Earnings Call: Q1 2021

May 5, 2021

Hello, and welcome to the Quinterx Corporation First Quarter 2021 Earnings Conference. My name is Michelle, and I will be the operator for today's call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. And Phone. I will now turn the call over to Amal Choebel, Quinteric's CFO. Sir, you may begin. Thank you, Michelle. Good afternoon, everyone, and thanks for joining us today. With me on today's call is Kevin Wazowski, our Chairman and CEO and Sean Stetson, our Corporate Controller. 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 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 In the appendix of our presentation, which are available on our website, you will find additional disclosures regarding the non GAAP measures, including reconciliation 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. Thank you very much, Amol, and we're very excited about our Q1 And start off with an agenda slide on Slide 3. Basically, we're going to talk about our accelerated growth, Numerous, what we would call, growth catalysts for the remainder of this year and for next year as well as the scaling potential that we feel we have as well as the strategy that we're evolving. We'll then talk through financial results, the growth, particularly the growth margin and the growth capital. And finally, we'll spend some time talking through our 2021 objectives. On Slide 4, you can see we had 58% non GAAP growth Year on year, which we felt was an incredibly productive quarter, certainly some catch up here from the COVID Crisis. I would say that most of this growth, 80% of it was due to just primary Recovery of the markets that we're serving, maybe 20% of it could be viewed as catch up, but Still very robust order for us and on a GAAP basis that was 73% growth. That GAAP Includes some of the RADx NIH funding that was declared as revenue in Q1. You can also see that we had a very strong instrument quarter, 86% instrument on a non GAAP basis, on a revenue basis and 86% for consumables. And those 2 are our primary product dimension of our business. The lab services had modest growth, and we expected that this year would be Somewhat flat versus last year where we had nearly 100% growth because we were creating there was a surge for COVID demand for our services as well as many of the HDXs being validated. So we did expect this year to be rather flat on services compared to previous year for that reason. You also see that we had 1,000 bps point improvement, primarily due to volume, Anders, just good momentum and dilution of fixed costs when the volume kicks in, particularly for Consumables. On Slide 5, you can see in addition here the 2 focus areas in the Q1 were COVID and neuro. And we did get 2 antigen. We got an antigen EUA and we have some appendixes and addendums that we've also submitted For other matrices, sample matrices, we also got our serology EUA. We do see that there was great Progress in bridging to diagnostics based on the NIH and FDA relationships as well as relationships with some payer groups that further build out The opportunity for diagnostics in the long term through the COVID pivot that we did in the second half of last year. We also found and launched a really good antigen test called an advantage assay for COVID that It's now actually being deployed across 2 or 3 different drug trials. NIH themselves are running a major 10 arm trial where it's utilizing And blood, our antigen viral test to see which drugs do perform against COVID, both for acute COVID as well as long hauler COVID. We also had numerous consumable catalysts, primarily in the neuro linkage to COVID, where we had NFL, we've lost the taste and smell, coupled then with some of the advances on LDPs for COVID Being a key area of research growth as well as the long hauler drug trials that I mentioned. In the neuro field, we did launch at the end of last year our I'm sorry, the Alzheimer's prior to dementia, but also allows you to stratify out Lewy bodies and frontal temporal dementia, 2 Really important cohort removals that enhances the cohort for Alzheimer trials, and we launched the NeuroPlex, Which has gained a lot of attraction and adoption. The Alzheimer trials, particularly at Lilly and Biogen, continue To be a very robust area, and we see several other companies now evolving drug trials, and this is an important strategy for us. And we had, As we mentioned, record revenue for the instruments, dollars 7,000,000 and consumer utilization was above pre COVID levels, Surpassing the 50% level, which was key for our advance. We also announced the Wuxi joint venture over In the China district, which we feel there's a lot of opportunity, we've continued our progress with Scaling operations, scaling Quanterix under the leadership of our new COO, Will Geist, Who's been doing a fabulous job with the rest of the team over the past 6 months. We also added Laurie Olson, who was formerly an Pfizer to our Board, and she was a very strong player in the strategy group and corped out for Pfizer for many years under Ian Reed. And we also raised over $250,000,000 of cash in the quarter, further enhancing our balance sheet. And you can see on Slide 6, The number of publications continues to expand and that's a lot of the validation for our technology and there's now over 400 Biomarkers that are being measured inside of our technology, mostly, as you can see here, mostly immune And oncology, but the 108 that we have in neurology represents a major portion of our business today and over the next 5 years, and we'll talk more about that. Instrument placements continue very robustly, over 40 instruments placed in Q1. And accelerator projects, You can see we're now at 139 Phase 1, 2, 3 drug trials being run inside of our accelerator. And on Slide 7, over the last 12 months, 12 month weighted average, you can see that our North America growth has been strongest at 40%, and it now represents 62%. So we have a lot of opportunity in Asia, where we know we've had some pullback due to COVID, but it's a Major area of expansion for us over the next several years. Customers still primarily pharmaceutical and CROs Growing at 23%. And then