Quanterix Corporation

The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 1 1. Good day, and thank you for standing by. Welcome to the Quantirix Corporation Q4 2022 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Mike Doyle, CFO. Please go ahead.

Thanks very much. Good morning, everyone. Thanks for joining us today. With me on today's call is Masoud Toulou, President and Chief Executive Officer 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 within the meaning of the U.S. Private Security Litigation Reform Act. These forward-looking statements 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 non-GAAP financial measures. Management uses these non-GAAP 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 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. 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 this presentation and the earnings release issued earlier today. With that, I'll turn the call over to Massoud.

Thank you, Mike, and good morning, everyone. So on today's call, I'll cover three topics. First, an update on our corporate transformation Then highlights on our Q4 and 22 results. And then finally, progress that we've made on our translation path. So in August of last year, we announced a comprehensive restructuring and business realignment plan to fully realize the potential of our Samoa platforms. And we continue and to continue showing our leadership role in ultra-sensitive biomarker detection. Two quarters in, I'm pleased to say we're on track. Our assay redev program designed to improve our ability to manufacture and deliver high-quality assays at scale is on target and moving forward. The initial phase evaluation of our components to streamline assays for improved manufacturability and reduction in variability has been completed and will begin transition into production starting the first half of this year. As we noted in our last call, we'll be feathering improvements into production and believe progress on our transformation can be improved or is best measured by sequential gross margin improvements. We have made gross margin improvements since Q2 due to our transformation activities, and the next wave is expected to be directly linked to our assay REDEF program. Third quarter progress was mainly due to restructuring efforts, and more recently in Q4, Progress was due to assay manufacturing process improvements, which resulted in efficiencies. On a non-GAAP basis, our Q4 gross margin was 41.3% versus Q3 non-GAAP gross margin of 34.9%. And this approximate 600 basis point improvement was driven by changes to manufacturing planning and a few one-time events. Moving on to the fourth quarter, we delivered $25.8 million in total revenue, As shared last quarter, we continue to manage demand during our REDEV program. In Q4, consumable revenue increased by 13 percent compared to prior quarter, while instrument placements in Q3 and Q4 were the same at around 39. Lower instrument revenue in Q4 versus Q3 was due to timing of our collaboration with UltraDx in China. Changing focus to year-over-year, we closed 22 with 105.5 of revenue, compared to 21 revenue of 110.6 million, which included 5.2 of non-reoccurring revenue under the NIH RADx grant. In conjunction with our transformation plan, year-over-year consumable growth declined as expected, while instrument placements were nearly flat. Finally, we significantly improved operating losses relating to our core operations in the second half of the year. We made solid progress in our assay redev program and have begun using those learnings to prime our product development engine. Now, turning to our translation path. Following our PTAH 181 LDT release in Q3, in early January, we announced the expansion of our LDT menu with the launch of neurofilament light, which can be used as an aid in the evaluation of individuals for possible neurodegeneration conditions or other causes of neuronal and central nervous system damage. Samoa NFL is the most widely published NFL test with hundreds of research papers demonstrating its validity for assessing neurodamage and has become widely adopted in therapeutic clinical trial design. So our core strategy is turning proteins into biomarkers, into measurable biomarkers, to unlock proteomics research and translate those discoveries to improve human health. ESI's Lekembe approval in January 6th from the FDA via the accelerated approval pathway was a great example. Quanterix is leveraging its ultra-sensitive detection capabilities to accurately measure Alzheimer's disease directly in plasma. Simoa P-tau-181 was identified as a biomarker endpoint on the Lekembe label. The study concluded that Lekembe every two weeks reduced mean plasma P-tau-181 24% from baseline in 79 weeks, a highly significant decrease. Overall, this is a very exciting milestone for the Alzheimer's solution space. Now, I'll turn over the call to Mike to discuss some more financial details.