All right. Great. Good afternoon, everyone. I'm Matt Sykes, the Life Science Tools and Diagnostics Analyst at Goldman Sachs, and I have the pleasure of having Masoud Toloue, the President and CEO of Quanterix, with me today. Masoud, thanks for joining me.
Matt, thanks for having us.
Great. Maybe if we could just start out, just for those who maybe kind of knew the story, maybe just give a brief summary of the Quanterix story and how the Simoa platform plays a particularly important role in ultrasensitive biomarker detection.
Yeah. Quanterix is a company that has an incredible technology called Simoa, and single molecule detection is what Simoa stands for. What essentially we're able to do with ultrasensitivity, we're able to look and identify biomarkers in blood non-invasively. With incredible sensitive detection of these biomarkers, we're translating that technology application to identifying disease early, in a lot of cases before symptoms, and turning that practice of biomarker detection for not only diagnostics but also clinical trials, pharma activity, enabling therapies in the market, and ultimately providing solutions for the healthcare market. Of companies in the tool space, we're a lot more translational and more patient-oriented versus discovery.
Got it. Maybe starting off, again, high level, just overview of your recent Q1 results. Maybe talk through some of the puts and takes. In the quarter, consumables got off to a great start, but it was a bit overshadowed by academic funding concerns, which is not a Quanterix-only issue, unfortunately. That kind of impacted the outlook for the Accelerator Lab. Maybe just talk through some of the puts and takes of the quarter.
Yeah, absolutely. We were very pleased with our record Consumables year. We had $18 million-plus in the Consumables side. That is a testament to the strong work that the team has been doing in developing really our product development engine. We have been able to expand our menu portfolio. We did over 20 new assays last year. We have approximate similar cadence that we are going to do this year. As we start to add those assays and bring them to the market, we are seeing good uptake. That was a positive sign, and we expect to continue to see good progress there. I would say instruments were fairly stable year over year. What you are referring to, Matt, was on our Accelerator Lab services business. The business grew, our Accelerator business grew 36% year-on-year last year.
What we're seeing here this year is some push out in pharma projects, pharma and biotech projects that were hopefully planning for Q1 for Q2 but got pushed to Q3, Q4. We're seeing some level in the biopharma market of push out, not cancellation, which is a positive sign. As things settle and as the biomarker or the biopharma market stabilizes, we expect to continue to go back to our pace of more and more clinical trials, preclinical work through the services program.
As you're speaking to the Biopharma customers who are pushing things out later in the year, these aren't project cancellations. These are just delayed decision-making given the issues in the sector. I mean, you're confident that those projects will still be there, just pushed out?
Exactly. As we talk to our customers, it's, "Hey, we have three projects. We're going to move forward with one. The other two we're going to hold until there's more certainty in the environment for their own localized budgets." So far, thankfully, no cancellations, more wait-and-see approach.
Okay. And then shifting to academic research, one, can you kind of quantify what kind of exposure you have to that end market? Two, last quarter, you highlighted you have not seen any material shift in demand but kind of revised your outlook off expectations for potentially a cut to NIH spend, which many companies have done. Have you seen a material pullback in spend as it relates to that end market? Are things better than the headlines would suggest? Just kind of what is going on in that market from your perspective?
Yeah. We looked at the sort of academic and government end market, and we have about 20-22% of our customers have NIH exposure. When we look there, our focus has been we're able to enable these customers with reagents on our existing install base, which is helpful, but CapEx is obviously difficult in an environment like this. We're always looking for ways to meet our customers where they are through services or through consumables or connecting them to places that have an HDX platform. It is, I would say, best characterized as some paralysis in customer decisions, whether grants are going to be canceled or not.
We have been coming up with unique ways to sort of mitigate some of that pressure, both in the short term but also in the long term as some of these headwinds may exist for a few years.
