- Earnings call transcript Q3 2022

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Operator

Good day and thank you for standing by. Welcome to the Quanterix Corporation's Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. today's being that advised be conference recorded. is Please hand over to would now speaker, conference to like CFO. I your the Michael Doyle, ahead. go Please

Michael Doyle

Thank on afternoon us Good of Quanterix. Toloue, you thanks CEO very joining for President everyone and today. call today's and me is Masoud With much.

that forward-looking Before management's the I of call on on of not available the to statements on Resources section our would remind few Today's about a be information available we intentions The this may forward-looking and based and assumptions in and call plans, are beliefs contain We will expectations the as date Web begin, actually disclosed our will site. statements. things. or will like you of achieve be recorded Investor call.

assumptions substitute performance known factors filings forward-looking by expressed or are recent achievements the Securities GAAP involve the has analysis performance the Exchange trends and other with pro these certain that company's and of the other should supplement in we most cause actual to period from Management appendix financial the The to uncertainties, to financial measures described company's presented Masoud. in different are or turn measures information a are the risks in I operating most statements. results, a forma of important materially release forma face performance. in in will The their business. risks, unknown earlier over information for any provided earnings that in measures. results, conjunction forma our that, not uses these basis, in reconciliation in pro comparing and the and investors presented financial GAAP our assessing Management set results statements company future analysts directly forma achievements to financial useful in comparable accordance presentation meaningful such performance are and as manner and GAAP. comparison and considered may on here believes of call the period-to-period presented with measures the the Commission. uncertainties Investors financial current measures forth statements that operating with be results with issued its review for pro implied the With Forward-looking evaluate encouraged pro and and to a or To today. company's be this to allows financial that

Masoud Toloue

Thank you, Good Mike. afternoon.

strategic a I'd of the overview of begin results, our its we progress. a brief discussion to realignment Before and take minutes like and provide our few

our hasn't where last technology. we up is at As scale shared in a earnings kept with to ability quality for demand our juncture customer call, with Quanterix Simoa our pivotal

August, operations. we announced company's improve last a plan So quality and to comprehensive the

say of we launched. that report a cost visibility and of I'm quarter, better track. we pleased program, we program the In the margin recently remediation the reflect progress in, we feel to better way gross number quality are into quarter made of will much assay we Starting addition, last that to changes on one our with current provide

[ph] with help evaluation margin. This variability. were lot-to-lot leading experiencing, The was performance and we reduction gross rating on improved ultimately first heavily components manufacturability in across focused phase improved for will streamline assays issues of to to

in reset positioning markets. translational We the value on Quanterix principal August; and on one, unlock focus our which to plan, restructuring innovation three also shared quality, our number executed objectives of

'XX improvement of versus efforts, initial points gross with XX.X% pro a QX gross XX% margin anticipated, forma of QX basis in with XXX As XXXX. saw we margin

program we'll updated and enter on We of expect phases continued progress. you improvement its as next the redevelopment we keep our

quarter when sequential third delivered quarter a prior increase X% a versus and revenue, quality efforts versus decline million the to XX.X year our performance. prior We scaling total but on Moving third quarter of began. in XX%

to next partially we improve to continue demand over an important quarters. as continue balance lever improvements process and decline, for while that Increased addressing as are offset the manage considerable been implemented Lab revenues our We several to Accelerator have expect and services quality demand offered in demand.

progresses, to ultra-sensitivity position program redevelopment strengthen our we As leading neurology. in continue particularly our space, in

identification of clinical more key Our cost modifying AAIC therapy, at approval. to prominent demonstrated pTau-XXX accelerating Simoa non-invasive benefit likely and being July. probability can from increasing to of enrollment, technology biomarkers has at effective to based been be testing present in one showing the Simoa most of recently enable patients disease trial and neurological blood studies,

of and clinical evidence to 'XX, grow, ultra-sensitive inclusions third discovery bringing providing In quarter the our technology on continue publications we for over publications XXX breakthrough Our specific added applications. the industry's X,XXX. total reliance research to Simoa in of

represents We others by Asia, over domains who testing, a clinical for technology. world. our are measuring to replacements and notably Those continue around strategic domains North empowered America IBD instruments recent most we molecule our instruments, in those research testing have discovery level at of North we're XXX secret We single a are approximately believe 'XX, with Europe It's to in just China. and XXX. bringing steady don't partnership placed America demand with revenues, the digital beginning of the China, not our neuro aligned capabilities, in Geographically, that XX% the high year-to-date, our and rates follow our total regional and in Simoa while decade participate. in UltraDx see of but and expand continue of no to

