Quanterix Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 8, 2023

There are 8 speakers on the call.

Operator

Good day, and thank you for standing by. Welcome to the Quanterix Corporation Q2 2023 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Ed Joyce, VP of Investor Relations.

Operator

Ed, the floor is yours.

Speaker 1

Thank you, Stacy, and good morning. With me on today's call is Masood Talu, President and CEO of Quanterix and Mike Doyle, Chief Financial Officer. Before we begin, I'd like to remind you of a few things. The call will be recorded and will be available on the Investors Resources section of our website. Today's call will contain forward looking statements within the meaning of the U.

Speaker 1

S. Private Securities Litigation Reform Act. These forward looking statements are based on management's beliefs and assumptions on information available as of the date of the call. We may not actually achieve the plans, intentions or expectations disclosed in our forward looking statements. Forward looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements.

Speaker 1

The risks and uncertainties that we face are described in our most recent filings with the Securities and Exchange Commission. To supplement the company's financial statements presented on a GAAP basis, the company has provided certain non GAAP financial measures. Management uses these non GAAP measures to evaluate operating performance in a manner that allows for meaningful period to period comparison and analysis of trends in its business. The company believes that such measures are important in comparing current results to the other period results and are useful in assessing the company's operating performance. The non GAAP financial information presented here should be considered in conjunction with and not as a substitute for the financial information presented in accordance with GAAP.

Speaker 1

Investors are encouraged to review the reconciliation of these non GAAP measures to their most directly comparable GAAP financial measures set forth in the appendix of the presentation posted to our website and in the earnings release issued today. With that, I'll turn the call over to Masood.

Speaker 2

Thank you, Ed. Good morning. Before I get into results, I would like to start by acknowledging the intense effort and progress the talented Quanterix team has made with our corporate transformation started last year. The magnitude of the improvements made while continuing strong operational execution is testament to the capabilities of our people. And these improvements have set a solid foundation to drive long term future growth.

Speaker 2

This quarter, those strides became more apparent in our business and financial performance. 2nd quarter revenue increased 32 percent to $31,000,000 and our non GAAP gross margin increased to 56.4% versus prior year with significant sequential improvement. We're seeing strong customer demand driven by consumables and Accelerator Lab Business with increases of 65% 94%, respectively. Our corporate transformation is also already positively impacting bottom line performance. This quarter, we achieved a breakeven cash flow milestone.

Speaker 2

With our accelerating redevelopment progress, we increased our full year 'twenty three revenue guidance to be in the range of $110,000,000 to 116,000,000 and full year non GAAP gross margin percentage in the high 40s. We also expect less cash burn and now estimate to be in the range of $30,000,000 to $35,000,000 this year. To remind you, we initiated our corporate transformation a year ago following a strategic business review with the prime objective of maximizing the potential of our Simoa technology and delivering high quality assays at scale with strong margins. We're now in the last two quarters of our transformation process and remain on track. Work that remains includes launching new assay kit SKUs and further implementation of newly scaled systems and modern processes in our operations lines.

Speaker 2

In early July, we launched Lucent AD, a test to aid in the Alzheimer's Disease Diagnostic Process. This blood based biomarker test measures an isoform of phosphorylated tau protein 181. Using our high sensitivity platform, this protein has been positively correlated with the presence of amyloid pathology in brain, a hallmark of Alzheimer's disease. Lucent AD provides measurements with cut points to indicate unlikely or possible amyloid pathology. With the recent approval of lekembi, one of the first promising therapies for Alzheimer's disease, We anticipate this test will enable access to quick and scalable screening.

Speaker 2

There's a lot of attention on Alzheimer's disease and we will deploy focused effort on building global infrastructure as well as patient and provider education around these tests. Moving to recent events. There were 2 notable announcements from the Alzheimer's Association International Conference that I'd like to bring to your attention. 1st, new guidelines were recommended by the National Institute of Aging and the Alzheimer's Association for the use of blood biomarkers to detect and diagnose Alzheimer's disease. All of the biomarkers listed are available on Samoa.

