Thank you for joining us for the Quanterix Corporation Q2 2020 Earnings Call. All participants are currently in listen-only mode. I will now hand the conference over to your host, Mr. Amol Chaubal.

Thank you, Grace. Good afternoon, everyone, and thanks for joining us today. With me on today's call is Kevin Hrusovsky, our Chairman and CEO. Before we begin, I would like to remind you about a few things. Today's 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. During today's conference call, we will discuss some financial measures that are not presented in accordance with U.S. Generally Accepted Accounting Principles or non-GAAP financial measures. In the Q2 earnings release and in the appendix of our presentation, which are available on our website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to comparative GAAP measures. We believe that these non-GAAP financial measures provide investors with relevant period-to-period comparisons of our operations. These financial measures are not recognized under GAAP and should not be considered in isolation or as a substitute for a measure of financial performance prepared in accordance with GAAP. With that, I will turn the call over to Kevin.

Great. Thank you very much, Amol, and appreciate everybody joining us for this important conference call of our Q1 and Q2 results – first half results. The Slide 3 shows an agenda. I will discuss the vision and strategy, both the executional side of our business as well as the aspirational value-creation side, talk through first half strategic advances and highlights, as well as some of the second half growth and strategic catalysts that we feel will be highly productive for investors, as well as for our customers. We also then will follow up, Amol will describe and provide more details on the financial report, then we'll open it up for Q&A. On Slide 4, this is a slide we've used in the past, but it shows how the evolution on the left-hand side of this exquisite sensitivities occurred for digital biomarkers that Quanterix has disruptively advanced over the past 10 years, starting – you can see back in the 1970s, there were nanogram per ml levels of sensitivity. And then through the last, I'd say, 20 years, there's been this picogram per ml capability that several of the customers – companies on the left-hand were able to achieve. And on the right, you can see Siemens, Roche and Abbott have utilized these technologies for immunoassays and ELISAs in the diagnostic industry. It's about 200 approved proteins today, but there's probably around 1,300 proteins that are researched in the RUO markets on the left. But the real breakthrough came when Quanterix started to advance by 1,000x since 2014, another 1,000x into femtograms per ml, and we believe that unlocks the potential to see as many as over 10,000 proteins in research markets that could lead to as many as 1,000 proteins in IVD market. These are all estimates, but we also just announced about 2 months ago that we've also achieved a 100x greater sensitivity beyond the 1,000x. So, this is really continuing to allow our technology to advance. And on the right-hand side, you can see the vision that we've been able to achieve utilizing this exquisite sensitivity. And the real promise is to go from late and invasive sampling, whether it be biopsies or cerebrospinal fluid taps, go from those very intensive or even imaging invasive samples to really noninvasive blood samples, saliva, urine, and allowing you to see disease earlier with a less invasive sample. And you can see that those two combined dimensions earlier and noninvasive allow, we think, a breakthrough in medicine. In this slide that we now have up, Slide 5, just showcases – you can see on the X axis the stage of detection of a disease. And the later you detect the disease, typically, the harder it is to treat. So, late intervention leads typically to very bad and expensive outcomes. And cancer and neurology are the latest many times to be detected, and that creates a lot of costs in the health care expenditure. You can see on the X axis, though, the red and the blue boxes down below the axis, that's the level of detection just illustratively of our technology. And the key here is that if you want to see disease earlier, the protein concentration is going to be much lower when the disease is very early stage. Baseline levels when you're healthy are the lowest level of proteins, and that's typically a level that most technologies today cannot measure. And then as you get sick, the concentration of those diseased biomarkers increases, and today's technology in red can't see them, but this is late stage. Then on the left-hand axis is the invasiveness, the Y axis. And you could see the same phenomenon. When you have a very intense, invasive sample, you have very high concentration of the protein. But if it's a very low invasive like blood, saliva, urine, the concentration is much lower. So, the key here is the blue boxes is what Simoa enables, allows us to reach into earlier-stage detection with less invasive sampling. And you can see the number of third-party, peer-reviewed publications now that are showcasing our ability to do this in cancers. Clearly, neurology has become one of the big focal areas. It's easy sometimes to see the disease in the cerebral spinal fluid, but it's a very invasive sample. Seeing it in blood with correlations is what we've been able to do now. And now there's a lot of publications leading to many drugs being tested using these biomarkers. And one of the newer areas that we're really reviving, we did a lot of work with HIV, but down at the bottom, infectious disease, and you can see the coronavirus, there's a lot of publications now on our ability to see this coronavirus, as well as infectious diseases earlier. This next slide is pretty important. We've been showing this for the last six months. On the left-hand side is what we call our research market, which is primarily a low-risk, high-growth opportunity where execution is paramount, and we believe there's a good 2x to 3x of value creation here. And a lot of what we're doing is catalyzing drug development by being able to allow our pharma customers to recruit patients using our technology in earlier in the disease cycle using these biomarkers. And when you can recruit them in less invasively earlier, it gives the drug a better chance of being efficacious and at a lower dose, which reduces its toxicity. And so the pipeline is very rich. We've been validating this technology, and we've been funding a lot of our company with nearly $300 million of raises over the last 5 years since I've joined. We have a very experienced management team, Board, and our founder founded Illumina, as well as Quanterix as well as many other companies. And so for the past six months, we've been talking about staying focused on neuro, but then also having a COVID-19 accelerator pivot in China. And we've made great advances in all of those areas, leveraging this ecosystem called Powering Precision Health of KOLs that allows us to quickly commercialize our technologies. In the area of neuro, you're going to hear we're making advances in Nf-L, now pTau, as well as the HD-X for those different biomarkers. In COVID, we're looking at both antibody, as well as antigen testing and also the innate immune system. And now we can even see Nf-L neuronal death starting to occur in COVID patients. And so we've got researchers, third-party researchers now that are measuring axonal death in COVID patients from the COVID virus hurting the neurons, and we can see it in blood again. Accelerator, we've used to really grow our business during the last quarter or two. We expanded it prior to the COVID pandemic, but now we've secured a large payer group, one of the largest in the world, to do major population studies inside of this Accelerator. We also are announcing today, in addition to that large payer group contract that we won, we're also announcing that we won at the NIH RADx program. First, work plan one, and we've been notified that we've won the award, and so we're now working in that work plan one. And we've also secured some major pharma deals relative to the biomarkers being used, particularly in neuro, and continue to evolve the Nf-L in the potential for companion diagnostics, and we're building our China channel aggressively. So, let's go back 5 years. We really didn't have revenue, and this past year, we had $57 million, we've raised, as we mentioned, this level. And our valuation has continued to increase. Today, it's roughly at these levels of value. And our outlook, we believe, is solid in this research market, we got about 10% penetration, but on the right-hand side is the aspirational side. Interestingly, we think COVID in this crisis, as we've mobilized our company to try to help fight this crisis and get the world back on its feet with better testing; we actually think it's further showcased the brilliance and the capabilities of our Simoa technology. As you know, two years ago, almost two years ago, we regained our rights to go back into IVD. We had sold the exclusive rights to bioMérieux, but we've retained those back. Since then, we've been advancing our serum Nf-L for MS and for brain health, and we've always felt that there's potential for an IVD partnership to replace bioMérieux, and we bought Uman, and we've subsequently licensed to Uman the Nf-L antibodies for a future IVD test for MS and other brain function tests that Siemens is interested in. We think our diagnostic strategy is gaining validation, and it's helping us see the potential of COVID, we mentioned the NIH grant we won and