Now trials our on to progress test development. and shifting

multi-analyte All X,XXX a patients resulted of beginning the is with promising memory international through PET Quanterix's patients. The Bio-Hermes are Alzheimer's XX% include and the early Foundation, conferences. X, Alzheimer's in the have trial completion sites the four phases we unimpaired Bio-Hermes prospective we amyloid 'XX. test. test. diagnosis will to We've Alzheimer's will support spans ADDF, off will As in trial at Medical of sites the Alzheimer's detection This showing partnership validation we which already accelerate our in our cognitively in FDA we subjects. for four filing validate for kicked are efforts underserved funding on and U.S. Centers abstracts Alzheimer's diagnostic Amsterdam trial May, a These of trial nearing generate around scans. disease Drug prospective development. XX from data existing And Global with Foundation. the clearance have University pTau-XXX test in the of U.S. clinical The and Platform shared in will populations is it to the have Discovery participating at complaints, trial differential Phase trial are of for include received results

back Mike to it more some over I'm discuss Mike? financial details. turn Now, to going to

Michael Doyle

the I'm I'm provide Thanks, XXXX starting for details financial Slide X. quarter Masoud. those some on call, performance. going And for to additional third about reference following on your our

noted, XXXX. revenue the total versus Masoud decrease third third As the quarter in of our X% quarter a was XXXX million, XX.X

million quarter included $X RADx third XXXX revenue in Our of revenue.

QX XX% XX.X Excluding product declining shortfall, Within of revenue million, third revenue, decrease were flat revenue a had quarter quarter was we the versus the RADx, of XXXX. of third the XXXX. quarter driver to biggest We versus of XX% 'XX. in third of the product the consumables

address to China. asset As UltraDx third aided while the XXXX, of demand production consumables manage sale by Masoud we and quarter the continue in we versus increased quality. of XX% instruments mentioned, Instrument revenue for to

the was to for talking of some million. X.X XX% agreement million revenue service the about Included the gross increased now time would revenue recognized quarter year third Lilly. from like our margin with prior third quarter X.X to services collaboration business. versus Eli XXXX within Third during quarter I spend

As a on quality a reminder, during we on the based we allocation a on captured changes made few on how based the second cost review focused our costs activity We operations. dive in deep their departments business, and three quarter, P&L. the of of changed

year adjustments but on cost the gross with line, costs of sold. In results move to a as goods addition, freight and sold significant impact operating pro in cost expenses no of pro prior The expense is of bottom adjustment reflected customers adjustment not a we a comparisons. margin. forma recorded from with impact are goods capturing costs to forma Both operating to in to as billed

We have our better quality give made to our these monitor visibility changes greater allow investors to activity and in progress.

QX versus pro of a was XXXX, XX.X% points. gross In change. There a in forma margin that quarter third X,XXX quarter of decline are review the few XXXX, this Now to in year. drove third margin our let's performance compared basis XX% prior factors of almost

First, margin our inventory negatively reserve the year basis to capture increased last significantly This impact versus approximately points. XXX quality. of impacted

the associated resources by Second, points. quality the negatively in quarter year allocation with year-over-year margin of impacted of operations the basis approximately this second XXX in and change

QX approximately in of with XXX already our However, pointed in pro are gross margin to forma as from increase out resulting of earlier, an QX Masoud points basis of 'XX. improved 'XX gross margin, efforts

the change in related in result QX actions of the operating of sold, XXXX, decrease had the of reorganization XX.X expenses, XXXX. a allocations cost the to to excluding during restructuring few a expenses, significant of and impact goods third million decreased in $X in As and related million third taken hit the and quarter. quarter items We expenses versus charges a of quarter of the restructuring operating

charges totaling million. $X.X restructuring for severance First, we incurred

non-cash of The $X.X causing goodwill, in the call, impairment our the price of announced subsequent reduced review goodwill. P&L. stock resulted a as result to of analysis charge and to meaningfully Second, QX our in restructuring our a dropped a an guidance million

$XXX,XXX charge for our Bedford, a the not real And we totaling expenses be abandoned a million, to related the estate X.X impairment Third, will we P&L. to incurred software write Massachusetts we other an utilizing charge for down incurred lease Bedford which and facilities. finally, to related non-cash

