Akoya BioSciences, Inc.

Hello, and thank you for standing by. Welcome to ACOIA Biosciences' third quarter 2024 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I would now like to hand the conference over to Priyam Shah, Head of Investor Relations. You may begin.

Thank you, operator. And thank you to everyone who's joining us today on this call. I'm Priyam Shah, Head of Investor Relations at Akoya Biosciences. On the call today, we have Brian McCalligan, Chief Executive Officer, and Johnny Eck, Chief Financial Officer. Earlier today, Akoya released financial results for the third quarter, ended September 30th, 2024. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. For a list and description of the risks and uncertainties associated with the COAS business, please refer to the risks identified in our filings with the U.S. Securities and Exchange Commission, including in the risk factors section in the 10-Q filed today, November 14, 2024. We urge you to consider these factors, and you should be aware that these statements are considered estimates only and are not a guarantee of future performance. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, November 14, 2024. ACOIA disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. The audio portion of this call will be archived on the investors section of our website later today under the heading events. And with that, I will now turn the call over to Brian.

Thank you, Prem, and good afternoon or evening to everyone. We appreciate you joining us today. During today's conference call, I will provide an overview of our performance in the third quarter, highlight our operational advancements, new products, recent partnerships, and strategic decisions aimed at positioning our company, for long-term growth. Following that, Johnny will delve into our financials, key trends, and our outlook for the future. First, let me make some important introductory and thematic comments. Revenue for the third quarter came in below our expectations, largely due to ongoing capital equipment purchase constraints seen across the life sciences tools market. We remain optimistic and the long-term growth outlook of our industry and are actively addressing the temporary challenges the current macro environment imposes. We worked to anticipate these challenges throughout the year with our organizational restructuring, which, while difficult and temporarily disruptive, was the right decision and enhanced our readiness to absorb these headwinds. That said, we expect to see continued pressure on customer spending and now expect full year revenue in the range of $80 million to $85 million. The midpoint implies a minor step up in our fourth quarter revenue from this quarter's performance. 2024 has been an incredibly challenging year for Akoya and the life sciences market. Throughout this year, we have built a strong foundation that we believe positions us for long-term success and a return to growth. We implemented a more operationally efficient cost structure and a manufacturing center of excellence that is delivering solid and improving margins and a growing list of new reagent product offerings. We continue to advance our companion diagnostic pipeline and believe that it will be a significant contributor to our growth and value in the near term. We lead with the largest install base and supporting publications in the spatial biology market a market that we believe is a current and future pillar of the life sciences research and diagnostics. Last week's Society for Immunotherapy of Cancer Conference, or CITC, was a strong point of reference where spatial biology as a theme was the most prominent we've seen to date. We are a company solely dedicated to spatial biology. From our founding until the end of 2023, we realized the high growth potential and the benefits of being a leader in this rapidly emerging market and consistently delivered solid top-line growth. Because of the improvements in our cost structure and margins, we now have the ability to manage through today's more challenging market environment. We remain confident that Akoya's technologies will continue to be the preferred platform in the spatial biology market from discovery to diagnostics, supporting a return to top-line growth in 2025 and beyond. And we remain committed to achieving our profitability goals. Let me now walk through our quarterly revenue numbers. We reported top line revenue of $18.8 million in the third quarter, a 25% year-over-year decrease compared to the prior year period. Much of the top line miss was driven by instruments, where total revenue for the quarter was $5.7 million. We placed 35 instruments in the third quarter versus 30 in the first and 51 in the second quarter. As noted, the underperformance and volatility are driven primarily by extended sales cycles and limited capital equipment funding, especially in the North America's market. Akoya's total install base increased to 1,299 instruments, a 15% increase over the prior year period. Reagent revenue totaled $6.3 million, an 11% increase over the prior year period. Services and other revenue totaled $6.5 million, a 10% decrease over the prior year, primarily driven by underperformance on our instrument sales. Gross margin was 62.3%, an improvement on the 60.6% from the prior year period, and is a byproduct of our now fully operational Manufacturing Center of Excellence. Operating expenses were $20.1 million, a 25% decrease over the prior year period. Even with a reduced top line, the result is an improvement in our loss from operations year over year. Our loss from operations was $8.3 million, a 28% improvement over the $11.6 million in the prior year period. We ended the quarter with 251 combined phenocycler fusions, or PCF, the industry's top-selling spatial proteomics platform for the discovery and translational markets, supporting both high-plex tissue analysis and high-throughput, low- to mid-plex studies. Our PhenoImager HT systems, or just HT, now total 376. As a clinical-grade system, On the path for regulatory approval, the HT is at the forefront of establishing spatial biology as a technology that we believe can truly impact patient care. ACOIA continues to lead the market in publication volume, having reached a total of 1,578 publications citing