Awesome. Good afternoon, everyone. I'm Evie Koslowski's Life Science Tools and Diagnostics Analyst here at Goldman Sachs. I'm joined here by Everett Cunningham, the President and CEO of Quantarix. Thank you for joining us.
Thanks, Evie. Thanks for having us.
Yeah. So I guess just to kick things off, you've had several months under your belt as CEO of Quantarix. Maybe walk us through how your background positions you well as you look to expand from kind of core research into clinical diagnostics and the high-level strategy of how you plan to execute this transition.
Yeah, it's been almost five months since my new job here at Quanterix. You know, I'm a lifer when it comes to health care. I've been in health care for 34 years. And my background, you know, in the pharma space, the research tool space, the precision oncology space, lends it really well in terms of the timing and fit with Quanterix. You know, if you look at Quanterix now, our research tool, big, robust business, install base, how we pull through our consumables to generate growth. Our research tools business is a very solid business. And I talk about fit and timing, Quanterix to go to that next level, being in that diagnostics business, our diagnostics opportunity, especially in the Alzheimer's side of the business. Right now, and I know we'll talk about it, but just from a timing standpoint of submitting our 510K for our blood-based biomarker test, making sure that our instruments are IVD-ready, making sure that we get solid reimbursement. I've been through all that in past companies, and how do we build that up to generate growth? It's exciting.
Yeah, definitely. So we're jumping in. You mentioned it, but you recently submitted the FDA 510K application. It's now under review. So what have your conversations been like with the agency? And I think you mentioned a timeline of around six to nine months of when you expect to hear back. So I guess how are you thinking about that?
Yep, we submitted our 510K in January. we've had ongoing conversations with the FDA. While we can't predict what the FDA is going to do, we have all signs that we're going to get FDA approval in the second half of this year. And that timeline is right on track. You know, a good sign is the FDA continuing to ask us really solid questions and us following up on those questions. So we feel good about, and that is a really big kind of sign for us to continue to execute our diagnostics plan is getting Lucent AD complete FDA approved in the second half. So all signs are headed in the right direction.
Great. And how should we think about the labeling requirements for multi-marker tests versus some of the single analyte PTAL-217 tests?
Yeah. Like I said, our Lucent AD complete test is a multi-marker, a five-marker test. You know, the blood-based biomarkers that are on market now are one-marker, two-marker tests. How we look at that in terms of how we're going to get designation is our test is differentiated. When you look at the one-marker test that's out there now, that indeterminate zone is around 30%. With the five-marker test, that indeterminate zone goes from 30% all the way down to 10%. So we look at that as a couple of things. First of all, it just gives more answers. It gives more answers to the patient, which is critically important, but it also gives more answers to the health care provider. And then when you think of giving more answers, there's less than need for a PET scan. So it also decreases the amount of health care dollars that are being spent, and the workflow just becomes easier. The last thing I'll say about the five marker test is CMS. So we got a really good price crosswalk of $897 for our five-marker test compared to the CMS price crosswalk of a one-marker test that's around $130. So it's not just clinicians saying that our test is differentiated, but it's also CMS with that robust price crosswalk.
Yeah, definitely. And I wanted to touch on the pricing more. Maybe talk through what this means from a margin perspective and how you compared it to the single analyte test and maybe on the margin side as well would be great. And I guess how do you feel this helped you with early conversations with payers?
Yeah, so a few things are going to help us with early conversations with payers that we're having right now. One is around our clinical utility studies. So we have three studies that are out there with three really credible partners, Mass General Brigham, Mount Sinai, and those are clinically utility studies. they should read out in the second half of this year. So we're taking those studies because they're real-world studies in the neurology setting and the primary care setting. We're going to take those studies, and they will help us with the reimbursement discussions that we're going to have with payers. So we feel good about that. As far as margin, you know, we're not going to talk about specific margin numbers right now. However, we're very confident that this will be and help our margin and be accretive to our margin goals for this year.