Speaker 2

This makes a lot of sense. Being able to screen large numbers of people with suspected cognitive symptoms requires scalable, Cost effective testing. Numerous studies using our Simoa technology have demonstrated high correlation between blood based biomarkers like Those measured by Lucent AD to the more expensive and invasive methods of testing in Alzheimer's such as spinal fluid analysis and amyloid PET scans. Any lab anywhere in the globe can order the Simoa platform and begin running every biomarker listed in the guidelines today. That reach, along with the scale of our CLIA lab, puts us in a great position to help build the global testing infrastructure needed for Alzheimer's therapies.

Speaker 2

2nd, data from a study was presented demonstrating the possibility for home blood collection for Alzheimer's biomarkers. Researchers at the University of Gothenburg in Sweden Used Samoa technology to test for biomarkers from dried blood spot cards collected from a finger prick. That's not a lot of blood. We're talking tens of microliters. Starting card samples were shipped to a testing facility Without temperature control and results showed high correlation to regular blood drawn samples for all biomarkers tested including PTAHL-one hundred and eighty one, VITAL-two seventeen, NFL and GFAP.

Speaker 2

Although this was an early study, it demonstrates the Ultra sensitive capabilities of our Simul platform as well as promise for patients and providers as the potential for a home test would be a significant advance over traditional blood collection, pretty incredible events. Now this decade, we expect A number of emerging disease modifying neurological therapies and most of these will need early cascade diagnosis and routine monitoring, which will require ultra sensitivity to identify biomarkers in blood. As we discussed last quarter with their approval of tophersen measuring neurofilament light chain or NfL, we're seeing increasing attention of this biomarker for neuro injury conditions. However, normal NfL levels vary between adults and adolescents, and there's a need for a comprehensive reference data set by age. Recently published in Lancet Neurology, Simoa enabled a study to produce a robust data set for pediatric NfL levels.

Speaker 2

This data set will provide a foundation for the clinical use and management of neuro conditions in children. This work was a significant step forward and further establishes Simoa as the go to test for blood NfL measurement. Moving to our clinical efforts. This quarter, we achieved a positive top line readout of our BioHermes clinical trial, which was a 1,000 patient prospective validation study done in collaboration with the Global Alzheimer's Platform Foundation. The study had 18 sites and aimed for a diverse demographic to better represent the entire base of potential patients, an important consideration by physicians and regulators.

Speaker 2

I'm pleased to announce our primary objective with the study to show high correlation between 181 and Amyloid positive PET scans was achieved. This work supported both our new Leasing AD LDT and is expected to support our IBD filing with the FDA. Now before I turn the call over to Mike, I want to take a moment to recap. Our corporate transformation, while not yet complete, is bearing accelerated gains because of the focus, Discipline and execution of people at all levels of the organization at Quanterix. Discoveries in the next 10 years will change the way we currently understand, test and treat neurological disease and we expect that much of that work will be performed on Quanterix's similar platform.

Speaker 2

Mike?

Speaker 3

Thanks, Vasud. For your reference, for those following along, I'm starting on Slide 8. Our total revenue for the Q2 of 20 $23 was $31,000,000 an increase of 32% from the Q2 of 2022. This quarter's revenue includes $1,000,000 for onetime revenue related to our agreement with UltraDx Limited in China and $500,000 related to an Abbott license deal. We had product revenue of $19,700,000 in the 2nd quarter, an increase of 33% over the Q2 of 2022.

Speaker 3

Within product revenue, instrument revenue was $3,500,000 a decline of 38% over the Q2 of 2022. As described last quarter and similar to other life science instrument providers, we continue to see global macroeconomic pressures on capital purchases. Offsetting this decline, our consumable revenue increased $6,000,000 or 65% compared to the Q2 of last year and up 8% versus the prior quarter. While we continue to manage production and demand for consumables as we address assay quality, We've made improvements that have allowed us to increase capacity. Services and other revenue was $10,600,000 for the quarter, increasing $2,000,000 or 23 percent from the Q2 of 2022, driven by strong demand for accelerator services.