Ending in shares in the The the strategic of scale from by to severance our was in year XXXX. purposes projected for by internal debt, of quarter our issues well our of third in XX, share balances. revenue the for still revenue, quarter sheet unrestricted cash detailed five. driven decreased our average Cash million of resources and per our a retained of loss, we Slide second with EPS We good by the positioned this no $XX.X on profitable balance net XX and business had During outstanding is build consensus. business near-term cash million to is CapEx, weighted resources pursue business but $X which and August the collections million Over objectives. as offset from September XXXX. cash adequate balance outflow on meeting to our restructure XXXX, exceeding partially quarter, the shape address manner. Basic quality are and made quarter excellent to our target unrestricted adequate a and of XXXX, the XXX.X right-sized decision $XX.X totaled balance was end expense million third due for past operations

are As Masoud assays. rebuilding discussed, we making progress on our good

XX is million of XXX full between head XX in would we year, excluding fourth XXX between of million to of we quarter, have million that, to year and flat I'll consistent Masoud. RADx million, project XXXX, the impact back finishing which the to As our into the guidance. with previous With it to which revenue QX prior revenue turn us

Masoud Toloue

you, Mike. Thank

want a we developments. share I few Before to into market get questions,

pharma check proteomics and NFL Recent Conference be serum demonstrated Over the instead tools of of CSF. health tau Aβ XXX the Key well IP, developments neurofilament over the using direct Simoa Association market we patients we're seeing damage publications, severity important July endpoint Simoa a MS. engine side that therapy in discoveries fair monitor light and stroke direct of International to companies the for at a unique, using for next levels unimpaired trials, use light NFL monitor to a screen one advances secondary NFL of using in a plasma include serve with of for critical preventative the and biomarker neural effects PET the common neuro. and value biomarkers are brain. to in treatment XXX, revenues new of or elevate It's XXX and last biomarker installed, chemotherapy diagnostics examples screening very presented light, Quanterix into used suggests neurological the predictor issues. of in instruments for correlate few with to recovery, evidence patients Alzheimer's from in monitoring ramp as an new and applications as several of range impact a as positioned measured data effects. and big development among a call of exciting with recent side these particularly commercial a of may strong These, key a serum of Simoa monitoring as million, other neurofilament over biomarker as both, as the This having therapeutics new with the months, critical continued in levels, XXX excellent by many that pathology. Simoa, Several wide more and early cognitively as CAR-T

steps our have the blood the on stronger, to panel forefront market. steps our a trials been larger an based remain still for Simply and proteomics similarities allowing work. we're both Francisco, them put, to challenges these and market It these growing readouts in greatest the of and ensure we discoveries, Disease, demand this partners, exciting for are have San improve our the our see time taking all developed and being truly see cost Alzheimer's detection lower participate could taking the head ultra-sensitive share capturing new transformation the we position expect believe goals. and and of never disease for improve confident to And to advance pharma where leading at preparation this opportunity on at of of exciting a that are use in faster before As in several an ongoing we manufacturability day early than we meeting that of but at structure the innovating space. ideal in data in priority to validated and be research, tools advancing by the Clinical will are scale are published top and we to It's propel pTau-XXX these assays, biomarkers translational hear Trials new of our single accomplish are to we will CTAD, and company. clinical much biomarker conclusion an research month, market, us and be just biomarker we a diagnostics. Later drugs. will update fact neurodegenerative that this to continues that levels and be the Alzheimer's first in quality to on We pace and starting the line neurodegenerative the this

Let's take questions. some Operator?

Operator

Instructions]. [Operator

question have from Securities. SVB a We with Puneet Souda

open. is line Your

Unidentified Analyst

for just any given far, the [indiscernible] you've question. wondering flat that so of to Thanks guidance? you're I kind the the is in But the Hi. midst see if still year-over-year assay progress appreciate This seen redevelopment. upside for Puneet. of you

Masoud Toloue

Phil Hi, is This [ph]. Masoud.

our quarter. is the beginning said as call, on track we and we expectations out So program that roadmap the on the set redevelopment assay from meeting last and of

And so in don't that in, versus call which measured is quarter, our said the to any we our delay see we progress. reiterated last guidance similar three sort we going on think in of it's 'XX. this and flat We months to and time our 'XX be guidance is on what --