you can see neurology still dominates and should dominate for the next several years because of the strength of opportunity there. And you can see also that we've now almost approached 45% of our revenue coming from consumables with that 27% growth. On Slide 8, the left side, research and discovery is where we're trying to really force execution fillers a good 2 to 3x value creation opportunity With the TAM going from $1,000,000,000 to $20,000,000,000 as more proteins get discovered upstream of us and our publications, the trials over 1,000 Phase 1, 2, 3 trials plus all the pharma data in the 2 MS drugs that were approved in 2020, 1 from Roche, 1 from Novartis using our NFL And the PPH ecosystem, hiring Precision Health ecosystem, those are all great validation points for a strategy to just continue fortifying our moat by Further enhancing our sensitivity by another 100x and also increasing our plex to 10, our ease of use, LEMS connectivity and menu expansion Over the next couple of years will be our focus, both for neuro and immunology and infectious disease. The growth catalyst, as we mentioned earlier, certainly these Alzheimer trials and neuro in general, plus the COVID drug trials, Coupled in with the launches of these new products, the PTALs and there are some new ones that we're also working on, PTAL-two seventeen. And we do expect more neuro plex Opportunities over the next year or 2 as well. And as we scale our manufacturing and improve our HDX performance And further invest in our global channel, we see that as another key growth catalyst. And really, the breakthrough over the last year has been connecting with the payer groups to run trials, 3rd party IRB trials mostly being run-in our accelerator, but some of the equipment now is at The payer groups themselves looking for improved outcomes using biomarkers. And then on the right hand side, on the next slide, you can see The aspirational diagnostics where there's a significant value opportunity in a larger TAM. And Abbott has done a deal with us, as you know, last year, $10,000,000 upfront. Siemens has done an NFL license. NIH has given us $20,000,000 Based on what they could see us, our advances in COVID and the FDA advances with 2 EUAs and then MS data that we're actually getting from pharma all Represent good validation for our strategy, which is to leverage what we've been able to do in COVID into the neuro and HDX diagnostic advances and to achieve What we would see is an LDP license this year with 1 of the major LDP companies, but also in house to keep working on our own single site LDP, Ultimately single site IVD for NFL and the PTALs. So we see numerous growth catalysts in the future for diagnostics. These EUAs will give us some short term tailwinds, we believe, this year. But we also believe that the key is the Alzheimer's screens As well as continuing MS in Parkinson's and managing and measuring minimum residual disease once a drug is approved for Alzheimer's, we It represents a very solid longer term value creation opportunity. And so we are increasing the accelerator LDP footprint and its capability, and we're Working closely with these payer groups because if we can see Alzheimer's precognitive impairment and move them ultimately into drugs that get approved, it can change the outcomes Those that have early stage Alzheimer's in those sectors. So strategically, on Slide 10, As we've shown in the past, there's about 1300 proteins in research and 200 that have actually found their way into IVD being measured primarily by Abbott, Roche and Siemens. But when you expand the detection ability into sensitivity levels 1000 to 100000 times Lower. We think that ultimately there could be as many as 1,000 proteins make it into IVD category and then 100,000 Possibly being reachable with research, and that is going to be achieved with early and noninvasive detection using our Technologies, which is digitizing and creating a lot of sensitivity for protein measurements. Slide 12, we've shown in the past, but It shows the pipeline from discovery all the way over to health screens. And you can see that, the plex starts out very high with many of the new entrants, The SomaLogix, the Olinx, the Nautilus, ISQ, there's a lot of companies, here that's moved in For creating 1,000 plus plexes to create more protein understanding where today it's only 5% discovered. Then as you move down the pipeline, you can see that the TAMs increase, particularly when you get into diagnostics, which today is almost 100% single plex From Roche, Abbott and Siemens, collecting about $25,000,000,000 of that $30,000,000,000 And you can see that Quanterix is primarily playing in the basic research, drug Development and someday hoping to cross over into health screens. And the impact of sensitivity allows you to Use home collection, less invasive samples, dry blood spots, potentially saliva to see disease earlier. And that's the key to creating more utility For these different proteins given home care collection. And when I click on to Slide 13, shifting from symptomatic where most of today's Current protein detection is on symptomatic patients. If we can move it earlier with the sensitivity, we believe that there's a major expansion of the TAMs By close to $60,000,000,000 $70,000,000,000 by moving upstream and being able to see disease before symptoms. This next slide just says in the area of neuro, Slide 14, today there's primarily using tau PET imaging and amyloid beta Imaging, pet imaging, to look for those who have Alzheimer's. And they can begin to see precognitive impairment, You can see in the middle image and also the cerebral spinal fluid, Spinal Tap are highly invasive technologies. And on Slide 16, we're working to move neuro with our sensitivity down to the bottom left. So we'll be able to see before symptoms disease non invasively. And then on Slide 17, the classic cycle is that you start with biomarker adoption and you can see in this case, There's a lot of companies that are using our technology in the neuro field where we believe there's a 300% improvement in the probability you're going to get a Phase III approval After having a Phase I advance, if you use