All right, good afternoon, everybody. Welcome to the 43rd JP Morgan Healthcare Conference. It is my pleasure today to introduce Quanterix with us today for the presentation. With us today, we have Masoud Toloue, the CEO of Quanterix. The presentation today will be in the format of around a 20-minute presentation, followed by a 20-minute Q&A. With this, I'll yield the stage to Masoud.
Thank you very much, and thank you for having us. So today, I'm here today with Vandana Sriram, our CFO; Niren Bhatt, Head of Corporate Development, NBD; and Joshua Young, Head of our IR. And also very excited to see Brian is also here today for the presentation. Thank you. So before we begin, I'm going to point to our disclosures page, several disclosure pages on forward-looking statements and non-GAAP measures. The mission at Quanterix is to create the tools to enable discovery and better health. And we're doing this on a foundational platform called Simoa. The Simoa platform allows users, researchers, clinicians to look at, with ultra-sensitivity, biomarkers in blood. And using that core technology across our 1,000-instrument install base, we're able to achieve 80% recurring revenues in the company with high margins.
The technology has also been critical in both society, research, and clinical impact with over 3,200 publications to date since the inception of the Simoa technology. Now, let's start with the technology. The key aspect is being able to detect signal from noise, and using the Simoa platform, we can exquisitely separate that and get to a point where we're looking at single molecules needed to reach a detection limit in a digital fashion, whereas all other traditional protein assays require millions of molecules needed to detect or reach that detection limit, and that's very much an analog signal, so we take this robust signal identifier, and what it means is that we're able to look for biomarkers that are unmeasurable by other technologies.
We apply the technology, and we can find early-stage disease markers before symptoms appear, whereas with other technologies, you're on a femto to nanomolar level, and you're looking at late-stage disease markers. Fundamentally, we've taken this technology and applied it through our assays, through our reagents, and through our tests to catch disease before symptoms. And if we can do that, we're truly enabling healthcare as opposed to today's management of sick care or symptom-based care. The company, over the last two years, has delivered strong operational execution, building the base of the company. We've executed with seven consecutive quarters of double-digit growth in a capital-constrained market. We've increased our recurring revenues from 65%-80% with resilient customer demand for the platform and stickiness.
We've expanded our gross margins by 18 points through our operational program, reduced our cash burn by nearly half, all the while continuing to invest in the core business, in the core R&D engine, and innovation. What's next for Quanterix? So over the last two years, we've built this incredible double-digit growing base. And today, I'm going to talk a little bit about our three core strategic growth vectors that we're looking to add on top of this base. I want to start with the first vector, which is growing the menu. Our key imperative is to extend the number one position that the company has in measuring neuro-based blood biomarkers. And we're doing that with our product development engine, which is already in motion.
Over the last two years, we made significant investments into our operations and R&D program, and we're seeing the yield of those investments in 2024. In prior years, the company didn't launch many NPIs. In 2023, around five new assays. But in 2024, we launched 20 new and exciting assays. 12 markers were around neurology, 8 markers around immunology. The company is delivering the latest innovation to our customers. Just last year, we launched new biomarkers that were previously unattainable and not available in the market, including brain-derived tau, a brand new marker that looks at tau from the brain and eliminates peripheral sources of tau, adding to its relevance in looking at neurodegeneration and separating out signal from noise. We launched a groundbreaking four-plex assay called the N4PD assay, which is going to be important in neurodegeneration detection.
And happy to say that we launched very exciting extracellular vesicle technology that allows our customers, researchers, and clinicians to begin looking at very interesting work as biomarkers move from tissue to blood and are encapsulated. And so we're very excited about these EV toolkits. These markers in aggregate extend and continue to give Quanterix a leadership position in neurology. As neuroinflammation pathways become more and more relevant for Alzheimer's disease, we're launching and developing inflammatory and pro-inflammatory response assays for our pharma customers to be able to measure and look at efficacy markers for therapies. In 2024, we launched 11 of these markers across three four-plex assays, ultimately extending Simoa utility to more laboratories. The second strategic growth vector in the company is about expanding into adjacencies, specifically around immunology and oncology.
When we do that, we expand beyond the $1 billion market share, our serviceable, addressable market share that we have today in neurology, to $3 billion with immunology, up to $5 billion, including oncology. The thesis of the company has been Simoa in all labs, not just specialty neuro labs. We're specifically focused in these areas of immunology and oncology. Now, when we talk to our customers that perform work on the Simoa platform in immunology and oncology, they tell us they want three things. They tell us, "We want ultra-sensitivity. We want twice the plex that you offer today. And we want results fast, fast turnaround time." Very pleased to talk to you today about the launch of a new platform to address these customer needs called Simoa One, breaking past the detection limits set by the original Simoa platform.
