Hello, thank you for standing by, and welcome to the Quanterix Corporation second quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. Please be advised that today's conference may be recorded. I would now like to hand the conference over to your speaker today, Mike Doyle, the CFO. Please go ahead. Thanks very much. Good afternoon, everyone, and thanks for joining us today. With me on today's call is Masoud Toloue, President and Chief Executive Officer for Quanterix. Before we begin, I would like to remind you about a few things. The call will be recorded and will be available on the investor resources 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. To supplement the company's financial statements presented on a GAAP basis, the company has provided certain pro forma financial measures. Management uses these pro forma measures to evaluate the company's operating performance in a manner that allows for meaningful period-to-period comparison and analysis of trends in its business. Management believes that such measures are important in comparing current results with other period results and are useful to investors and financial analysts in assessing the company's operating performance. The pro forma financial information presented here should be considered in conjunction with, and not as a substitute for, the financial information presented in accordance with GAAP. Investors are encouraged to review the reconciliation of these pro forma measures to their most directly comparable GAAP financial measures set forth in the appendix of this presentation. The risks and uncertainties that we face are described in our most recent filings with the Securities and Exchange Commission. With that, I will now turn the call over to Masoud. Thank you, Mike, and good afternoon, everyone. We're at a unique and transitional moment, both at Quanterix and in the broader life science industry. Never before have there been more measurable parameters to assess normal or disease processes in human health. Using new biometric screening, imaging, genomics, and proteomics technologies, this industry is developing more lab parameters to discover and help make decisions in this assessment in diagnosis and treatment of disease. Perhaps even more importantly, industry participants are accelerating our understanding that multi-marker approaches and the data associated with them will create better predictive indication of changes in protein state and expression. Quanterix sits in a key translational space in this continuum, where our ultrasensitive detection of protein uniquely propels new discoveries and early indications of disease. Alzheimer's is one of those diseases where there's an early symptom-free phase that, if detected, could revolutionize the way we treat patients. An important step in this direction, last week, we launched the first p-Tau 181 plasma laboratory developed test for clinical diagnostics and research. This is an early move as we arm researchers and clinicians with new tools to provide insights into poorly understood pathologies and empower therapeutics companies with a growing menu of multiplex blood-based markers to advance brain health. Now, Quanterix is at a pivotal juncture where operations and ability to scale have not kept up with growth and customer demand for our Simoa technology. This has manifested itself into quality challenges that will, in the near term, have impaired our growth rates. Costs to manufacture assays with current processes are not efficient in the long term. Following our strategic review and top-down assessment of our operations, we announced a comprehensive plan whose imperative is to fully realize the potential of Simoa by ensuring the company's technology is built and scaled with operational rigor and excellence. First, we have set in motion an assay redevelopment program with the objective of improving our ability to manufacture and deliver high-quality assays at scale. We anticipate making initial progress this year and expect to complete this program in 2023. Second, we have refocused and aligned our capital and resources along three go-forward principles, quality, innovation, and positioning Quanterix to unlock the value of translational markets. We have initiated several decisive actions to reallocate resources and capital, eliminating projects and reducing spend on initiatives not related to assay redevelopment and innovative research. These adjustments will put us on a path to accelerate the return to strong growth and put us in a position to achieve positive cash flow. These actions will result in a reduction in force affecting approximately 130 employees across the company's worldwide operations. On to our Q2 results. We reported total revenues of $23.5 million, which represents a 7% decline year-over-year. Revenues were impacted due to a reduction in consumable revenue as we addressed asset quality challenges. As shown on slide 3, consumables revenue declined year-over-year by 29%. As I discussed, we have initiated critical steps to realign our business so we can focus on improvements required to remediate these challenges. On a pro forma basis, Q2 gross margin was 28.3% versus prior year Q2 pro forma gross margin of 47.5%. Our Q2 gross margin reflects the reallocation of resources, mainly headcounts, to our ongoing quality-related activities, as well as an adjustment relating to shipping costs to our cost of goods sold. These increases to cost of goods have a corresponding reduction in operating expenses with no overall change to the company's total expenses. Mike will provide additional details in a moment. We believe presentation of pro forma gross margin provides visibility into the progress of our quality process initiatives and their improvement on our cost of quality. Forward-looking, we now expect total year 2022 revenue to be flat compared to total year 2021. On a longer-term basis, we expect to return to double-digit revenue growth in 2024, when the benefit of our restructuring