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Item 1. Business

2024-02-28 compared with 2023-02-23 · 65 added, 87 removed, 699 unchanged (18% of the section changed)

BACKGROUND OF BUSINESS COMBINATION

On June 9, 2021 (the “Closing Date”), Nautilus Biotechnology, Inc., a Delaware corporation (f/k/a ARYA Sciences Acquisition Corp III, a Cayman Islands exempted company and our predecessor company (“ARYA”)), consummated the previously announced business combination (the “Business Combination”) pursuant to the terms of that certain Business Combination Agreement, dated as of February 7, 2021 (the “Business Combination Agreement”), by and among ARYA, Mako Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of ARYA (“Mako Merger Sub”), and Nautilus Subsidiary, Inc., a Delaware corporation (f/k/a Nautilus Biotechnology, Inc.) (“Legacy Nautilus”).

Pursuant to the terms of the Business Combination Agreement, on the Closing Date, (i) ARYA changed its jurisdiction of incorporation by deregistering as a Cayman Islands exempted company and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication”), upon which ARYA changed its name to “Nautilus Biotechnology, Inc.” (together with its consolidated subsidiary, the “Company” “New Nautilus” or “Nautilus”) and (ii) Mako Merger Sub merged with and into Legacy Nautilus (the “Merger”), with Legacy Nautilus as the surviving company in the Merger and, after giving effect to such Merger, Legacy Nautilus becoming a wholly-owned subsidiary of New Nautilus.

Upon the Domestication, all of the outstanding Class A and Class B ordinary shares of ARYA were exchanged for an equivalent number of shares of common stock of New Nautilus, par value $0.0001 per share (“Common Stock”).

In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the effective time of the Merger (the “Effective Time”), (i) each share of Legacy Nautilus outstanding as of immediately prior to the Effective Time was exchanged for shares of Common Stock of New Nautilus, and (ii) all vested and unvested options to purchase shares of Legacy Nautilus were exchanged for comparable options to purchase shares of Common Stock of New Nautilus.

Concurrently with the execution of the Business Combination Agreement, ARYA entered into Subscription Agreements (each, a “Subscription Agreement”) with certain investors (each, a “PIPE Investor”), pursuant to which the PIPE Investors subscribed for and purchased, and ARYA issued and sold to the PIPE Investors, on the Closing Date immediately prior to the Effective Time, an aggregate of 20,000,000 shares of New Nautilus Common Stock at a price of $10.00 per share (the “PIPE Shares”), for aggregate gross proceeds of $200,000,000 (the “PIPE Financing”).

ARYA granted the PIPE Investors certain registration rights in connection with the PIPE Financing.

Also concurrently with the execution of the Business Combination Agreement, ARYA entered into the Amended and Restated Registration Rights and Lock-Up Agreement with certain stockholders of ARYA and Legacy Nautilus, which obligated the Company to register the resale of certain shares of our Common Stock issued in connection with the Domestication and the Business Combination.

As of the open of trading on June 10, 2021, the Common Stock of the Company began trading on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “NAUT.”

Unless expressly indicated or the context requires otherwise, the terms “Nautilus,” “New Nautilus,” the “Company,” the “Registrant,” “we,” “us” and “our” in this Form 10-K refer to Nautilus Biotechnology, Inc., the parent entity formerly named ARYA Sciences Acquisition Corp III, after giving effect to the Domestication and the Business Combination, and as renamed Nautilus Biotechnology, Inc., and where appropriate, our wholly-owned subsidiaries (including Legacy Nautilus).

On June 9, 2021 (the “Closing Date”), Nautilus Biotechnology, Inc., a Delaware corporation (f/k/a ARYA Sciences Acquisition Corp III (“ARYA”)), consummated the business combination (the “Business Combination”) pursuant to the terms of that certain Business Combination Agreement, dated as of February 7, 2021 (the “Business Combination Agreement”), by and among ARYA, Mako Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of ARYA (“Mako Merger Sub”), and Nautilus Subsidiary, Inc., a Delaware corporation (f/k/a Nautilus Biotechnology, Inc.) (“Legacy Nautilus”).