these biomarkers and many of these drugs require the biomarkers to get approval, which Gives us and the pharma groups a much more cooperative environment for us to work together. You can see here 16 years before dementia, there was a lot of Headlines that we received over the last year being able to use blood plasma biomarkers to see Alzheimer's that early, an elevation of NFL and Now some of the PTAOs like 217, that then leads into demonstrating clinically, both validating and And you can see 6 or 7 of the key ones that we're honed in on. And then down below, you can see that there's a lot of Evidence that Biogen and Lilly, both trying to move an Alzheimer drug across the goal line and both claiming that blood plasma Technologies from Simoic have great utility for helping them advance. And then ultimately, step 3 is to actually get a drug approved and then And so when you look at that cycle, and we mentioned earlier that already for Novartis and Roche, we have a proof case With our NFL helping these two drugs get approved in 2020, many of those trials were run-in 2018 2019. You may recall some of the surges for those. And so now moving the same model into Alzheimer's is where we're going. And Slide 23 shows all the pharmas That are now adopted our technology, one of the fastest adoption cycles, to enable this incredible ability To transform the way drug development is working. So on Slide 24, you can see that when you look at neurodegeneration landscape, Whether it be Alzheimer's, where there's 5,000,000 cases after cognitive impairment, so pre cognitive, it could be 2 or 3 times that level, Then ALS, Huntington's, multiple sclerosis, Parkinson's, a million, total about $6,500,000 And already, we've got Major biomarkers looking at all of these disease cascades. Slide 25 just showcases that interestingly now that 15% of the drug trials are for neurosciences versus other areas. So it's continuing to increase. And inside of neurosciences, The neurodegenerative diseases represent 37% of the NS, which is 15% of all drug trials. And This is where we play. And on the right hand side, you can see the number of molecules in Phase I, II or III trials that we are only less than 10% penetrated today, But this is where we see a major advance because 83% of the MDD drugs on Slide 25 are, in fact, areas that our biomarkers currently cover and support drug trials. Slide 26 just shows how Over the last 4 years, you're seeing more and more drug trials and more and more sponsorships from industry in each of the areas of Alzheimer's, Parkinson's, multiple sclerosis And other NDD. And we think that the blood plasma biomarkers is really, an objective way to significantly enhance these Drug trials and the cost, the efficiency and the ability to get we consider enhanced cohorts that have Disease before dementia and also have better stratification towards the actual Disease that the drug is intended and that enhances the ability to get approvals. Slide 27 just shows all of the different biomarkers we have And Slide 28, I think is the last slide that I'd like to leave you with, and that is that One of the challenges is that PET imaging and CSF spinal taps cost $5,000 to $10,000 They're highly invasive. They can't really be scaled. And our technology for $100 in a blood plasma test, we think is a game changing way to see What you could have seen in imaging, there's now a lot of correlative studies that have shown this in our 3rd party peer reviewed publications. And so teaming up with pharma around what we already have with these different biomarkers, but then further enhancing this with the 100x To even see earlier stage Alzheimer's and to see better discrimination of these stratification of disease cohorts, We believe that this represents an amazing partnership opportunity between Quanterix and Pharma Companies for early detection, stratification And then minimum residual disease monitoring once drugs are approved. So richer clinical outcomes, speed and cost leads to, We think an incredible opportunity for Quanterix and those companies that are utilizing Quanterix's technologies. So with that, I'd like to turn it back over to Amal, who Amal has found himself in a really nice position at Waters Corporation as CFO Beginning on May 11, we've just been so blessed to have had Amal working with us the last 2 years. He's done a lot for our company. And I can tell you That he will always be in our ecosystem and he's someone that we know for the rest of our careers will be working very closely together. But Amal has agreed to continue supporting us and working with us. And while that's going on, he's also recruited A really productive Sean Stetson, who is our Corporate Controller, that on May 11, we'll become our interim CFO as we do our search. And I would also say that Peter Macri, He was my CFO at Caliper for about 7, 8 years, been a publicly traded CFO for many years, even after Caliper Has offered to work with us for a couple of months during the search to support Sean just to make sure all of the SOX and the key things that we're working on internally continue to progress On point and on schedule. So with that, Amol, I'd like to turn it over to you. Thanks, Kevin. I mean, as you said, it's been an incredible learning For me under your leadership and very proud of what we've achieved here at Quanterix and will always be part of our broader PPH Ecosystem where more and more companies, investors, KOLs continue to participate in our mission of early disease detection when these diseases Can be cured and it's game changing for patients. I'll be providing some additional financial details about our Q1 2021 performance and I'll be Referring to Slide 29. As Kevin noted, GAAP revenue in Q1 2021 was $27,200,000 and included $2,300,000 of revenue from our Bladex Awards. Excluding this non recurring item, our non GAAP Q1 2021 revenue was $24,900,000 a 58% increase versus prior year Q1. We had record instrument revenue in Q1 2021 with $7,000,000 in revenue, an increase of 86% versus prior year Q1. Consumables revenue grew 86% in Q1 versus prior year to $11,300,000 driven by significant demand for PETA-one hundred and eighty one, neuromultiplex