Maybe touch a little bit more on some of the clinical utility studies that you mentioned. I think completion in the second half, but maybe talk through what you're seeing there.
No, we're right on track. So we talked to those three partners that I talked about on a frequent basis. Those studies should read out in the second half. So we have a lot of things happening in the second half, right? We have, you know, our 510K, we should get FDA approved. We have clinical utility studies reading out in the second half. We have our discussions with payers. We are also taking our HDX, which is our workhorse, right? The install base is robust. We're getting that IVD ready. That should be in 2017. You're putting all that together. We talk about that as our diagnostic moat. And, you know, what differentiates us from many competitors in our space is the fact that our moat is ready now. You take all of that, and we're setting up, we're being intentional. I brought in a diagnostics leader from Quest Diagnostics, Jeff Albrecht. 30 years of experience at Quest. He knows big, we will drive growth with our diagnostics now.
A lot of catalysts kind of adding up for the second half. I mean, I guess from a sales team build-out perspective, you know, how are you looking at that and then also managing expenses kind of appropriately?
Yeah, I smile at that, Evie, because it's probably one of the most common questions that I get, right? And it's because people, you know, they look at my background, and I've built out, you know, diagnostics organizations at organizations like Quest Diagnostics, at Exact Sciences. At Illumina, we built out a pretty robust diagnostics organization. Here's the similarities. The similarities are we know the call points that we need to go to to grow this product. And what I like about our opportunity is it sits not only in the neurology call point, but it also sits in the primary care call point, because half of Alzheimer's is diagnosed in the primary care setting. So we know that we have to be there, right? And we're going to be there through a multi-channel approach. We're going to have, obviously, key account executives that will call on neurology and that pull through to primary care. We're going to have a multi-channel marketing effort. My team, we were talking about that this morning in terms of how do we cast a wider net with marketing and social media and working with advocacy groups to get the word out there. And then what I'm really excited about is we'll not only do it organically at Quanterix, but we're going to use smart third parties to do it. And we announced in the first quarter a really unique partnership with Tempest AI. They have great relationships at key health systems in the United States. Those health systems are integrated with EMRs, and we're targeting key health systems to integrate loose and scale deal with third parties like companies like Tempest also.
This partnership, are there any key metrics we should be looking at regarding that partnership specifically? Growth is one.
I think another key metric, and we're working really closely with Tempest, is we're being strategic on those health systems that we target, health systems that see a lot of Alzheimer's, health systems that we have access to, health systems, like I said, that have a solid EMR partnership. And those are the ones that we started to go to. We kicked this off at the end of Q1. And, you know, throughout the year, I'm sure we'll talk about the second half. But that's why we feel optimistic about the second half is because of, you know, smart things that we're
doing to focus on growth. Definitely. And you touched on this a little bit, but when you think about like the neurology specialists, which are probably the earlier adopters, and then, you know, specific investments that are really required to get more into the primary care setting. I guess, how do you balance the education of high-touchpoint PCP with kind of your current margin targets?
We're going to be smart about this. I mean, the key opinion leaders with Alzheimer's, the Alzheimer's journey, dementia, are the neurologists. I would say they're concentrated. We are already embedded in today, so we'll continue to making sure that we have a diagnostics key account leader in these key neurology centers. And then we'll use it as like a hub and spoke. You know, from that, we'll make sure that we deploy appropriately. I mean, and I say that only because I've done this before. The primary care call point is so dispersed. It's so, there's so many different ways you can go. We'll make sure that we know which primary care physicians are ready, you know, for blood-based biomarker adoption, and we'll make sure that we deploy accordingly. That's where Jeff will come in. You know, the good thing about Jeff is his experience at Quest Diagnostics. They have experience in selling blood-based biomarkers. We know kind of where the fish are, and that's where we'll deploy accordingly.