The Business Combination Agreement provided for, among other things, (i) the domestication of ARYA as a corporation incorporated under the laws of the State of Delaware, upon which ARYA changed its name to “Nautilus Biotechnology, Inc.” (together with its consolidated subsidiary, the “Company” “New Nautilus” or “Nautilus”) and (ii) the merger of Mako Merger Sub with and into Legacy Nautilus (the “Merger”), with Legacy Nautilus as the surviving company in the Merger and, after giving effect to such Merger, Legacy Nautilus becoming a wholly-owned subsidiary of New Nautilus.

Concurrently with the execution of the Business Combination Agreement, ARYA entered into Subscription Agreements (each, a “Subscription Agreement”) with certain investors (each, a “PIPE Investor”), pursuant to which the PIPE Investors subscribed for and purchased, and ARYA issued and sold to the PIPE Investors, on the Closing Date, an aggregate of 20,000,000 shares of common stock of New Nautilus (“Common Stock”) for aggregate gross proceeds of $200,000,000 (the “PIPE Financing”).

As of the open of trading on June 10, 2021, the Common Stock began trading on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “NAUT.”

Unless expressly indicated or the context requires otherwise, the terms “Nautilus,” “New Nautilus,” the “Company,” the “Registrant,” “we,” “us” and “our” in this Form 10-K refer to Nautilus Biotechnology, Inc., the parent entity formerly named ARYA Sciences Acquisition Corp III, and where appropriate, our wholly-owned subsidiaries (including Legacy Nautilus).

We are a development stage life sciences company creating a platform technology for quantifying and unlocking the complexity of the proteome.

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Unlike the genome, which is largely unchanging throughout an individual’s lifetime, the proteome is an ever-changing source of biological information.

Our proteins directly control and determine the functions of our cells, yet we lack the ability to measure all of them with the ease, breadth and sensitivity that is used to measure DNA

Our proteins directly control and determine the functions of our cells, yet we lack the ability to measure all of them with the ease, breadth and sensitivity that is used to measure DNA today.

We believe that deep characterization of the proteome will have the potential to unveil an entirely new layer of complexity and valuable biological information that may have significant implications across life sciences, healthcare and drug development.

Approximately 95% of FDA-approved drug targets are proteins, and yet today we still lack the ability to routinely read and quantify all of the proteins in our cells, or to fully map the downstream changes and modifications to those proteins which may define their biological function.

By leveraging our novel design coupled with advanced machine learning software, we believe our Nautilus platform, which includes our end-to-end solution comprised of the proteome analysis system, consumables, and software, has the potential to rapidly and reproducibly identify approximately 95% of proteins in a sample from virtually any organism, and could have the ability to detect and map the diverse landscape of modifications on those proteins.

By leveraging our novel design coupled with advanced machine learning software, we believe our Nautilus platform, which includes our end-to-end solution comprised of the proteome analysis system, consumables, and software, has the potential to rapidly and reproducibly identify up to approximately 95% of proteins in a sample from virtually any organism, and could have the ability to detect and map the diverse landscape of modifications on those proteins.

We believe that unlocking proteomics has the potential to create a long-term transformation of basic science, translational research, and healthcare.

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For years, these methods have facilitated novel drug development and improved diagnostics.

As with most technology platforms however, these also suffer from distinct limitations that make simple, high-throughput, ultra-deep characterization of the proteome challenging.

As with most technology platforms however, these also suffer from distinct limitations that make

simple, high-throughput, ultra-deep characterization of the proteome challenging.

Mass spectrometry approaches have tremendous flexibility and thus have been applied to a wide range of applications, however their use requires a trade-off to be made between either depth or throughput;

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In our third phase of commercialization, we intend to execute a broad commercial launch of our Nautilus platform including the introduction of our proteome analysis system, which is an integrated fluidics and optics system for massively parallel single protein molecule detection, accompanied by consumable reagents and analysis software, in direct sales to customers across academia and industry.