and business realignment plan are fully realized, and to accelerate at a faster pace once new growth categories are unlocked. The difficult but necessary changes to improve our operations and cost structure are far-reaching and will affect approximately 25% of our employees across the company, worldwide. We regret the impact of these changes on our departing employees, and would like to thank them for their contribution to our company. Moving forward from here, we're committed and focused on executing to achieve our operational, market, and growth goals. We are dedicated to advancing our mission of transforming diagnostics of neurodegenerative disease, biomarker research, and discovery. Today, we also announced that Kevin Hrusovsky has stepped down as our company's Executive Chairman and is leaving our board of directors. As we move forward in the next phase of our company's evolution, this is also a natural point in the evolution of our board structure. I would like to thank Kevin for all his efforts in helping Quanterix become a leader in our field. With Kevin's departure, the board has appointed Martin Madaus to serve as independent non-executive chairman of the board. Martin is deeply familiar with our company and industry, and I look forward to working with him in his new role as we embark on the next phase of our journey. Now, I'll turn it over to Mike to discuss some more financial details. Mike? Thanks, Masoud. I'm gonna provide some additional financial details about our second quarter 2022 performance. For your reference, for those following on the call, it will be slide 3. As Masoud noted, our total revenue in the second quarter of 2022 was $23.5 million, a 7% decrease versus the second quarter of 2021 revenue. We had product revenue in the second quarter of $14.8 million, a decrease of 21% versus the second quarter of 2021. Within product revenue, consumables revenue was the biggest driver of the shortfall, declining 29% versus the second quarter of 2021. As Masoud discussed, we had quality-related issues that we are addressing. Instruments declined 4% versus the second quarter of 2021. However, during the second quarter, we shipped 10 instruments with a value of $1.9 million to a new customer, for which we did not record revenue due to the start-up nature of the business. We will be recording this revenue when the cash is received. Second quarter 2022 service revenue increased 51% versus the prior year second quarter to $8.5 million. Included within services revenue is $2.7 million recognized during the second quarter of 2022 from our collaboration with Eli Lilly, announced during our Q4 2021 release. I'd now like to spend some time talking about gross margin for the business. During the second quarter, based on a deep dive review of the business, we made a few changes in how we capture costs in our P&L this quarter. We have changed the cost allocation of three departments based on their focused activity on quality and operations. In addition, we are capturing freight costs not billed to customers and recorded as operating expenses as a pro forma adjustment to cost of goods sold. We've made these changes to give greater visibility into our quality activity and allow investors to better monitor our progress. First, let me walk you through the impact of that change from the first quarter of this year to the second quarter of this year. If you look at slides 5 and 6, we have bridged gross margin and operating expenses from the first quarter GAAP to our second quarter pro forma presentation. When you look at the gross margin change from our GAAP Q1 performance to pro forma Q2, both the allocation change and freight expenses have corresponding operating expense decreases, which you can see on slide 6. Of the gross margin decline of 21 percentage points from our first quarter GAAP to our second quarter pro forma, 16 of the 21 points relates to the allocation change and pro forma freight adjustments. The remaining difference reflects volume and mix shortfall, primarily due to the decline in consumable revenue mentioned previously, partially offset by the improvement in our excess and obsolete charge. Now let's review margin performance for the quarter versus prior year. For your reference, that will be captured on slide 7. Our second quarter 2022 pro forma gross margin was 28.3% compared to 47.5% in the second quarter of 2021. There are a few factors that drove this change. First, revenue declined versus prior year, with the biggest shortfall coming from our highest margin product, consumables. Our volume and mix contributed 10 percentage points to the margin decline. The change in allocation we made in Q2 impacted margin approximately 7 percentage points versus the second quarter of 2021. Our pro forma operating expenses totaled $31.6 million in the second quarter of 2022, an increase of $5.9 million versus operating expenses in the second quarter of 2021. Major expense drivers were headcount increases, stock compensation expense, and increased lease expense related to the new facilities in Bedford, Massachusetts. We are considering our options, including terminating the lease or subleasing some or all of the space in order to reduce the drag on operating expenses. During the second quarter of 2022, our cash balance decreased by $13 million, ending unrestricted cash balance was $361.3 million at June 30, 2022, and basic weighted average shares outstanding for earnings per share totaled 36.9 million for the second quarter of 2022. Cash outflow from operations was $8 million during the quarter, driven by higher operating expense, primarily driven by headcount increases and CapEx, partially offset by tenant improvement rebates from our landlord in the Bedford facility. With approximately $10 per share in cash and no debt, our balance sheet remains in excellent shape, and we are well positioned with adequate resources to pursue our strategic objectives. The difficult decision we have made with our restructuring