Yeah, that's great. I did want to touch on the competitive landscape. Gabe, you have some large cap players entering the PTAO 217 space. Maybe walk us through the competitive advantage of the multi-market test relative and then what you're actually seeing from the positions on the market.
Yeah, first of all, competition. I mean, we're asked the question all the time around competition. And Evie, in a really maybe unique way, I love competition twofold. Number one, it defines how important and attractive this market is. If you think about Alzheimer's, right now the Alzheimer's journey is a journey of cognitive impairment, a lot of questions, what do I do if I have Alzheimer's, and almost people, because they don't have tools, waiting too late. And so the fact that the competition is here in this space, It talks about the need for many, many people to go and compete in this early detection, early biomarker space. I welcome that. I also welcome it because it sharpens our tools. When you have competition that's out there, we have to be that much better. And so I use that as a catalyst for our internal people to say, hey, we do have competition that are out there. How do we differentiate? So here's how we differentiate. First of all, our diagnostics, we call it moat, right? Our diagnostics base is better than any company that's out there right now.
We have the tools, the instruments.
We have the kit. We have the blood-based biomarker. We have our internal lab right now that we can do order to cash and bring samples through our lab. We also have the opportunity because we have our HDX instrument, we can have a distributed strategy too. So we'll have to determine kind of how we go and where we go. So that's important, the differentiation. And then if I double-click on the five-marker test, you know, a lot of people say, well, the one marker's okay. You know, it's okay for people. I beg to differ. I think that the five-marker test that looks at all the markers that are essential for diagnosing Alzheimer's is important. And I go back to what I said earlier. If I can then take that indeterminate zone that's now 30%, if I can take that down to 10%, that fold increase in giving more answers and making now the caregivers just knowing what to do with that, to me, we're going to impact the market.
Yeah, definitely. You mentioned the distributed strategy with your instrument. Maybe talk through what would be the considerations if you decided to go that route versus maybe using your internal lab.
Yeah, we will go that route. You know, first of all, we're going to utilize our own install base and the relationships that we have on the research tool side of the business, in academia, you know, in going after the right labs and making sure that they can then use our instrument to process their own samples. So to me it's flexibility of having a centralized strategy with our own lab that's amazing, it's in Bill Ricca, But, you know, it's up and running samples and samples now. So it's not a startup lab, but it's an established lab. And then having the flexibility of saying, hey, we'll put an instrument in your own lab. You run the samples. I think it's given us that flexibility.
Yeah, absolutely. I think it's a good place to start to transition to the core research business. So I guess pharma revenue in Q1 was sort of impacted by fewer larger accelerator projects and weaker instrument placements. But can you talk through what you're seeing from a macro perspective? It feels like the end market is maybe seeing slow and steady improvements. You've got some MFN deals, slightly better funding from academia, but maybe talk to you some of the puts and takes.
Yeah, maybe I'll talk about it from a balance sheet standpoint first. Listen, end markets are tough. They're not just tough for quantarics. They're tough for everyone. Yeah, it's broad-based. And I still keep in touch with some of my Illumina colleagues, and we talk about the end market that's impacting everyone. So we actually, in our plan this year, and we talked about it in our earnings call, we don't have anything built into in-market improvement throughout the year. So that's from a balance sheet P&L standpoint. You know, if I could just go pharma, for example, yes, our accelerator business was down, but not because of the number of deals. The number of deals that we've done are kind of compares the same. The number of deals that we're doing is a quantity of deals. It's the size of the deal. So because of that, and thank goodness we've done a lot of research around that, I'm going to dedicate more focused capabilities on our accelerator business. I'm bringing in senior leadership that will focus solely on accelerator. They're going to use the entire company. I say that with a smile because I will start calling on pharma customers, and we need to compete for bigger deals in this space. That, we think, will bring upside to our accelerator business in the second half. As far as academia and research, that business was down in 2025 by 25%, and in Q1 it was down by 16%. So we're still seeing headwinds in that space, but that won't preclude or hinder us from going into that customer and still selling our instrumentations and our assays. We have the best in the market. It's on us to go out and execute.