Speaker 3

Our accelerator services continue to be valuable a valuable customer offering, particularly when biotech and pharma experienced pressure on CapEx purchases. While we don't expect further decline in instruments for the second half of the year, we do expect both consumables and accelerator services to fully offset for the second half until biotech and pharma returned to normal purchasing patterns. Now let's move on to gross margin for the quarter. Our GAAP gross profit margin was $19,100,000 61.7 percent for the Q2 of 2023 compared to $8,700,000 37.1 percent in the Q2 of 2022. Our non GAAP gross profit margin, which includes shipping and handling costs for product sales within cost of goods sold instead of within SG and A expenses, was $17,500,000 56.4 percent in the 2nd quarter as compared to $6,800,000 or 29.1% in the Q2 of last year.

Speaker 3

Overall, we're very pleased with our redevelopment progress and it is reflected in better than targeted gross margin Our overall GAAP operating expenses declined $5,000,000 from $33,700,000 in the Q2 of 2022 to $28,700,000 in the Q2 of 2023. Our net loss declined from $24,900,000 in the Q2 of 2022 to $6,100,000 in the Q2 of 2023 due to improvements from our redevelopment program, the impact of our restructuring in 2022 and improved interest income. Moving on to cash, which is on Slide 9, we had a healthy cash burn improvement. We ended the 2nd quarter $332,200,000 in cash, a small net decrease of about $100,000 from our Q1 cash balance. We essentially burned no cash during the quarter, driven by revenue mix, efficiency gains and operating expense management.

Speaker 3

Our balance sheet remains in excellent shape and remain well positioned to make internal investments and be opportunistic for inorganic investment. Let's turn to guidance, which is highlighted on Slide 10. As Masood mentioned, we're increasing our guidance for 2023. We now expect our revenues to be in the range of $110,000,000 to $116,000,000 from a previous range of $104,000,000 to $111,000,000 As a reminder, we're still managing our demand and shipments as we continue our assay redevelopment efforts. Due in part To our redevelopment program as well as our anticipated revenue mix for the full year of 2023, we are adjusting our margin outlook.

Speaker 3

We now anticipate GAAP gross margin percent to be in the low 50s and our non GAAP gross margin percent to be in the high 40s. We do anticipate some headwind impact in the second half of the year with the launch of our new assay kit SKUs, but feel confident with our ability to execute on plan. We expect our cash burn for the full year to be in the range of $30,000,000 to $35,000,000 a significant improvement from last year in our previous guidance. I will turn it back over to Masood before we take your questions. Masood?

Speaker 2

Thank you, Mike. I want to provide an update As previously announced, Mike is planning to retire in early 2024 And we've been searching for a new CFO. And it's an exciting time clearly to join Quanterix. And I'm thrilled to say that we found someone amazing to join our team. So we'll be making a formal announcement tomorrow morning, and the official transition is set for August 21.

Speaker 2

At that time, Mike is going to transition to Executive Director of Finance, supporting our strategic growth until his retirement in March. So I want to take a moment to acknowledge the pivotal role Mike has played in the transformation at Quanterix, Specifically, his guidance, dedication and financial leadership over the past 2 years has put us in a strong position. He has made a lasting impact on our business. We're appreciative of his service, thankful for the solid transition period and look forward to what's ahead in the coming months. Operator, let's take some questions.

Operator

Thank you. We will now conduct a question and answer session. Our first question comes from Puneet Souda of Leerink Partners. Puneet, please go ahead with your question.

Speaker 4

Hey, thanks. Vasud, Mike, thanks again and Congrats on the quarter here. Mike, and really great working with you and good luck on what's ahead. Maybe if I could first one, maybe if I could ask on the guide and then I have a follow-up on Lucent and On the biomarker set, we look at the full year guide. If you go to the higher end of the guide, it Still implies a step down in 3Q and 4Q.

Speaker 4

I know you talked a little bit about obviously the biotech funding situation that is well Understood and known on the street. Is that largely part of the conservatism in your assumptions here? Or is there something else that we ought to keep in mind for the second half? Just want to clarify on the top line and also on the gross margins.

