{ "docId": "019dd923-622c-750b-8b9a-101b5bfde4b8", "docSlug": "a70fecd99534", "documentTitle": "Berkeley Lights (BLI)", "authorId": "58_Scorpion_Capital", "authorName": "Scorpion Capital", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2021-09-15 00:00:00", "orientation": "landscape", "aspectRatio": 1.2941177, "pageNumber": 138, "pageCount": 158, "prevPage": 137, "nextPage": 139, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 3, "notes": "Uses expert quotes to undermine the company's growth narrative.", "elementsJson": [ "headline_text", "paragraph", "quote_block" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9a-101b5bfde4b8/138", "deckHref": "/decks/019dd923-622c-750b-8b9a-101b5bfde4b8", "deckJsonHref": "/decks/019dd923-622c-750b-8b9a-101b5bfde4b8.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9a-101b5bfde4b8#slide-138", "components": [ { "bbox": null, "kind": "callout", "text": "Given the insignificant TAM, ex-employees indicated BLI is already saturated within the ~30 large biotech/pharma customers who can afford to pay $2MM: already “in most of them” who gave it a try; BLI fully penetrated the trivial cell line development opportunity years ago; company realized there “aren’t enough pharma companies” for the machine; already hit a “ceiling to the growth.”", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-2042-70a9-a1af-b5afed3637b1", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.2, "w": 0.9, "x": 0.05, "y": 0.65 }, "kind": "quote", "text": "Cell line development market is so negligible that BLI quickly penetrated the opportunity years ago; company realized there “aren’t enough pharma companies” for it; already hit a “ceiling to the growth” which is not much. “In 2016 we found a pretty good fit with cell line development. Over a year or so, through the process, I realized that there aren't enough pharma companies to keep doing this forever. You start off with cell line development, you have in the high tens of companies, maybe 60, 70. And then, you do about 10-20 campaigns a year and then have a 50 to 100 installed base... They've seen enough penetration, and it's kind of obvious that there's a certain ceiling to the growth. You can have some flow through, but the growth turns out to be not much” -Former BLI senior scientist", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "1a6f9d0c-1cfd-4198-a7ce-5edabd56f4e7", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.9, "x": 0.05, "y": 0.48 }, "kind": "quote", "text": "Already in most of the large pharma customers; “still a stretch” for companies with smaller research budgets. “While I believe the company has announced deals with smaller biopharma's now, it's still a stretch for the people with smaller research budgets. It's just a matter of what sort of assumption can you make on the penetration into medium biopharma's and CROs. If I had to rank the segments, I'd say large biopharma—yes—and they're in most of them.” -Former BLI executive", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "917bf164-9561-4276-95ea-8dba83df22f0", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.2, "w": 0.9, "x": 0.05, "y": 0.25 }, "kind": "quote", "text": "Only ~30 pharma companies that can afford $2MM BLI machine; almost all have already bought one to try it out. “One machine per $50B of market cap sounds like about a good bellwether. Typically, the customers that you'll see coming through first, big pharma that have $2 billion-plus research budgets a year, they buy one of everything, and they validate it. I'm pretty sure Berkeley Lights is in almost all of the big pharma's now. Big pharma's with a budget that size, there are 30-odd of them globally. Of course, the MAB space is a lot bigger than that, But that said, 30 of them have the budget to be buying pieces of equipment like that in that price range.” -Former BLI executive", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e83aef31-f495-4930-88da-b047d4fba460", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "“One machine per $50B of market cap sounds like about a good bellwether. Typically, the customers that you'll see coming through first, big pharma that have $2 billion-plus research budgets a year, they buy one of everything, and they validate it. I'm pretty sure Berkeley Lights is in almost all of the big pharma's now. Big pharma's with a budget that size, there are 30-odd of them globally. Of course, the MAB space is a lot bigger than that, But that said, 30 of them have the budget to be buying pieces of equipment like that in that price range.” — Former BLI executive; “While I believe the company has announced deals with smaller biopharma's now, it's still a stretch for the people with smaller research budgets. It's just a matter of what sort of assumption can you make on the penetration into medium biopharma's and CROs. If I had to rank the segments, I'd say large biopharma—yes—and they're in most of them.” — Former BLI executive; “In 2016 we found a pretty good fit with cell line development. Over a year or so, through the process, I realized that there aren't enough pharma companies to keep doing this forever. You start off with cell line development, you have in the high tens of companies, maybe 60, 70. And then, you do about 10-20 campaigns a year and then have a 50 to 100 installed base... They've seen enough penetration, and it's kind of obvious that there's a certain ceiling to the growth. You can have some flow through, but the growth turns out to be not much” — Former BLI senior scientist", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-2042-70a9-a1af-b84239c00dfc", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.3, "x": 0.05, "y": 0.96 }, "kind": "source-note", "text": "Source: Scorpion Capital consultation calls with experts", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6b2d03b4-bc43-4dde-9c70-bea99c6c3e02", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.9, "x": 0.05, "y": 0.08 }, "kind": "title", "text": "Given the insignificant TAM, ex-employees indicated BLI is already saturated within the ~30 large biotech/pharma customers who can afford to pay $2MM: already “in most of them” who gave it a try; BLI fully penetrated the trivial cell line development opportunity years ago; company realized there “aren’t enough pharma companies” for the machine; already hit a “ceiling to the growth.”", "attrs": null, "subkind": "action-title", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5ebf1251-2120-4e74-8d8d-1b20630ce1af", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.5, "x": 0.05, "y": 0.04 }, "kind": "title", "text": "Part 2) Former BLI employees/executives: Sales are close to saturated", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c57a5501-5fee-48d5-8051-058cd580fe30", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 150, "from": 42, "beatId": "172d6e2f-be3f-4802-92e5-e7e412ccdabe", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "Testimonials from Customers and Former Employees", "beatSlug": null, "evidence": "The document presents testimonials from customers and former employees, providing first-hand accounts of the challenges and limitations of Berkeley Lights' product.", "position": 2, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [ { "to": 144, "from": 136, "name": "Quick Win Big Bet", "slug": "47-quick-win-big-bet", "bestFor": "Transformation planning, 100-day plans, resource allocation", "matchId": "3eb28de0-fb75-4045-92e6-38c126678047", "evidence": "The document contrasts the potential outcomes of a 'quick win' versus a 'big bet' on Berkeley Lights, highlighting the risks and limitations of investing in the company.", "position": 1, "objective": "Contrasting the potential outcomes of a 'quick win' versus a 'big bet' on Berkeley Lights", "structure": "The Full List -> Quick Wins (Low effort, High impact) -> Big Bets (High effort, High impact) -> Sequenced Roadmap", "confidence": 0.6, "description": "Separate initiatives into immediate wins and longer-term strategic bets" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }