Hey, everyone. My name is Yuko Oku. I'm on the Life Science Tools and Diagnostics team at Morgan Stanley. Before we begin, I'd like to remind our listeners that important disclosure information can be found at morganstanley.com/researchdisclosures. With that, it's my pleasure to host Quanterix, and speaking on behalf of the company is CEO Masoud Toloue and CFO Vandana Sriram. Thank you for joining us today. Thanks, Yuko. Before we begin, I wanted to set up the stage. You've announced a corporate transformation last year. Tell us the key components of that transformation and where you are today in that journey. Yeah, Yuko, so we announced the transformation in August 2022, and Yuko, it was really on the next, you know, shifting and preparing the company for its next stage of growth. And in that transformation, you kind of think about it as three key pillars. The first pillar of the transformation is getting the organization and the company to a stage that's ready for scale. So, you know, we have incredible technology, and we're able to measure proteins at ultra-high sensitivity. And how do you take that technology and apply it to, you know, different applications in the market? And so getting the company and the operations to a stage where it'll scale and be ready for the next phase of growth was pillar number one. The second pillar of the transformation really around innovation, and as a, you know, high-growth, life science tools company, that's also in a, in a diagnostic space, what were the things that were gonna drive the next 5, 10 years of growth, that were going to be, one, part of our core technology and, detecting biomarkers with ultra sensitivity, but two, what's going to be next? And what's incremental to that? And we wanted to make sure that the product development engine, for the company was humming and moving forward, and that we were gonna be very focused on new NPIs and new technology this year, not two years from now, this year and looking into 2024. And then the final pillar of the transformation was around getting ready for translation. So we're a company that's very focused in research and academia. What are the steps we would have to take to take these tools that are used in clinical trials and research applications to the clinic, to patients, and to diagnostics? And to do that, we'd have, you know, to do a few things inside of the company to prepare the company for that. And I'm happy to say that, you know, we announced this in August of last year, and as we said on our last call, we're well on track, you know, accelerating towards completion of that transformation. So to sum it up, all, you know, every function, every business, whole scale view of the company. Great. That was a great overview. But before, you know, we talk more about that journey, stepping back a bit, could you provide an overview on the Simoa platform? And, you know, while some of your peers have focused on multiplexing capabilities in the proteomics space, Simoa is, as you mentioned, known for its ultra-sensitivity. What about Simoa technology that drives that high sensitivity that's difficult to match in other protein detection platforms? Yeah, Yuko, it comes down to signal and noise, right? And what you have with Simoa technology is the ability to measure things digitally, whereas if you look at all the other platforms out there, you're looking at things in a very analog sense. So we're able to measure interactions of these proteins on bead in single wells, and so we get light, and we measure the light from those wells. That gives us a digital signal. And when you look at sort of chemiluminescent-based systems or ELISA, you have a mash in a big well of a lot of different particles, and you have to sort of normalize concentrations and et cetera, and that's very analog. Where our digital signal becomes important is that as you get complex matrices, you know, such as blood, and you start to measure proteins in blood, you have these interactions, and those analog systems just are gonna be kind of noisy. You won't be able to detect those low-level protein analytes, and with our system, we can detect it. And so you wouldn't use Simoa necessarily for, you know, really easy to measure proteins, albumin. You use Simoa and the technology where it's difficult to measure those proteins, and that's what differentiates us. On the multiplex side, you know, we're really around, you know, 1-4 today on the Simoa bead-based technology. We get to 10-plex when you look at our planar array platform. That's sort of the sweet spot, and we view that as, you know, kind of more translational versus the, you know, looking at 500 or 1,000 or 5,000 at a time. Got it. That high sensitivity have been appreciated by the research community, particularly in neuroscience and neurology fields. Tell us why you've seen that robust traction in neuroscience, neurology versus other fields? You know, I think it's focus, Yuko. You know, we spend a lot of time on neuro. The technology is something that, you know, can be ubiquitous and can be used in other areas and other fields. In fact, while we spend a lot of time in neuro, you know, our customers are using Simoa technology to elucidate immunology. And they're using us for hard-to-detect immunology markers, which are important in a lot, ranging diseases from autoimmune to other type of inflammatory markers. People are using us in oncology frequently to look at some of the early markers in oncology, and in even in infectious. You know, there's been a lot of interesting work on infectious disease and looking for these, biomarkers, protein biomarkers, at a very early stage of disease, or looking at sort of long, you know, stage diseases and whether these, infectious particles persist with us over a period of time. So, to answer your question, I would say focus. We're one of the very few life science tools company that's taking, technology on the research side, and we're taking it from research to translation in pharma and clinical trials. And now we're going to the third leg of that stool, which is testing and diagnostics. If we were to do all of that in four fields, that I would call a lack of focus. And, that's why we've been so, you know, interested in neuro. It turns out that when you look at these neuro biomarkers, typically, the diseases we're looking at, Alzheimer's, Parkinson's, ALS, you know, 1 to 4 to 5 markers are typically sufficient for doing the elucidation that we're doing. But, as we said in January, you know, we are looking at ways our customers could drive further growth in areas beyond neurologists, just that our focus has been on neuro. Great. Well, and then, you know, now talking more about those clinical applications in neurology, could you talk about the landscape for use of blood biomarker in neurology, and what are the key benefits of using blood? Yeah. So blood in neuro is, we believe, incredibly important. And I think when you take a step back, you know, we're working with the brain, right? And, how do you access, what's happening in the brain, right? I guess, you know, soon we may have chips and things like that implanted, but, I mean, that's a big problem, and you need a proxy to measure that. And so right now you have imaging. You could do imaging, and you get some sort of answer for, you know, health state of the brain. You could do a spinal tap, an invasive spinal tap, and look to see what's in the cerebrospinal compartment, or you could measure things in blood. And, we've been very focused on the blood side. When you have a misfolded protein, I think you said earlier that your background is in neuroscience, so you know, Yuko, as you have sort of misfolding or damage in the brain. These proteins misfold, they accumulate, and they have to be exited through a sort of cleaning mechanism. And so those proteins will go to your cerebrospinal fluid, so half a liter there, and then they go to your blood, 5 l. And so you get this dilution effect from brain to blood, and that's where Simoa comes in. We can measure it effectively in blood, very hard to measure proteins, and a lot of the other technologies, you know, can't even detect that in blood. So that's one key reason why, you know, Simoa and the technology is so ubiquitous in blood. Important, obviously, is non-invasive detection of disease before symptoms. Great. And you recently announced positive top-line results from Bio-Hermes clinical trials, which assess correlation between p-tau181 and amyloid-positive PET scans. And, and also to support IVD filing, could you provide an overview of that finding of the trial and when you anticipate this to be published or presented? Yeah. So we are working on a publication. We on our last earnings call, we announced some of the results of that trial. So the trial was a 1,000 patient prospective, where we looked at people with cognitive symptoms that were early and late stage. And then they were measured at PET and with our, you know, Lucent AD test or p-tau181 assay. And we showed a high correlation to PET with sensitivities that ranged, you know, anywhere from 90% to up to 97% or so detection. And we're basically able to have, you know, in a very effective high correlation, detect these patients that had amyloid pathology. We use that data for our, not only our LDT, but we're using it for submission on our IVD as part of our breakthrough designation with the FDA. So that was Bio-Hermes. Then we've been talking about another advanced clinical trial that we're running between this year and next year, where we're gonna look at a larger population sample, and we're gonna be measuring, in a prospective way, folks who are going to the primary care clinic and memory centers. Analyzing, seeing, you know, hey, how does this compare to PET in that setting? That's probably gonna be more of a multi-marker assay that we're doing a comparison of. Do you eventually see that that type of approach replacing, like a PET scan in the future? Or how does that journey play out? Yeah, we do. You know, we believe, you know, the vision at our company is can you detect disease before symptoms, and really mitigate the effects of disease by detecting things early, non-invasively? And we believe that doing this in blood, you'll be able to detect things earlier than PET, and, it's less invasive, doesn't require the cost of PET. And we think that today, we view Lucent AD as a rule-out test, but with the advanced clinical trials that we're doing, we're expecting to look at a rule-in, the holy grail, I think, in the market, to, you know, go from blood right to potentially a therapy, as opposed to having PET be the a required intermediary. ... and you also have this, non-exclusive