assays and COVID RUO assays. Our strong revenue performance in Q1 may include some recovery of previously deferred demand due to pandemic as customers return to more normal operations. Service revenue increased 11% in Q1 to $6,400,000 and was somewhat limited due to resources and supply diverted to support Our strong consumables demand. As stated previously, we are not providing revenue guidance. Customer activity has returned to pre However, a potential renewed spread of new coronavirus strain could force renewed lockdowns potentially impacting installations and utilization. On a GAAP basis, our Q1 gross margin was 60.1% and was favorably impacted by our RADx grant revenue versus prior year Q1 gross margin of 43.3%. Our non GAAP gross margin was 58.5% in Q1, which was an approximate 1,000 basis points improvement compared to 48.5 percent in the same quarter of 2020. Our non GAAP gross margin excludes the impact of our Radix awards as well as non cash acquisition related purchase accounting adjustments relating to our 2019 acquisition of Oomaan, thus providing investors with relevant period to period comparison of our operations. Gross margin expansion was driven by volume, productivity gains and price, Demonstrating a significant opportunity for gross margin expansion in future as we evolve the mix towards high margin consumables and accelerator services, Scale our overall business and reduce product cost. Our GAAP operating expenses totaled $26,100,000 in Q1 2021 and non GAAP operating expenses, which primarily exclude non recurring expenses associated with our Radix grant revenue, totaled $24,400,000 During Q1 2021, our cash balance increased by 261,500,000 driven by $269,700,000 in net proceeds from our public offering in February. Use of cash in Q1 2021 was 8 $200,000 and ending unrestricted cash balance was $442,700,000 Basic weighted average shares outstanding for EPS totaled $34,400,000 for the Q1 2021 period. Overall, we are pleased with our Q1 2021 performance and progress made on our strategic priorities and remain committed to delivering solid 2021 results in line with expectations. With that, I will turn it back to Kevin. Thank you very much, Yamal. And I'm just going to close with our objective slide where We do show RUO growth from 2019 to 2024, 2019 being a better base year Of 30% to 40% compounded annual growth rate in neurology, increasing our trial penetration to greater than 10%, 65% of our HDX installed base, at year end 2021, which means, the HD1s will be a much lesser component of our Future, which HDXs have greater pull through and greater consumable growth opportunity. Also, we mentioned the NFL diagnostic LDT Plus, AD pharma drug trials, we want to continue to evolve those. COVID, we want to drive a leverageable antigen serology EUA penetration, Deliver our radix scale up that they gave us $20,000,000 to scale up our technologies, achieve the COVID drug trial adoption that already And expand the surveillance from payers of the COVID landscape. Immunology, we want to continue to expand many of the Interfuran and interleukin, cytokine assays, which we think also relates to COVID and expand our SP X placements and also continue with our payer pharma long hauler trials. And then financials, in addition to The growth that we've already mentioned, we want to have 240 HDXs, SRXs and SPXs placed this year. That's a large number, And then we want 60% of those installs to be HDXs, which is our most profitable and the highest pull through instrument that we sell. And on a platform level, scale the Quanterix supply and global channel, define the pathway to deploy this 100x sensitivity, hopefully, through partnerships with With that, we'd like to turn it over for questions, and I'd like to open the lines up. You may need to pick up on your handset first before pressing the numbers. The first question I have in the queue comes from Tycho Peterson. Your line is open. Please proceed. Hi, guys. This is Casey on for Tycho. Thanks for taking our questions today. I guess the first one is around COVID contribution for 1Q. Can you just Maybe quantify what the antigen and antibody tests contributed to the quarter? And then also on the research side for COVID, Between research being done on long COVID and the drug trials as well, just any sort of way you could quantify the COVID contribution here Sure. I'll start and, Amal, you can provide additional clarity or Sean. Basically, we don't provide a lot of granularity, but I would say that the COVID revenue For Q1 from our vantage point, it's clearly less than 10% of our revenue. We are primarily seeing it in research Early on supporting LDT research as well as some of the drug trials that we mentioned. And so it's Not a significant component to our Q1, and we didn't have much in 2020 either. So there weren't a lot Tailwinds, it was mostly headwinds in 2020. Now the only other exception to this is if you go from non GAAP to GAAP, You will find that we had a little over $2,000,000 of NIH funding that would have been COVID related. So on the non GAAP, it's less than 10%, but on the GAAP, there are some funds. Any additional color here, either Amol or Sean? Yes. Thanks, Kevin, and thanks, Casey, for this question. I mean, as Kevin noted, right, I mean, on sort of the EUA COVID approval, The revenue has been minimal. I think most of the revenue is really on the RUO assay as We see this new dimensionality get added to our technology. And what we remain absolutely excited about is The level of adoption we've seen in some of the leading edge research happening in some really key research houses like NIH, where They continue to work with our technology on long haulers and that could provide some long term applications for this technology. But again, for the quarter, most of it was sort of research assays getting used in sort of LDT or research settings. Got it. Thank you. And then can you sort of talk to any progress that's been made by Siemens and Abbott from each respective partnerships? And then what are sort of the next steps there and timelines for sort of milestone payments there? Any color on each of those? Yes. First, I would say, Casey, good question. And