Speaker 2

Sure. I

Speaker 3

think a couple of things. I think we obviously had some one time revenue in this quarter. And so that's when I look at the $31,000,000 I really look at it at about a $29,500,000 quarter. So I think We're still balancing our redevelopment effort in this last couple of quarters, which I'm sure Masood is going to get into is We really it's the last big push. So we expect a little bit of noise and we're trying to just sort of make sure that we've given ourselves some room there.

Speaker 3

Clearly, our goal is to exceed that, but that's how we're looking at it. I don't think there's anything else out there other than what we've chatted about That we would see impacting our revenues.

Speaker 2

Yes, I think that's right. Puneet, we Clearly, this is a backdrop of this macroeconomic situation. I think Mike highlighted on the call that we've been able to Offset that pretty effectively. We'll see what happens in the second half. And then as Mike said, a lot of implementation of Key processes in the production lines, but we want to be conservative about.

Speaker 4

Got it. Okay. And then wondering on Lucent, can you clarify if this when this platform is going to have p Tau 217 as well beyond 181. And when do you think we'll see a marker set that involves 181-two seventeen A beta-four thousand and forty two, both as an LDT and then eventually as an IBD And potentially maybe one more marker, let's say, GFAP in it. So just trying to understand what the final marker set could look like, when Do you think you'll be able to launch that as an LDT and then eventually as an IBD?

Speaker 2

Great question, Puneet. So We our plan is to have 2.17 LDT this year. So some other future announcements, We'll talk about including that into our Lucent series of testing. And then on your question about the multi marker test, just As you know, the multi market test today already exists at Quanterix as an RUO offering. And then to your point, We intend to add that to the Lucent AD offering after we complete some of our Clinical trial work.

Speaker 2

So we have we talked about the results of BioHermes specific to 181. We're expanding that And looking at multimarker with that study and then we have a very exhaustive large study with ADDF where we're looking at all the markers that you just mentioned with an algorithm to look at amyloid pathology for patients. So That's also upcoming. And again, on the regulatory side, our intention is that we'll be submitting these To the FDA along with the clinical trial findings.

Speaker 4

Got it. Super. And then last one for me. Can you talk a little bit about the level of validation that you have currently with your assays and what is needed for The diagnostic assay for the LDT and potentially for the IVD as well and sort of what sort of level of readiness That you have as lekimbi and adenimumab, these drugs get on the market, how do you think Scalability if rapid scalability is required, just want to get a sense of If you validation and other things that might be needed for those assays, how positioned are those Assays from both validation point of view and scalability point of view. Thank you.

Speaker 2

Thanks, Puneet. Yes, so when we No, I would say the foundation first, let's start with the foundation of the assays. We're talking about 100 and 100 of publications Over peer reviewed publications over the last several years that have shown the biomarkers that we're talking about 181, 217, NFL, GFAP, together incredible correlation to amyloid pathology. This is really robustly shown. And that's kind of on our that's our RUO basis.

Speaker 2

We take that one step further and we're working on these prospective clinical trials. So the BioHermes, for example, Trial that is used to support our pTile-one hundred and eighty one LDT was a 18 site U. S. Trial. Over 20 of the samples were from underserved populations, critical for Alzheimer's testing as you'll probably hear about more and more in the news.

Speaker 2

And we looked at imaging, clinical and other key data to support Our LDT and we look at patients that are cognitively unimpaired, MCI and mild AD patients and we compare each of our tests to imaging and to CSF. And that's the data And the backing we have for our 181 and we expect to continue to do that for each of our tests that come out as an LDT. And we think the data and robustness It is also sufficient to support future regulatory filings. So from a clinical trial From a utility perspective, we have great work that's ongoing by the team. And then from a scale perspective, we believe that Scaling, these assays are going to be critical.

Speaker 2

Blood based testing is going to be critical for entry to therapy. And How do you scale the test as in a robust way as possible? I think number 1, you heard about the guidelines, All of the markers and the guideline today can be run-in Samoa and we'd support any labs globally who would purchase a similar platform to get their lab up and running for them to do testing. The second, we can do thousands of samples here In our CLIA laboratory on a weekly basis and we think that will take some level of Support for building this global infrastructure. So I think we have a plan.

Speaker 2

We have a good Clinical trial plan and a good go to market plan on the LUCIN AD. So we're very excited about the next several months.