The launch of our proteome analysis system is expected to be done with a multi-year product roadmap of system enhancements and new applications designed to help our

customers achieve their research objectives and expand the utility of our Nautilus platform.

The launch of our proteome analysis system is expected to be done with a multi-year product roadmap of system enhancements and new applications designed to help our customers achieve their research objectives and expand the utility of our Nautilus platform.

We also plan to leverage our machine learning software to build a data analysis and insights engine that improves over time as we grow our data sources and the analysis learns to deliver better accuracy and identify new potential discoveries.

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• Commercial model with clear market entry point, designed to support a wide variety of customers and applications.

Many successful life sciences research tools companies with disruptive technology have employed a business model

similar to our planned commercial model.

Many successful life sciences research tools companies with disruptive technology have employed a business model similar to our planned commercial model.

However, we believe a key advantage for us is the near-term commercial opportunity of capitalizing on the existing mass spectrometry-based proteomics marketplace estimated at over 16,000 installed systems.

Our price point is expected to be in-line with mass spectrometry system budgets allocated for broad scale proteomics applications, and thus with a premium instrumentation average selling price, or ASP, we plan to operate with a very efficient sales model.

Our price point is expected to be in-line with mass spectrometry system budgets allocated for broad scale proteomics applications, and thus with a premium instrumentation average selling price, we plan to operate with a very efficient sales model.

Further, since the early days of our product development, we have consulted with biopharma companies, academic institutions and research organizations to inform our product development plan and specifically address our target customer needs.

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We believe there are multiple high-value research applications in precision and personalized medicine, drug discovery, and clinical diagnostics that can be unlocked by accurate, reproduceable, and cost effective proteomic profiling.

As the proteomics market continues to mature, and if our technology is validated across translational research applications, we believe our Nautilus platform could transfer well into the clinical setting prior technologies have thus far been unable reach.

As the proteomics

market continues to mature, and if our technology is validated across translational research applications, we believe our Nautilus platform could transfer well into the clinical setting prior technologies have thus far been unable reach.

• Our experienced, multidisciplinary team brings together a group of individuals with diverse backgrounds to disrupt the field of proteomics.

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We recognize that these opportunities extend into ancillary markets across life sciences, including clinical and translational research, and clinical diagnostics, where we believe there are substantial unmet needs our Nautilus platform can address in the future.

We expect to drive expansion into these adjacent markets by developing and validating new product configurations and workflows targeting high impact applications, either by adapting our existing workflows or by partnering with leaders in those markets to develop workflows that address their immediate needs and will provide broader general value for other customers in that market segment.

We expect to drive expansion into these adjacent markets by developing and validating new product configurations and workflows targeting high impact applications, either by

adapting our existing workflows or by partnering with leaders in those markets to develop workflows that address their immediate needs and will provide broader general value for other customers in that market segment.

A PRIMER ON PROTEOMICS

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Proteomics is the next step in the study of biological information systems and is believed by many to be one of the most important disciplines for exposing disease-causing protein pathways, uncovering new drug targets, highlighting novel therapeutic indications and identifying clinically relevant biomarkers for use in precision medicine.

Molecular profiling techniques, such as NGS, have led to widespread genomic characterization and sequencing.

While this information has augmented our knowledge of biological systems, the detail at the protein level remains largely unknown.

Proteomics seeks to address this gap, and is an emerging scientific field that involves the identification, characterization, and quantification of proteins in whole cells, tissues, or body fluids.

Molecular profiling techniques, such as next generation sequencing (NGS), have led to widespread genomic characterization and unprecedented access to genomic information.

While this information has certainly enhanced our knowledge of complex biological systems, there is still a tremendous amount of detail at the protein level that remains largely unknown.