Yeah, and touching on that market, too, because we've seen an NIH budget that's now been confirmed up slightly, but there's been talk of maybe the flow of funding isn't quite as robust as you would expect in that type of environment. So I guess what are you hearing from the conversations? Hesitancy.
It doesn't mean that research isn't important, but hesitancy to see a full release of kind of their spending. I think the important thing is that we're not going to let the market impact us from not being out there. We're going to be out there so when it does, they have the best solutions, the best selling, the best marketing, and we'll be there to capture it.
Yeah, and kind of to that point, on the Samoa HDX, HDX, you're upgrading your platform, and you plan to submit IVD status next year. I guess talk through some of the upgrades and how you expect this upgraded version to help in terms of driving interest in placements.
Yeah, reliability. When you get into the diagnostic setting, your machine has to be 98, 99% reliable. So it's going to be improving on the reliability of the machine, the software, the workflow. So when we do put it in the diagnostics clinical setting, man, it is seamless on how our clinicians work with us and health care providers work with us. And that's on track. We made that prioritization back in Q1 that we would focus on upgrading our HDX. We're doing that because it has the largest install base. We're working with one of our contract manufacturers, Stratec. And we have a really good plan in place to be IVD ready at the beginning, sometime in 27.
And Samoa One is an early access. Maybe walk through the feedback of what you're hearing from customers so far on that and how you're thinking about that launch, given the environment, maybe more capital constraints.
Yeah, Samoa One, I mean, I think it's the example of our innovation, right? We're refreshing our HDX machine. That's innovative because we're getting it ready for IVD. Samoa One, like you said, is in early access. I'm actually seeing our early access partner next week down in Providence. And we're still getting insights from the early access program. We'll take those insights not only to improve on Samoa One, but also to improve on all of our instrumentation. So it's going well.
And on Akoya, you already hit your $85 million annualized synergy target for the acquisition. So maybe talk through how you're balancing the strategic focus towards attacking new markets versus maybe some of your existing markets in neurology.
Yeah, first, my hat's off to our existing team. I thought Vandana Shriram did a great job of discipline and hitting targets all across the organization. We hit our $85 million target in Q1. That really helped us from a balance sheet standpoint of, again, being cash flow break even in the second half. And so my compliments to the team. One thing that I've been impressed with in my first five months is just the discipline around prudent spending, investing, doing the things that we say we're going to do. That $85 million synergy target is spot on. What I said during Q1 that I'm excited about is now making the pivot from being a synergy-hitting target organization to an invest-to-grow organization. being on the offense now and having the synergy plan behind us and now focused on how do we generate that flat to low single digit growth in our research tools business in addition to now starting to have our diagnostics business take off we have the acquisition behind us and now we can focus on execution that's the pivot that i've seen from
q1 to q2 heading into the second half and beyond great and you know did you kind of gain more familiarity with the business, is there anywhere you feel you could drive additional synergies or maybe cross-selling opportunities within your core platform?
Yeah, to me, I look at it as productivity. Synergy word sometimes is looked at as defensive. And making the Okoya capability, the spatial capability, a part of Quinterix, it's just going to bring us, first of all, it's diversifying our business. So not only are we a neurology-focused company, but now oncology and immunology. So that's a good thing. Other synergies come with our commercial organization. We now have one person going to a similar call point. So if I look at, like, pharma or academia, you know, there's no need to have two separate people. It's usually the same call point that we can go to. So as time goes on, that productivity decision that we made will only gather momentum. So I'm happy about that. And I told our company this, right? I mean, we had to do a lot to hit the $85 million in synergies, and now we're kind of in investor growth mode. Now we can look at surgical things that we can do, whether it's a growth opportunity or a synergy opportunity that will benefit our company, and that's how we'll look at it.