Got it. Let's turn to the Accelerator Lab. That's a segment of your business that I think had a lot of foresight in developing, one, because it acted as a really great safety valve when you were redesigning the assays and the platform essentially, but it also gives customers a choice to have you run those tests. Maybe talk a little bit about the genesis of the Accelerator Lab to what it's brought to Quanterix in terms of not only relative stability and revenues but also, in the future, where do you see the Accelerator Lab playing a role at Quanterix?
Yeah. I'll start at the genesis. Accelerator was originally conceived of as a service program when the company first began, and it was essentially try before you buy. As a new technology or new platform, you can run your project through our Accelerator Lab, see the incredible, exquisite ultrasensitivity, and then make a purchasing decision. Through the years, that's evolved. We have over 25 instruments in the Accelerator laboratory, each of them. Last year, did around $1 million of pull-through in consumables to showcase the high-throughput nature of the platform and the system. Through the years, it became a lot more sticky of a business. If you have 10,000 samples and you want to go through those 10,000 samples quickly, dropping them on 25 instruments will be a fast way to get results.
What we've seen is pretty significant pharma clinical end market adoption. You have to think of a use case as you have a big preclinical trial or you have a longitudinal trial or a phase two, and you come to Quanterix and you want to run the study, you want to use the biomarker as a secondary, in some cases, primary endpoint, and we're able to provide results very effectively. That's become fairly sticky. Customers have repeat purchases, and that's been a positive part of the business. In a CapEx-constrained environment, as began to show itself last year and maybe the year before, it became super attractive. There were budgets to outsource R&D, but less capital equipment. Last year, it became around 30% of the business, growing 36% year-on-year, 36%. We want to continue offering those services to the Biopharma end markets.
Now, what Accelerator has also become is an incredibly prophetic product manager. We are always interested in the latest and greatest biomarkers. When you're working with one company and you have an agreement to develop an assay for a new biomarker, we're able to take that through our agreements and make that assay available to a wider install base. You can imagine you have a new biomarker, you're working with a company, you're offering it as a service, and then it becomes a product offering that other biopharma can have access to or researchers. That has essentially been one of the reasons why Quanterix has been ahead of the market when it comes to new biomarker development in neurology.
The first Tau's, Neurofilament Light, all the phospho-related variations of Tau have all really come through that department, and we've been working very closely with these pharma companies to develop that and bring it to market. While it is an important revenue-generating source, it's margin accretive, it's a healthy aspect of the business, important in environments like this, it's also a great product development tool for the engine that we have.
Just as a reminder, so you retain the right to all products. Is there any level of exclusivity in some of your pharma partnerships that might not allow you to do that, or do you retain some level of your own ability to license and produce those assays?
In some cases, if the pharma customer is bringing the antibody themselves because they've developed it, they can request for some level of exclusivity. That has played out in a couple of examples where we worked very closely over a few years to develop a solution with a pharma company. After a couple of years, we make it accessible to the broader market through an agreement. Generally, if it's a commercially available antibody or a commercially available solution or Quanterix itself has worked to develop the antibody, we make the solution available almost immediately to the broader market.
Got it. Maybe shifting towards Consumables, you reported a pretty impressive quarter of Consumable revenues in Q1. Can we just talk through the drivers of strength in your outlook for the rest of the year for the Consumables business? Also maybe give us an idea of volume versus price and how that factors into the revenue growth for that segment.
Yeah. The one advantage we've had is we're offering a very unique solution in the market. There are not a lot of solutions or any solutions that get to our ultrasensitivity in a non-invasive sample with a high-throughput platform. By being able to offer that, we've had pretty good ability in elasticity and pricing. We're able to command reasonable pricing. As markers become more important or interesting, we have some flexibility there. Based on volumes overall, our volumes have increased over the last several years, all related to ability to scale the manufacturing platform. I think three, four years ago, these were very hard to manufacture reagents and solutions. We've put them into an operating line. We're able to do it very effectively and get things to market. After we did that, we started working on our product development engine.