We're very excited to talk about this new platform launch by the end of this year. So using incredible breakthrough technology from the Walt lab, we've been able to harness the ability of detecting ultra-sensitive biomarkers in a new platform. And this is a breakthrough. This is not an incremental change. We're able to, by an order of magnitude, increase our sensitivity beyond our current Simoa platforms, extending our lead position in ultra-sensitivity. We're increasing our plex by tenfold while maintaining ultra-sensitivity across that plex.
Our technology is going to include code-match technology, which are optically encoded barcodes on proprietary emission beads that will allow us to grow plex while maintaining high specificity across the assay. And finally, we're delivering simple and an efficient workflow with results in less than three hours, with no PCR, no NGS, and no 48-hour waiting periods for a result.
We're super excited about this platform launch in 2025, and we're going to be talking more and providing more details as we get to our product launch. As we look into these adjacencies, we start to think about oncology from the core premise of what's happening in tissue. Diseases like cancer begin in tissue. They move and migrate to blood, and they usually end up in organs like liver and lung that can take life, and so if we're going to develop diagnostic tests and therapy treatments, we need to measure the signals as they move along this pathway. And so protein-based tests have become increasingly important in testing and monitoring, and as we become more multi-omics-based, these approaches with protein are going to be more and more required.
We're super pleased to announce the acquisition of Akoya Biosciences that's going to uniquely position the combined company to accelerate the development of these new tests along those pathways. On close, Akoya is going to have access to our 1,000-instrument base of customers in neurology, and they'll be able to offer their neurobiology applications to that base. On close, Quanterix is going to have the opportunity to go to Akoya's 1,300 installed base to offer new oncology and immuno-oncology solutions. We're combining the best-in-class in tissue and best-in-class ultra-sensitive detection in blood to drive faster testing, better tools for monitoring and detection in oncology.
And the exciting part is that Quanterix has already begun to develop these tests. A key piece to remember is that when you start to look at biomarkers in tissue, their spatial organization provides a lot of information to people developing therapies as well as diagnostics.
And when those markers leak into blood, you want the most sensitive technology to be able to detect the first molecules that enter circulation. And in this combination with the markers that we have here, we're excited to say we're developing tissue, blood, complementary biomarker kits that we'll be making available this year. So in summary, the combination provides us an accelerated path to scale, profitability with a focus on great high-growth markets. On combination, our install base doubles. We have pro forma revenue of $220 million.
We expect strong double-digit growth in 2026. We expect the milestones that we've set out from an efficiency standpoint to be reasonable and achievable by the end of the first year and second year. We will be accelerating our cash flow positive rate in 2026, all with a strong runway to continue growth investments in the combined entity.
So the third growth vector that I'm going to talk about today is diagnostics. Alzheimer's disease, unfortunately, has been a sad story with 55 million globally living with a disease expected to double by 2050 with the demographics in our population, with a societal cost that's near $1 trillion in 2019. And so this is a difficult disease, and there are not many diseases out there with such an impact. Quanterix is playing a large role in enabling detection of this terrible disease by best-in-class early detection. We're able to monitor patients who potentially have the disease over a period of time and after they've received therapies and ultimately provide differential diagnosis opportunities for people who are looking and have memory concerns. So we're building the global infrastructure for Alzheimer's testing in the company in two parts. First, we're enabling our partners.
We've demonstrated early success in lab enablement by providing our technology to the top prescribing hospital networks in the country and reference labs around the globe. We've announced 12 of these partnerships in 2024, and we're pleased to say that we're growing this network in 2025 with 10 partners already in the pipeline validating our Alzheimer's disease tests for incorporation into their businesses. The second part of our growing the Alzheimer's testing infrastructure is around Lucent Diagnostics, our laboratory in Boston. At Lucent Diagnostics, we're offering the best multi-marker tests. We have a differentiated reimbursement strategy and high-capacity infrastructure with approximately a capacity to perform about a million tests a year out of our CLIA laboratory. Last year, we're pleased to announce the launch of Lucent AD Complete, a test for all patients, not just late-stage patients.
By offering a five-biomarker multiplex test, we're able to really lower the intermediate zone of a single marker test from 30% down to 10%, threefold reduction, while maintaining high sensitivity, specificity, and accuracy when compared to CSF and PET scan, and as I said in prior presentations, we're developing this five-marker test to allow differential diagnosis using our AD Score or algorithm and the additional AD-relevant biomarkers we have in the test to begin to differentiate between Alzheimer's disease, frontotemporal dementia, Parkinson's, and Lewy bodies.