the momentum of exposure to the NIH so they can see now what our technologies can do. These large payer group studies that really are based on finger prick, getting capillary blood. We're pretty excited about the infrastructure being built out to support that payer group studies and building out the capability because we think it's a key opportunity and franchise that our sensitivity enables is the ability to get an answer from a very small sample. And then in neuro, we continue to have opportunities to evolve into drug trials, and you might have saw on the front page of the New York Times, the discussions around pTau, creating a lot of excitement for a blood test that could maybe screen for Alzheimer's. And in that particular article, they are talking about seeing Alzheimer's maybe as much as 20 years before dementia. And then the Nf-L also is playing a role in both Alzheimer's disease, as well as MS drug trials. The validation of normalcy studies have continued to evolve as well for Nf-L, allowing us to further pursue FDA sanctioning of that technology, particularly in a single-site LDT lab. We also saw drugs get approved using Nf-L. Roche and Novartis both had Phase III trials and drug approvals, and that's a pretty important breakthrough for demonstrating the value of our Nf-L. And we'll show you that more in a moment. But we do think there's potential, not only for the partnerships that we mentioned in IVD, but also working to license the pTau antibodies for some of these newer opportunities to see Alzheimer's and blood, and we think it's game-changing. This is a slide we've also shown. Left again is execution. We've added in here COVID, which we think COVID markets and research are about a $200 million market opportunity. And then you can see we move that across to the right. And if you add COVID and what's been going on in COVID diagnostics, we now think that the overall TAM opportunity, longer term, when we look over into diagnostics, the approachable market here, the opportunity for a TAM can actually go up from $40 billion to $55 billion. So, we continue to see a lot of positive movement. And you can see the dispersion of our technologies and where we're deploying them in this build-out, and you can also see our penetration in neurology is less than 10%. And we intended to go into oncology this first half, but a lot of those oncology labs shifted over and became COVID labs. So, it's actually allowed us to showcase our ability to measure the immune system with our technologies, which have been very productive. This next slide just walks through COVID, neuro, and platforms. There's some pretty important advances here. Simoa is potentially holding the keys to some high-definition testing in the COVID world. We're going to talk more about that. We also see it as an attractive entry point to precision health and vision with this large payer contract that we won in the last couple of months. Game-changing, home-based antigen test in blood is being looked at as a major opportunity with this NIH RAD feasibility study that we've also won and are currently doing work on. And then we've won a lot of large accelerator deals with strong growth occurring in the first half. And that second neuro area, as we show, compelling neuro toolbox continues to evolve. We launched pTau-181. We launched the 4-Plex. We're working on pTau-213. So, there's been large drug studies also for Alzheimer's and MS that we are seeing in the outlook, which is a very big opportunity for us. Nf-L, pTau also is getting more validated, and its clinical potential is beginning to be more ascribed as these publications continue to amass. And we've also seen these drug approvals that we mentioned which we think is really exciting. And then on the platform itself, we got the 100x sensitivity. We've got IVD licenses with Siemens, and there's more interested for Nf-L, as well as we think there's potential for Simoa license more broadly with an IVD partner. And then HD-X is delivering on the promise that we said around increased reliability. And our Powering Precision Health syndicate continues to grow with many webinars and different levels of communications coming from these KOLs and podcasts, helping the world see the way our technologies can disrupt. This next slide just shows that there's a lot of different technologies that have been approved for COVID in virus and an antibody. And there's a lot of challenges still as we see in many of the publications around those technologies. And so this next slide illustrates that those barriers of invasive testing, when you have to use PPE to take a nasal swab, there's evidence of some false positives and negatives due to sample collection challenges, makes that somewhat unreliable. The lack of quantitation, low throughput, high cost, many of those barriers have the potential to be moved positively by our Simoa solutions. And that's what we're currently working towards, and it was great to see the NIH validation of that as well as the UnitedHealth Group validation. And this slide has been used over the past six months as well with many of the seminars we've had for COVID. You can see the early interferon innate immune response to the antigen, which is, in fact, the virus, which sits in the center, and then you can see the peaks of the adaptive antibodies, which is serology on the right-hand side. And our initial volley into this with the NIH is looking at this high-sensitivity antigen. We also are working towards a high-definition serology capability from an RUO for vaccine producers. And then the innate immune system, we've already seen a lot of stratification for cytokine storm using our technology with many researchers in the hot zones. And we mentioned the Nf-L being looked at for measuring the impact of COVID on the brain. And Number 5 is really the ability potentially to look at all of these areas simultaneously, if you could do the testing and the samples to kind of get a much better picture. And we're starting to see some publications from some of our KOLs in the PPH ecosystem using the HD-X showcasing different types of testing that they're able to achieve. And we think that comprehensive testing is going to be needed to really understand what's going on with this virus. When do you have immunity? How long would that immunity last? Will you have re-infection? There's a lot of deep questions that need, we think, better technologies and testing to answer. This is just a summary of all the different companies, an example of all the companies in our PPH ecosystem that are deploying our technology and helping us further advance it. And this is just a slide to discuss, we think, a breakthrough in these past couple of months when we signed this contract minimum of $1 million of population studies with one of the largest payers in the United States or in the world. We think teaming up directly with the payers who are really trying to create outcomes and then utilizing this Quanterix vision, where you can see the disease earlier less invasively and potentially with home sampling, leads to this partnership opportunity where we've already signed one contract. But we see on the left-hand side, there's millions of members in these payer groups, and their goal is improved outcomes, as is our goal. And finding the biomarkers that enable that and then having the drugs available when the biomarkers reveal early detection, those are the key components. And this slide further illustrates across all of these different areas. We've got biomarkers today that we can start to deploy, and we're starting that out in COVID, but longer term, we think that even for areas where there are top disease costs, where there are no biomarkers, we think discovery, working with these payer groups could lead to further advances in that biomarker menu to enable this kind of visionary opportunity for baseline assessments and early detection. I wanted to show, in the area of COVID, the breakthrough of doing finger pricks, we think, allows home sampling, eliminates a lot of this challenge that health care workers have wearing PPE to do these nasal swabs to try to get the infection on it. And you can see that there's, on the right, a lot of challenges with false negatives and positives and work exposure that have been evidenced in publications, and we're trying to try to use our technologies to see if we can create a breakthrough by seeing the virus and the antibodies in blood, which we think, particularly the virus could be a major improvement to sample testing and its ability to be scaled, less worker – health care worker exposure, more convenient, lower cost. We think the supply chain is also somewhat distinct. This is a couple of publications. One of it is dated back to 2004, where they were able to see SARS-1 pretty productively in blood. And now we've got a game-changing publication that hasn't been published yet, but it's been issued for preliminary review, and that made it public, where they're able to see antigen in blood approximately 60% of the time. So pretty excited about the ability now to see SARS-CoV-2 using the Simoa technology in blood and the potential that that could have for advancing the research markets as well as some day, maybe even the diagnostic markets. And these are opportunities, we think, if you did drive blood spots, you could then courier them into different laboratories, centralized laboratories that currently are able to do a lot of testing. And within a 75-mile radius of these current reference labs, you can probably get to half the population of the United States. So, we're looking at these different avenues in our work with the