The field of proteomics seeks to address this gap, and is an area of scientific research that involves the identification, characterization, and quantification of proteins in whole cells, tissues, or body fluids.

To date, there has been very little technological advancement in how to physically measure a protein, and this has been a major impediment towards creating the same level of access to proteomic detail as we have with genomic detail today.

The proteome ultimately drives the function of a cell and tissue, and therefore it dictates the physically observable characteristics known as the phenotype.

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However, if proteins captured in a sample can be repeatedly probed, it becomes possible to gain far more insight on the individual molecules.

With our platform, each protein molecule has a unique coordinate address on the flow cell, and repeated probing enables deeper characterization of each individual molecule with each cycle, unlocking the ability to characterize proteoforms and ultimately decode the whole proteome.

Nautilus Platform Multi-Cycle Affinity Probe Reagent Binding, Imaging, Washing, and Re-Binding

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In addition, the protocol is highly compatible with standard lab automation equipment and workflows, which is expected to further minimize the effort required while increasing laboratory processing throughput.

Also, unlike existing shotgun proteomics methods, no sample protein digestion is required in our method which in turn makes the workflow very

Also, unlike existing shotgun proteomics methods, no sample protein digestion is required in our method which in turn makes the workflow very simple.

The result is a process that is expected to effectively prepare a sample into a library ready to load on the flow cell with approximately 2-3 hours of hands-on time completed over a 2 day period.

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An analysis of nearly 1,000 flow cells showed typical sample loading of single protein libraries yielded near complete flow cell occupancy, which demonstrates the speed and efficiency of our sample handling process.

Flow Cell Loading Demonstrates Approximately 97% of Flow Cell is Occupied with Protein Library

Nautilus Platform Stability in Multi-Cycle Experiments

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To understand how stable our measurement process was, we tested the durability of our flow cell with a loaded protein library to ensure that proteins remained present on the surface over multiple cycles in a proteome analysis system run.

In our studies evaluating stability over numerous cycles, we observed substantially less than 1% of proteins were lost from the flow cell as seen on the panel below on the left.

As shown on the right figure, to examine both the effectiveness of our wash buffer and the ability of proteins to be probed after being washed, we first examined the detection ability of the protein on a first cycle (blue).

We next demonstrated that our wash buffer successfully eliminated remaining signal (yellow).

Last, we demonstrated that after extended exposure to washing, and rinsing, that the protein detection remained nearly identical to the initial measurement (red).

These results suggest that our wash conditions are highly effective and that our process of reagent cycling does not significantly damage the protein and thereby interfere with the probability of its measurement accuracy.

In our studies evaluating stability over numerous cycles, we observed substantially less than 1% of proteins were lost from the flow cell.

To examine both the effectiveness of our wash buffer and the ability of proteins to be probed after being washed, we first examined the detection ability of the protein on a first cycle.

We next demonstrated that our wash buffer successfully eliminated remaining signal.

Last, we demonstrated that after extended exposure to washing, and rinsing, that the protein detection remained nearly identical to the initial measurement.

These results suggest

that our wash conditions are highly effective and that our process of reagent cycling does not significantly damage the protein and thereby interfere with the probability of its measurement accuracy.

Protein Library Remains Bound to Flow Cell During Repetitive Probe Binding and Wash Cycles

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On our Nautilus platform, we project we will be able to reach sensitivity down to 1 molecule out of 10 billion.

The figure below shows a limit of detection experiment performed on the Nautilus platform, approaching attomolar sensitivity (1 out of 10 16 ).

We are also able to use this sensitivity in flexible way, for example we can perform an extremely deep analysis of a single protein library sample across all lanes of a flow cell, or we can perform a multiplexed analysis by processing a batch of samples together (each sample protein library individually barcoded) during one proteome analysis system run.

Extreme Sensitivity Quantified by 10 -16 LOD (Limit of Detection)

Development and Characterization of Multi-Affinity Probes

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These pipelines employ multiple candidate discovery methods to identify and select antibody, antibody fragment, or nucleic acid based candidate multi-affinity probes.