announced today will reduce expense on an annualized basis by approximately $25 million, excluding the impact of our leased facilities in Bedford, Massachusetts. This helps offset the reduction in revenue guidance and allows us to continue to strategically invest going forward. The changes we have made in how we show our financial results will provide greater visibility to investors going forward and allow you to see our progress towards improved quality and scalability. With that, I'll turn it back to Masoud. Thank you, Mike. Before we get into questions, I want to summarize a few important points. First, the market opportunity in neurodegenerative research and the demand for ultrasensitive tools for early biomarker detection has never been stronger. From grant agency spend, clinical enrollments to drugs and late-stage trials, we expect continued growth in this category. Second, we have shown through our over 1,800 publications that Simoa technology is a robust and critical element in advancing discovery and accelerating drug approvals from research to post-market clinical studies. Simoa blood-based testing can enable non-invasive, cost-effective identification of patients more likely to benefit from disease-modifying therapy, accelerating trial enrollment and increasing probability of approval. There is no mistaking that we do have some challenges, but we've sized and understand them and have a comprehensive operational plan to address. This plan will improve our quality and manufacturability of our assays, allowing us to both scale and improve our cost structure in preparation to accomplish our translational goals. It's the single greatest priority of the company, and we've aligned our resources around it. At the conclusion of this transformation, success will be profitably capturing a larger share of the proteomics market, innovating and growing at a much faster pace than before, and in a leading position to propel new discoveries, advancing neurodegenerative disease research and diagnostics. We can now open the line for questions. Operator? Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. Please limit yourself to one question and one follow-up. Please stand by while we compile a Q&A roster. Our first question comes from Puneet Souda with SVB Leerink. You may proceed. Yeah. Hi, Masoud, thanks for question. First one is really, I mean, can you talk a little bit about the quality challenges and just walk us through that? Why was this not you know sort of detected or identified earlier? And also help us understand, you know, sort of how what is the ongoing impact to you know sort of how much is it to the clinical trial side of the business versus to the academic side of the business? Help us just understand what exactly happened on the quality side of consumables. All right, Puneet. Yeah, thanks for the question. You know, on the consumable quality side, clearly, and as you can see from some of the charts that we provided, we have a, you know, high cost of quality for our assays. You know, that cost, you know, involves our manufacturing process, you know, some product stability. And that, you know, the cost for that includes rework, scrap, higher distribution costs. You know, that level of rework required to send our products with quality isn't going to be something that we wanna continue or sustainable in the future. That's why we're launching this redevelopment program for our assays to make sure we have sustainable growth. On the question related to the clinical customers, we've done a lot of work in piloting, you know, some of our redevelopment efforts on our Accelerator Laboratory. The work that's done in our Accelerator Laboratory includes a lot of the initiatives around quality. From that perspective, you know, a lot of our clinical customers and the work that we're doing in the accelerator benefit from that. We are able to mitigate and work around many of the quality challenges we have. That being said, it's going to be a significant effort and that's why we've reduced our guidance for the year. Okay. On the guidance part, I mean, sort of what gives you confidence in this flat year-over-year guide? I mean, you were, as you said, the 25% of the employees are being laid off. I wanted to understand, I mean, how what gives you confidence given that this obviously causes a disruption within the workforce, overall morale and such. There could be further impact from that. Can you just walk us through, what gives you confidence on the flat number for the year? Yeah. That's a, you know, good question. The concept of the guidance, we you know believe, first of all, there's no decrease in demand. I would say that demand for similar products and our ultrasensitive detection, you know, is unmatched. Our customers need the ability to measure these proteins at low levels. That, you know, that's a strong positive. Two, you know, obviously, with the high growth we've had, we have to take a step back on developing some of the products and assays so that, you know, we can sustain that growth, you know, in the future. We've focused in this reduction in force to really around two tenets, as I talked about on the call. One, you know, the focus on quality and this redevelopment program, and two, around our innovation. You know, from a focus and resource perspective, we haven't reduced that at all. We've put all our effort on in those baskets. We think that the you know this new focusing helps from a cost perspective and a focusing perspective. Just last one for me. Does this impact your agreement with Eli Lilly or other private prior commitments that you have with pharma companies? If I recall, you had agreements with Abbott and BARDA and other government agencies as well. Just wanted to, you know, understand if which ones of those are impacted at this point. Yep. None of those that you mentioned are impacted. We don't have any, don't expect any impacts to the collaborations that we have or that we have announced. We don't anticipate