets or technologies, enter into joint ventures, or make other strategic investments in companies, which could divert our managements attention, result in additional dilution to our stockholders and otherwise disrupt our operations and harm our operating results.
• If the company fails to maintain an effective system of internal controls, or otherwise fail to comply with the Sarbanes-Oxley Act of 2002, it may not be able to accurately and timely report its financial results, which may adversely affect its business and investor confidence in it and, as a result, the value of its Class A common stock.
• If the company elects to label and promote any of its products as clinical diagnostics tests or medical devices, it would be required to obtain prior approval or clearance by the FDA, which would take significant time and expense and could fail to result in FDA clearance or approval for the intended uses it believes are commercially attractive.
• If the company is unable to obtain, maintain and enforce sufficient intellectual property protection for its products and technology, or if the scope of the intellectual property protection obtained is not sufficiently broad, its competitors could develop and commercialize products similar or identical to ours, and its ability to successfully commercialize its products may be impaired.
• The company is currently subject to, and may in the future become subject to additional international and U.S. federal and state laws and regulations imposing obligations on how it collects, stores and processes personal information. Its actual or perceived failure to comply with such obligations could harm its business.
• If the company, or its vendors, partners or customers, experience a significant disruption in its information technology systems or breaches of data security, its business could be adversely affected.

Future Outlook

Seer expects to continue to incur significant losses and does not expect positive cash flows from operations for the foreseeable future. The company believes its current financial resources are sufficient to fund operations for at least the next twelve months.

Management Comments

• Our mission is to imagine and pioneer new ways to decode the biology of the proteome to improve human health.
• Our growth strategy is to continue building evidence in the market to demonstrate the Proteograph’s differentiated abilities to deliver unique, actionable biological insights.
• We aim to continuously innovate and develop new products, applications, workflows and analysis tools that simplify and accelerate researchers and clinicians ability to generate proteomic data and to connect proteomic data to genomic and transcriptomic data that drive novel biological insights.

Industry Context

Seer operates in the highly competitive life sciences technology industry, facing competition from established players like Agilent, Thermo Fisher Scientific, and emerging growth companies. The company is focused on differentiating itself through its proprietary nanoparticle technology and integrated Proteograph Product Suite.

Comparison to Industry Standards

• The document mentions a comparative study by Dr. Joshua Coon at the University of Wisconsin, which demonstrates the Proteograph Product Suite's performance against five other plasma proteomic technologies and methods.
• The study shows the Proteograph assay provides the greatest proteomic depth across the six technologies and methods tested.
• Thermo Scientific TM directly compared the breadth of the Proteograph Product Suite to other unbiased proteomics methods using the same biological sample.
• Using the Proteograph Product Suite, Thermo Scientific TM detected 6,033 proteins in plasma, representing 8.0x expansion in depth of protein coverage.

Related Party Transactions

• PrognomiQ constitutes a related party and, as of December 31, 2024 and 2023, the Company recorded $ 0.4 million and $ 0.6 million in related party receivables, respectively, on the consolidated balance sheets mainly due from product sales and service revenue.
• For the years ended December 31, 2024 and 2023, the Company recognized revenue of $ 2.5 million, of which $ 1.6 million was from product sales, and $ 4.7 million, of which $ 4.4 million was from product sales, respectively, from PrognomiQ and is presented as related party revenue on the consolidated statements of operations and comprehensive loss.
• On August 12, 2024, the Company entered into a preferred stock purchase agreement with PrognomiQ, pursuant to which the Company purchased $ 10.0 million of PrognomiQ's Series D Preferred Stock.

Stakeholder Impact

• Shareholders may experience volatility in the stock price due to the company's financial performance and market conditions.
• Employees may be affected by potential cost-saving measures and restructuring activities.
• Customers can expect continued innovation and product development, as well as expanded access to the Proteograph Product Suite.
• Suppliers and manufacturers are subject to the company's efforts to manage its supply chain and ensure continuity of supply.

Next Steps

• Continue building evidence in the market to demonstrate the Proteograph’s differentiated abilities to deliver unique, actionable biological insights.
• Expand our user base by continuing to enhance access to the Proteograph.
• Enable and deliver large cohort studies to accelerate the market for deep, unbiased, proteomics at scale.
• Innovate continuously to develop and commercialize additional transformative products to break down MS proteomic workflow barriers, access the proteome, and accelerate our understanding of biology.

Key Dates