I think we remain very bullish on both of these relationships. We've seen a lot of activity From Siemens continuing to evolve the NFL, and we do believe that over the course of the next 12 months, we'll continue seeing them evolving this For their installed base, and that's the primary purpose here is to give our NFL legs and to try to keep the standard. We've got the best Highest specificity antibody pairs when we acquired UHON, and we would like to continue to evolve that With many of the diagnostic houses. And in the case of Abbott, that was actually a Simoa license. And so they Are working to incorporate it into their technologies and that is not a short term advance, that's going to take time because that's engineering advances. You can't simply take existing installed based Abbott technology and convert it to Simoa. It requires actual componentry that's associated with the IP that they licensed from us. So that would not be anything you should expect to Any significant advances from Abbott in 2021, as you will, from Siemens. Got you. Okay. And then if I can just sneak in 2 more quick ones. Sure. In terms of pipeline for liquid biopsy partnerships, you talked about this in the past. Can you elaborate on Any progress on signing deals with companies like Thrive and the like. And then we've gotten this question more and more on how should we think about The Lilly Alzheimer drug data that was disclosed in March, what does that mean for Quanterix maybe from a high level perspective and Also as it relates to your collaboration with Lilly on the Alzheimer's biomarkers. Thanks guys for taking our questions. Absolutely, Casey. Great questions. I think first on the liquid biopsy, there's 2 companies that already have our technology that are productively Advancing, one is freenome and the other is Volition. And these two companies are utilizing the ability to see proteins Much more sensitively and having much lower LL, lower limit of quantitation. And so this is key to many of the algorithms That the liquid biopsy companies have been evolving is not just looking at genomics, but also proteomics. And We have, showed in previous presentations, some of the critical proteins in the Thrive algorithms That we do believe we can bring some value to those algorithms for seeing Certain proteins that today's technologies win most of the standard that they had been using was based on Luminex, they would not The lower limit of quantitation or detection was not low enough to be able to detect these proteins, and we do think That those algorithms could be enriched. And so there's no advances that we would speak of publicly at this point, except that No, we are showcasing that data and we still have a good strong belief that there's a lot of utility for using our technologies In the liquid biopsy landscape, but we ourselves feel like the drug companies aren't as excited and as interested To use companion diagnostics in oncology as they are in neurology. In neurology, they really can't get a drug approved, In many cases, like Alzheimer's, without the support, and that makes it a much more attractive win win environment For us to work with the drug companies in neurology and the area of liquid biopsy, unfortunately, Many times, it restricts markets and reduces the size of the markets when you utilize companion diagnostics. And that is where we just want to partner And allow those companies to utilize the technology. Your second question regarding Lilly, they continue to be one of our most strategic and important customers as Does Biogen and several others that are in the Alzheimer landscape. And I do think that there's been a lot of enthusiasm around some of the anti tau Technologies and the ability to correlate with blood plasma utility and biomarkers correlate with images And with CSF and those breakthroughs can change the economics of drug trials and even enable, the ability to recruit patients earlier presymptomatic or precognitive impairment and also stratify out certain types of Dementia that is not related to Alzheimer's that could actually hurt drug trial performance for efficacy. And so Lewy body's dementia and frontotemporal dementia, As an example, pTile-one hundred and eighty one has showed a lot of utility in helping, stratify those patients out of the drug trial cohorts. So I would only say at this point that Lilly remains very strategic. They've got a lot of our technology and we have Very close relationship working daily in stand up meetings around a lot of the plans that they have moving forward, as well as Several of the other companies that I mentioned in the landscape. You might remember Tatiana worked with us for 1 year and had left to go to Takeda, and she's now Deeply integrated into the Takeda neuro landscape where we're seeing several different companies utilizing Our technology well beyond Biogen and Lilly, and that I think is going to be key to getting some of these drugs approved. So we remain very bullish On the drug trial landscape for the next 18 months in Alzheimer's. And if for some good Practice, the FDA does approve one of these Alzheimer drugs. We think that we're well positioned to then try to evolve Some blood plasma diagnostics for health screens as well as managing the minimum residual disease similar to what We're doing an MS. So we look at this as being a very encouraging piece of our overall franchise for the next several years. Other questions? Okay. I do have another question in the queue. The next one is from Chris Lin. Your line is open. Please proceed. Hey, Kevin and Amol. Thanks for taking my questions and congrats again Amol. Thanks. Kevin, maybe just to start, could you update us on your oncology market efforts? Growth there has just lagged the neurology business. PEDSOMO seems uniquely positioned in that market given the sensitivity. Also, I think one of your slides talked about the launch of a 10plex assay. I'm curious if you think that should be able to catalyze oncology growth given the utility of multiplex within that market. Yes. Great question, Chris. And I think that one of the things that the COVID pivot did in fact Achieved for us is that many of the oncology labs did