global license agreement with Lilly for their p-tau217 antibody for use in RUO products and services, as well as IVD applications. So with plans to launch the LDT this year, what data has been generated to support the use of that biomarker in the clinic? Yeah. So I'll take a step back. You know, one, we continue our relationship, you know, with Lilly continues. And, as we mentioned in the press release, we're working on, you know, both research and, testing and diagnostic products, specifically around, Lilly's 217 antibody. So that's, that's progressing really well, and, we're excited about that progress. And then taking a step back, and looking at 217 as a marker, I think, Yuko, what we've seen in the last, couple, several months is that 217 is turning out to be a very important biomarker for catching, folks at the very early stages of disease. And if you can do that, it looks like the therapies on the market will be more efficacious and will, you know, have a better result if you can catch someone early. That sort of makes sense in disease. And two seventeen is probably hands down the best out of, you know, all the single biomarkers that we see out there today. And so, you know, we mentioned that we have a very high interest and desire to get a two seventeen assay solution out before the end of the year. Okay. And then you also highlighted on the last call that new guidelines were recommended by National Institute on Aging and Alzheimer's Association for use of blood biomarkers to detect and diagnose Alzheimer's disease. Can you tell us a little bit more about that? Yeah. So, you know, I, I think this, these guidelines came out, or the draft guidelines came out at the AAIC platform at the conference, and the guidelines are, are being driven by the National Institute on Aging and Alzheimer's Association. And, you know, very encouraging for patients, I think, there was clear, you know, discussion on blood, blood-based biomarkers. So today, if you wanna do a diagnostic test, you know, typically you have either PET, CSF, both of which are invasive, or blood. And the markers that were listed in the draft guidelines included, you know, everything that we currently have on the shelf, right? Aβ40/42, p-tau217, and p-tau181. So very encouraging. We think that that was very important for the field. At the end of the day, it's gonna be blood that's going to really help with the infrastructure on getting patients access to therapy. You know, I think when people think of PET and CSF today, they, they think of sort of situations where there's tons of access. And that's not necessarily the case, not only here in the U.S., but also around the world. To get greater access, you're gonna need to do things non-invasively in blood. And so, you know, I think that was a very important step forward, and I'm very happy with those, with the beginning of the draft guidelines. Could you tell me a little bit more about the timelines and what finalization of those guidelines would look like? I'm guessing there's some kind of public comment period. Yeah, I think there's a public comment period right now, and I have a little bit less detail on sort of when the draft guidelines are expected to come out. But, yeah, usually a discussion period, and it's usually pretty robust. What is your strategy to broaden access to those markers that were highlighted in the guidelines? And do you see a path to make these markers available as IVD over time? Absolutely. Yeah, I think the one of the markers that were listed are currently is currently available as a Lucent AD product. So we have a patient-provider portal today on the site. So a provider can come to our site and order the Lucent AD test. And either they do their own blood draw, or we send them materials to do the blood draw. And we're already starting to see patient samples, you know, being sent to us. And we're doing some measurements there in our laboratory developed p-tau 181 test. So that, I would say, has already begun. On the IVD side, 181 is also the breakthrough designation we have with the FDA. We also have neurofilament light as part of that designation. in our multi-marker test, we have, you know, all three of those markers, as part of the multi-marker strategy. So they're definitely in an IVD path, and we're beginning with some of the laboratory-developed testing. Great. The FDA also granted accelerated approval to tofersen, a drug for SOD1 ALS, based on neurofilament light chain, a marker of neuronal injury. What does this accelerated approval mean for Quanterix and potential for subsequent approvals based on biomarkers on board? Yeah, I'm so glad you brought that up, Yuko. I think a lot of attention in neuro, you know, rightfully, is probably on Alzheimer's. But, you know, I think taking a step back, we think that that was incredibly important. I mean, if you look at the tofersen trial, it was a Phase 3 that failed, and yet the patient, ALS patients, there was an efficacy. I think we saw, you know, with the agency and people involved in the study saying, "Hey, look, this therapy is having a positive result on neurofilament light. We're seeing neurofilament light decrease over the therapy period, but we're just not seeing the clinical benefit. So let's give accelerated approval for this therapy based on a blood biomarker-"... and maybe, you