Unidentified Analyst

It XX% orders you which quick I if Thanks. trending. good. And quarter, great. the on I just you a have been could up. just any is here share wondering in follow Okay, how instrument was looks pretty updates said like, think, growth

a kind of negative challenges expect consumables assay I have business? to in So or just from like impact broader there been wondering you has do was some

Masoud Toloue

Yes.

that challenges have and the quality in improved self the lot were of some see the stability the A of we consumables can inflicted, we side. assay. variances those as the of you So processes,

on You versus did that instruments year see what in 'XX. last are track we

So they're and unusual. per our expectations nothing

Unidentified Analyst

Okay, thanks. back. hop I'll

Masoud Toloue

Phil. Thanks,

Operator

with Our next Kyle Mikson Canaccord question comes Genuity. from

Your line is open.

Alex Vukasin

Mikson. Vukasin for Hi. Kyle Alex This on is line

So just questions. a few

as experienced you whether I during there's be Also, quarter you. whether you headwinds any as during workforce So or curious could -- it Thank instrument related? consumables any reductions the geographic-related I any well. that more further if wondering to discuss was quarter, the was

Masoud Toloue

Yes.

the Maybe I'll on Mike breakdown. add regional some So question. can that take color

last I'd that reduction say quarter that last plans and realignment for had we we additional translation quarter. we have focus in we the And And don't that no, the really quality, initiatives the reductions. the any So to brought force announced the innovation announced.

expected. So as that's progressing

any major some see P&L. the can think can speaking, into a perspective, broadly region. it, improvements headwinds You in I no geographic And in but the Mike of go from particular

announced a partnership fact, UltraDx. In we with

so the don't And instrument But, you from Mike, China. side saw why growth some in --? we

Michael Doyle

Yes.

North almost it, evenly and and revenue you If from year-over-year, Europe. perspective between a at we're expect America look slightly down

Asia Pac, shipments instruments is to primarily digits Masoud the double by driven of to China. up point, UltraDx

way isolated it doesn't North be seem XX%. that's evenly. at So the America to any still to region obviously much looks it like is one But pretty like, largest our out. region. It about say, it's pretty spread breaks

Alex Vukasin

Got it. Thank you very much.

Operator

you. Thank our question from with next will And Sykes Matt come Sachs. Goldman

open. is line Your

Matt Sykes

Maybe Hi, clearly slide my assay Masoud on you've the just and to operations, taking seen. redevelopment questions. Mike. Thanks Good improvement afternoon. show very is helpful the for the to that start

they we how's talking managing missing sounds there. volume, clients some you're consumables, risk Just some demand closed or business? if in in is wait the Meaning redevelopment? wondering still for a system about risks volume elsewhere, But of you to there they're volume like Is that and providing those communicated some could resulting a manage to work assays that saw it the managing substitution is you're in there where that you're of what go that is as when being able customers? through you're and/or unique onto

Masoud Toloue

Matt. take I'll that. Hi,

measure the in unmatched. great of cases, of our is, that So need, with the is sensitivity to a that Simoa and ability you detection news is great ultra achieve to limits lot

these a quality we want so manage been volume of to to have able we a and lot put and the wall. we customers, validate say, And things hey, up

to So fast things expect. their hands as aren't we might out as getting

we're demand demand. wait? managed. some Laboratory. course. Accelerator some So can't there our Of But, moved Will I customers be of think is overall, the manage trying a to We've lot of that it to

we that. fill So

partners pharma there. other capacity, of projects Lilly we've see big we terms you that can and with In have moved

triage. volume are going Accelerator to orders been delayed, we've a orders say have it's when some partly been and doing some So we management,

Matt Sykes

color. high sort Got a just of question it. markets. for And more level maybe then of that Thanks end on

lot from bit the talked talked CROs and there. PET doing costs the look being lowering the diagnostic. little the and out you're Do Earlier for inroads your that and trial just see partnerships one Quanterix? you you as into can Any there. You've given about a in few slide a eventual potential important had versus years about year, a if as work you of CRO up work provide market screens pharma you the market? a an the the And with you

Masoud Toloue

own doing of our demand all match laboratory that we're neurology. going be clear to very not the to We're through or internally, ourselves able what through we're Absolutely. in here

to so working with that And CRO we companies. absolutely partners, want are enable the partners pharma

And is so for it big them. of anywhere the part our from let's enable for a the XX% They're XX% market. They us on to business, depending of account quarter.