Promising candidates are

further screened in assays to determine EC50 values off-platform (example results for two candidate probes shown below), and then leads are evaluated in detail for their performance on the Nautilus proteome analysis platform.

Promising candidates are further screened in assays to determine EC50 values off-platform (example results for two candidate probes shown below), and then leads are evaluated in detail for their performance on the Nautilus proteome analysis platform.

Multi-Affinity Probe Discovery and Development Pipeline

Model Protein Decoding

Bringing multiple aspects of the platform together, we created a control sample library using model synthetic proteins that were designed to be multi-epitope controls to demonstrate the PrISM decoding method in action on the Nautilus platform.

A multi-cycle run was completed using 24 unique multi-affinity probes.

Shown below is the detection of Model Protein 1 (MP1) across two replicate datasets.

The relative count of MP1 identifications within the library was generated by decoding the pattern of binding events at each location present on the flow cell over the course of the multi-cycle run.

In the figure below, the observed binding events (yellow) for each cycle of multi-affinity probes matched the expected binding events unique to the MP1 epitopes present (top orange) vs the MP2 epitopes (bottom orange).

Model Protein 1 Decoded by PrISM

Mapping Proteoforms

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The protein counts in the image above are for illustration purposes only.

Demonstrating this workflow in action, on a single chip we deposited positive control Tau proteins, a negative control (ubiquitin), and a mixture of four Tau proteoforms.

After correcting for non-specific binding and antibody false negative rates, we detected all four proteoforms in the complex mixture.

Over 500k molecules were analyzed.

Nautilus Platform Proteoform Pattern Detection

Further demonstrating the ability of this workflow to identify increasingly lower levels of Tau protein in complex mixtures, below recombinant 0N4R Tau (exogenously phosphorylated by the ERK2 kinase) was spiked in to a K562 cell lysate.

Tau was added at 0 (no spike control), 5%, 10%, or 20% of total protein.

Tau protein was then enriched by immunoprecipitation and detected with the Tau anti-0N antibody.

Detection of Low Tau Levels in a Cell Lysate Background

Nautilus Platform Development Plan Key Areas of Focus

In order to achieve our goal of broad commercialization by mid-2024, we plan to advance the development of our Nautilus platform across all components including chemistries, reagents, consumables, instrumentation and analysis software.

In order to achieve our goal of broad commercialization in 2025, we plan to advance the development of our Nautilus platform across all components including chemistries, reagents, consumables, instrumentation and analysis software.

The prototype of our proteome analysis system has generated all of our internal data to date, and we are continuing the development process to optimize, improve upon, and validate the final designs, formulations, protocols, manufacturing processes, and software code comprising our Nautilus platform.

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Lastly, we intend to continue the development of our analysis software, where we expect improvements to our algorithms and analysis that will help with the speed, accuracy, and reliability of our commercial proteome analysis system performance.

Assuming the completion of our development across these focal areas on our currently anticipated timeline, as well as additional related development activities, we believe we will be in position to achieve our goal of broad commercialization by mid-2024.

APPLICATIONS OF OUR TECHNOLOGY

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By design, our Nautilus platform technology is open to the use of virtually any affinity binding reagent, where each reagent can be efficiently chemically labeled and used in our multi-cycle process to identify and quantify a protein library.

We further believe one of the inherent strengths of the open design of our

Nautilus platform is the ability to use reagents across a range of different binding profiles to create unique applications that unlock different types of important biological information.

We further believe one of the inherent strengths of the open design of our Nautilus platform is the ability to use reagents across a range of different binding profiles to create unique applications that unlock different types of important biological information.

On one end of the spectrum (above left), our technology is designed to harness the power of low specificity multi-affinity binding reagents that will potentially allow us to detect substantially all of the proteome.

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It is estimated there are as many as 6,000,000 different proteoforms produced through protein modification pathways that hold critical biological and contextual information on the function and purpose of the proteins in our cells.