any impacts to them at all. Okay. All right. Thank you. Thanks, Puneet. Thank you. One moment for questions. Our next question comes from Max Masucci with Cowen. You may proceed. Hey, thanks for taking the questions. Yeah, you know, we've been a longtime supporter of Quanterix, you know, and the company's mission, you know. This will be a bit more blunt about list of questions. I guess just, you know, to start, you know, what triggered the strategic review of the business? You know, it sounds like manufacturing scale was one, you know, area of focus, but can you explain the other items that were on the short list, you know, of key findings from the strategic review, whether it's, you know, Quanterix's competitive positioning in a budding proteomics ecosystem, you know, or anything else? Hey, Max. Thanks for that question. Yeah, you know, first of all, I think, with me coming on board, I think it's natural that there's, you know, a strategic review of the operating model, and then anyone new, you know, who's coming to a business is going to take a look of how we wanna allocate our resources and our capital. When we did this strategic review, it was clear, as you can see from some of our charts, that, you know, our cost to get product to a customer is significant. We do a lot of rework, and then there's scrap and high distribution costs. That is not gonna be something that's sustainable in the future as we look for profitable growth. That's number one. Number two, we think this is an incredible time where there are several trials. There's you know several workarounds around research and diagnostics that's being done. There are a few you know therapeutics in the market that are gonna be coming in the next couple of years. What better time to take a you know top-down look at the business and you know get it into shape for meeting what we think is gonna be pretty you know strong demand going forward. It hopefully provides some color on you know why the review, why the look back, and why the focus on our operations. Okay. Got it. I mean, as a company with a relatively mature, you know, installed base compared to specialty tools peers, you know, consumables that have ramped nicely for years, you know, and still very long runway for growth, even in research and biopharma end markets. You know, I guess one would assume that you'd probably be able to, you know, to breakeven even just with volume leverage, but it doesn't necessarily sound like that's the case after the strategic review. I mean, Quanterix underwent a major transformation, you know, nearly 10 years ago, and you chose to prove out the technology in biopharma and research markets before, you know, strategic entry into diagnostics. That was in part due to the success that Illumina generated by employing a similar approach. You know, I'm still relatively unclear whether the go-forward strategy is, you know, more or less diagnostics-focused, you know, just how you're prioritizing go forward. Yep. Yeah, the way, you know, we think about this is, first, all of our revenues today are, you know, in the research and the translational market around, you know, academia, pharma, and our CROs. That's whether it's discovery, you know, of a new biomarker or that's translation of that biomarker into the clinic, or during a clinical trial. That's the majority of our revenues, and we wanna ensure that we can sustain that base, on a go-forward basis. Now, that being said, as these markers are moving in this translational space and in pharma, you could see the utility for them in a diagnostic setting. Our view here is, look, we want to be able to offer these tests in a diagnostic setting in our LDT laboratory. We announced our first p-Tau 181 for that purpose, but we don't anticipate, you know, a lot of volume or a lot of demand for that until there's a therapy on the market. It's important to begin to make some small steps in the diagnostic space. We think that that'll be some bigger steps in the future, but now we wanna focus our efforts on this translational place that Quanterix plays very well in. I think one comment, Max, you mentioned cash flow. You know, when we did the deep dive, one of the things that it highlighted is that this cost of quality that Masoud talks about and the ongoing need to put additional resources and have additional expenses associated with product we're working on getting it, you know, in a place where it can go to market, was gonna be a drag on us getting to cash flow breakeven. I think you know, it's our belief that as we get these resolved, it actually expedites versus the internal forecast we did, and it expedites getting to cash flow breakeven. We believed it was a necessary next step in addition to the other things that Masoud mentioned. Okay, got it. Final one. You know, just with north of $300 million in cash, you know, reduction in the size of the organization, I think there's been a comment made lately around a desire to gain access to technologies that, you know, can improve your multiplexing capabilities. But just generally speaking, you know, you do have a strong balance sheet. You know, how should we think about, you know, how you're gonna be, you know, prioritizing the use of that balance sheet, M&A, things of that sort? Yeah. You know, our clear focus today is really, one, we wanna make sure that we have scalability. I think that demand and that opportunity, that we see in the market for Simoa, is our number one importance. The more we can scale and, get these products to customers that need it, that is gonna be our focus. Number two, you talked a little bit about the multiplex and our efforts to continue around higher sensitivity. That's another. That's our second area where we have to continue innovating as a company. We have some very interesting projects that we hope to, you know, talk about in the future as we progress on some of those initiatives. You know, that's where we're really focusing the resources. We have the cash balance to