know, in a different clinical setting, we'll start to see some clinical improvement. So that was the kind of core thesis behind the accelerated approval, and we're thrilled that, as a, you know, blood biomarker that's, you know, energizing that. So take a step back. What does that mean? So today, if you're a biotech or a pharma company that has a, you know, neurotherapy or a pipeline, blood biomarkers should be, you know, part of your, you know, clinical, you know, trial study. I think that, if anything, emphasized that point, resoundingly, and we're starting to see uptick there. Okay. So, you're starting to see more discussions about using neurofilament light chains? Yeah, not just discussions, but you know, more clinical trials, highest number of neurofilament light clinical trials to date. And a lot of interest, not only of buying our platform and running those clinical trials, either locally or sending the samples to our Accelerator Services Laboratory to power a trial or to do you know some preclinical trial work. So one of the things with NfL is that you see it elevated in a lot of different diseases. Do you see NfL being used in other neurological diseases over time? And, you know, like, given that it is a little elevated in a lot of different types, like, is it a good strategy to use that as, like, a clinical approach? You know, the way it's used. It's a good question. The way it's used, we call it oftentimes the check engine light of the brain. Check engine light is on, you really have no idea what's wrong with the car, but you know that something's wrong, and you gotta go get it checked out. And so, when you see improvement or, you know, improvement with a therapy and a neurofilament, like, you know that something positive is happening. Those, you know, neural cells, you know, that are dying are dying at a less, you know, active rate. And so it gives you that sort of perspective that, you know, things aren't getting worse. And so I think that, for that perspective, for a test or a trial, I think that's pretty important. And then a lot of times, you know, it's used as, hey, a proxy for brain health, as I just described. And if you wanna go to the next level, you know, is it dementia? Is it Parkinson's? Is it ALS? You start to add additional biomarkers that will, you know, tease and give, you know, that answer and sort of give you, by bifurcate, okay, you know, it's probably more dementia, Alzheimer's based on the tau results. So you get an answer with NfL, and then you go down the tau pathway. Or, you know, there's some inflammatory or astrocyte conditions and, with the GFAP result, or is it frontotemporal dementia? So, you know, you have more exquisite tools downstream of NfL, but for these clinical trials, I think NfL is an important marker. And so much so that we talked a few times in our earnings call about these reference standards. And if you can develop a reference standard for NfL, then everyone can be normalized in this database. So what was understood is that with age and BMI, NfL rates increase. And if you could do this in a large cohort population from you know children to adolescents to adults, you can start to say, "Hey, this is what your- this is what a normal NfL level looks like, and you're elevated versus you know a population." And all that work was done with Simoa and our NfL. You talked about... Earlier, you talked about people using, researchers using Simoa for fields, therapeutic areas beyond neuro, immunology, oncology, as well as infectious diseases. What additional capabilities do you think will be beneficial as you know try to push towards that ground? Yeah. I think, for us, you know, our view, and our mission is always, hey, develop the best biomarker tools, for our customers. And today, those customers are, you know, pharma, CROs and academia. And, you know, we can translate interesting proteins to biomarkers, then we've done a, you know, great job. And we've done a lot of that in neuro, but we've also, to your point, done that in immuno, you know, markers, inflammation markers, as well as some oncology markers and infectious. I think the view that if you can catch things early or from an MRD standpoint, make sure that something is gone, after therapy, then I think, you know, Simoa becomes extremely attractive, in those settings. And we have active programs in both the sort of MRD, make sure it's gone, versus, you know, early detection. Those are, you know, active in, you know, programs outside of neuro. So I wanna, you know, make the point that if we're successful in the next several years, then Simoa will be a more ubiquitous tool. I wanna touch on your Accelerator business. Despite softness in the instrument side, you've seen strong demand for the Accelerator lab business, which is expected to offset the softness in instrument, along with consumables this year. What level of visibility do you have into the pipeline? I can take that one. So our Accelerator business is really unique because it really gives us a view to what our customers are looking for, and it also helps to offset, you know, any short-term headwinds that we might have as customers aren't able to buy CapEx, et cetera. So there's really a lot of volume that goes to the Accelerator. There is some visibility to it because there's some level of constant research use that goes