We believe our customers could show strong interest in this important field of research given the lack of technologies and tools in existence today capable of mapping multiple features on a single protein in

one analysis workflow.

We believe discovery focused proteoform specific reagents could be used in combination with our multi-affinity broad protein detection method to enhance the output of our analyses.

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Our Nautilus platform represents an entirely new single protein molecule data source for proteogenomics, which we believe could contribute significantly to the field by increasing the scale of proteomic data accessible for these analyses, and ultimately increasing the discovery potential of the integrated dataset.

Given the current level of access to genomic and transcriptomic information enabled by NGS, we believe the research community could rapidly integrate data from our Nautilus platform technology into these studies to leverage matched genomic and proteomic data.

Given the current level of access to genomic and transcriptomic information enabled by NGS, we believe the

research community could rapidly integrate data from our Nautilus platform technology into these studies to leverage matched genomic and proteomic data.

Translational Research and Discovery Applications

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Also, cell-free nucleic acid methods have emerged recently as amongst the first molecular surveillance tools in oncology for the emergence of disease progression post treatment or surgery, and may also prove to enable the detection of disease at earlier stages in some cancers where cell-free nucleic acids are present at higher levels.

However, the same fundamental challenges

exist in this setting.

However, the same fundamental challenges exist in this setting.

Nucleic acids are still only a proxy for measuring the biological consequences of the functional proteins, and further the sensitivity needed to find early-onset molecular features of disease before it presents clinically is incredibly high.

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Our consumables are expected be priced at a level that provides comparable market value for full proteome analysis.

The use of multiplexed run configurations will continue to grow over time, which we believe will help to reduce our costs and the price-per-sample of our reagent kits such that we are able to support customers with very high-throughput applications of our systems.

The use of multiplexed run configurations will continue to grow over time, which we believe will help to reduce our costs and the price-

per-sample of our reagent kits such that we are able to support customers with very high-throughput applications of our systems.

We expect these high-throughput run configurations and economics to accelerate the initiation of large-scale proteomics and multi-omics research projects, and also to be much more compatible with centralized core lab facility operations with requirements for proteomic data generation that can support an entire organization or user base.

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Our strategy to utilize our Nautilus platform early in its formal development cycle through partnerships is an important component, and in part can be attributed to the inherent flexibility we have to employ commercially available reagents for targeted applications of single-molecule proteomics that drive new and significant discovery value.

Further, as we advance from low-cycle targeted applications towards longer runs with increasing data output, we believe each

of the milestones on our development plan are potentially new and unprecedented advancements we can leverage to build commercial momentum.

Further, as we advance from low-cycle targeted applications towards longer runs with increasing data output, we believe each of the milestones on our development plan are potentially new and unprecedented advancements we can leverage to build commercial momentum.

Aligning Go-to-Market Strategy with Research and Development Milestone

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Proteome Analysis System Launch and Commercial Scale Up

At full commercial proteome analysis system launch, we expect to continue offering our Proteomic Data Early Access Program, and to maintain the laboratory services to continue supporting proof of concept and pilot projects for an extended period of time to continue building our sales funnel.

period of time to continue building our sales funnel.

Our proteome analysis system launch is expected to be coupled with a substantial scale up of our commercial sales and marketing workforce.

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We currently source base nanoarray chips and flow cell components, sample preparation and assay reagents.

We believe that our suppliers have sufficient

capacity to meet our near-term development needs through to commercialization.

We believe that our suppliers have sufficient capacity to meet our near-term development needs through to commercialization.

We believe it may be advantageous to have multiple sources for our consumable components and reagents in the future, to help reduce the risk of production delays or quality issues that may cause a disruption to our development timelines or pre-commercial activities.

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Olink Proteomics;

Standard Biotools (formerly known as SomaLogic);

and Thermo Fisher Scientific.