There's an interesting marker in a matter of months, not years. We're able to bring a super interesting marker, develop it, build it at scale, and have a lot of controls and longitudinal validity to the assays and bring it to market. That's now creating over 20 assays a year. We're expanding beyond neurology into immunology. Our intention is to also go into immune oncology, and this process is allowing us to do it.
Got it. Maybe I do want to talk a little bit about the expected One Launch and one, kind of describe to the audience what that is and maybe talk through the expanding role you expect Simoa to play in sort of immunology and oncology. Given your pretty strong hold on the neurology biomarker market, expanding in those two areas, which I think you had started out in oncology actually a long, long time ago. It's not like it's a new one, but it's just a shift of focus. Maybe talk about Simoa One and then talk about the expansion into other disease types.
Yeah. Yeah. You bring back a super interesting marker. When the company first started, one of the most interesting markers was PSA. And so you have a regular PSA test, but there was a strong interest to use and have ultrasensitivity for PSA. So then very quickly, working with our partners, there became a strong demand in neurology and the field of Alzheimer's research, traumatic brain injury was growing, and you really could not access these markers effectively unless you did a spinal tap or did a brain image. Non-invasively measuring these markers early or measuring patients over a period of time became super important, and Quanterix quickly focused on neurology. We are now at a stage with that where we are number one player in the market for biomarkers in neuro.
We want to expand the power of the ultrasensitivity to all labs, not just specialty neuro labs. A big way for us to do that is by doing more and more on the immunology side. Now, organically, we have a plan, and inorganically, we can talk a little bit about that later. Organically, thanks for the mic. Organically, we plan on really approaching this through menu. Last year, we launched additional immuno menu. This year, we're planning to increase the immuno menu on the product.
When we talk to our immunology and sometimes oncology customers, they say, "We really love your platform, one to four plex, but can you give us a platform that can do twice the plexity?" In those conversations, we came to realize that as we increase the plexity, if we can offer the sensitivity across that plex, we're going to be able to meet that sensitivity requirement and that plexity requirement that immunology wants. There are a lot more immunology markers than there are neurology markers. We kicked off a program a couple of years ago. We're calling it Simoa One now to launch a platform and reagents for that platform that improves sensitivity, increases plexity, and provides a robust signal a customer can expect on the Simoa system, all with a fast turnaround time and workflow.
We plan on launching that before the end of the year. Really, the first menu there is going to be immunology menu that those customers have been asking for.
Got it. Maybe just staying on sort of Consumables and Simoa One, you recently announced in early 2026 your oncology immunology-focused Simoa One kits will be compatible with greater than 20 commercial flow cytometers worldwide. That is a very large install base and something that is relatively untapped. I think we are roughly a year away from that platform launch. How are you thinking about the ramp of Simoa One Consumables in 2026 to the extent that you can comment on that?
Yeah. So thinking about sort of the market that we're in right now, Quanterix likes to be very reactive and pivot to market conditions. Last year, I think in January, people were noticing, "Hey, there's a lot of CapEx pressure." We quickly invested significantly in our Accelerator program, and I mentioned we grew that pretty significantly. That became last year was close to a $40 million franchise that grew tremendously. This year, with academic pressure in the market, our view has been, "How do we get our platform and make it ubiquitous? How do we make Simoa One for all labs, not just neuro specialty labs?" Thinking through this, we started focusing on our Simoa One and Simoa One efforts. What we've really done here is we've taken the technology from a solid-state femtoliter wells to kinetic beads that are flowing through a channel.
We have moved a lot of the IP and technology from the instrument or solid surface onto these kinetic beads. By doing that, we are able to get the same digital signal by pulsing these beads as they flow through a channel and convert the reader now to a more ubiquitous system, which is a flow cytometer. By moving things onto the reagents, onto the beads, that transformation had us thinking that, "Hey, this will give us the ability to use a low-cost system and get into a lot more hands." Now, with sort of this year and NIH pressures, we took that one step further.