our platform technologies as of the third quarter, a 47% increase from the prior year. Over the last month, we have announced several important partnership and product introductions. Let me briefly review those. In early October, we announced that the Francis Crick Institute and the Royal Marsden NHS Foundation Trust in the UK announced a large multi-institutional study to better understand why certain patients do or do not respond to cancer immunotherapy and what drives side effects to these drugs. This multimillion-dollar program, titled MANIFEST, which stands for Multinomic Analysis of Immunotherapy Features Evidencing Success in Toxicity, has the ambitious goal of identifying all the biomarkers predictive of response to immunotherapies. The initial testing will include 3,000 patients who have already started their treatment and at least 3,000 new patients in breast, bladder, kidney, and skin cancer over the subsequent four years. We are proud that the PCF and HT were chosen as the spatial proteomics platforms for this large-scale study. Okoye's platforms were also the leading spatial proteomics solutions, with the PCF as the only ultra-high plex platform prominently featured in recent high-impact nature publications from the Humer Tumor Atlas Networks, which traced the origins and evolution of 20 cancers across 2,000 individuals and were highlighted by Eric Tobel in his popular media outlet, Ground Truths. This was on the heels of major initiatives such as HubMap and the Human Cell Atlas, which have now incorporated spatial profiling and preferentially selected ACOYA's platforms to analyze their samples. ACOYA's inclusion in these programs is a strong endorsement, driving visibility, adoption, scientific value, and a meaningful revenue stream for our Because of the now robust content engine out of our manufacturing center of excellence, we have the ability to rapidly and affordably produce additional high-value content to drive increases in system utilization, reagent revenue, and pull-through. At last week's CITC meeting, which I previously referenced, Akoya introduced several new reagent product offerings. First, we announced our PhenoCode IO60 panel. The IO60 panel is an immuno-oncology dedicated solution covering 60 key protein biomarkers on a single panel, enabling interrogation of whole tissue samples or multiple tissue samples per slide at scale and high resolution. With a ready-to-use and off-the-shelf panel that is pre-validated and pre-optimized, researchers can quickly begin large-scale discovery and translational projects with little to no setup and panel development time. At CITSE, our partner, Precision for Medicine, an industry-leading high-volume global contract research organization and an early adopter of the HT, announced that they have now also incorporated the PCF as a spatial proteomics discovery platform of choice and will actively promote the IO60 panel. Based on the positive feedback from CITC and our customers, we are confident that the IO60 will be a meaningful driver of PCF adoption and utilization. Second, Akoya unveiled a new 24-plex mouse panel optimized for preclinical immunoecology applications to drive translational research and insights in both biopharma and academia. Lastly, Akoya expanded our phenocode catalog of molecular barcodes to enable routine ultra-hyplex 100 biomarker spatial experiments. These additional molecular barcodes will simplify our customers' ability to easily supplement our HyPlex panels with their own markers of interest or more rapidly develop their own HyPlex panels. we will continue to strive to make 100 Plex routine, fast, and affordable. Now, moving on from our core research business, let me provide some updates on the transformative clinical business we're building out of COIN. Throughout the year, we announced several significant late-stage clinical development updates and the strong momentum we now have in this emerging business segment. First, our biopharma partner, Acrovan Therapeutics, had a very promising phase two registrational intent clinical trial update at the European Society of Medical Oncology, or ESMO, in September on the ACR368 therapy and the accompanying OncoSignature assay deployed on our HD platform and run out of our CLIA lab. They showed incredibly promising results, and Akoya is increasingly confident that our partnership with Acrovan could yield our first commercially launched companion diagnostic. I would encourage you to watch their September 14th corporate R&D event to get a full update. Additionally, earlier this year, we also announced our exclusive partnership with NaraCare to enable personalized therapy selection for early stage melanoma. NaraCare's immunoprint assay has demonstrated robust clinical performance in identifying early-stage melanoma patients at high risk of relapse through multiple independent prospective and retrospective clinical studies. This data demonstrates that the immunoprint high-risk patient group is ideally suited to potentially benefit from therapeutic options that would usually only be administered in later stages. We believe that this would represent a significant expansion of the TAM for current melanoma therapy. Along with opportunities in the antibody drug conjugate market, Immunoprint has been a key driver of our rapidly expanding companion diagnostic partnership pipeline with our HC system reagents and our CDS capabilities as key enablers. Should these partnerships be realized, they have the potential to yield meaningful revenue in the coming years and add significant shareholder value as ACOIA realizes our clinical aspirations. Our priorities remain clear. First, continue to efficiently implement platform improvements and content menu expansion to drive system utilization, adoption, and revenue growth at increasing margins. Second, advance and accelerate our pipeline of clinical trial and companion diagnostic partnerships. Third, drive to meet our profitability goals. As part of our ongoing commitment to maximize shareholder value, the company is also actively evaluating a range of strategic alternatives to identify the best path forward for sustainable growth, profitability, and long-term success. With that, I will now turn the call over to Johnny to discuss our financials in more detail. Johnny?