through, so we do have some visibility to it, and then we also have, you know, some of the larger trials going through there, so larger activity going through there as well. Great. And then, also with the strong traction you're seeing there, how do you feel about your capacity right now? Yes. So we've got about 20+ instruments in our Accelerator lab. We also only run one shift right now, so there's definitely an opportunity to expand and flex capacity as we need to. So it gives us a lot of, I'd say, optionality as the right opportunities come along. Great. You've also been seeing macro-related softness in instrument purchases, starting with China in first quarter, as you talked about. But now it sounds a little bit more broad-based, affecting APAC, North America and EU. Could you elaborate on what you're seeing in terms of those headwinds within both academia and biopharma customers? And remind me, what is your academic versus biopharma mix today? So let me start with the mix. We're right about 50/50 between academia and biopharma. You know, ebbs and flows, but right about evenly split between them. And you're right, we have been seeing some amount of instrument softness. For the first quarter, it was China, but we actually did pretty okay in the second quarter. So again, there's not, you know, one particular pattern or trend to point to. But a lot of our peers and others in the tools industry have also pointed to the fact that, there's some amount of tightening of belts around CapEx. There's some amount of macro uncertainty, so we've definitely seen that come through. What's unique for us that's a little bit different, though, is, the Accelerator Lab that we just talked about. So, you know, we've seen over the last couple of quarters, as customers haven't necessarily gone and bought an instrument, the work still goes on, and they've come to us in the Accelerator Lab to perform services instead. So while, you know, the instrument sales haven't happened, we've definitely seen the volume still come through, which also points to the fact that the demand is still there. You know, there might be a timing impact, but there is still solid demand, and, you know, the work still needs to get done. One of the things that's been like, one of the themes that's been coming up over and over again at this conference, at least for life science tools and diagnostics, is that, there's been a lot of comments about headwinds in China. So could you tell us a little bit more about what you're seeing and, how you're thinking about the impact on the business? Yeah. So let me comment on the size, and then, Masoud, if you can add on. So we're about 10% of our revenue comes from the total APAC region. Again, heavily skewed to China because that's the largest market, but we have somewhat limited exposure compared to others in China. And as you mentioned, you know, we saw a little bit of a dip and then kind of saw it come back, so we haven't seen major headwinds come out of there, at this point at least. And we, you know, we're very positive about what can happen in China. It's the largest market when it comes to patients with dementia and Alzheimer's, and one of our approaches, you know, has been in China for China. And so, as you heard, last year, we, you know, struck a deal with UltraDx to offer IVD solutions in the market, and we're happy with the progress of that, and we expect, you know, to do more there. Also, I wanted to ask about what your current thinking on M&A? What types of assets would you be interested in adding to your portfolio? So, you know, I think on the M&A side, you know, as you've seen, we have a pretty decent balance sheet, and our cash burn has been declining or decreasing. You know, if there was something that would get us to, you know, our goals, faster, we should do it, and it would make a lot of sense for us. If there was something that would accelerate our ability to offer exquisite biomarkers, in the field, that's something else that I would be paying attention to. Great. And in the last minute or so here, I just wanted to wrap up. So with the corporate transformation on the way of completion by year-end, could you speak to where you see Quanterix exiting the year and outline your next key goals for 2024? Yeah, Yuko, we have a high level of confidence on the transformation now. I think you can see it in the financial results, but also in, you know, in the company and what we're able to do now that we may have not been able to do in the past. In 2023—Coming out of 2023, I would expect... We talked about a lot of these operational improvements. We probably, you know, very importantly, have developed a product development engine, and I expect by the end of 2023, us to have an engine that is developing faster and new NPIs at a lot faster rate. So we'll be a company in the Alzheimer's and neuro space that could do this, you know, in a very effective way. I also expect then, on the diagnostic side, that we're going to begin the initial pieces of, you know, building the global infrastructure for testing, and both, you know, are going to, you know, accelerate the ubiquitousness of Simoa. So that it's not Simoa in just specialty labs, but it's really, you know, Simoa in all labs. Great. Well, that was a great overview, and thank you so much for joining us today. Thanks, Yuko. Thanks, Yuko.