Quanterix Corporation

Good day, and thank you for standing by. Welcome to the Quinterix Q2 2024 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 11 on your telephone. You'll then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Francis Perot, Head of Investor Relations.

Thank you, and good afternoon. With me on today's call are Masood Tulloo, Cointerax's President and CEO, as well as Vandana Sriram, our Chief Financial Officer. Before we begin, I would like to remind you of a few things. This call will be recorded and a replay will be available on the investor section of our website. Today's call will contain forward-looking statements within the meaning of the U.S. Private Securities 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 the filings with the Securities and Exchange Commission. To supplement our financial statements presented on a GAAP basis, we have provided certain non-GAAP financial measures. These non-GAAP measures are used to evaluate our operating performance in a manner that allows for meaningful period-to-period comparison and analysis of trends in our business and our competitors. We believe that such measures are important in comparing current results with other period results and assessing our operating performance within our industry. Non-GAAP financial information presented herein should be considered in conjunction with and not 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 the presentation posted to our website and in the earnings release issued today. Finally, any percentage changes we discuss will be on a year-over-year basis unless otherwise noted. Now, I'd like to turn the call over to Massoud Talu. Thank you, Francis.

Starting with our second quarter results, total revenue of $34.4 million grew 11%. Despite a constrained capital funding environment and overall muted growth in the tool space, demand for Samoa sensitivity continues to expand by double digits. This quarter's results were driven by 35% growth from our accelerator lab, where customers can access our tech without the CapEx, 7% growth from our consumables business, and very early signs of progress with partner enablement and diagnostics. Second quarter non-GAAP gross margin of 52.3% was solid as we continue to invest in our assay development, which we expect will yield future growth. Our balance sheet remains strong with nearly $300 million of liquidity. Cash usage in the period was approximately 5 million. Well, and then I will touch on these results and our updated guidance in more detail. Recall, our three core growth objectives are one, high growth in menu, specifically maintaining our leadership position in neurology and growing into immunology and oncology adjacencies. Two, the ubiquity of Samoa in all labs. where we are allocating heavy resources and investment into pushing forward a new frontier for multiplexed, ultra-sensitive protein detection that we expect will culminate in a new platform. And three, a leadership position in diagnostic testing for Alzheimer's disease. Starting with menu, we commercialized three new assays this quarter for a total of eight in our first half of 24 and are on track to complete 20 by end of year. In neurology, we're building on the successful launch of BD tau and plan to launch an N4PD assay in Q3, which combines BD tau with additional relevant markers in a neurology-focused multiplex test. We also expect to launch several exciting cytokine panels in the back half of 24, which we will discuss later this year. Samoa has a clear leadership position in neurology. and our menu continues to accelerate this lead, powering exciting research, clinical trials, and neurotherapies. Starting with neurology, in a recent June publication of Nature Medicine, researchers using Samoa were able to demonstrate that plasma extracellular vesicle tau and TDP43 were effective biomarkers in both frontal temporal dementia and ALS. suggesting new modalities for evaluating disease progression and clinical trial targeting. Next, in oncology, in the International Journal of Molecular Sciences, researchers using SEMOA showed that NFL and GFAP were promising targets to evaluate brain metastases in patients with lung cancer. Patients with brain metastases showed higher serum NFL and GFAP compared to those without. suggesting these biomarkers can effectively identify patients at high risk and potentially improve the efficiency of MRI screenings. Staying on NFL, there's a growing recognition by the FDA that this biomarker is important in drug development and clinical trials. In May, the Foundation for the National Institute of Health received acceptance from the FDA for its intent to qualify NFL as a biological indicator of frontal-temporal degeneration. This builds upon the agency's 2023 accelerated approval of Biogen's drug, Topricin, for treatment of ALS, which relied in part upon extended review, evaluating trends, and reducing NFL levels. More recently, in Q2, NFL was again used as an effective biomarker by Inexxon Biosciences. Annexon announced positive top line results for their pivotal phase three trial in Guillain-Barré syndrome, a condition in which the body's immune system attacks the peripheral nervous system. Utilizing data generated by our accelerator lab, Annexon was able to demonstrate that their phase three trial met its primary endpoint. In addition, Annexon established their therapy delivered improvements compared to placebo with other secondary pre-specified endpoints. one of which demonstrated early reduction in the biomarker NFL between weeks two and four of therapy. Moving forward, we expect more clinical trials will incorporate monitoring NFL levels, and we'll be ready to support our customers as the market leader for this biomarker. Samoa's leadership among key opinion leaders, researchers, and pharma was evident at the Alzheimer's Association International Conference, or AEIC, last week. Samoa has helped build the field of highly sensitive biomarker detection in neurology as evidenced by our technology cited in approximately 150 posters and platform presentations at the conference. Our platform is entrenched with academia and pharma, and we continue to work with our customers to generate data for key publications and evidence for pivotal clinical trials. The highlight of our week at AAIC was important new data on our multi-marker approach to Alzheimer's testing. Our presented data was derived from BioHermes and Cantate trials, two independent and diverse cohorts, and highlighted that combining amyloid beta 42, 40, NFL, and GFAP with PTAL 217 and using an algorithm can improve the accuracy of diagnosis compared to a standalone p tau 217 test. We believe the future of Alzheimer's diagnostics therapy selection with blood-based biomarkers will follow a multi-analyte roadmap. Thirty percent of approximately 7 million symptomatic Alzheimer's patients in the U.S. today have pathologies other than Alzheimer's. We believe these patients will benefit from the diagnostic clarity that multi-marker tests can provide. We will launch a multi-marker LDT later this year and we'll share further data on our test at CTAD this fall. Staying on diagnostics, I want to make a clear point on why Samoa is best in class for early detection of Alzheimer's disease. To date, the Samoa platform has provided a numerical result for every single Lucent pTau217 patient sample tested. Other competing platforms are not able to provide results for up to 30% of patients due to limits of those platform sensitivity. To be clear, that means for every 1,000 patients visiting a neurologist to get blood testing, up to 300 may not get a numerical result if a platform other than Samoa is used. It is well understood that amyloid progresses over time. Someone with family history and early memory concerns should get blood-based testing. Of the blood-based tests available, we believe Samoa is best for measuring this early to late progression for the simple reason that there is a numerical value to measure each time someone is tested in the clinic. Our commercialization efforts for Alzheimer's diagnostics are also progressing. Within the quarter, we engaged four new partners, representing both large hospital systems and reference labs with broad geographic reach. More specifically, we announced three new partnerships in the U.S., including Mount Sinai, Banner Health, and UCSF, which see approximately 5 million patients annually. We also announced a partnership with KingMed, which has 49 labs set up in mainland China, Hong Kong, and Macau. These partnerships build upon our previously announced relationships and are early steps in building the infrastructure for Alzheimer's testing. Vandana will now discuss our financial performance in more detail.