be able to focus on those two priorities. You know, we talk about some of the focus thing, like, hey, this is where we wanna pay attention to. If there was something that helped inorganically, you know, one of those two initiatives, we take a look at it, but we wouldn't wanna take a look at anything that was distracting. Got it. Thanks for the color and transparency. Thanks, Max. Thank you. One moment for questions. Our next question comes from Matt Sykes with Goldman Sachs. You may proceed. Hey, guys, this is Dave on for Matt. Can you provide any additional color on how instrument growth has been trending and what you expect going forward? Yeah, Dave. Instrument growth, particularly when you look at, you know, the placement activity I mentioned that we didn't bill for, instrument growth has been consistent. You know, it was similar to Q1 and similar to Q4 in the prior year. The placement activity from an instrument standpoint was actually good. HD-X up a bit more this quarter. If you remember, last quarter was a little softer, and SR-X was up. From an instrument placement standpoint, I think we are performing consistently, so I don't see challenges there at this point. Great. Thanks. Thank you. One moment for questions. Our next question comes from Kyle Mikson with Canaccord. You may proceed. Thank you. Hi, everyone. This is Alex Vukasin. I'm on for Kyle Mikson. Just a question on competition. Labcorp launched the NfL blood-based test to facilitate the detection and verification of signs of neurodegenerative disease in July. Then there's also the Siemens ADVIA Centaur Serum NfL assay, which achieved BDD in March of 2022. At a high level, some of the product differentiation of your NfL test versus some of these competitors. And is it mostly like a sensitivity value proposition or do you feel that that's not like big picture approach? Thank you. Hey, Alex, your line was breaking up. We heard the second part of your question about the Siemens NfL test. I didn't catch the first part of your question, but maybe I can start on the Siemens, and then you could repeat the first part. When we look at our test, our NfL. Two things are important to keep in mind. First, we have the largest number of publications around neurofilament light versus, you know, any other company or, you know, or provider of that platform. That publication record is incredibly strong. We talked about last quarter, this, you know, big, large normative study around NfL and baselining NfL levels in order to create a baseline based on weight and BMI. That was an incredible study across, you know, thousands of people that provide a lot of information and make the data points of NFL incredibly useful to both you know, users of Simoa and other users. That's a very important point. Finally, I just wanna, you know, make a comment. If you're looking at sensitivity, it's a combination of, you know, great antibody, but it's also the Simoa technology that's gonna allow that ultra-sensitivity and give you the best results. It's a combination of both. We support Siemens and their initiative. We talked about Siemens being a partner and them using our antibody. We wanna promote the use of Simoa and our NFL product, you know, all around. I didn't catch the first part of your question. Could you repeat that? Yeah. Apologies for the miscommunication on my end. That's a great answer. My first question was actually just, it was specifically open-ended question, and it was related to Labcorp and how they launched an NFL, a blood-based test, in mid-July. Yes. Yeah, we saw that from Labcorp. I think that's a great testament to what we're gonna see as, you know, more and more interest in a marker for brain health. I think that's a, you know, excellent indicator that there's an appetite in the market. Brain health is probably one of the most difficult and costly ways to diagnose a pathology or, you know, disease. That was a big plus. We applaud that, and we hope that there's more companies out there that are going to be doing testing with NfL. Excellent. Thank you for providing me some more color on that. One additional question, then I will hop off. Apologies for this on the call. I've had to hop between calls given a lot of volume today. Just to kind of highlight one of your goals for 2022, you were able to secure Breakthrough Device designation for p-Tau 181 test designated for Alzheimer's disease in very short order. Another one of your objectives is to achieve a neurofilament validation for p-Tau 181 as well as clinical trials for p-Tau 181 and other AD biomarkers. I was just curious if you could provide any more color on any of these. Thanks. Your line was breaking up again, but I think I got the basis of the question. Just to provide, you know, an update, we received our, you know, p-Tau 181 breakthrough designation last year and our NfL breakthrough designation this year. Those continue, they're both single site IVD applications with the agency. The big update or change, I think, was a couple weeks ago when we launched at AAIC the first p-Tau 181 laboratory developed test for, you know, as an aid in the diagnosis. We think that progress is very important because, one, it's, you know, very available in the near term through our Accelerator Laboratory. Two, it provides a great sandbox for us to work with pharma and CROs that are very interested in a LDT test. Three, you know, it being the first one in the market with the most sensitive platform, we think it paves a great way for more work in the future. We don't expect it from a diagnostic standpoint to be a big revenue generator, but I think, you know, paving this way as a first step is an important milestone for us, and happy to say that we achieved it. Thank you very much. Thank you, Alex. Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Masoud Toloue for any further remarks. Thank you for participating today. We look forward to seeing you on our next quarter's call. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.