shut down in 2020 and became COVID labs. Because if you think about a lot of the early impairment, acute impairment of COVID patients was cytokine storm Or pneumonia from cytokine storm where the immune system basically unraveled very rapidly and they needed to then try to control the immune system Or they found themselves in cytokine storm. And what we basically do for oncology is immunology. We're looking at The immune system and in the places where there are immunotherapies, getting more research into how The drugs interrelate with the various cytokines, whether they be interleukins or interferons, is the key to our 10 plex. And so yes, we did launch the 10 plex, which basically has been utilized more for COVID because many of those labs had, like I said, converted to COVID labs. So as they convert back, we believe in the second half of twenty twenty one and twenty twenty two, it should bode well for Our oncology franchise, which does take a second seat for what we've done in COVID and certainly neurology. And so as the neurology has further heated up with the Alzheimer excitement over the last 6 months, coupled then with COVID Basically, raining on many of the labs that were oncology labs. We don't expect a lot of short term focus on oncology. We think it would Defocus what we think is an incredible opportunity in neurology and COVID. But as those labs transition back into oncology We think we'll be well positioned. And so that's the way we're staging this so that we're getting the optimal use of our OpEx And keep the growth targeted where we have the greatest opportunity. And so because neuro and COVID both Sit right now in very strong positions. We are trying to make sure we capitalize on those opportunities before diluting Our efforts into oncology. Got it. And then Kevin, the pipeline of early life science tools companies has been rapidly increasing over the past few years. You have a very strong balance sheet, especially with the financing earlier this year. You also made a number of Strategic acquisitions. We're a few strategic acquisitions over the past several years. So with that in mind, I was hoping if you could give us an update on your capital developments, Deployment efforts and if you see any opportunities for M and A in the near future? Yes. First of all, I think We had a lot of investors that were interested to get into our stock, and we found a nice win win to Puts more cash on our balance sheet to just give us better protection in the event of a downturn as well as to allow us to look at strategic M and A assets As they might advance our strategy, key to the way we look at M and A is that we're looking primarily for ways to advance our strategy As opposed to any opportunistic pure play M and A. And when we look at it that way, we certainly see a lot of opportunity For evolving our laboratory accelerator services footprint as well as globalization around the world are 2 key areas that we think M and A could in fact enhance and advance our strategy. Another related area Would be for assay development and for antibodies that we think are key. The Uman antibody pair was highly specific and we were able to Because of our sensitivity in our Simoa technology, and that gave us an advantage in knowing and seeing the potential that the Uman Company and those antibody assets represented. And so similarly, when you look in the p Tau franchise, there are some newer Phosphorylated taus that are creating great stratification as well as early detection of precognitive impairment Alzheimer patients. And so anything we can be doing in the assay development and or antibody landscape, whether it be licensing, Key antibodies, we're actually acquiring them. We think that, that is another area that capital deployment Could be a very productive advance for investors because of accelerating our strategy. So we do have a strong balance sheet and we also won because it also allowed us To invite in some newer investors that we think have been very productive because if you also recall, many of our investors Create demand for us by introducing us to the pharma companies that they own. And those pharma companies trying to get drugs approved Benefit by using our technologies and so investors end up becoming a real good commercial opportunity for us to increase our pipeline for selling our technology. So we actually think that the raises were very productive and subsequently it's given us a balance sheet to allow To look for ways to accelerate our strategy. So we feel very productive opposite our current Balance sheet dynamics and ability to deploy capital for strategic assets that come on the market. Okay, great. And last question for me and probably for Amol. I think I heard that the catch up dynamic contributed 20% to revenue growth this quarter. Did that primarily impact the instrument business? Or do you see a benefit on the consumables and services side as well? Thanks again. Sure. Yes, I think I'll start, Amol, and you can maybe follow-up. I think that in general, There's some level of catch up because you have some customers that basically Depleted their stocks and when they went into shutdown mode, they started many times to utilize our accelerator. And so we estimate that there is some level, not as significant, probably 15% to 20% Of the very strong growth we had in Q1, that could be allocated to some level of catch up. But the Instrument was certainly a stronger instrument than we've probably had in really 4 years. And this has been an area that we've been Continuing to ramp up because we've got new form factors, which have been very productive. And the HDX itself has really showed its capability, And that's allowed a lot of customers to want to get into the HBX. And so I do think that much of what you see in instrument Demand is in fact strength and it will, we believe, continue to be an area of strength. But we ultimately believe our Consumables will grow the fastest because it's an installed dynamic where you have installed base and then you have utilization that we keep increasing by expanding our menu. So utilization levels give us a double pronged opportunity for growth in the area of consumables. And