Okay. And, you know, Akoya is more positioned towards the translational research side. Do you see any low-hanging fruit to start to penetrate on the drug discovery side or maybe the clinical side within that?
Yeah, both. You know, I look at our accelerator business. You know, our accelerator business right now is mostly on the Samoa neurology side of things. There are absolute connections that we can have on the Akoya side of things. So we'll look to stabilize and build up and bolster our Akoya spatial drug discovery opportunity on that side. The other things that Akoya brings that I absolutely love, and we're being purposeful. I'm actually recruiting back Akoya talent to the company. We recently brought back Anthony Catalano, who is now our COO, an Akoya executive that we brought back. You know, I'm looking to continuing to, you know, reach out to customers and figure out how can Quanterix partner in that translational side of the business. And then the question is, and we saw this at AACR in San Diego, is how do we move from being a big partner in translational, staying there, but how do we also move then into diagnostics and clinical? So that will be our focus, too.
Exciting. I have to ask an AI question. So I think when you think about tools business more broadly, we've heard several pharma companies are talking about changing their drug discovery and R&D workflows as they incorporate AI and predictive models, I guess. What are you hearing from customers on that front?
I mean, AI, we were at our CEO dinner last night, and thanks again for hosting us. And AI was a big topic in terms of how AI is just revolutionizing the world. If I look at AI and what I'm hearing with regards to Quanterix and how we can partner with customers is around assay development and how can AI not only increase assay development in the market, we will not shy away from AI and helping us with assay development. I can get, because of my chief commercial officer, kind of like Gene, I always think of AI in terms of how can we better target customers, how can we target patients how can we be more precise at marketing there's a lot of space that AI will play and help Quanterix speed to market
yeah turning to the financial performance you reaffirmed your top line guide in 1Q but given the 1Q softness in instrumentation a lot of those end market challenges that are broad based I guess what specific catch up could help support growth in the second half You talked about some of the catalysts, maybe from a financial perspective.
Yeah, so just to reaffirm, what we talked about at our last earnings call was we have about $100 million in cash, no debt. We will hit cash break even in the second half. So we feel good about that plan. We're right on track, even with the softness in Q1. We say that Q2 would be about the same as Q1, and then we would then start to see a lift in the second half of the year. And we're standing by that because we made moves in Q1. You know, a few of those moves are we enhanced our commercial organization. We saw that while our current install base was okay, our net new customers fell behind a little bit. So we actually instituted lead generation representatives. All they do, Evie, is they go after new business. They look at leads. They legitimize those leads, and they work to bring those leads in to where we can sell and close. So I love that piece of our business. We put more money into our spatial marketing. For whatever reason, in Q4, Q3 of last year, we decreased marketing efforts on the Akoya side. We put monies and investments back into that, so we feel really good about that. We talked about our commercial organization and training. We need to make sure that we train them up on their capabilities, whether if they're a legacy Akoya, they need to train up on Samoa and vice versa. So we've increased our training in that. So those investments will definitely accelerate our business, bringing in executives that really understand accelerator. We brought in a new head of diagnostics, and we're putting in more investments in our diagnostics business. All of those will help us, what I would say, change the trend in the second half.
And you're targeting free cash flow breakeven by 4Q. What are the primary levers to drive this? Is most of it kind of on the top line recovery and then getting the operating leverage on that?
I mean, it's revenue cures a lot of woes, we always say. So, you know, that growth in the second half will definitely help us with cash flow breakeven. And then just doing what the organization has already done before I got there, the discipline that Quanterix has around hitting its targets and doing the right things is still there. And we have that plan in place for the second half of the year. You combine our revenue lift with that continued discipline, we're confident we're going to hit revenue with cash flow break even.
Great. And margins, you kind of expand into clinical diagnostics over time. You know, what initiatives are in place to ensure you have sort of a self-sustaining tools business to make sure that you have the necessary capital to sort of reinvest back into this clinical diagnostics opportunity?