We're very excited about this tool and this test. It's available today in our LDT market, and we're very excited about its differentiated reimbursement strategy. We're taking this marker test, this multi-marker test. We've already submitted a PLA code. We expect approval in the first half of 2025, and we expect pricing for this PLA code in the second half of 2025.
We have an ADLT Advanced Diagnostic Laboratory Test reimbursement strategy for the platform where we're expecting reimbursement on that in 2026. The company continues to invest in this very attractive, high-return on investment business around Alzheimer's disease. Over the course of last year and this year, we've invested $20 million in our prospective studies, where we have four prospective ongoing studies where they will complete enrollment in 2025, at which point we'll be submitting our FDA package. We're investing in our testing capacity now, just under a million tests per year available at our Boston laboratory. And we're making investments in our commercial team, around 16 people today, focused on partner enablement as well as tests sent out to our own laboratory. So I'll conclude today with the strong position that we have entering 2025.
We've named and we've talked about the strong operational execution that the company has performed and the great base that we've developed, and we've talked today about three key growth verticals that we're layering on top of that well-performing base, growing the menu to extend our number one position in neurology, expanding into adjacencies of immunology and oncology, and translating incredibly exciting markers in the research space to diagnostics. Thank you for your time, and let's take some questions.
This relates to your blood test and platforms for Alzheimer's. Fascinating to see you're looking at the heterogeneity of the disease. Do you have any plans at looking at kind of the biology of the aging, like inflammation, vascular issues, mitochondrials? That's one question. Second, do you see yourselves going into the consumer-facing Alzheimer's blood test competitive landscape? And if so, who do you see as the major competitors there?
Yeah, so I'll take the first question, and then I'll get to your second question. So from a vascular standpoint and inflammation standpoint, we're involved in several active clinical trials that's looking at vasculature and inflammation as part of Alzheimer's disease. And the companies that are utilizing our services to run these trials are interested in the cause of disease as it relates to inflammation. And so we're an active part of that. And if there were tests or small molecules that are developed, we expect our markers to follow that pathway.
On the direct-to-consumer, today, this is a physician-ordered test. We expect that to continue. There's obviously a large workup that has to be involved when someone suspects they have memory issues. There's a history. There's a genetic component to it. There is the question of, is it something else, and is it not Alzheimer's?
So physician, neurologist is heavily involved in the process, and they tend to be physician-ordered tests. Volumes in general are low today. As therapy adoption improves, I could see it being something that's measured on a regular basis at your physical in the same way cholesterol is measured annually. And so I think in the early stages, it's probably less consumer-driven adoption, but in the future, I can imagine that this is something that everyone wants on an annual basis. Quanterix pointing in that space. Absolutely, yeah. Absolutely. I can see us providing the tools to allow companies that have good, extensive direct-to-customer networks to be able to fuel some of that growth. But we would be very interested from a platform and a reagent perspective. Thank you.
The presentation talked about your strategy and how Akoya fits into that strategy. Can you elaborate a little bit more about why you think you can accelerate your growth with Akoya being part of Quanterix?
Yeah, we're very excited about day-one opportunities. I talked a little bit about the presentation. That day one, Quanterix has an extensive neurology base. Akoya participates in neurobiology and the science of neurobiology. In fact, the whole spatial market really began in this whole neuro field, and so the opportunity to go and talk to our 1,000-install base and provide neurobiology, tissue, and spatial solutions is incredibly exciting. From a Quanterix perspective, we have exciting tests that go from tissue to blood, and that accelerates our entry into immuno-oncology and oncology, so the synergies and the growth opportunities are clear.
Thank you. I'll continue asking. It's been a tough capital-spending environment in the life science tools industry, yet you have posted one of the highest growth rates in the industry. Can you talk about how you have been able to drive that growth?
Yeah, I think we're one of the very few tools companies that had seven consecutive quarters of double-digit growth. It's been a tough environment. When we saw significant CapEx constraints in the market, we pivoted to a model where we started offering our customers services. Our customers said, "We don't have the budget today for a platform, but we still have work that needs to be done." And so we began taking those samples from our pharma customers and offering services through our accelerator laboratory. And that's been very productive for the company.
We have a near $40 million franchise, 36% growth in this accelerator business over the last year, and it continues to be a place that pharma companies turn when they want a clinical trial. They want to outsource R&D or work with us in developing a new assay for a new disease indication. So we expect, in a capital-constrained environment, to continue growing this accelerator franchise. About 70% of the orders that we get and the customers that come back to us have been recurring and margin accretive to the whole business. So excellent execution, excellent program at Quanterix.
