On March 6, 2023 Quanterix Corporation (NASDAQ: QTRX), a company fueling scientific discovery through ultrasensitive biomarker detection, reported financial results for the fourth quarter and twelve months ended December 31, 2022 (Press release, Quanterix, MAR 6, 2023, View Source [SID1234628194]).
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"Our Simoa technology continues to be on the forefront of research, testing, therapeutic trials and has been an integral part of recent advances in Alzheimer’s disease. In order to best capture and lead in this area, two quarters ago we began a corporate transformation and we’re pleased announce the program is on track, with good progress quarter over quarter, "said Masoud Toloue, President and Chief Executive Officer of Quanterix.
Sequential Progress with Strategic Business Realignment
In August 2022, the Company initiated a strategic business realignment to maximize its full potential to enable access to current and future Simoa technology. As part of the realignment, the Company established an assay redevelopment program with the goal of improving its capability to manufacture high-quality assays at scale.
Quanterix’s fourth quarter and full year revenue results were in line with expectations set forth with this plan. Gross margin, a key success indicator of the Company’s strategic realignment, saw strong quarter over quarter improvement. Q4 GAAP Gross Margin was 48.8% versus Q3 GAAP gross margin of 41.1%. Q4 Non-GAAP gross margin was 41.3% versus Q3 non-GAAP gross margin of 34.9%.
GAAP Operating loss of $22.3 million for the fourth quarter of 2022 included approximately $10 million of restructuring and impairment related charges. As a result of the restructuring, SG&A costs were $19.3M for the quarter, down $9.1M from last year Q4
Year over Year Financial Highlights
Fourth Quarter 2022
· Q4 GAAP revenue was $25.8 million versus prior year Q4 of $30.3 million, a decrease of 14.7%. Prior year Q4 revenue included $1.0M of RADx revenue.
· Q4 GAAP gross margin was 48.8% versus prior year Q4 of 53.7%; Q4 non-GAAP gross margin was 41.3% versus prior year Q4 of 47.2%.
· Cash burn for Q4 was $5 million, ended 2022 with $338.7 million of unrestricted cash.
Full Year 2022
· FY GAAP total revenue was $105.5 million versus prior year FY of $110.6 million, which included RADx revenue of $5.2 million.
· FY GAAP gross margin was 44.4% versus prior year FY of 55.8%; and FY non-GAAP gross margin was 37.5% versus prior year FY of 49.6%
For additional information on the non-GAAP financial measures included in this press release, please see "Use of Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Financial Measures" below.
Fourth Quarter and Full Year Business Highlights
· In Q1 2022, Quanterix announced new agreements with Lilly to advance Alzheimer’s disease diagnosis and treatment; the agreements provide Quanterix access to Lilly’s P-tau217 antibody technology to create pathways for plasma-based biomarkers for use in Alzheimer’s disease and establish a framework for future collaboration and supports development of Quanterix tests to advance diagnosing and treating life-threatening diseases.
· In Q2 2022, the Company received funding from the Alzheimer’s Drug Discovery Foundation to accelerate Alzheimer’s disease diagnostic plasma test development. The Company is collaborating with Amsterdam University Medical Centers on four phases of clinical trials to validate Quanterix’s multi-analyte test. Phase 1 training cohort was completed in Q4 with 1,200 samples and Phase 1b (independent retrospective cohort) and Phase 2 (prospective trial) are expected to start by the end of Q1 2023.
· The Company is participating in the BioHermes trial with the Global Alzheimer’s Platform Foundation. The 17 US site and 1,000 early Alzheimer’s patient trial closed in November of 2022 and is expected to complete data analysis in Q2 of this year. This prospective validation trial is expected to support a regulatory filing for FDA clearance for Quanterix’s pTau-181 test.
· In Q4 2022, the Company presented findings at the 15th Clinical Trials on Alzheimer’s Disease conference, revealing that Quanterix’s Simoa technology has powered critical advances in ongoing clinical trials for the treatment of Alzheimer’s disease.
