Quanterix Corporation

To raise your hand during Q&A, you can dial star 1-1. Good day, and thank you for standing by. Welcome to the Quinterix Corporation's third quarter 2022 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Michael Doyle, CFO. Please go ahead.

Thank you very much. Good afternoon, everyone, and thanks for joining us today. With me on today's call is Masoud Toulou, President and CEO of Quantarix. Before we begin, I would like to remind you about a few things. The call will be recorded and will be available on the Investor Resources section of our website. Today's call will contain forward-looking statements that are based on management's beliefs and assumptions and on information available as of the date of this 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. 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 pro forma financial measures. Management uses these pro forma measures to evaluate the company's operating performance in a manner that allows for meaningful period-to-period comparison and analysis of trends in its business. Management believes that such measures are important in comparing current results with other period results and are useful to investors and financial analysts in assessing the company's operating performance. The pro forma financial information presented here should be considered in conjunction with and not as a substitute for the financial information presented in accordance with GAAP. Investors are encouraged to review the reconciliation of these pro forma measures to their most directly comparable GAAP financial measures set forth in the appendix of this presentation and in the earnings release issued earlier today. With that, I will turn the call over to Masoud.

Thank you, Mike. Good afternoon. Before we begin the discussion of our results, I'd like to take a few minutes and provide a brief overview of our strategic alignment and its progress. As we shared in our last earnings call, Quanterix is at a pivotal juncture where our ability to scale with quality hasn't kept up with customer demand for our Samoa technology. So last August, we announced a comprehensive plan to improve the company's quality and operations. In addition, last quarter we made a number of changes to the way we report gross margin that we feel better reflect our current cost equality and will provide much better visibility into the progress of the assay remediation program we recently launched. Starting with that program, one quarter in, I am pleased to say we are on track. The first phase was heavily focused on evaluation of reagent components to streamline across assays for improved manufacturability and reduction in variability. This will help with lot-to-lot performance issues we were experiencing, ultimately leading to improved gross margin. We also executed on our restructuring plan, which reset focus on our three principal objectives shared in August. Number one, quality, innovation, and positioning Quanterix to unlock the value of translational markets. As anticipated, with initial efforts, we saw 700 basis points of gross margin improvement, with a Q3 22 pro forma gross margin of 35% versus 28.3% in Q2 2022. We expect continued improvement as we enter the next phases of our redevelopment program, and we'll keep you updated on its progress. Moving on to the third quarter performance, we delivered 26.6 million in total revenue, a 4% decline versus third quarter prior year, but a sequential increase of 13% versus prior quarter when our quality and scaling efforts began. We continue to manage demand while addressing quality and expect revenues to improve as process improvements are implemented over the next several quarters. Increased demand for services offered in our accelerator lab continue to partially offset consumable decline and have been an important lever as we balance that demand. As our redevelopment program progresses, we continue to strengthen our leading position in ultra-sensitivity space, particularly in neurology. Our Samoa technology has been key to showing pTau217 to be one of the most prominent biomarkers being presented Neurological Clinical Studies, recently demonstrated at AEIC in July. TAMOA noninvasive and cost-effective blood-based testing can enable identification of patients more likely to benefit from disease-modifying therapy, accelerating trial enrollment, and increasing probability of approval. Our publications continue to grow, providing evidence of the industry's reliance on our ultra-sensitive technology for breakthrough discovery in research and clinical applications. In the third quarter of 22, we added 159 publications, bringing total Samoa-specific inclusions to over 2,000. We continue to see steady demand for our instruments and have placed approximately 130 instruments year-to-date aligned with 21, bringing our total of placements to over 800. It's no secret that high rates of discovery follow those who are testing and measuring in domains others don't participate. Those domains are at the single molecule and digital level empowered by our Samoa technology. Geographically, while North America represents 65% of our revenues, we continue to expand our regional capabilities most notably a recent strategic IBD partnership with UltraDx in China. We believe we're in the beginning of a neuro decade of research and clinical testing, not just in North America, but in China, Asia, Europe, and around the world. Now, shifting to our progress on trials and test development, as we shared it in May, We have received funding from the Alzheimer's Drug Discovery Foundation, ADDF, to accelerate Alzheimer's disease diagnostic test development. We've kicked off our efforts with the Amsterdam University Medical Centers on four phases of a clinical trial to validate Quanterix's multi-analyte test. 50% through phase one, we're already showing promising results for Alzheimer's detection and differential diagnosis of memory complaints which have resulted in four abstracts at international conferences. The BioHermes trial we are participating in is nearing completion at the beginning of 23. BioHermes is a prospective trial in partnership with the Global Alzheimer's Platform Foundation. The trial spans 17 US sites and will include around 1,000 early Alzheimer's patients. These patients will have amyloid PET scans All the sites are in the U.S., and the trial will include underserved populations and cognitively unimpaired subjects. This prospective validation trial for PTAL 181 will generate data in support of our existing FDA filing for clearance of the test. Now, I'm going to turn it over back to Mike to discuss some more financial details. Mike?