NIH as we try to build this out. This is interesting. A publication just came out in the Journal of Neurology, where you see a lot of symptoms of loss of smell, taste, headaches, insomnia, cognitive impairment. And again, they're now showing a direct correlation to these symptoms with our Nf-L in blood. So, this is going to enable, not only short-term exploration around these issues with axonal damage from the coronavirus, but more importantly, what are the longer-term impacts. There's a lot of individuals saying they didn't have symptoms, but they're now having neurological symptoms and brain fog. And so, we think our Nf-L can play an interesting role there. And then just going full-fledged into the neurology side of this, these are these products that the top 3 that we've already launched, and pTau-217 is something we have under work, and this is that New York Times article. Amazing, isn't it? Long – saw blood test for Alzheimer's in reach. And so, our technology, the Nf-L and the pTau Total and the 181 were showcased there, but we also have a lot of work out that we're doing in that 217 area and believe that that's a big area for our future as we got the greatest sensitivity to see these biomarkers in blood. And then finally, in this area of diagnostics, I just wanted to further iterate the possibility and promise to further advance the IVD markets. And we've been really establishing a lot of validation in our RUO markets. And you can see here, there are four top players in IVD that make up probably two-thirds roughly of the revenue. And those companies typically have core labs and a point-of-care position. They're stable, growing and they're attractive markets, but they've got high barriers to entry, very expensive. And so since we've recaptured our rights, and we've been able to prove all eight of these checkmarks on the versatility of our technology, we think that the advances we've made with this large payer group, NIH RADx program, the major pharma advances with Nf-L and pTau, and all the publications that we've been able to validate Simoa in RUO markets, we think it opens the door now better than ever before for a win-win opportunity for an IVD partner relationship to mitigate some of the risk and create the upside of their ability to penetrate those IVD markets. So, relative now to Q2 specifically, I wanted to show that the publications now are approaching 900 third-party, peer-reviewed publications. You can see 500 of them are in neurology. And you can see the number of biomarkers in the second category. Those are what's fueling our growth. And you can see the Accelerator growth. We almost have had year-to-date revenue almost equal to what we had all of last year. So, we're making good progress and continue to want to grow the Accelerator with a lot of opportunity and projects. Particularly when many of these labs are shut down out there and the HD-X is being revalidated, we felt that the consumables, we knew that they're going to be a little bit off when we had the revalidation of HD-X. But with the pandemic hitting, we've been able to really keep a lot of that consumable flow, doesn't show up as consumables, but through our Accelerator. And that's been key for us during this pandemic time. And you can see the number of instrument placements has been pretty significant for the first half of the year, and our total revenue, we're around $29 million for the year. And then if you look at the specifics, you'll hear more from Amol on this, while we knew that we would have an off first half due to some of the HD-X revalidation, the pandemic hit us hard, primarily in Q2, but there's a lot of strength in our business, particularly in June as we continue to then evolve into the second half of the year with a lot of growth catalysts, as we mentioned, those major contracts that we were able to get approved in the latter part of Q2. And so instruments, you can see the growth was 2%; consumables, minus 34%; and lab services was plus 33%. First half of the year, lab services, other services is plus 60%, minus 17% and then 7%. And we're going to see, we think, in the second half a resurgence of many of these pieces of our business as we're already seeing evidence. That's assuming that the coronavirus doesn't have a major secondary relapse and an economic issue on our customers where, right now, most of them have been opening back up. This graph just shows the demographics on Slide 22 of how our business is currently stacked up. And you can see that North America grew 27%. Europe and Asia is growing faster. This is the last 12 months average. And you can see our customer groups at pharma; biotech is growing around 30%. Academia, a little bit faster because we've launched products to further cater to them. And then in the disease category, as you can see, neurology does overwhelm, but we are evolving our oncology position, and COVID will also play a role moving forward. These are our three products, HD-X, SR-X, SP-X. We've already discussed kind of at year-end where we think we'll be. We feel still really good about the targets that we set at the beginning of the year for HD-X in both trade-ins and new sales. And the SR-X has been very hot, 120-plus installed in 2019, and we're off to a very fast start, very strong quarter in Q2 as well. We don't provide granularity on those numbers, but it was a very strong quarter. And the same with SP-X. And then you can see our plate and bead assays that we have and then the Accelerator itself working towards CLIA and LDT capability by year-end. This slide shows all the companies that are currently utilizing our technology for primarily drug approval, research as well as diagnostic longer-term research, improving both efficacy and toxicity with a 300% improvement and overall probability of a drug getting approved in a Phase III, if you use our technology after a Phase I or starting in a Phase I. This probability improvement by lowering toxicity, increasing efficacy, has really been the driver of our growth on the left-hand side for the execution. And all of those companies now presenting at PPH and further validating the ability to use it and that research markets has allowed us to keep evolving our business. And you can see the number of CROs now that are using our technology. And we've actually completed 118 major Phase I, II, III trials in Quanterix since we started running them in the Accelerator. Key to this, as we've mentioned before, is that the FDA has really sanctioned new biomarkers, particularly for neurology, because they see a lot of neuro health as a national priority, given the COVID long-term impairment, veterans post-traumatic stress disorder, the opioid addiction, the rapid ramp in Alzheimer patients over the next 50 years and then many of the mental issues. The cost burden is extraordinary. So drug makers have been looking for objective biomarkers. And we really broke through in MS first, and now we're starting to migrate into Alzheimer's, which is really exciting and that's the rapid adoption, and you can see in Number 2 of those markers. And in the area of Nf-L, you can see we've had a very rapid ramp in publications. 42 MS publications and clinical trials. And it also branches into Alzheimer's, ALS and Parkinson's. So, Nf-L has really been a big winner. And this is the two drugs we mentioned earlier that utilized our technologies, either as a surrogate, secondary endpoint or primary. And you can see that these drugs are being approved this year. And without the Nf-L, it would have been hard to have gotten them approved this quickly. And this year, coming up to ECTRIMS on Slide 29, we're actually going to be showcasing this study, which is the normalcy study for Nf-L that is a key to advancing our clinical validation with the FDA. And there's going to be a lot of fanfare. A lot of our customers will be presenting data at ECTRIMS around this study and many other studies using Nf-L. In Slide 30, you can see we are just continuing on our road map to build our neuro-based biomarkers. On the left-hand side, you can see there are a lot of neuro toolkits in the cerebral spinal fluid, but that's a very expensive, invasive and really somewhat dangerous sampling technique. And across all these different diseases, on the right-hand side, you can see now the ones we can do in blood, and we're continuing to mount our advances in pTau is the most recent category where a lot of our future growth over the next, I'd say, six quarters, you're going to see a nice spike in our pTau with the launches of 181 and eventually 213. So, in summary, I would say on the left-hand side, the execution continues to flow with neuro plus the COVID-19 accelerator pivot. And on the right-hand side, our aspirational opportunity continues to accelerate, given what we're seeing happening with COVID and with our neuro panels advancing in the clinic with many of the drugs. So, we would like to summarize, we have a category-changing, defining sensitivity and technology. This market is evolving into a larger TAM opportunity. We think we've got tremendous validation, 19 of the top 20 pharmas. We have all of those publications and now close to 900 of them; and all the drug trials, nearly 1,000 of them. So this is key to our continued evolvement. We've invested heavily in the growth of our products so that we can have a razor-razorblade approach, and we're seeing solid returns from this growth, and we do think there's a good commercialization track record with this group that we have. So now with that overall summary, Amol, I would like to turn it over to you if we could then talk more specifically around the Q2 financials.