We said, "If CapEx pressure becomes difficult in academia, can we give access to a broader population of researchers and give them Simoa sensitivity by using any flow cytometer?" If you think about a sequencing instrument or a PCR instrument, those are ubiquitous platforms. Flow cytometer is over 20,000. This increases our install base by over 20x. If you do not have a CapEx budget, you can still get some of the sensitivity by buying our reagents. Our view is this year we will have the platform and the reagents launching. That is called a walled garden. You want very clear longitudinal results. You want the full solution. You will be able to get that. In 2026, we will be able to give access to a much wider range of folks by buying our consumables.
It is agnostic as to the flow cytometers that are used.
Correct. It's going to be some small puts and takes. Obviously, with our platform and our system, we'll have the most number of solutions and most number of knobs, but a customer will be able to use it on any flow cytometer that's in the market.
Got it. Last quarter, you initiated a cost savings program. I think it reached $55 million in savings by the end of 2026. Maybe talk through some of the areas of focus and how you're able to strike the balance between kind of remaining prudent in your spend, given the continued challenges in the macro environment, versus sustaining what you believe would be sufficient investment in the business in order to maintain sort of a leading presence in neurology. You build this great business in neurology. I think investors want to see you continue that. At the same time, the reality of the macro environment suggests that you should be cutting costs. How do you strike that balance?
Yeah. Yeah. We've looked at some of the cost savings have been volume-related. Our platform has scaled over time, and we expected some of these cost savings to happen naturally. As we take a look at sort of the scale we're going to need in 2026, we adjusted accordingly with some of those changes. I would say that on your question of grow menu, expanding into adjacencies, and Alzheimer's diagnostics, we've not touched any of those areas. We're a life science tools company that believes in heavy R&D and innovation and the next thing. None of our savings really touched those key areas. We kept that intact. The savings that we are pulling out are more GNA and volume-related.
Got it. Okay. I do have to ask one question on the pending Akoya acquisition. Obviously, there's been a lot of noise around the strategic fit, but maybe could you walk us through the rationale of the acquisition and how you expect the synergies to play out if it does indeed close?
Yeah. I mean, there's three key areas. First, going back to my comment on Simoa and all labs and going to additional indications, we're increasing our addressable market from $1 billion today in the RUO neurology space to about $5 billion when you add in immunology and immuno-oncology. Earlier, we talked about $30 million-$40 million in synergies. We're not talking about some of the cost cuts that we've made, $55 million in synergies. We have line of sight to those synergies. This is more revenue, single footprint, one operating line, single commercial team, and we expect to realize some of that. Finally, scale and profitability. As we bring the organizations together, we're going to be a scaled company with revenues that are above $200 million, and that's going to get us to profitability in 2026.
These are all of the tactical and financial reasons why we're bringing the two companies together. The strategic vision has always been that a few years from now, we believe that the entire—first of all, we believe the liquid biopsy market is going to be as large as the full diagnostics market today. Sorry about that. In setting that up, we believe that it's very important to look upstream. Proteins are going to be a key part of liquid biopsies. When you think about liquid biopsies today, you think about DNA. When you add protein, you get location, you get a lot more information, and they become a lot more sophisticated of a test. Over the last two, three years, we've been working with researchers, pharma in identifying where these protein biomarkers originate from.
If you have a disease like cancer, these typically originate in tissue. What we're finding by looking at matched tissue blood samples is that these markers leak at very ultra-low levels from tissue into blood. The need to monitor progression of a disease or to identify the disease in blood is very compelling for any number of reasons, easy to access the sample, etc. As we start to look upstream, we're identifying new markers, and it's becoming a biomarker generator for us as we work with these customers that have an Akoya instrument and have the Simoa instrument either in the same lab or across the hall from each other. It's compelling. As we see more and more of that work coming together, we believe that that's going to drive growth for the company.
It's going to expand our market more and more into oncology, and we should see some of that strategic synergy growing, not just from a near-term commercial basis, but also from opening up new fields and new areas for our customers. Overall, we think that tissue and blood play a very integrated role. As we look at proteomics as a whole, this is going to be an important growth driver for both companies.