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Not for use in diagnostic procedures.” – the regulations do not subject such products to the FDA’s jurisdiction or the broader pre- and post-market controls for medical devices.

In November 2013, the FDA issued a final guidance on products labeled RUO, which, among other things, reaffirmed that a company may not make any clinical or diagnostic claims about an RUO product, stating that merely including a labeling statement that the product is for research purposes only will not necessarily render the device exempt from the FDA’s clearance, approval, or other regulatory requirements if the totality of circumstances surrounding the distribution of the product

indicates that the manufacturer knows its product is being used by customers for diagnostic uses or the manufacturer intends such a use.

These circumstances may include, among other things, written or verbal marketing claims regarding a product’s performance in clinical diagnostic applications and a manufacturer’s provision of technical support for such activities.

If FDA were to determine, based on the totality of circumstances, that our products labeled and marketed for RUO are intended for diagnostic purposes, they would be considered medical devices that will require clearance or approval prior to commercialization.

commercialization.

Further, sales of devices for diagnostic purposes may subject us to additional healthcare regulation.

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However, on October 3, 2014, the FDA issued two draft guidance documents that set forth the FDA’s proposed risk-based framework for regulating LDTs, which are designed, manufactured, and used within a single laboratory.

In January 2017, the FDA announced that it would not issue final guidance on the oversight of LDTs and LDT manufacturers, but would seek further public discussion on an appropriate oversight approach and give Congress an opportunity to develop a legislative solution.

More recently, the FDA has issued warning letters to genomics labs for illegally marketing genetic tests that claim to predict patients’ responses to specific medications, noting that the FDA has not created a legal “carve-out” for LDTs and retains discretion to take action when appropriate, such as when certain genomic tests raise significant public health concerns.

The FDA has issued warning letters to genomics labs for illegally

marketing genetic tests that claim to predict patients’ responses to specific medications, noting that the FDA has not created a legal “carve-out” for LDTs and retains discretion to take action when appropriate, such as when certain genomic tests raise significant public health concerns.

Legislative and administrative proposals to amend the FDA's oversight of LDTs have been introduced in recent years, including the Verifying Accurate Leading-edge IVCT Development Act of 2021 (VALID Act), which aims to create a new category of medical products separate from medical devices called “in vitro clinical tests,” or IVCTs, and bring all such products within the scope of the FDA’s oversight.

To date, Congress has not passed the VALID Act, but may revisit the VALID Act or similar policy riders and enact other FDA programmatic reforms in the future.

In October 2023, through rulemaking, the FDA proposed to amend the definition of “in vitro diagnostic products” in FDA regulations to include laboratories that manufacture such products and to phase out the FDA’s general enforcement discretion approach for LDTs so that IVDs manufactured by a laboratory would be regulated similarly to IVDs.

It is unclear when the FDA will finalize and begin enforcing such rule and how current and future judicial challenges and legislation by the federal and state governments will impact the industry, including our business and that of our customers.

As laboratories and manufacturers develop more complex genetic tests and diagnostic software, FDA may increase its regulation of LDTs.

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Although there is a trend towards harmonization of quality system, standards and regulations in each country may vary substantially which can affect timelines of introduction.

In August 2020, the Department of Health and Human Services, or HHS, announced rescission of guidance and other informal issuances of the FDA regarding premarket review of LDT absent notice-and-comment rulemaking, stating that, absent notice-and-comment rulemaking LDTs are not required to obtain FDA premarket authorization.

In November 2021, HHS under the Biden administration issued a statement that withdrew the August 2020 policy announcement stating that HHS does not have a policy on LDTs that is separate from the FDA’s longstanding approach.

To date, Congress has not passed the VALID Act, but may revisit the VALID Act or similar policy riders and enact other FDA programmatic reforms in the future.

It is unclear how future legislation by federal and state governments and FDA regulation will impact the industry, including our business and that of our customers.