Thanks, Kevin. I'm going to provide some additional financial details about our Q2 2020 performance. I'll be referring to Slide 32. As Kevin noted, revenue in Q2 of 2020 was $13.1 million and was impacted by ongoing COVID-19 pandemic. Our field services team maximized opportunities to safely gain access and install instruments at customer sites, delivering $2.8 million in instrument revenue, in-line with prior year, despite access challenges. As anticipated, consumables revenue was impacted by customers facing interruptions in their operations due to COVID-19 and finished at $4 million or 34% lower than prior year. We had proactively expanded our Accelerator services capacity to support our customers, sustain their research and clinical trials. This drove a 33% increase in our services revenue, which finished at $6.3 million and also limited the total revenue decrease to minus 3%. Year-to-date, total revenues are $28.9 million, a 12% increase. As stated previously, we're not providing revenue guidance. On a non-GAAP basis, Q2 gross margin was 44.1% versus prior year Q2 gross margin of 51.2%. Q2 2020 gross margin also includes a 354 basis points negative impact from our successful HD-1 trade-in program and 300 basis points adverse impact from lower cost absorption due to lower consumables revenue. Our non-GAAP gross margin excludes the impact of noncash acquisition-related purchase accounting adjustments related to acquisition of Uman in 2019 and provides investors with relevant period-to-period comparison of our operations. On a GAAP basis, our Q2 gross margin was 39.7% versus prior year Q2 gross margin of 51.2%. We believe we have a significant opportunity for gross margin expansion in the future as we evolve the mix towards high-margin consumables and Accelerator services, scale our overall business and reduce product cost. Operating expenses totaled $17.4 million in Q2 2020. Use of cash in Q2 was restricted to $7.6 million through proactive working capital measures. The balance sheet is in good shape as of June 30 with approximately $89 million in unrestricted cash. Weighted average shares outstanding for EPS totaled 28.3 million for Q2 2020 period. Overall, we are pleased with our Q2 2020 performance and progress made on our strategic priorities. We remain focused on recovering to our strong growth trajectory in the second half of the year despite the continued challenges brought on by the coronavirus pandemic. With that, I will turn the call back to Kevin.