Got it. Maybe shifting over to Alzheimer's. Last month, the FDA approved Fujirebio's blood test or blood-based test for Aβ42. But obviously, you're still on track with your submission to the FDA. Does this impact at all the timing of your submission? I'm assuming not. But also, how do you continue your leadership position in the early detection of AD with a competitor having an FDA-approved test?
Yeah. I think no time change our application. We still have our clinical trials that are ongoing. We do not anticipate any change in our existing timeline. I would say that this is a very early market right now. In early markets, one incredible thing that we have here in the U.S. is this laboratory-developed testing environment. In this environment, clinicians, researchers, people doing tests get to learn and identify what is the right test, what is the right test for the right indication, and what does the market need. In that environment, which is today laboratory-developed tests, you identify, you learn, you identify the solution, and then you have an FDA application. We have been along that journey working with our customers and laboratories and reference labs and pharma companies to identify what that right test is. I think this is a dynamic market.
If you asked us two years ago or three years ago, it was pTau181 as a single marker test. Everyone had told you that that is the marker, that is a test for Alzheimer's testing and diagnostics. Quickly, as I said, fast-moving market, it became p-Tau 217, another variation, a phosphorylated variation of that Tau marker. Two, three years ago, you would have said it was just 217. Now what we're finding is that when we add four markers to p-Tau 217, we're able to not only get better sensitivity, but we're able to reduce the intermediate zone of a single marker or two-marker test pretty significantly. It's up to threefold reduction in that intermediate zone.
What that means is we're able to provide a more definitive answer to a patient that reduces reflex PET or CSF invasive-type tests and provides a lot of value, not just for the patient, but the physician and even the provider in the current healthcare environment. Five markers, really important. That's what we're applying for in our FDA application. It's available today as LucentAD Complete as an LDT. We're providing the access of that test to our customers. It's involved in clinical trials, four clinical trials right now. In two years, if you ask me again, Matt, I might give you a different answer than the five-marker test. Today, as we understand, our five-marker test is really the leading test in the market.
Yeah. I mean, one thing that's always impressed me about Quanterix is that you've got this experience in neurology for so long, and you've probably looked at more biomarkers than many other companies have. Because this is clearly a moving target, given the kind of evolution you just described, having that experience allows you to quickly pivot into those other areas. I guess one question that I think is still on investors' minds, not necessarily the value proposition of blood-based biomarker testing for Alzheimer's, because that, and I can lay it out, it's very clear from an economic and also ease-of-use standpoint relative to, say, CSF or even PET. I guess it's sort of we've talked to some of the companies that are producing the therapies. They're super excited about BBM.
Everyone seems to be excited about it, yet it's been slower moving than I think anyone would expect. What do you think finally unlocks the rapid use of BBMs? Is it further FDA approval and validation? Is it some level of guideline recommendations? I mean, what is it that you think? Because from an economic standpoint, there's really no argument. And from a concordant standpoint, it's already there. So in your mind, what is sort of the unlock for BBM in Alzheimer's?
Yeah. I think all of the examples you give are key reasons why these blood-based biomarkers will become sort of the first line, and we believe even second line for Alzheimer's disease detection, monitoring, and efficacy measurements. We think it's definitely going to be blood-based markers. Where I believe we're going to see adoption is with the therapy adoption. I think when you look at oncology-based therapies, you have the clinical pathologist, very experienced in making the diagnosis, giving the therapy. A lot of that infrastructure is there. Alzheimer's has been, sadly, a not very well-addressed market in the last 10, 20-plus years. A lot of that critical infrastructure didn't exist, whether it's the education that, hey, now there are two FDA-approved Alzheimer's therapies in the market, the infusion centers being ready to administer. The therapy still has a high cost. And then market awareness and adoption.