Speaker 1

Okay. Super guys. Thanks.

Operator

Standby for our next question. Our next question comes from Kyle Mixon of Concordia Genuity. Kyle, go ahead with your question.

Speaker 5

Hey, guys, thanks for taking the questions. Congrats on the quarter and congrats on the progress on this redevelopment program. On the program, Masood, I just wanted to ask how you've been able to convey to customers that reproducibility, the scalability of your assays has now improved and how that approach and how The customer response kind of differs between those RUO and the biopharma customers.

Speaker 2

Yes. Hey, Kyle. Thanks for the kind words. We I would say that if you look at our Whether it's our consumables, Kyle, or our accelerator, I mean, we're hitting levels of Demand that the company has never seen before. So and I would say that What we're able to manage and ensure is that if it's a product that's leaving the doors at Quanterix, it's a quality product in the customer's hands.

Speaker 2

So I'd say we've done a great job at doing that. And then over the next several quarters, we're going to ensure that those SKUs that are leaving the door are also scalable and accretive to our margins. So a couple of quarters of work left, but Right now, today, we're getting good assays to customers and we're providing solid work through our accelerator program. And I think the results speak for themselves.

Speaker 6

Okay. That was great.

Speaker 5

And then just following up on the BioHermes. So are we completely done with readouts for that trial? And then did you comment on the timing for the IVD approval?

Speaker 2

Yes. So we are complete with our 181 study and so that The BioHermes trial data supported both our LDT and the FDA filing we have that exists For our PTA-one hundred and eighty one test. Now what we're going to do next is we're taking a look at other biomarkers with that data set. And there'll probably be more news in the future on BioHermes. But with regard to 181, Our intention is for peer reviewed publication on those testing results, but you can already see the data for that and our sense and specs on the ListenAD website.

Speaker 2

And then on the second trial that we've been talking about Is this multi marker test with ADDF, that's a global test, global trial, and that's going to be to support the multi marker. We haven't mentioned any sort of timing on regulatory filings. As you know, we have a breakthrough designation for 181, And we've talked about doing more work with the FDA as we progress.

Speaker 5

Okay, awesome. And then Maybe Mike, if you want to comment on this and I guess congrats on the next steps and look forward to kind of chatting about it soon. On the prioritization of cash, you have cash of $330,000,000 and net cash flow in the quarter was breakeven, Which is great. I mean, it's fantastic. I think in the past you estimated that you will achieve positive cash flows at the $170,000,000 to $190,000,000 range for revenue.

Speaker 5

That's like 2026 maybe. I guess I wanted to ask, is that pushed up now? Is that or I guess pulled forward? Could you kind of reach that point earlier? And just given all this cushion now, I mean, how do you kind of anticipate using cash going forward?

Speaker 3

Yes, thanks, Colin. I think, first, we haven't adjusted our projection longer term for whom will be, I would say, Cash flow positive consistently. I'd say we'd still keep our current guidance in place, probably updating in February. Look And we were, look, super happy with the quarter. And I think what it's demonstrated is we are running ahead from a financial standpoint.

Speaker 3

And I think that We've been very focused on the asset redevelopment. I think what you're going to start to see and you've touched on some of it Kyle is Investments in organic investments in the business, also funding more for LucentDx. So I expect we're going to see Cash go out. CapEx was light in the first half of the year as we stay focused on the assay redevelopment. It's going to pick up in the second half of the year.

Speaker 3

I think we're looking at because we have the cash we do a number of things both organically and down the road inorganically that will help us accelerate our ability to grow. So, and like I say, we'll probably be updating guidance in February on the call and we'll probably update our targets for cash flow break Even as well.

Speaker 5

Okay, perfect. Sounds good. Thanks guys. Appreciate it.

Speaker 2

Thanks, Kyle. Thanks, Kyle.

Operator

Standby for our next question. Our next question comes from Matt Sykes with Goldman Sachs. Matt, please go ahead with your question.