Thank you very much. Appreciate that, Amol. And we'd like to now open it up for questions.

Your first question comes from the line of Doug Schenkel from Cowen.

Hi. This is Chris on for Doug. Kevin, just to start on Accelerator that was a really impressive performance. Could you just give us a bit more detail on where the incremental demand is coming from? I ask because I'm curious if these customers are new to Simoa, and therefore, there could be opportunity to sell a system to these customers down the road.

Yes. Great question. And Chris, I would say that there's a couple of dimensions that are encouraging about the Accelerator revenue. One of the dimensions is that we saw a lot of pickup in the planar, what we would call the 10-plex, CorPlex technology, looking at a lot of cytokines. And as you know, the immune system is central, the inflammatory pathways and pathology are central to most diseases. And so, we had some pretty important breakthrough customers come in and run some of those trials with this newer technology that we always know that what we do in Accelerator today helps us in our product sales tomorrow. So, we were very encouraged to see that newer technology being deployed in those immune opportunities. And so that would be one area. Another area that we certainly are seeing some evidence of opportunity is in the COVID area in infectious disease. We are certainly seeing an impact to many of our customer labs that either had our technology or didn't have it, but because we expanded and were prepared for running on behalf of customers, it's given us an opportunity to showcase our technology to a new group of customers, as well as those that already own our technology. And so those as well were very productive for our advancement. I think the two major contracts that didn't really have a lot of revenue recognition as yet, but are looking very good for our future would be this large payer group, a multinational, diversified health care payer group. For them to see and be able to team up with this vision of home care sampling has been doing the testing in our laboratories, we felt this is a breakthrough, and this is a minimum of $1 million contract. So, we think it's just gonna allow us to keep showcasing how biomarkers can play a role in significantly changing the cost structure and the outcomes by seeing disease long before symptoms less invasively. And then secondarily, having NIH notify us that we've won this work plan one feasibility study for developing an antigen test, we think this also has given us great momentum in our Accelerator lab to showcase a lot of our capability. And then there's been some large pharmas as well that I mentioned to further continue their retrospective testing, some of it prospective testing of neuro primarily and then in this new area of immune with the planar assets and the CorPlex, 10-plex of cytokines. So, hopefully, that helps you, Chris.

No, that's great. And maybe turning to just – now, obviously, lots of exciting developments on both diagnostics and research side in both your press release and prepared remarks. I'm curious how this impacts your thinking on – how does that impact your longer-term revenue growth target of 30% to 40%.