so that's where we would expect our growth When we say 30% to 40% CAGR, it's going to be highest for consumables and it's likely going to be lowest For instruments, but it's going to be in the averages for services. This year is an exception for services because we did grow 100% last year. So, Amol, anything any color to add there? Yes, Amol, I think you've covered it well. I mean, consumables, because of the shelf life, the impact is going to be small. Instruments, it's hard to parse out, right, because there are several positive factors providing the tailwind for instruments, Gotcha being one of them, but also the HDX performance is well received. There's also demand for neuromultiplexes and PTAS that's Creating new demand for instruments and the whole COVID dimensionality in RUO is creating demand for instruments, right? So it's hard for us to parse out there is some catch up in the instruments, which will come out in the future quarters. But other than that, As Kevin said, it's small. Great. Thank you. Absolutely. The next question in the queue comes from Max Messaging. Your line is open, sir. Please proceed. Hi. Thanks for taking the questions. So with the vaccine rollout, the utility, the role of antibody testing for COVID-nineteen purposes, I think it's becoming more Defined. So can you just give us a sense for which types of antibody testing projects are seeing the most traction? Is it Serial testing programs to sort of understand how vaccine immunity degrades or understanding the right dosing or It would just be great to get some color around what you've experienced firsthand In a serology market that's sort of evolving in real time. Yes. I would say, Max, your question It's very strong because everything you described, many pieces of what you described, we're seeing. And one of the things that Our serology test is going to enable is the ability to quantitate how much antibody is there, and we're only one 2 or 3 EUAs that have quantitation. We also made a move about, I guess, 2 months ago With Dawn Matoon, who you might recall, she actually joined us from Cell Signaling, had a significant backdrop. I was on their board and got to know her Well, being on the board there, but that's one of the top antibody companies in the world. And she joined us about 3 years ago, And we've now assigned her to help us build out the diagnostic franchise. She's done an incredible job Helping us get the EUAs working with the FDA for both serology and for the antigen test. And we now see many different Shots on goal for utility in serology. And we're going to be planning additional moves over the next couple of months because we do believe that COVID It's far from over when you start thinking about the immune system protection against COVID. The things that you mentioned, the durability of the vaccine, key question, will there be a need for boosters? We've listened to the Pfizer calls yesterday. There's a lot of belief that boosters will likely be needed. Also, how do you quantitate when a booster is needed? And how about the variants that are starting to emerge, particularly when you see the surging occurring in India, where you've seen as many as 400,000 Proven and tested demonstrated cases in one day, which means that it could be twice that when you consider what's maybe undetected. When you start to see levels of that level of spread, what you start to look at are the variance and how does these various vaccines Quantitate and neutralize. So I think neutralization will be another area of interest where it's not just what's the quantity of the antibody, Is that quantity neutralizing and for how long is it neutralizing? And so I do believe, Max, that serology will begin to emerge, But it's going to need to be a specialty serology that you have the quantitation and longer term the neutralization understanding Of those antibody sets. Now we also are seeing a lot of interest in using our viral test in blood To actually measure how well antibodies from, say, like Lilly and or Glaxo or other companies, how well Are they received as treatments? Same with remdesivir and new analogs of remdesivir from Gilead. These are trials that the NIH are running with our technology, looking at the antigen and seeing which of these drug Cocktails have the best impact for acute management, but then long hauler management, where 30% to 40% of those that have had COVID still are having trouble with recovering taste and smell and have neuronal death plus Other issues around the body. So we do think that it's important research opportunity, and we are more interested in pivoting into the research sustainable opportunity because there will be other coronaviruses in the future as well that we see a lot of investment and activity by the NIH, WHO and others around the world to try to protect against the next pandemic. That's great. Super helpful. Thanks. Final question for me. I'd imagine the catch up period for demand will be drawn out over the course Of 2021, sort of given the global nature of your customer base, that should pad what you can consider, I guess, organic demand. By new customer wins versus utilization increases for existing users, just trying to get a sense for That's it for me. Thanks. Absolutely, Max. Another set of great questions. I would say that We are entering into a phase now where we do unless there's a relapse of some significant Proportion, we think that the reopening of many states in the United States and as that starts to cascade And to other sectors in the Western Europe probably hopefully being next and then ultimately, some of the more Serious current situations getting corrected in South America and India longer term. We do believe that we will Continue to see a rebound in a lot of the research that many cases wasn't put on hold because they utilize our accelerator. So we had this great opportunity to further invest Early in 2020 to build out our accelerator assets to cover and allow customers to continue a lot of the research in our services. And that's where we do think many of those service opportunities will emerge back into the actual customer labs where Consumable sales will go back across their