In the future, to the extent we develop any clinical diagnostic assays, we may pursue payment for such products through a diverse and broad range of channels and seek coverage and reimbursement by government health insurance programs and commercial third-party payors for such products.

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The federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), and their implementing regulations, which impose obligations, including mandatory contractual terms, with respect to safeguarding the transmission, security and privacy of protected health information by covered entities subject to HIPAA, such as health plans, health care clearinghouses and healthcare providers, and their respective business associates that access protected health information.

HITECH also created

new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates in some cases, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions.

HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates in some cases, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions.

In addition, in the U.S., numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of health-related and other personal information.

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While we are not currently subject to the CCPA, we may in the future be required to comply with the CCPA, which may increase our compliance costs and potential liability.

Furthermore, the CCPA could mark the beginning of a trend toward more stringent state privacy legislation in the U.S., which could increase our potential liability and adversely affect our business.

Furthermore, the CCPA could mark the

beginning of a trend toward more stringent state privacy legislation in the U.S., which could increase our potential liability and adversely affect our business.

Furthermore, the collection, use, storage, disclosure, transfer, or other processing of personal data regarding individuals in the European Economic Area (EEA), including personal health data, is subject to the GDPR, which became effective on May 25, 2018.

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We strive to obtain and maintain intellectual protection for our products and technology by using a variety of intellectual protection strategies, such as patents, trademarks, trade secrets and other methods of protecting proprietary information.

As of December 31, 2022, we owned eight issued U.S.

patents, approximately twenty-nine pending U.S.

non-provisional patent applications, approximately twenty-two pending U.S.

provisional patent applications, and approximately fifty-five pending foreign patent applications, including twelve international patent applications filed under the Patent Cooperation Treaty (PCT application).

Our owned patents and patent applications, if issued, are expected to expire between 2037 and 2043, in each

case absent any patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees.

As of December 31, 2023, we owned seventeen issued U.S.

patents, approximately thirty-eight pending U.S.

non-provisional patent applications, approximately twenty-three pending U.S.

provisional patent applications, approximately four granted foreign patents, and approximately eighty-two pending foreign patent applications, including nineteen international patent applications filed under the Patent Cooperation Treaty (PCT application).

Our owned patents and patent applications, if issued, are expected to expire between 2037 and 2044, in each case absent any patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees.

Our solely owned patents and patent applications contain, among others, claims directed to our core platform technology, such as compositions, methods, and systems directed to identifying and quantifying proteins utilizing probes that can bind different epitopes of the proteins with different degrees of binding non-specificity;

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In addition to patents, we utilize trade secrets and proprietary know-how to boost our competitive position.

Specifically, we rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

Specifically, we rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for,

patent protection.

We protect trade secrets and know-how by establishing confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors and partners.

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These agreements also generally provide that all inventions resulting from work performed for us or relating to our business and conceived or completed during the period of employment or assignment, as applicable, shall be our exclusive property.

As of December 31, 2022, we owned approximately six registered trademarks in China, the United Kingdom, and Europe.

In addition, we have seven pending trademark applications in the U.S., Australia, Brazil, Canada, China, the European Union, India, Israel, Japan, Korea, Mexico, Singapore, Switzerland, and the United Kingdom.

As of December 31, 2023, we owned approximately nine registered trademarks in Australia, China, Israel, the United Kingdom, and Europe.

In addition, we have approximately thirty-four pending trademark applications covering seven different marks in the U.S., Australia, Brazil, Canada, China, the European Union, India, Israel, Japan, Korea, Mexico, Singapore, Switzerland, and the United Kingdom.

Collaboration Agreements

28 unchanged sentences

Our principal executive offices are located at 2701 Eastlake Avenue East Seattle, Washington, 98102, and our telephone number is (206) 333-2001.

Our investor relations website is located at http://www.nautilus.bio/investors/.

Our investor relations website is located at https://investors.nautilus.bio/.

Information contained on the website is not incorporated by reference into this Form 10-K or any other filings we make with the SEC.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business