Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Nautilus Biotechnology Second Quarter 2025 Earnings Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Ms. Ji-Yon Yi, Investor Relations. Ma'am, please begin.

Earlier today, Nautilus released financial results for the quarter ended June 30, 2025. If you haven't received this news release or if you'd like to be added to the company's distribution list, please send an e-mail to investorrelations@nautilus.bio. Joining me today from Nautilus are Sujal Patel, Co-Founder and CEO; Parag Mallick, Co-Founder and Chief Scientist; and Anna Mowry, Chief Financial Officer. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking within the meaning of the federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section entitled Forward-Looking Statements in the press release Nautilus issued today. Except as required by law, Nautilus disclaims any intention or obligation to update or revise any financial or product pipeline projections or other forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast on July 30, 2025. With that, I'll turn the call over to Sujal.

Thanks, Ji-Yon, and thank you all for joining us. Q2 was a milestone quarter for Nautilus. Not only did we continue our momentum across both targeted and broad-scale proteomic development efforts, but we also publicly shared the first preprint to feature novel data generated using the Nautilus platform. We believe that this first-of-its-kind proteoform data across a range of important biological systems can only be generated on our platform. No other analysis method comes close. The manuscript now live on [indiscernible], represents nearly a decade of pioneering work by our team and collaborators. In it, we introduced and validate the application of our iterative mapping method, showing that it can measure proteoforms at a resolution and breadth never before possible. The results speak for themselves. Our approach demonstrated unprecedented dynamic range and industry-leading reproducibility. Even more exciting, early biological insights from this work suggests that iterative mapping may illuminate new mechanisms of tau biology, potentially opening the door to a new generation of neurodegenerative disease diagnostics and therapeutics. Parag will elaborate on these results presented in the manuscript shortly. We believe that this manuscript is both scientific validation and a significant external milestone for Nautilus and that it sets a new bar in the field of proteomics. I want to recognize the herculean efforts of our team as well as our partners at Genentech, the Neural Stem Cell Institute and Mount Sinai Health System. Zooming out, this quarter, we remained focused on building engagement around our tau proteoform assay and laying the foundation for external collaborations. Feedback from researchers is highly enthusiastic. Many now see Nautilus as a forerunner in decoding the complexity of post- translational modifications with the resolution necessary to drive meaningful biological and therapeutic breakthroughs. This enthusiasm is translating into real momentum. We've continued to deepen our conversations with academic, pharma and nonprofit partners and the ability to now reference our manuscript gives us a new level of credibility and visibility. The discussions we're having today are more strategic, focused not only on tau, but also broader use cases for targeted proteoform analysis across neurology, oncology and immunology. To provide more detail on our R&D efforts, let me now turn the call over to Parag. Parag?

Thanks, Sujal. Good morning, everyone. Q2 marked a major inflection point in our scientific journey. As Sujal mentioned, this quarter, we shared a preprint of a manuscript illustrating how our iterative mapping method enables a unique capability on the Nautilus platform, resolution of proteoforms at the single molecule level at scale. In traditional proteomic techniques, a protein is often treated as a single entity. But the reality is that proteins exist in many modified forms, each with their own distinct structure and function. These different variants are called proteoforms. Just like a single gene may have thousands of variants defined by mutations, a single protein may have thousands of different proteoforms defined by a combination of alternative splicing and multiple post-translational modifications. The prevalence of different proteoforms may ultimately influence the role a protein plays in disease and how best to therapeutically target it. Before I dive in, I'd like to clarify one important point. You'll hear from others that they are measuring proteoforms. However, the reality is that only platforms that look at intact protein molecules and are able to interrogate multiple positions on those molecules are capable of examining proteoforms with the necessary resolution. Existing affinity-based methods such as Olink, SomaScan or LMR are able to report the relative amount of a protein, but they typically do not measure modifications of those proteins and certainly not the co-occurrence of those modifications on individual protein molecules. Likewise, peptide-based methods, such as employed by Shotgun mass spectrometry or even single molecule peptide sequencing methods entirely lose the contextual information required to know that multiple modifications are co-occurring on a single protein molecule. Any peptide-based measurement method cannot measure proteoforms. Consequently, we believe that the Nautilus platform is the only platform that has been designed to readily quantify the thousands of…