Speaker 6

Thanks for taking my questions and congrats on the quarter and Mike congrats on the next chapter. It's been great working with you. Maybe just a first question for you, Mike. You've previously talked about double digit top line growth for 2024. Just given the guidance raise last quarter and this quarter, Are you still kind of thinking about that as a range for next year and any kind of clarity on double digits that could mean a lot of different things?

Speaker 3

Yes, Ken. You're right, Matt. It's because we're obviously we've had a good quarter and their point of the guidance would suggest this is our core product that We're there and I think our goal is to accelerate from there. We haven't fleshed out yet A 2024 forecast to get more specific about what double digit looks like and feels like. But clearly, our intent is to accelerate off of where we are today.

Speaker 3

So that's probably all we're going to say on it right now, but I expect again in February, we'll be giving a more robust view Of the year and what double digit is going to look like. But clearly, we're in a good place right now and are feeling pretty good about Where we sit this year and we're obviously on the core products cracking double digit right now.

Speaker 6

Got it. Thanks for that. And then Just you mentioned in the prepared comments about the Abbott collaboration and some of the revenue you received from that. Could you just maybe Provide a little bit more color. Apologies if I've missed this in the past, but just a little more color on what you're doing with Abbott?

Speaker 3

Yes. Actually, the Abbott is an expiration of

Speaker 2

an old license deal.

Speaker 3

So it's not an active. Essentially, we Since deal, so it's not an active essentially, we received funds some time ago for a license that's now expired, so in revenue. So it's not new activity per se with Abbott. And then the $1,000,000 from Ultradx is a reflection of Shares that we were issued in the UltraDx venture in China. So in both instances, those are one time revenue And they're not going to repeat.

Speaker 3

So they are just and they impact margin in a favorable way this quarter by about 2

Speaker 6

And then just one last one for you, Masoud. You talked about the study that looked at finger prick Testing and the blood cards. And could you maybe just talk longer term about what you think that could do in terms of accessibility, but also kind of what the timeline potentially for that could be and how it would be incorporated into your logistics and technology if that were to happen?

Speaker 2

Yes, absolutely, Matt. So I'll just say that we're sort of on the heels of all this excitement Blood draw and traditional collection methods, but keep bringing up this concept of Global scale and global infrastructure. And while in the U. S, let's say 90% of the population It is near a place where you can do a blood draw. We have to think globally and there are a lot of places where Low temperature, storage, transportation, centrifugation, those are all issues.

Speaker 2

And what we're really excited about by this study Was that demonstrated the ability to do remote collection and quantification of all the biomarkers that we have. And so we could see this as a screening and monitoring tool in secondary care, in therapeutic trials. Expanding access to therapeutic trials to underserved populations, which is going to be important for future therapies, As well as the storage concept and being able to monitor progression of treatment response So you don't have someone coming in on a regular basis for a blood draw and you can do this more at home. So it's early days In the study and the cohort and the population was a small population. So I do want to Say that, but incredibly promising data on the correlations with PET and CSF.

Speaker 2

And so We're very excited about what this study could be and think that there's a lot of interesting work that could come within the next year or so For detecting these blood biomarkers. And then the final point I'll make is that this sort of Goes to show, I mean, we're talking a blood draw, 100 and 100 of microliters. Now we're talking about tens of microliters And the need for a platform that has high sensitivity to detect that in those tens and tens of microliters It's what's required to enable blood card testing. And so again, very excited about the prospect of these results.

Speaker 3

Got it.

Speaker 6

Thanks very much guys.

Speaker 2

Thanks Matt.

Operator

And our final question comes from Dan Brennan with Cowen.

Speaker 7

Thanks for the questions. Great. Congrats on the quarter. Maybe one on placements and then one back on Alzheimer's. Just can you speak to Instrument placements in the quarter, sorry if I missed it and what are the expectations throughout the year?

Speaker 7

Just how much of softness is due to APAC? I think you called that a distributor issue in 1Q, just maybe some color there.

Speaker 3

Yes, Dan. I mean placements on the quarter were Net placements were 22%, which is that's a low for us. Historically, we've run high 30s to 40s and it started to drift Late last year, Q1 placements were 32. So we're down. I think Asia Pac Was our issue in Q1, I think more broadly, and I think Masoud mentioned I did as well.