Yes. Interestingly, that growth target has been primarily a research growth target, and we still feel very good about that. And the more we've advanced the promise of what we're doing in diagnostics as opposed to advancing purely diagnostics, I would say that many of the advances we're making can really showcase the promise of what we're going to be able to do in diagnostics and probably with more validation than we've ever seen. It actually helps our research business because most of our pharma customers, part of why they came to us was they felt there was a very strong path to the clinic. And we are very committed to continually looking for an actual specific IVD partner, as we mentioned, was a goal going into this year, as well as just continuing our own advancing. And so our ability to evolve into our own CLIA LDT lab by year-end and provide actual patient samples is a capability that we think really could be showcased with Nf-L, if we can further advance Nf-L for MS, for multiple sclerosis disease progression with the FDA, it gives us a single-site opportunity to advance that. So, I would say that the 30% to 40% has never been stronger in our minds relative to the long-term growth prospects of the research, where we have very low levels of penetration into those markets, and we're disrupting them very productively. But I do think we're starting to see the advancement of the diagnostic side that really would be over and above that. But I would also call that longer term, as a lot of big contracts being signed today to validate it, but the longer-term aspirational side of revenue growth probably takes a year or two before you start to see anything material there.

Understood. And for my last question, is 75 HD-X and 75 SR-X and SP-X systems still the right way to think about placements for the full-year? I ask because the instrument performances were certainly much more resilient than we had expected in Q2. And then I know you're not providing revenue guidance, but how should we think about the recovery trajectory from here? I guess when do you anticipate returning to your historical revenue growth rate? Thank you.

Absolutely, Chris. Yes. I think that we provided what we thought the HD-X was going to be possible that roughly half of our HD-Xs by year-end will be – or HDs will be HD-Xs. And some of that, about half of it is coming from replacements of the HD-1s, and then it's the pure growth of HD-Xs. And the goals that we set at the beginning of the year are really a one-time set. And interestingly, I would say that – we would say that we've felt the first half has been a productive advance versus both our HD-X and our SR-X goals as well as SP-X. We didn't expect a large number of SP-Xs in 2020. So, instruments have continued to flow. And I think the strong accelerator growth is a very good indicator for future instrument and consumable growth. So, we feel pretty good about that. And as long as there's not a major closing of labs, I think we feel like we're going to be back into action relative to our growth trajectory. We are still projecting a strong second half. We feel like we are starting to see a lot of good progress of lab openings. If they continue to open at the current pace, we feel comfortable that we will be, by year-end, for sure, back at this level of growth that we projected longer-term. So, the key will be basically continuing to get labs opened and keep evolving our menu, particularly in neuro. And I think that we're going to start seeing some productive, positive tailwinds from COVID in the second half as well.

Awesome. Thanks for taking my questions.

Sure, Chris.

And your next question comes from the line of Puneet Souda from SVB Leerink. Your line is open.

Yes. Thanks, Kevin. First question is, I mean the service and accelerator business continued to do well. So, I just wanted to understand the sustainability of that trend. I mean, obviously, we are not seeing complete recovery across the country. And maybe Europe – actually, Europe has recovered a little bit better. So, maybe just give us a sense of how do you expect that business to continue to recover, while consumables and the installations recover on their trajectory. So, just help us understand how should we look at services business.

Sure. Yes. The services business has really been a way for us to continue driving consumables. But as you know, the consumables that get consumed in the services business go on to that service revenue line. So, a portion – a large portion of what goes through services, those are actually consumables. But I would say that there's still a lot of uncertainty in many of our customer labs, and many of them have continued to stay focused on COVID as opposed to returning to the categories that they were originally. Most of the labs that have turned into COVID labs were cancer labs. So interestingly, we're seeing good, productive visibility by our oncology customers in COVID as they explore using the HD-X for serology and/or antigen testing and also the innate immune system, as well as Nf-L. So we're actually been pretty encouraged by that development. And we see opportunities, as we mentioned, in the second half for services to support those large-population studies with one of the largest payer groups in the world. And then getting data can only further fulfill the opportunity for more testing. And what's been interesting about some of that work is, it's being done with capillary finger pricks, where we're able to take a really small sample, maybe even a 1-microliter to 10-microliter sample, and get an answer from it. We dilute it up and have sufficient sensitivity to still get good answers. And that infrastructure enables a whole new paradigm of testing that I think will support and build upon our Accelerator services for the next several years. So, I'm actually very encouraged that the services have a lot of growth catalysts kind of being built into them for the second half and potentially longer. And again, that translates into product sales on a longer-term basis, which I think also bodes well. And on consumables, we had negative growth in Q2. I think most people expected that it would be negative potentially in Q3 as well. But we'll see because a lot of these large pharma trials now are starting to gear back up for Alzheimer's, and there's a lot of interest in our technology, as we mentioned, because we're the only ones that can really help them noninvasively in blood, have biomarkers that are objective for a category where there's been no drugs approved. And aducanumab that Biogen is now looking for approval this year, and we see Lilly and other companies really making advances fast and furious in utilizing our technology. So, I do think that the consumable pull-through, independent of the services, can also start to see a recovery in the second half.

Okay. That's very helpful. On the academic, and I know you covered some of this already, but I just wanted to get a better picture. Given the replacements that you did here for HD-Xs and installed, can you give us a sense of how is academic expected to recover for you? And what – any trends that academic access to the labs, how is that doing in July? And then on European side, I mean, do you any impact from the European Horizon budget? And essentially it was flat from the last budget. Do you expect any impact there? Or were your expectations for that budget, too – I think generally, the expectations were that budget is going to improve, so it was a bit of a surprise. So, do you see any impact from that?

Puneet, that last question was on the NIH budget?

It's the European Horizon budget. That came in...