Thanks, Parag. This quarter marks a shift from what could be to what is. We've now shown publicly, rigorously and reproducibly that the Nautilus platform can do what others cannot, and this is only the beginning. Earlier this week, we presented our data from our tau manuscript at the Alzheimer's Association International Conference, AAIC in Toronto. The conference served as an excellent venue to highlight the capabilities of our platform and get feedback on the potential impacts that high-resolution proteoform analysis of proteins like tau might have to neurodegenerative disease research. Throughout the event, we spoke with a broad range of researchers and potential customers, spanning the academic, nonprofit and pharma sectors. Conversations consistently centered around the gaps that exist in understanding of disease progression in Alzheimer's. We heard from several researchers about the conundrum of single PTM measurements of p-tau217. Despite being FDA approved for Alzheimer's diagnosis, it's been observed that p-tau217 is abundant not only in patients with AD, but also in young children. Furthermore, p-tau217 tests have a high false positive and negative rates and do not predict disease trajectory. Researchers are excited about the implications of Nautilus' work for generating more precise ways to stage and prognose disease. They're also excited about how understanding the proteoform landscape might inform therapeutic development by helping identify which model systems are most reflective of human disease and which tau species to target. One other surprising area of interest was in using a patient's proteoform landscape to distinguish among various tauopathies such as frontotemporal dementia and progressive supranuclear palsy. The scientific community showed clear enthusiasm for the specificity and resolution our platform offers in analyzing proteoforms that have historically been impossible to quantify at this level of detail. These interactions reinforce our belief that the ability to measure tau at…

Thanks, Sujal. Total operating expenses for the second quarter of 2025 were $17.1 million, an 18% decrease from $20.8 million in the same quarter of 2024. This result is attributable to a reduction in personnel costs from the headcount reduction we implemented in Q1 as well as normal variability in the timing of R&D activities and ongoing cost optimization efforts. We also saw a meaningful decrease in stock compensation expense year-over-year. Research and development expenses were $10.4 million, down from $12.4 million a year ago, while general and administrative expenses were $6.7 million, down from $8.4 million in Q2 2024. Net loss for the quarter was $15.0 million compared to $18.0 million in the prior year period. We ended the quarter with approximately $179.5 million in cash, cash equivalents and investments and continue to project a cash runway that extends through 2027. While we're planning for a pickup in research and development spending in the second half of the year, we anticipate that total operating expenses for the full year of 2025 will remain below 2024 levels while still supporting critical platform development and early-stage partnership activities. Back to you, Sujal.

Thanks, Anna. We're incredibly proud of the Nautilus team for the science we're advancing, the platform we're building and now the data we're publishing. With the public release of our first manuscript, we reached an exciting new phase. The world can now see and evaluate our technology on its own merits. Our foundation is solid. Our belief in the mission has never been stronger, and we're excited about our path forward. Thanks for joining us today. And with that, we'll open the call for questions. Operator?

[Operator Instructions] Our first question or comment comes from the line of Dan Brennan from TD Cowen.

Great. And obviously, congrats on the presentations at the event and the manuscript. Maybe just kind of starting off on the reaction so far from the field. You discussed the reaction is so strong and you walked through just how unique this targeted approach is. But at the same time, you talked about the need to kind of build awareness and educate, because it is so different. I'm just trying to kind of reconcile both of those. Maybe could you speak a little bit to maybe the kind of early collaborators who you signed up and kind of what the pipeline of demand looks like and kind of how you think this might manifest in actual projects and/or revenues as we look out over the next 18 months?