Speaker 3

We're seeing it really across the board. I think there's just a macro Effect on CapEx that's impacting us and we're seeing it in North America, Europe and in Asia Pac. Asia Pac actually And the quarter performed better than they did a year ago. So, it bounces around. Now the good news for us is We get we still are getting revenue from people who would otherwise purchase.

Speaker 3

I think Vasud referenced, I think folks are running more through our accelerator lab As opposed to purchasing an instrument. So I think as the broader macro improves, we're going to see instruments pick up, Which is encouraging. But right now, it's we're kind of at a it's going to be soft. I don't expect it's going to degrade from where we are. That's how we're projecting and building out the balance of our year.

Speaker 3

And we expect in 2024, a return to something more normal.

Speaker 2

Yes, Dan, one of the really unique capabilities that we have is that when we've seen biotech or pharma, We tend to see these companies outsource more and more of their work to Accelerator Lab and we're clearly seeing more of that and expect this to continue for the second half of the year. So Accelerator for us is Both try before you buy, but it's also outsourcing a lot of R and D work. And in the future, we expect those customers will, once There's less pressure to come back and purchase those platforms. Great.

Speaker 7

Thank you for that. And then maybe just kind of a bigger picture on Alzheimer's. And I apologize, Maybe this was mentioned a little bit throughout, but just maybe to get a list. What are the if you look at over the next 12 months, like what would you say are the key milestones To watch that would be kind of most important just to kind of check progress and see if the opportunity is materializing for Quanterix.

Speaker 2

Yes. So Dan, I think we talked about the readout on this BioHermes test and how it's supporting our LDT And also our IBD filing. I think, it was a question earlier in the call related to 2/17 that Puneet asked. I think that's pretty important. 217 is a biomarker that you just can't measure on any platform, right?

Speaker 2

And so, Samoa It's one of the platforms that you can detect 217. And so, the interest and demand, for 217 is important. And one of the reasons you're kind of hearing about that importance is because As these drugs and these therapies come out, we're seeing data that shows The earlier you can identify a patient in the disease cascade, the better the therapy works. And so 217 is one of those early Markers and so from a standpoint of a screen or a diagnosis, the better you can get a better patient cohort and And it looks better from a rule in perspective. So we're very excited about that.

Speaker 2

I think that will be a big milestone. And then the second Is on the multi marker. Can we do differential diagnosis? Can we use a multi marker To get more information on these patients that might get a negative result and are asking, hey, I have cognitive symptoms, but I'm getting a negative result, now what? And so behind what we're talking about here is intensive program to build solutions for patients.

Speaker 2

And so I think I would view those 2 as the next 2 key milestones. And then externally, I think if you look at the guidelines, Some of the biomarker promise in blood biomarkers is incredible. And so we expect in the next several months There to be more discussion about blood biomarkers and their adoption from not just the screen, but More and more towards diagnosis of patients instead of a spinal tap or a PET scan. So I kind of would view those Sort of three areas as key milestones for us and for the field.

Speaker 7

Great. Thanks a lot.

Speaker 2

Thanks, Dan.

Operator

I am showing no further questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.

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Key Takeaways

  • Our corporate transformation drove a 32% Q2 revenue increase to $31 M, raised full-year guidance to $110–116 M and achieved break-even cash flow, with non-GAAP gross margin up to 56.4%.
  • We launched Lucent AD in July, a blood-based pTau181 assay providing cut-points for amyloid pathology to enable scalable Alzheimer’s disease screening ahead of therapy roll-outs.
  • All NIA-AA-recommended blood biomarkers are measurable on our Simoa platform globally, and an early study showed high-correlation detection from home dried blood spot cards.
  • The 1,000-patient BioHermes trial met its primary objective of correlating pTau181 with amyloid-positive PET scans, supporting our LDT and upcoming IVD filing.
  • Consumables rose 65% and Accelerator Lab services 94%, offsetting a 38% decline in instrument sales, while operating efficiencies cut GAAP net loss to $6.1 M and maintained $332 M cash.
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Earnings Conference Call
Quanterix Q2 2023
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