European horizon. Yes. Got it. Yes, got it. So, I think in general, academia has been a smaller portion of our business. And I think one of the things we've done this quarter is we've included the Accelerator and the total revenue of the company when we split out academics versus pharma. And we've seen a really strong pharma usage of the Accelerator, very strong concentration. And that's why you see more like almost 60% pharma, 40% academics, but we do have products geared towards academics with the SP-X and the SR-X. These are more recent launches that we feel very productive, lower price points, smaller size, smaller footprint. And so we do believe that the combination of the smaller footprint, and also going into Asia, we believe that we're going to see more academic growth, and that's where a lot of the publications come from. And you're right, I would say a disproportionate of academic labs shut down versus pharma during the COVID crisis. And so some of those academics did switch over, but many of them were shut down. But we're starting to see a lot of them opening back up. Very interested in the HD-X for COVID trials and for COVID linkages to medical institutions. So many of these academic groups do have affiliations with the medical institutions that are really still trying to do research on COVID, and we have this panel of capability now for COVID that I think will be – will bode well for academics in the second half. But they don't utilize the Accelerator as much as they do by products. And so I think you've got a much better product distribution on academics. And as they start to return, it's going to create, I think, good instrument and consumable pull-through. I don't expect there'll be any impact at all to the Horizon's budget being flat in Europe. We have a lot of European funding that's coming from many of the disease consortiums. And so I think that in the areas of MS and many of the neuro with ECTRIMS coming up, you're going to see just a nice surge of funding and a lot of activity still in that landscape just due to the fact that there's a real need for drugs in neurology. And we see neurology being impacted, not just in the United States, but around the world, and COVID is partly due to that fatigue. And the impact of COVID on patients longer term around the world, whether it be the innate immune system fatigue and the cytokines or the neuronal death and the longer-term implications for mental health and for brain health, all of these are areas that I think we'll start to see funding coming from multiple sources in these countries as they try to get back on their feet and then figure out how to sustain a healthy setting in each of their countries.

Thanks. And last clarification. I just wanted to understand. It seems that you have worked through half of your HD-1 replacements with HD-X. So, wondering, how do you think the rest of the trajectory works out here and the duration of that? How long would it take to replace the rest of the sort of installed base there? And Amol, maybe can you clarify if that was to sort of occur over the next couple of quarters? How are you thinking about the gross margin impact?

Yes. Maybe Amol, I'll just – a high-level comment that we gave some goals out at the beginning of the year, and in this call, Amol felt that we still pretty much feel good about most of those goals. And so it might be good if you could just provide your clarity and thinking around the overall HD-X position, Amol.

Sure. So Puneet, I mean for the remainder of the year, we do expect a lot of HD-1 trade-in opportunities. There is healthy demand for it. And keep in mind, we launched this towards end of Q3, early Q4, right. In September, October time frame, especially in university-funded situations, new budgets become available. So, we will continue trade-in program across Q3 and Q4. And we will continue to see gross margin impact commensurate with Q1 and Q2 in the remainder of the year. But as we discussed before, it's a good problem to have because it creates a larger consumables annuity going forward and a much better customer enrollment and satisfaction with our products.

Okay. That’s great. Thank you.

Thank you. And your next question comes from the line of Max Masucci from Canaccord Genuity. Your line is open.

Hi, Thanks for taking the questions. So, can you just dive a bit deeper into the recent trends you've observed for your core neurology customers over the past month or so just in terms of trials and utilization picking back up, just particularly with your larger pharma customers? And has COVID-19 led to any major expansions from one therapeutic area to another or an extension of business with some of your top pharma customers?

Yes. So Max, I would say, first of all, that there is more excitement than I've seen in quite a while in the field of Alzheimer's. And the AAIC was held last week, and I think there were 50 posters that showcased Simoa, and there were a lot of talks. And I think in general, there's this belief that we're on a very important moment for Alzheimer research with the Biogen aducanumab making the advances that it's made and then Lilly and others seemingly investing aggressively in many of these different areas. We're very encouraged by the work that they're doing and the way in which they are approaching Alzheimer's and feel that biomarkers are becoming a more important objective marker to help them with the FDA showcase efficacy. And I think that historically, being able to try to reverse dementia once dementia has hit, when it could take 20 years of pathology now being shown in many of these biomarker trials before dementia hits. By the time it hits, the ability for a drug to reverse that, it's very difficult. It's like a raging forest fire, and you're trying to put it out with a water gun. But if you can get to these pathologies of Alzheimer's when it still looks like a match being lit, you've got a chance with a drug even at a lower dose to put it out. And I think that, that reality is really beginning to take hold. And I really applaud the MS community as being the first shot on goal, where there's 16 approved drugs in MS. And what the FDA requires, Max, is that you approve the validation of a biomarker by showcasing it on a currently approved drug. And so in MS, where you had approved drugs, it was easy to take an Nf-L, show how the biomarker Nf-L comes down with an approved drug and then show its validation via that approved drug and then move it across then make it a secondary surrogate endpoint for a new drug. In the area of Alzheimer's, it's taken longer because there's no approved drugs, and it's harder to show the validation around the technology. And I think that these recent breakthroughs of being able to see correlative impact of imaging with measuring the pTau in blood, those breakthroughs are starting to really give hope to many in the drug industry to new objective biomarkers that will open up a field of neurology and neuro advances and agents that you couldn't get to without these biomarkers. So, I'm very encouraged. I see a lot of interest right now by the large pharmas that have pipelines in this area and even some of the biotechs that are building Parkinson agent portfolios, et cetera; even direct Nf-L to disarm some of the smaller venture groups. We see a lot of interest in those biomarkers. And then when you look at the field of what COVID has done to the world, I think that the – we're really probably only in about the third inning, because every day, we're learning new things about ways that the disease can be transmitted, what's it mean to have immunity protection so that you don't get re-infected and how long will that protection last. Is it T cell or B cells that are providing this? And I had a chart that didn't make it into the deck around vaccines and the fight – in the race for vaccines. And many of our customers are trying to get those vaccines approved. And our ability with our testing to try to help them with endpoints on vaccines and even to recruit appropriate patients, looking at the innate immune system, as well as the adaptive immune system and serology, we think all of these different questions haven't been answered yet. And so what fields and what disease categories are going to be impacted, I think it's early. But we see like the large payer groups running trials like on ACE inhibitors, where they might have evidence through their medical records that people on ACE inhibitors might show a better prophylactic benefit from getting COVID, as an example, or we might see some of these vaccines that we've seen for hepatitis being deployed as potential vaccines for COVID and blocking the virus. And then you're starting to see the neuronal impact of COVID. And you see the strokes that are occurring, and you see a lot of the immune system fatigue that is occurring. So what's the long-term implication of COVID on patients, is something that I think the payer groups are very concerned about, and they're trying to do their own research so they can get underneath and understand COVID so that they can protect their members and be able to keep their life expectancy longer than those without these biomarker technologies and also to deliver health care more efficiently. And I think that leads to longer life expectancies and greater membership, and I think it's going to happen across the heart. It's going to happen across, I even think, oncology because you're going to see relationships between fatigued immune systems and what that might mean to acquiring cancers. You might see it certainly in the whole neuronal area. And even future infectious disease, I think, is going to be a category because there's going to be the next SARS-2 coming, and are we going to be ready for it? So, I think across the board, you're seeing a pretty interesting moment where diagnostics valuations could approach what a pharma's valuations. And if you can link diagnostics to early detection and then have the pharmaceutical agent with lesser dose and toxicity actually prophylactically prevent the disease, I think you're going to start to see the diagnostic increasing in value. So, I'm pretty bullish right now on the role diagnostics is going to play across therapies and across just early detection and disease prevention.