Yeah, that is very exciting. You also issued preliminary results yesterday morning. Can you talk a little bit more about the current demand environment and what investors should expect Quanterix to do in 2025?
Yep. I would say that, obviously, demand for Simoa sensitivity is robust.
We're entering 2025 with a position of strength. We talked today about a solid base business and our chapter and where we're turning, where Quanterix is going next, three vertical, three areas of growth for the company. We won't talk today about 2025 guidance. However, in a normal course, we usually talk about what the outlook in 2025 will be on our Q4 call.
Thank you. Can you also talk about some of your competitive advantages in Alzheimer's diagnostics market? How will you balance integrating Akoya with hitting your timelines and key milestones in this market?
Okay, I'll take the first part of that question, which is competitive advantage. It's very important to remember that Alzheimer's disease is not a yes/no binary result, meaning you have a variety of different people at different stages, at different amyloid pathology, at different tau levels.
When you go first and see a physician, you may go because of a genetic concern, hereditary concern. You have somebody in the family who has the disease, and you may be exhibiting memory symptoms. Because of our ultra-sensitivity, 100% of all patients going to see a physician will get a result on our Simoa platform because of that ultra-sensitivity. Using other platforms like chemiluminescence and less sensitive methods, up to 30% of people coming in and walking in through that door won't get a result. They'll get a result that says below the limit of detection of this platform. So from a monitoring perspective, when we work with these 12 hospitals, the neurologists want to provide results to the patient. They want to monitor a patient over a period of time, and that's the real advantage of the Simoa platform.
The second key advantage is we're a five-plex platform, and being five-plex, we're able to reduce the intermediate zone and offer things like differential diagnosis that are just not possible in single-plex protein platforms like chemiluminescence or traditional diagnostics today. So those are some of the advantages of Alzheimer's diagnostics. And you're going to have to remind me what that second question was.
Yeah, sure. How will you balance integrating Akoya with hitting your timelines and key milestones in this market?
Yeah, so from a diagnostic perspective, we have a team that's dedicated in our CLIA laboratory. We have a dedicated commercial team that's completely separate from our research group. And so we've already allocated time and resources to be able to hit and continue to deliver what we've committed to in building our diagnostics franchise. So we feel comfortable in that.
And then by day one of this combination, both companies are going to be ready to look for opportunities in our research. And Akoya also has a companion diagnostics business that we're very excited about. We have laboratories, CLIA laboratories, both in the Boston area. And I think that learning from Akoya, Akoya learning from Quanterix, are going to provide synergies as a combined entity that are going to be exciting.
Yeah, makes sense. And strategically, you also mentioned about the new platform, Simoa One, which will be launched by year-end. Strategically, how will this new platform help you to compete in this market?
Yeah, so the new platform takes our current technology, Simoa, and it makes it an order of magnitude better. We're now looking at molecules as opposed to thousands of molecules with this new change in sensitivity.
When you look at plexity, typically, as you increase plex, you're proportionately reducing sensitivity in the platform. With this breakthrough technology, we're maintaining sensitivity across that plex with our digital detection. And that's going to be a game changer when it comes to fields like oncology, where the first molecules coming from tissue and going into blood are critical for developing an early detection test and a monitoring test. So we're going to be focusing the technology in new areas like immunology and oncology. And we're excited to tell you more as we get closer to our launch.
Yeah, sounds great. And last question from me. We've seen the stock price reaction post the Akoya announcement. So what do you think the investors are missing about Quanterix?
Yeah, I would say that I think in the near term, there's always stock fluctuations, and we really don't comment on sort of day-to-day fluctuations of the stock. What I can say is that Quanterix has built a solid base. We've shown seven quarters of double-digit growth. And what we're presenting today are three growth verticals on top of that base business. So internally, we're extremely confident about the prospects of the company. As I said, we're going into 2025 with a strong position. And I think that over the long term, investors who understand our story are going to appreciate the benefits of what we presented and what we will deliver.
Thank you. Are there any other questions from the audience?
Would Simoa One improve your Alzheimer's disease panel sensitivity, or how would it improve it?
Yeah, that's a great question.
Our plan for Simoa One will initially be in the areas of immunology and oncology and expansion of our market and TAM through those adjacencies, less initially on neuro, but more towards those fields. Now, fundamentally, when you get to the next order of sensitivity, you obviously can see more and detect more. And we're pretty sure there are going to be a lot of folks in our neurology base clamoring for it. But right now, our focus has been immunology and oncology.
Thank you. I think this concludes our presentation today. Thank you, Masoud, for joining us today.
Very good. Thank you.