Go ahead and get started here. Thanks, everyone, for joining us. I'm Mason Carrico. I'm the diagnostics and genomics analyst at Stephens. Today, we have Brian McKelligon, CEO, and Johnny Ek, CFO of Akoya, with us. If at any point anyone wants to hop in with questions, feel free. Maybe to start it off here, Brian- Sure. For those who are less familiar with Akoya, could you give us a quick overview on who Akoya is, current offerings? Sure. Maybe where you tend to focus in, in spatial versus some of the other well-known peers. Yeah. Well, first, thanks for having us. And Johnny was joking, this feels like a post-game interview room. So Akoya is a company in the spatial biology space, and simply put, it's really a methodology to look at and understand normal disease tissue, disease progression, by analyzing the slide and then analyzing a tissue in an intact state on the slide. And you can do that as a discovery study, as a translational study, or as a clinical study. And a lot of the efforts in spatial are in the field of oncology, particularly immuno-oncology. And so what we built as a company is a suite of products that do this spatial interrogation, primarily on tissues like that, for customers in the discovery setting and the translational and increasingly in the clinical setting. And we have a suite of products that are really purpose-built for each of those market segments. To do this high-plex tissue analysis in the discovery setting, you wanna maximize the discovery power, meaning look at as many analytes as you can, so that's high-plex. Generally, your studies aren't as big, tens of samples, so focus really on depth of understanding with a speed and a robustness that can handle a study size of tens of samples in a week. That's really the discovery market, and that's our PhenoCycler product, coupled to our Fusion microscope. So that really is a platform that we use again to serve the discovery and early translational markets. The latter translational clinical markets, while they're also asking spatial questions, they're generally more focused, 3, 5, 7 specific proteins they wanna look at, but you're talking about study sizes that are hundreds to thousands, with really stringent requirements on reproducibility, and a path to the clinic, and for that, we have a high-throughput platform. And so we've been selling those for a number of years and gotten to the point where we've got about 1,200 products on the market, and about, you know, 1,100 publications. And a lot of our peers in the spatial biology market, most of the ones people would recognize are in the discovery market with, with our colleagues at 10x and NanoString, really focused on the RNA side of spatial, and to date, we've been really focused on the protein. So while I would put them in a bucket of competition, there's certainly a lot of co-opetition that happens. Where capital is available, you see a lot of people that have both. That may change over time as we go into RNA and they go into protein, but hopefully that's a good summary. Yeah, no, that, that's really helpful. So you IPO'd in 2021. Yep. You've front-loaded investments, maybe that's the best terminology there, over the past few years to build out the commercial infrastructure, build out a portfolio of products. And, you know, as we saw in Q3, we're starting to see operating leverage start to play out while top-line growth has remained strong. Yep. So, most, most of your competitors are, are focused in genomics like you had said. You guys are more in protein. But, you know, as we look forward, do you feel like you've put the pieces in place to continue to be able to compete, while recognizing operating leverage going forward as some of those competitors maybe start to push into protein? Yeah, I think, I think, you know, there's, there's different cycles for life sciences businesses. And I think what we did, as you correctly noted, coming out of the IPO in April of 2021, is really make an upfront and accelerated investment, both in our R&D and in commercial, so we could get market share, get products on the market, have a commercial scale and infrastructure, that can catch those products and drive them hard, but also give us the ability to not have to continue to invest on top of that, in the forthcoming years. And so that's what we did. And now we're at a point where having 1,200 instruments in the market, the best place for us to invest is in our existing customers. Improving the workflows, getting content out, so you can have panels ready to go, improving software solutions. So coming out with effectively our version two, which we can talk more about, our version two of our products, to make the workflows easier, to make it easier for the customers, that's how we grow our business now. And it's really on the back of good customer experiences, this wealth of publications, and investing in our customer base to drive utilization, to drive more reagents, to drive higher margin reagents, and that's how you really get that operating leverage, because that's a much more efficient way to invest, driving reagents and R&D now that the instrument's in place. Instrument programs