Dan, this is Parag. I'll take the first part. I was at AAIC talking to researchers in the field. And it was -- what was so striking was that there's a tremendous interest on the part of folks in the AD community for better ways to understand the disease that we have new markers like p-tau217, [indiscernible] that are showing greater specificity, but they also aren't predicting the course of the disease. They aren't able to be used effectively as surrogate endpoints in clinical trials. They aren't able to predict which therapeutics might work in different populations, and they aren't able to stratify amongst a variety of tauopathies. And so there's also -- we had one researcher that we sat down with who essentially said -- I mean verbatim that proteoforms are critical for understanding disease, understanding how tau itself forms fibrils that are the underlying root of many of the symptoms of the disease. And so those statements about the criticality of proteoforms in understanding and making progress in Alzheimer's disease was in every conversation that we had. And so it was pretty exciting. Even though it is a new measurement, there has been a recognition that the current class of biomarkers for tau and mechanisms for understanding of tau are focused not on total tau. They're focused either on PTMs of tau, truncations of tau. And so I think that recognition that it is not just the whole protein, but all the different flavors of it, all the different proteoforms of it are critical to understand.

I'll take -- this is Sujal. I'll take the second half of the question. And your question really was around pipeline and how we see the opportunity for the tau proteoforms to develop. I think the first thing I want to highlight was in the prepared remarks, but I just want to put an exclamation point on it. The go-to-market activities on the proteoform side and the proteome side will be a bit different. On the proteome side, just to address that first, our customers know what to do with complete proteomic data. They are looking for better tools to analyze the proteome. They're looking for ways to do proteomic analysis in a more effective and easier-to-use way, and they have existing budget pools. And so that's a technology when we release our proteome product, the end of 2026, we expect to have more significant, faster ramp-up in terms of revenue and instrument adoption. In contrast, the proteoform opportunity, which I view as just as exciting as proteomes, will take longer to develop. And when I say developed, I mean, market development types of activities to show the world what's possible with proteoforms and then as well for us to develop assays for each individual biomarker one at a time, starting in neurodegeneration and starting with tau. And so what we're doing in terms of our activities with tau and our early partners, I think, is an exemplar of what we'll do as we continue to roll out more biomarkers. Today, our -- the majority of our focus has been on early collaborations with academic and nonprofit partners focused on trying to show the power of this data and have the types of biological insights that enable us to go to a conference like AAIC and have meaningful conversations with biologists, which is something that's a bit different than you typically do at a conference like HUPO on the proteome side. From that point, I also expect that we will be signing early types of like pilot agreements with pharma organizations who are looking to start to incorporate this proteoform data as we start to show what the potential is into their workflows. And then those pilot agreements in the longer term will lead to revenue-generating agreements. So right now, our focus is not on revenue. Our focus is on market development and showing the world what the power of this technology is. We're interested in continuing to advance our tau assay to the point where we can more broadly allow customers access to it, and we'll talk about that more in the coming quarters. And then we're interested in developing our proteoform pipeline and the next biomarkers. But as well, as I said in the prepared remarks, we are very careful to balance our resources between broadscale and proteoforms considering that we continue to believe that while both are incredibly exciting, broad scale represents a faster revenue top line ramp type of opportunity.

Great. And maybe I'll just ask one more. Even though the proteome is really the focus, I'm sure others will get to that. Maybe just on this manuscript, when do you think it will be published? And what type of journal do you think you would hope to get this published in? And then what type of revenue knowing that the proteome is really the bigger and easier opportunity if you can achieve kind of what you hope to achieve on this proteoform product, what type of -- like how would you size the opportunity for this product?

I'll pass it to Parag to give you the first part, and then I'll tackle the second here again.

Sure. We do look at this as a seminal manuscript as something that's very important for us in our future. We've sent it out for peer review. We think it will -- that's an important aspect and the manuscript will further improve through that feedback. The places that one would hope a seminal manuscript are, of course, the big 3. And so the time line for that, of course, is incredibly variable, and it depends in part on the journal and the reviewer process. And so it's probably best not to speculate on when publication in a journal will come out. But our hope is certainly for it to be in a high-impact journal.