instruments in their labs. So we do think that that's going to be a very productive area For future expansion, and we do think that, throughout the year, as we look at Customers that are utilizing the technology historically, buying and re upping The consumables across their instruments obviously is a key area of our current growth. But interestingly, those instrument sales that you saw peak in Q1, Many of those are brand new customers. And so this is really good news as the neuro opportunity, particularly in Alzheimer's and MS and Parkinson's It's hitting at the same time because those trials continued while the COVID crisis was shutting down many labs in our accelerator. So that's enabling new customers now that used our accelerator to buy instrumentation. So we get kind of a double prong Of both existing customers utilizing and continuing to kind of get back into action, But the new customers that experienced us for the first time through the accelerator during this period given us a good opportunity as well For growth with new customers. I hope that helps, Max. Yes, that's great. Thanks, Kevin, and also congrats to them all on your new opportunity. Thanks, Max. And I do have one more question in the queue that comes from Puneet Sudha, your line is open. Please proceed. Yes. Hi, Kevin. First of all, congrats on the quarter and I'm all So just two questions for me, Kevin. First one on neurology. I mean, as you're seeing increasing involvement in the neurology trials, how should we view the long term diagnostic opportunities If and when those drugs are approved, how do you think you'll be participating that? Is that through licensing? Or Could we see potential direct installs, direct revenue there? And then just broadly in terms of your CRO relationships, can you give us an update there? Where you stand currently, what's the penetration, where you're at and where you'd like it to be, and how does that Pat, your accelerator revenue longer term. So that's it for me. Thank you. Yes. Hey, Puneet, great Two great questions here. The first, this diagnostic opportunity for Alzheimer's Really, is something that we are gearing up for given our relationships with pharma, who have a lot of interest in Evolving our technology of blood plasma markers into health screens as well as management of residual disease Post an approval. So we had most of our focus, Puneet, on MS, as you know, with NFL Up until COVID hit and NFL found its way into helping us measure loss of taste and smell in the COVID landscape, But it also played a role in Alzheimer's. And so we've got multiple shots on goal of showing neuronal depth and then more specific Markers like the phosphorylated taus and even GFAP for some levels of inflammation for the Alzheimer And so, I think what you might see evolve would be a multiplex that would be, have a lot of diagnostic relevance Post an approval and the multiplex would look at neuronal death from the NFL, but would look at some of these PTALs for more specific Stratification and understanding the disease and trying to see it early to be able to move patients. And this is where Our payer relationships are playing a lot of dividends because they have a lot of interest. Some of these payer groups feel like It could have significant quantities of precognitive impairment Alzheimer's when you think that you could detect it 10 or 15 years before dementia. And if you can get a drug approved that can stop the progression, what you basically could do is use early detection methods with our biomarkers To reveal which members have the specific Alzheimer cascade before any impairment Cognitively. And then if you can get them on a drug that stops the progression, in effect, you can prevent a lot of the deleterious effects of Alzheimer's. And so that's The dream that's starting to emerge and I think having the payer relationships is also going to be a way to help us advance a health screen Strategy for using our biomarkers post a drug approval. So I do think we continue to feel very good about that aspect of our And feel well positioned to leverage opposite multiple growth catalysts that opportunity. The CROs have never been stronger. Many of them were utilized even heavier during the period of COVID because their labs stayed open. And so we have very strong relationships with most Our technology has been through the CROs, whether it be rules based medicine or quintiles From Quest or Covance, from LabCorp or Frontage, Eurofins, Across the board, we've got very strong adoption cycles in the CROs and they utilize the technology and bring higher levels of pull through. So we actually see it as a Very strategic area. The accelerator, we think, complements it. We have many customers that say, I really want to work with The people that invented the technology to run the trial. And so probably 10% of the drug trials, I think something like 139 have now been running our accelerator. But we do think that there could be, as you asked, both relationships where we license to some of the Diagnostic companies, the ability to run post an Alzheimer's trial approval diagnostics, but we also believe there's The opportunity for us to merge our own direct channel and expansion of our direct capabilities. So we're exploring both. And over the next several months, you'll be seeing more evidence of us trying to gear up as these trials gear up so that we can be ready It's a pivot into diagnostics for Alzheimer's in the event that a drug does get approval. Great. I think that, that probably concludes our call. Is that correct? Okay. I have no further questions, sir. Do you have any closing remarks? Perfect. Yes, I just would say, hey, we really thank you for continuing to Invest in Quanterix and understand our story. We feel like we have a duty to try to help the world through a lot of the opportunity that These plasma biomarkers are creating for neurodegeneration, COVID and longer term oncology, And we really appreciate the opportunity to continue our collaboration with the investor community. So thank you very much for today, and we'll continue giving you updates. And I wish once again Amol and Sean Stetson great luck in their next chapter