are expensive. So now that the instrument program is in place, we have the ability to really drive our focus on reagents, and that's a much more... Again, that's a much better ROI, because the I is a lot smaller. I don't know if you want to add anything, Johnny. I think that's great. And really, what will happen with our business is, as we to drive that operating leverage, as we focus on the costs, reducing cost of goods, and as reagents become a more important part of our business, it'll sort of have a compounding effect, where we'll be able to see that margin expansion while keeping the OpEx at a level where Brian has noted. We're fully invested with what we need to drive the product forward, and we'll be able to continue to grow at that growth rate without a significant additional investment, certainly not. We've always looked at our business really in two large phases. One is to build the right instruments, build the right products, get them out there, and then once you've got that, really invest in that workflow, invest in the margins, invest in the simplification. You know, customer 2000 is very different than customer 200. It's helpful. So on the installed base you're now around 1,200. Consistently been growing above 30%. Yeah. Can you kind of talk about what's driving that? I mean, is immuno-oncology, does that continue to be the primary driver, or are there some other diseases that have potentially played a contribution more materially recently? Yeah, I mean, I think there's some direct therapeutic drivers in immuno-oncology, most certainly. And increasingly on the translational and clinical side, the explosion of antibody drug conjugates, because you've got these payloads that are to antibodies, really sort of necessitates the need for multimarker. So certainly, IO and oncology, from a therapeutic standpoint, are a big driver. But I would also say there's, you know, there's more qualitative drivers, which are the sort of recognition that to understand the tumor microenvironment, to understand cancer biology or even immune response, this concept of spatial is just sort of fundamentally obvious. And I think now, the platforms, including ours, are at a degree of maturity where people are actually getting the value out of it. We're more sort of moving past putting your toe in the water, you know, to making significant investments, to having it be part of your core lab or your CRO business. So it's becoming, I think, what we always assumed was inevitable, that spatial is becoming a meaningful pillar of life sciences tools alongside things like flow cytometry, mass spec, and sequencing. I do think over time, it's gonna be seen as, well, the fourth pillar, because it's just so fundamentally obvious on its value. Yeah. So moving to the PhenoCycler-Fusion. Yeah. You've got 186 combined units now. Right. I think that's over a third of your installed base of the PhenoCycler. Attachment rate is still high. Yeah. Can you kinda talk about what percentage do you, of your install base, do you ultimately expect to upgrade, to repair with the Fusion? Yeah. So maybe just for background, so, the first box that we launched was this box called the PhenoCycler, which was moving reagents on and off a slide, with initially a third-party microscope. And then we launched our own microscope to pair with it, really effectively two instruments in one that are sort of umbilically attached. Now, every time we sell one of those cyclers, it's with the Fusion. So there's, you know, 320 or so cyclers out there, and a little bit more than half are now with our microscope. We expect. I mean, there's gonna be a long tail that maybe don't convert, but we expect the majority of those to be converted, you know, throughout next year, and we now always sell them paired. The attachment rate's. It's pretty much all the time now. Got it. So pull-through for the PhenoCycler was in the mid-$30,000s in Q3. Yeah. The average across PhenoCycler-Fusion customers, that's, that's PhenoCycler-Fusion customers and just PhenoCycler customers. Yeah. So could you talk about the ramp and pull-through of the combined units? I know maybe you don't wanna put a dollar figure on it- Yeah. but even qualitatively. So the reason why, maybe to go back in history, so, you know, the, the big catalytic event in Akoya's corporate history is the acquisition of the Phenoptics division from PerkinElmer. And then we were 12, 15 people at the time, and that was a business that was doing about $20 million in revenue. But what it gave us was this incredible technology stack for imaging and image analysis. So we took that technology stack and the high-throughput instrument that came with it, and we built another microscope, a smaller version, to pair it with our cycler. 