Yeah, I look at our, right now, our footprint across Quanterix, and we look at this almost on a daily basis. Like, do we have the right mix? Do we have the right mix to grow our research tools business by low single digit, make sure that our diagnostics opportunity we we invest in the right way with that and as i look at our our mix we're there like we're there now this isn't a hey we have to go out we have to all of a sudden you know ramp up more people in the research tools business um i spent um a week in in beijing you know with our asia pacific team and i asked the question to them like do we have the right footprint to maintain our research tools business and to grow an amazing opportunity in diagnostics in China? And the answer is yes. Now, as we get FDA approval, we get more partnerships and all that type of stuff, we will not shy away from adding, especially on the diagnostics side. But our research tools business right now, the footprint that we have, the relationships that we have, the install base that we have, the way in which we interact with our KOLs on that side, We're in good shape.
And with some of these upgrades coming on within the life sciences space, how do you think about a replacement cycle? Do people then look to replace their instruments as you have upgraded versions coming out?
Yeah, I mean, we'll do. We will give our customers a lot of insight and transparency in terms of what that upgrade is, how it helps in their own workflow, so they won't be surprised in terms of knocking on their door. And a lot of the customers we bring in, they give us input. So the transparency that we have around upgrades and how we do that and get paid for the upgrades, it's already there.
Would you ever have a dynamic where a customer kind of knows that you're coming out with an upgrade, maybe they see the early access and then they actually wait to buy an instrument until they can get the newest version?
Yes, and we're working on those plans, those specific plans now. You know, one of the things we don't want, and not just from a P&L standpoint, but from even a technology innovation standpoint, we don't want people waiting. So, you know, that's where transparency comes in. But our planning right now is selling in the moment of what we have today. I like the balance.
I want to make sure we have time to touch on this, but this morning you announced the CFO transition, so maybe talk through Jason's background and sort of how you're excited about that.
Yeah, I have to just first talk about Bondana. You know, day one, I got there in the middle of January, and probably of anybody I've talked to the most in the company has been Vandana Shriram, and she's been so helpful to me in terms of getting to know the business, the company, getting to know the rhythm of our numbers, what we need to do to set ourselves up for growth. So kudos and thank you to Vandana. We actually extended a robust search. You know, we used a third party to cast the wide net for, you know, for colleagues that are out there. Jason's background fits planning on the finance side, robust FP&A experience, solid investor relations. He's a local guy, worked for a broker right up the street, so, you know, the transition from, like, you know, relocating, it's going to be quick. He starts on June 22nd, and just excited about not only his personality, his growth mentality, he's transformed and integrated companies into Brooker, which we need from where we are today. He will be a really good addition. We're excited to welcome him on board.
Very exciting. And I guess you have a couple of minutes left, so maybe to wrap up, you've been with the company for just over five months, but what kind of excites you the most, and what do you think investors are most sort of underappreciating about the Quinteric story as we stand here today?
I'll tell you what excites me the most. It's the people. I have a few colleagues that are with me today, and the enthusiasm and the sense of urgency of making an impact on disease states that need solid partnerships and blood-based biomarkers. Listen, everyone in some ways, the passion that our team brings every day to their jobs gives me the confidence that we're going to make an impact in this space. So that's number one. Number two, maybe something that investors are underestimating, and that is the balance that we have in the company. We have a solid research tools business with probably the most robust install base. We have amazing technical and researchers that are developing new assays. We have a diagnostics opportunity that is second to none with a differentiated blood-based biomarker. KOLs that are out there giving us input and relationships that we have on the payer side. And also a compare versus last year. Our compare was at this time, this company was going through a major acquisition. So acquisition was kind of on the brain. Now with the acquisition behind us, we can focus on execution. That means upside growth for Quanterix, and we're excited.
Great. Awesome. That's a great place to end. Thank you so much.
Thank you, Evie. Appreciate it.