So Dan, on the second part of your question, I think we're in the pretty early stages of trying to size what an opportunity like this looks like. If I look out at the opportunity over the course of the next 5, 6, 7 years, it's certainly an opportunity that has the potential just in proteoforms alone to be a multi-hundred million dollar business for us. But the question still is open on the proteoform side, will we just let the world have access to all this data without any sort of upside for Nautilus depending on what we find, will we form partnerships that are focused on therapeutic development or DX development and share in the upside. The proteoform work because the data is absolutely not generatable in any other method, gives us more optionality on the types of business models we'll pursue. And so I don't have an exact answer of how that will roll out. But I do know from just the early conversations around neurodegeneration and then what we've heard in wider oncology and autoimmune and other areas that proteoforms are incredibly exciting. And we -- while we think it's a really exciting opportunity, it's going to take some market development. So when I think about revenue, I don't think about any revenue this year from these types of activities. And I think about it starting -- proteoform starting small next year. And I think about proteomes starting at the end of next year and ramping very quickly in 2027. So that's how I think about them differently.

Our next question or comment comes from the line of Subbu Nambi from Guggenheim.

Congratulations on the publication. From the tau manuscript, where did you get the most inbounds in terms of customer profile? And can you share any other information on the funnel?

Yes. So Parag, do you want to take the first half? I'll take the funnel question.

Sure. I think we've actually seen a tremendous amount of interest from academic groups reaching out, from pharma reaching out and from nonprofit research institutes reaching out. So it's actually been across the board.

Yes. And Subha, in terms of the funnel, I think it's really early to talk about what's in the funnel and how is it developing, especially considering that our biggest development activity just occurred in the last 72 hours or 96 hours at AAIC. AAIC, I think, has 8,000 in- person attendees compared to a conference like HUPO, which is our big proteome conference, this is 4x the number of researchers, plus -- more than 4x. And so this was a really big opportunity to get in front of customers. And I would say in terms of net new conversations, we probably had 3x, 4x, 5x more net new conversations this week than we did in the entire year before that. And so I think it's really early. I will tell you the types of early interest matches sort of what I said in the earnings call script. It's academic institutions, academic PIs, nonprofit research organizations, nonprofit foundations focused on neurodegeneration. We're finding some early groups inside of pharma who are interested in doing pilots to see how this proteoform data adds a new dimension to their therapeutic development programs. And so those are the types of things that we're seeing, but really still pretty early. I think over the course of the next 2 quarters, we'll see some more development on that front, and we'll be able to say more.

And so, just a follow-up to that. Does having these 2 collaborations now actually help you show a former proof of concept? Or you think these are independent?

So I think that the 2 collaborations that we've recently signed here, I think, are focused on a few different things, right? First and foremost, both of them are focused on reproducing the data that we have on our samples that we talked about in our manuscript. They're focused on increasing the number of biological samples that we have that have gone through our platform and starting to take some of those insights and showing the world what the power of proteoforms are. And then in addition to that, another key goal for us is that because proteoforms and proteomes share the same platform, each of these collaborations is serving to harden our core platform, to harden our consumables and to work through some of the kinks that you'd have to work through during an early access program on proteomes doing those earlier with proteoforms today. And so I think for all of those reasons, I think this work that we're doing with these collaborations and others to come is really quite strategic for us.

Got it. And one last one. I know you guys have decided to not give any additional specific update on probe performance, but any reason you decided to not do that moving forward?

Yes. So just to clarify, I didn't say we wouldn't do it going forward. We will certainly do that in the coming 2 quarters. We didn't do it today because if you recall sort of our comments for the year, at the beginning of the year, we introduced this assay configuration change. And the assay configuration change was focused on rebuilding a piece of our assay so that a greater number of the probes that we've already developed and that are in development would be able to run properly on our platform and in the assay. And so we -- at the beginning of the year, too many of our thousands of probe candidates did not function properly on the platform, did not have the specifications needed to hit their performance targets in our assay. So instead of going and building thousands and thousands and thousands of more candidates, we took a pause to change the assay configuration and get to the point where a greater percentage of those will be working on the platform. The assay configuration work is a multi-quarter exercise. It's proceeding on target and at the pace of our expectations, we just in the last few weeks, hit a point where all of the pieces of our assay configuration change came together so that we can start to test the entire probe library and the new configuration. And so the next couple of quarters will be critical for us to making that transition fully into the new assay configuration. And once we have a yield percentage or some sense of how many of those probes are functioning well in the new configuration, we certainly will give you some guidance.

[Operator Instructions] I'm showing no additional questions in the queue at this time. Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.