Great. And then have your COVID-19 applications led to conversations with diagnostics companies or types of diagnostics companies that you hadn't been interacting with much before the pandemic? And how have the last few months changed how you think about the ideal way to enter the clinical diagnostics market and maybe your ideal partner?

Yes. So, I would say that one area that we've been getting a lot of inbounds is around home care sampling and this whole area of finger prick or saliva testing and exploiting Simoa's technologies for being able to have that exquisite sensitivity to see inside of those sample matrices, disease early. I think there are diagnostics of point-of-care systems that have been very much awakened by this promise. And so, we've got some inbounds occurring in that area. I think the broader-based IVD companies, as I showed on the one slide, have also watched carefully as they've seen us make great advances with the payer health care syndicates because those payer syndicates are really trying to create new outcomes. And how they interrelate with their patients and surveillance of their health could lead to the next big breakthrough, I think, in the diagnostic category. So, I do think that our advances with the payer groups, coupled then with our advances with NIH, have further, I'll say, created interest by the large IVD houses that would potentially want to deploy this sensitivity, not only in their core labs, but in point-of-care as well. And so my view is that this is a great moment where we've created so much validation of the Simoa technology within – over – nearly 900 third-party peer-reviewed pubs, all the pharma is using it, all that momentum in the MS, Nf-L and now with COVID. I think we've lowered the risk for an IVD house to deploy Quanterix' technology. Back when we did the bioMérieux relationship, which was an exclusive relationship, 100% exclusivity across all disease categories, I do think it was premature for them to really have our technology validated. And as it ends up, we were more focused in oncology and I would say neurology than infectious disease at the time. And so we really weren't that good of a fit. But I do think that all of the large IVD houses, I would say, any of them and all of them have shown different capabilities to be able to use our technology and become disruptive. And so we think there's an interesting win-win opportunity with either one of them or many of them. And I think if you have a strong imaging position, you would want to try to marry the biomarkers that we can measure with imaging. If you don't have a strong imaging position, you might try to use the neuro panel to displace imaging. So, I do think the different diagnostic houses, whether or not they have imaging or not, have impacted the way they think about the role and the disruption that these biomarkers can play. And we're just very formally focused right now on NIH, CDC, FDA, these agencies better understanding our technology. The more that it advances, couple them with the payer groups, the more it validates and lowers the risk of a large IVD house utilizing the technology. And that's where I think the win-win comes in, Max, and so I don't know if there's a particular player I would highlight as being best. They all seem to have a little bit different demographics and potential impact in the way they would utilize Simoa.

Great. That’s all from me.

Perfect, Max.

Thank you. I'm showing no further questions at this time. I would now like to turn the conference back to our Chairman and CEO, Mr. Kevin Hrusovsky, for any closing remarks.

Thank you very much. We really appreciate it. We've gone a little over the hour, and we're very excited about the progress that we're making. The world is definitely in a very tough place right now, both health-wise and economically, and we're trying to do everything we can. We have an incredible group of employees that have dedicated themselves. I mean, I've never seen anything like it over the last four or five months. They've worked – most of them, seven days a week across the board and really doing everything they can to try to help. And we just want to thank the investor base for all your support as we continue to do everything we can to help the world get back on its feet. And we hope you stay safe and healthy. Thanks very much for listening, and we'll talk to you soon. Bye-bye.

Ladies and gentlemen, this concludes today's conference. Thank you all for joining. You may now all disconnect.