'Cause while it was a great technology, it was slow, and what the Fusion brought was real speed. So historically, our pull-through on that cycler instrument for the discovery market initially was in the teens, low 20s, 30s, now mid-30s. It's gone up because of the addition of our microscope with it, instead of a third party. It's a lot faster. So I would say directionally, you're right, we don't give the number, but it's several-fold higher when you have a Fusion instrument versus it being with a third party. Okay. That's why getting those conversions over is a really important driver for the total reads and revenue growth. Yep, that makes sense. So utilization in terms of pull-through, you know, is moving higher just 'cause it's faster. Yeah. Yeah. Have you also seen a step up in plex- Yep ... or the number of targets that researchers are looking at on average? Yeah. So to get pull-through up, you know, there's the obvious levers, is more samples per unit time. And that... We did that with the Fusion, and we did it again this summer with the multi-slide carrier. And then more plex per sample, which is higher dollars per sample. You know, that's enabled because of the speed, but we have to catalyze that, and that's sort of our focus in the rest of this year and into next, is coming out with more and more ready-to-use antibody panels. And that's sort of this transition that we talked about, going from building out instruments to really focusing on assays and pull-through. So that really is our focus as we exit this year and go into 2024. So then moving to the 2.0 upgrade that doubles throughput... enables RNA. You've talked about, you know, 50%, I think, of your current installed base to be upgraded by the end of this year. All new placements are gonna be 2.0's. How are you prioritizing which customers get upgraded first? It's usually scale. Okay. 'Cause it's, you know, it's available to everyone, but the customers that are upgrading. And it's a field upgrade, they're not buying a new box it's a field upgrade. They're doing so because they've got pressing demand, and they want the increased capacity. So that, that's really the number one driver. There's also, you know, generally, our platforms, like most life sciences discovery platforms, are sort of project driven. You kind of have to slot in between projects. Right. So. Right. So I know the HT is probably a better fit for CROs, and we'll get to the HT. But I'm just curious, given the throughput enhancements of the PhenoCycler-Fusion, have you seen any increased interest from CROs? A ton. Tons? Yeah. I think our largest single site for revenue, they're both CROs, and one is for the HT, and one is for the PhenoCycler. So a ton of interest because now it's at a throughput and a capacity where you can make money. Unless you can charge a boatload per sample, which, you know, there's a cap of that, it really becomes about experimental cycle turns. So doing 1 or 2 samples per week, you really can't make money off of that as a business, as a CRO. But if you do 20 to 30 to 40, then you do. So that's helped us. But what has also happened, ironically, not ironically, but with that, with the maturation of that platform and its increased throughput, our biopharma business has also gotten stronger on the discovery side. Mm-hmm. And it's probably too early to talk about the trends in terms of pull-through from the two- for the 2.0 upgrade. But I mean, are early signs encouraging that you know you are gonna see that lift in pull-through per box? We're seeing the lift in pull-through. We're seeing, you know, just like, you know, you do this long enough, you can sort of see the evolution of a platform. You start to see these really large-scale orders. People aren't stacking up inventory, but they're getting their large single lots because they've got a, you know, a 400 sample project to do. So... and when you have a platform that's got that now that throughput capability, the project sizes start to be bigger bites. So your POs start to get bigger, so now you gotta start working on your chain of custody and your supply chain and the margins on those projects. So in addition to—as we look into 2023 and 2024, in addition to building out the content menu, a huge focus for us is on simplifying, simplifying supply chain, chain of custody, reagent manufacturing, panel development, because we want higher margins on those reagents has to become a higher percentage. So those are—I mean, they're sort of obvious, but as we change our business, those are the things that we're shifting our mindset around. We used to build boxes, now we've got to build juice, and we have to have, we have to have a great capability in reagent manufacturing. And 2.0 in enabling RNA, I think you guys' approach is a bit different than, you know, a 10x or a NanoString. Yeah. Maybe looking at it as a complementary analyte. Yeah. Could you maybe just talk about your current customer base? Yeah. How often are they asking about RNA capabilities, and where do you think, you know, demand will be strongest initially? So there is keen interest among our existing customers and installed base on the discovery side, which are largely, you know, I'd call them PIs that are focused on disease states versus a genomic researcher that really is doing exploratory studies using a range of technologies. So they want RNA as a complementary technology to doing high-plex protein, either to look at transcriptional, translational, see if they're correlated or not, or in cases where there's some analytes that are