This is not a therapy where a single physician makes the diagnosis and the drug is being administered. You have to think of this as a very complex and sophisticated neuro hospital. This is a five- or six-person decision with a family on whether they want to get onto the therapy. That decision is the diagnostics. We believe that as the adoption of the therapy improves and there are more that want access to slowing down the amyloid destruction, testing is going to also increase over time. It's a little bit of a chicken and an egg. We think having an early test that you provide a test and you get a result for all patients.
Using our digital answer, everyone who has gone on a similar platform has gotten a numerical result, whereas with other systems, you get, hey, you might be below a limit of detection. When you think about this from an early detection perspective, from a monitoring perspective, and then at what point do you get off the therapy and do you go below detection, all of this becomes critical to have an ultrasensitive blood-based biomarker test. We think the adoption follows.
If we just kind of walk through sort of the different potential test types for Alzheimer's. You have the screening, the initial diagnosis. Then you have some level of therapy selection, and you could include safety in there with ApoE and other markers you can put in there. You have the therapy monitoring, which is really important because, as you know, these Alzheimer's drugs do not cure. They stabilize levels, and you want to make sure those levels are still at a stable level. Of those three, of the detection, which is probably the largest population market, but probably needs to be proven out with an FDA approval for that, versus therapy selection versus monitoring, I guess two questions. One, where do you see sort of the biggest opportunity, and where do you see sort of the nearest opportunity?
Yeah. Nearest opportunity is definitely screening and diagnosis. The largest opportunity, we believe, will end up being monitoring. And monitoring.
From a frequency perspective as well, for sure.
Exactly. Monitoring at various stages, to your point, Matt, even before you're diagnosed, we believe you don't just need a genetic test to know that there might be some history or family history. Usually, you have patients who have a loved one in the family who's had the disease, and they're curious, and they're quite, hey, should I get a genetic test? Should I start to monitor over a period of time? Now, if there are very efficacious therapies in the market or folks that perform better if the disease is caught early, then there's a big early detection case. We believe that this ultimately becomes how cholesterol is monitored. You have a parent or someone who has high cholesterol. You come in, you're 45, 50, and your physician says, hey, we need to measure you for cholesterol and see how it goes.
At some point, we're going to give you a statin. We think that's ultimately where Alzheimer's disease detection goes. There will be that upstream monitoring case. Then there's a monitoring case of you have the therapy, and people respond differently to the therapies. When is the therapy working, right? Is it the right therapy? Are your plaques coming down? When do you get off the therapy or when do you have to go back on? We think longer-term monitoring becomes an important use case.
Got it. We're running out of time, and I have a lot more questions, so I'm going to try to narrow this down. Maybe if we talk a little bit about health system partnerships. You've already signed up a few. You're actively working to sign up more. Are you sort of seeing a higher level of outsourcing of these tests, either partners sending samples to the Accelerator Lab, or have your collaborators begun to start thinking about purchasing instruments in order to run the samples in-house? I mean, either way, you win. There's probably some level of margin differential in there. As you're signing up these large health systems, is the initial reaction like, we'll use your lab, see how it goes, just like your other customers used to, and then we're going to buy instruments, or are some of them saying we want to do them in-house?
How is that going to evolve?
Yeah. A lot of the partners we listed have ended up wanting to have capabilities on-prem to offer the services. I would say a majority have bought systems that are buying reagents and really buying our platform because of the sensitivity. I think in areas or regions where access to and the capabilities to perform the platform are not there or volumes are still low, we've been getting tests sent out to Accelerator. While the tests are waiting for reimbursement, we expect a lot of these to be clinical and volumes to be limited. As there is reimbursement and wider adoption of the therapy, we think that those volumes will grow, not just in tests sent out, but also adoption of the platform at various hospitals.
Got it. Just last question, just so everyone's on the same page. When are you planning on submitting the Lucent AD Complete to the FDA in terms of line of sight with the end of the clinical trials?
So we.
Consideration?
Yeah. We have four ongoing clinical trials. We expect those trials to conclude this year. Immediately after conclusion, we'll be submitting the application.
Great. All right. Masoud, thank you very much. I really appreciate your time.
Thanks for having me, Matt.