we're support so fan, continue to a big CROs. And and we'll

Matt Sykes

just Got And one then Mike. up it. from final follow

at made we gross year-over-year. not that fair exceptions accounting to as the sequential look margins, all improvement you've As on changes that in sequential terms in I'm about talking basis. and that's that an of see apples-to-apples

Michael Doyle

and sequential right, a you're absolutely impact capture the the On allocation the of forma Yes. capture the basis, changes, impact distribution. Matt. of pro QX QX

So reductions expense by that that inventory the much of were restructuring. of product up we and mix driven some pretty result the it's had improvement, bump a reserves. offset primarily real the some then And

So a quarter-over-quarter real it's improvement.

Matt Sykes

so can in expecting see terms changes not from sort you're any forward? going And base it. there work as to Got a we your of QX of additional plan,

Michael Doyle

right. that's I think

going and be what's beyond just call to once that's from. as out baseline And try of year-over-year in comparisons to understand easier people and are what's a But QX we it we're call in well. out. going work so think year, next each I get the to good

Matt Sykes

Thanks Appreciate it. very it. much. Got

Masoud Toloue

Thanks, Matt.

Michael Doyle

Matt. Thanks,

Operator

Max Cowen. question a Masucci have with We from

Your line is open.

Stephanie Yan

Max. on questions. This taking Stephanie my for for Hi. Thanks is

care? at study expect service and will this results do influence readout is month. landmark later a in to acute for what the [indiscernible] late I So How and [indiscernible] the to presented CTAD PDUFA the data be going for catalyst November the demand the from Alzheimer's revenues phase, patient following be product

Masoud Toloue

incredibly Hi, well. as excited Stephanie. We're

believe a line we to this also is top ischemic neuro you We in it's be expect the going decade progress the the at readouts ALS, really mentioned, There's conference. -- MS, TBI, to CTAD. and to of of lot area. in great Parkinson's. stroke; I just that A addition think neuro that a in readouts lot work as hear whole happening

trials. think So of that we start in aware Obviously, you're the lot Alzheimer's. our are for a CTAD tests market being is a great in used clinical

diverse used enrolling drug are tests Our prescreening, and the just disease really for whole monitoring continuum. and effects improving being populations,

fortunate readouts the think the to the So field. that and incredibly continuum. is are and going have really disease just for and great that then technology the enable products improvement we results I And the we're

and the we're looking So to we're about the forward excited conference, results.

Stephanie Yan

color. that for Thanks Great.

week Additionally, context plans diagnostic one, last so President around company is the run pTau blood to indicated company's provide and the CLIA in will Lilly year. two, assume call your some Eli Lilly's Could referring should a that test the common; of during Neuroscience we that to launch additional Lilly's earnings next you, be lab?

Masoud Toloue

Yes.

have on So But Stephanie, we're And in I to public this on make we Lilly a I and I publicly But want active specific to we're released not haven't that say make wouldn't it. can do is that -- comments want very wouldn't to that call. information. partnership I comments on that space. this call. that listened able with to have we

Stephanie Yan

for more in. if it. one me, just one And can sneak I Got Understood.

from pTau-XXX was customers LDT, research and July within a, potential And to the clinical the contributor that researchers, demand describe versus you in trends on that So exiting LDT late customers? you've clinical launched revenue you seen can commercially QX? the pTau-XXX users

Masoud Toloue

Yes, that's question. great a

us side. for we of kind So test diagnostic its revenue I an It's innings, to being say important in could early be approval for driven very an would testing, in nothing interest as pathway for LDT pTau-XXX America. Alzheimer's. material terms diagnostic a did has we the launch North this absolutely first able of for and something future. that regulated the aid in FDA in diagnostic provide get to But ultimately for could research having clinical applications, and

was available on today. from a drug prescreening stay screening, until anticipate driven revenues approved. drug there your do and minimal We would the biopharma that to a trial the very interest So minimal having that test revenues. helps. do and There high, to to testing isn't But clinical answer question, is

Stephanie Yan

Great. much taking my questions, so Thanks for again.

Masoud Toloue

Thanks, Stephanie. Absolutely.

Operator

you. there no in for are This queue. Thank today's conference And you the Thank call. concludes questions participating. other

disconnect. now may You

Quanterix (QTRX) 9 Nov 222022 Q3 Earnings call transcript