just tough to get to with protein, secreted molecules, you know, chemokines, et cetera. So that's what they're looking at. So our customer base, at least to date, has really not been what I would call those core genomics users, where I think 10x and NanoString do super well, 'cause they're really on this natural continuum that went microarrays, RNA-seq, single-cell sequencing, now spatial array. It really is a natural progression in that customer base. We're really going to people that were from imaging cores or they've done a lot of flow on solid tissues or mass spec. Some of those genomics, there's some cross-pollination, but it's not head-to-head. Then longer term, as we kind of think about, at least in the discovery market, a lot of use of multi-omic panels. Yeah. How do you kind of see that trend rolling out as maybe you guys develop multi-omic panels? Is it, you know, starting relatively, you know, moderate adoption, or is there a fair amount of demand that you think could kick up as soon as those start rolling out? You know, across our 1,200 boxes, you've got a little more than a third of them, which are the discovery boxes. I think for us, what's powerful about having 1,200 instruments on the market is when you come out with a new application, you're dropping it into a large install base, so you don't have to build that out. So there's demand right now, so when we launch RNA, it'll drop in, and I think there'll be pretty rapid adoption, and initially it will be focused on complementary applications where targeted RNA and spatial proteomics are complementary. Okay. Yeah. Moving to the HT, maybe starting with the broader question. Yeah. Could you touch on some of the points of why, you know, you view this platform as, as best in class when it comes to translational and clinical-based work, you know, throughput, reproducibility, performance, you name it. So the high-throughput system, the people that are buying that are buying that because they're doing biomarker work, and they're classically doing single-marker immunohistochemistry. That's generally what they've been doing on a Roche Ventana platform. But what they need to do is they need to look at 2, 3, 5, 7 biomarkers. And they're making a choice between, "Okay, do I take my tissue block, and do I do 7 slices and do single-marker classic chromogenic stains? Or can I do all, all of those on one slide?" This will be a semi-quantitative or really qualitative pathology view of that. "Or can I do it all on one slide using fluorescence, save my tissue, and have this be quantitative? I would rather do that." That's the people that are buying the platform. But it has to have this, it has to have the same degree of clinical robustness and, and possibilities to be a clinical assay in the future, meaning, does, does Akoya have the ability to do that technically, and can they take this, this assay all the way through post-clinic onto the market? That's why people are increasingly interested in the HT, because it can do that technically. And now, because of our Acumen deal, our Agilent deal, our CLIA lab, our CDx partnerships, our regulatory capabilities, now they see that technical capability, and then now they're believing, "Yes, okay, Akoya can support a full CDx." And so that's why that business is growing, and that, those are the people that are interested in it. And it is, as you noted earlier, a lot of people in IO, and again, the antibody drug conjugates has been a catalyst for us as well. Long answer, but- Yeah, no, that's helpful. And then moving to the 2.0 upgrade for the HT, bringing post-processing onto the instrument. So you've talked about the reduction in turnaround time that ultimately brings. Can you kind of break that down and- Yeah, I mean, it sounds like a bit of a technical, "So what?" but the reality is, if you wanna build a box to do what I just outlined for the clinical markets, you've got to remove steps. 'Cause you're not gonna have a pathology lab sitting there, doing post-processing. They- it just... You won't make it. So we recognize that, and that's why we sort of scheduled this 2.0 release. So what we used to do is, you scan your slides on the box, you go to a post-processing computer, and there's somewhat of an interventional post-processing that takes some time. We put all of that in an automated manner right back on the instrument, so there's parallel processing. So once your data comes off the imager, it's already post-processed, cell segmented, all the peaks are shown. The data is there, kind of ready for, I would call it, more tertiary analysis. That is a fivefold shrink in total time. It was really important for us to roll that out, because what it means for our CRO customers is now they don't have this serial methodology, where I image, and then it, the box is gonna sit there while I go over here and do my post-processing. Now, they just keep that sucker cranking. So, that's why we did it for pull-through reasons, for practical clinical reasons, but also to make it easier for the customer. Got it. And then on the PhenoCode Panels, maybe just to start, why are these panels valuable to your customers? Yeah. And then maybe from, you know, workflow benefits, you name it, but then when it comes to an economic standpoint, maybe for Akoya, why are they valuable? Yeah, I mean, it just goes back to what we talked about in the beginning, is that, So our multi-year strategy was build out the instrument portfolio, simplify the workflow, like we just talked about with the 2.0 releases, and invest in the bookends. The bookends are: have content ready to go and have great software solutions on the back end. Now, could we have done all of that simultaneously? Yeah, but we should have raised more money. So we had to do it in a serial manner. So the PhenoCode, these are just essentially ready-made antibody panels. That's what they are. So as we transition to an antibody content company, that's the brand under which all these panels will flow out. And so what it does for the customer, it makes it easier for them to build our high-plex panels. So they can quickly piece these modules together and build a 67, 80 plex instead of a 20, 30 plex. And that's, that's twice the revenue per sample for us. Same on the HT side, building out panels that have all the IO content that are ready to go out of the box, makes it a lot easier for our CROs to go market, you know, to a, to a Merck, a GSK, et cetera. With these ready-made Akoya panels, it becomes a commercial amplifier for us, and it could just drop right into their instrument. So it really is about kind of ready-made content, workflow, simplicity, driving that pull-through. Got it. Yeah. Maybe some color on initial adoption feedback and ultimately, how do you think about the top-line contribution between, you know, discovery versus signature over the next, you know, 12-24 months? I think they'll contribute equally. There are different dynamics on the discovery market with these modules, these PhenoCode modules that are coming out. That's gonna be sort of more incremental. The way we look at the panels for the HT platform, which are, you know, call them 5 or 6 Plex panels, those are gonna be step function. Because what we're seeing right now, you know, early on with our pharma customers, is they're doing validation studies of other panels or the panels themselves. And if those validation studies are successful, we're working with them and a CRO partner to do much larger scale studies. And now, those are the exact dynamics that we wanna see. So I think on the HT side, those new panels, they're gonna be lumpy but meaningfully contributory, and on the discovery side, I think we'll see the ramp. But I think those will average out, and then... And, And, and combined, you'll see those pull-through numbers per instrument, mid-30s, low 40s, high 40s over the next year or two. Moving to the ABS business, you know, it seems like you guys are making good progress there. You've called out project shifting to later stages. You know, on the clinical opportunity, the translational opportunity, you've got this CRO network- Yeah. You've got workflow enhancements that we've kind of hit on. You've talked about the, the signature panels rolling out. Could you kind of just tie all this together and, and talk about how you're leveraging what you're doing in the ABS business to hopefully push out business to the products business and your CRO partners? Yeah, I think, so to pull the aperture back, pun intended. So in order to be successful clinically, we had to get the workflow, and we think we're there now, to the point where it really is clinically robust. We had to seed our partnerships with biopharma in a service mode, and we did that through our CLIA service offering, the Advanced Biopharma Solutions. Now, with the workflow more mature, the market more mature, we don't have to take as much of that on through our CLIA lab. That's why we have this network of 18 CRO partners, that we can feed projects to, but they're also out there farming projects as well. And the objective is to become involved in more and more clinical studies that are increasing later and later stages. So you can build a portfolio of ongoing CDx projects that are still in the clinical trial stage, but contribute significant, meaningful revenue to the business. That right now, we look at generally those as upside. And you start getting some of those flipping to on-market CDXs. Now, our business looks completely different. So this is part of a longer-term strategy to build our platform to clinical readiness, to build an army of CROs to amplify that clinically ready platform, to embed ourselves in as many clinical studies as we can, so you have a number of these CDXs break through. And this is exactly how it played out, you know, during my days in NGS over, you know, 8-10 years. So the exact same dynamics are happening. Maybe one more within the ABS business and Johnny, I'll have a couple for you after this. But could you just update us on how things are progressing with Acrivon? As much as you can, I realize. Yeah, they just, they just put out some press. They announced some preliminary interim data. They're announcing their interim data first half next year, and that'll be really seminal for us. So we have a companion diagnostic partnership, our first, with Acrivon Therapeutics, who had in-licensed a late-stage, a late-stage product from Eli Lilly that really showed high durable phase II response in, in three indications. So their, their clinical trial is ongoing. We're testing every patient through our CLIA lab, so if you're positive for the OncoS ignature, as it's called, you'll get the Acrivon drug. If you're negative for the signature, you get the drug with low-dose chemo. So they'll report out interim results first half next year, and, and, you know, they're sort of fast track, so it could move very quickly. And for us, the upside for that would be if they did get full approval, we would have our first on-market companion diagnostic. And again, in terms of our financials, it's just complete upside. We don't bake that in. Got it. But that's what we're trying to do across a number of different programs right now, that objective. Moving to the financials here. On the guide, you guys reiterated 95-98. Maybe any color you could provide in terms of what's baked in to Q4, maybe from a seasonality perspective a budget flush, a budget flush perspective, and whether, you know, just Johnny or Brian here, could we get your take on just the macro in general and how you're thinking about that in the fourth quarter, what you've been seeing? Yeah. Maybe next year. So I'll go high level, and Johnny, you can dig in. We're not going to count on some budget flush. Okay. I mean, that's, that seems, that seems counter to everything that we're all living every day. But it's, again, it's not, it's not a binary thing, so as we talked about before. So that's kind of how we're thinking about it. And that's... Fourth quarter is generally our, our largest quarter. It sort of goes Q1, Q2, and Q3, and then Q4. The only thing I would add, from a macro perspective, is, you know, we're, we're pretty diversified from a customer base, from a geography. We're, we're not concentrated, anywhere that gives us significant concern. I mean, frankly, North America is our, our, our highest growth, and it's the biggest market, and we're doing really well there. You know, there's, there's questions about what, what Asia Pacific looks like, and we don't have a lot of exposure. We're seeing, you know, we see it like everyone else is there, but, that's what gives us confidence in our current guide, and we think that's the, the right number for, for Q4 as well. Got it. Okay, so maybe one last one here, and Johnny- Yeah ... this is probably for you. So burning cash, I think, you know, you're around $10-$15. That's expected to come down over time, top line grows, margins expand, you get operating leverage. But maybe just... We've talked about it here and there throughout, you know, this, this chat, but talk about the margin expansion opportunity going forward, you know, how you've managed costs in 2023, and how you're thinking about managing costs or capital allocation next year. Yeah, and maybe to go back to kind of Brian's initial post-IPO strategy, it was really to forward invest, to build out the commercial infrastructure, build the R&D, to get the product on market on as many bench tops as we could, which is done, with always the intent to pivot as that matures to drive operating leverage. And it coincided with, frankly, with where the market's valuing a you know that bottom line. It happened to always be part of our strategic view. So over the last 6 to 12 months, we've really started to put in place specific supply chain manufacturing operations, you know, yield improvements, all these things we've put into operations that will start to bear fruit into next year as we drive bring in-house some of our reagent, you know, our conjugation, some of our reagent production related to our highest dollar, highest value, highest throughput, highest number of SKUs that we sell. We'll focus on those SKUs, the high dollar SKUs and the high volume SKUs, to really take the first big bite at gross margin. So most of it is cost reduction, but naturally, that's amplified by the continuing increased pull-through of the reagents. Naturally, that kind of magnifies. So that's why we're going after those savings. And we have some savings built into in the coming years into our instruments as well, but those are sort of volume-based, and some of the, you know, those are longer-term contracts. We really will be able to see it in our reagent manufacture. And again, it's things as simple as chain of custody and ensuring you've got the longest dating you can on your reagent components or driving yield improvements. All of those go quickly to your gross profit line. So that's really part of our driving focus. And then from an OpEx side, as you saw and as you mentioned, we've been able to take that OpEx down. Really, early in the year, we did some sort of housekeeping to really ensure we had a clean OpEx spend, ensuring everything we spent money on was high return, and that allowed us to flatten OpEx, and we'll see that into next year. We'll see that OpEx remain pretty consistent. Perfect. I think that's a good place to end it. Thank you, guys, both. Thank you. Thank you. Thank you.