· The Company expanded its LDT menu with the launch of a neurofilament light chain (NfL) LDT, which can be used as an aid in the evaluation of individuals for possible neurodegenerative conditions or other causes of neuronal or central nervous system damage. Quanterix’s Simoa NfL is the most widely published NfL test with hundreds of research papers, demonstrating its validity for assessing neuronal damage, and Simoa NfL has become widely adopted in therapeutic clinical trial designs
Published discoveries enabled through Quanterix’s Simoa technology continue to illustrate industry reliance on the Company’s ultra-sensitive technology for breakthrough discovery in research and clinical applications. The technology was highlighted in 137 new publications in the fourth quarter 2022, bringing total Simoa-specific inclusions to over 2,100 as of the end of 2022.
Conference Call
In conjunction with this announcement, Quanterix Corporation will host a conference call on March 6, 2023 at 8:30 a.m. Eastern Time. Individuals interested in listening to the conference call may do so by pre-registering here and obtaining a dial-in number and passcode.
A live webcast will also be available at: View Source . You may also access the live webcast by visiting the News & Events page within the Investors section of the Quanterix website at www.quanterix.com. The webcast will be available on the Company’s website for one year following completion of the call.
Financial Highlights
Quanterix Corporation
Condensed Consolidated Statements of Operations
(Unaudited and in thousands, except share and per share data)
Three Months Ended December 31, Year Ended December 31,
2022 2021 2022 2021
Product revenue $ 16,674 $ 23,476 $ 69,808 $ 81,062
Service and other revenue 8,767 5,674 34,495 23,629
Collaboration revenue 170 162 649 648
Grant revenue 213 975 570 5,217
Total revenue 25,824 30,287 105,522 110,556
Costs of goods sold:
Cost of product revenue 9,631 9,916 40,809 34,149
Cost of service and other revenue 3,601 4,110 17,907 14,679
Total costs of goods sold and services 13,232 14,026 58,716 48,828
Gross profit 12,592 16,261 46,806 61,728
Gross margin 48.8 % 53.7 % 44.4 % 55.8 %
Operating expenses:
Research and development 5,600 7,734 25,890 27,978
Selling, general and administrative 19,272 28,423 91,995 92,336
Other lease costs 669 — 1,278 —
Restructuring 329 — 3,755 —
Goodwill impairment — — 8,220 —
Impairment expense 8,677 — 17,372 —
Total operating expenses 34,547 36,157 148,510 120,314
Loss from operations (21,955 ) (19,896 ) (101,704 ) (58,586 )
Interest income (expense), net 2,815 15 5,131 (403 )
Other income (expense), net 614 (213 ) (62 ) 1,265
Loss before income taxes (18,526 ) (20,094 ) (96,635 ) (57,724 )
Income tax (expense) benefit (75 ) 4 (65 ) 36
Net loss $ (18,601 ) $ (20,098 ) $ (96,700 ) $ (57,760 )
Net loss per share, basic and diluted $ (0.50 ) $ (0.55 ) $ (2.61 ) $ (1.60 )
Weighted-average common shares outstanding, basic and diluted 37,160,472 36,659,254 36,990,965 35,997,473
Quanterix Corporation
Condensed Consolidated Balance Sheets
(Unaudited and in thousands)
December 31, 2022 December 31, 2021
Assets
Current assets:
Cash and cash equivalents $ 338,740 $ 396,465
Accounts receivable, net 19,017 23,786
Inventory 16,786 22,190
Prepaid expenses and other current assets 6,860 6,514
Total current assets 381,403 448,955
Restricted cash 2,597 2,577
Property and equipment, net 20,162 17,960
Intangible assets, net 7,516 10,534
Goodwill — 9,632
Right-of-use assets 21,223 11,491
Other non-current assets 1,298 378
Total assets $ 434,199 $ 501,527
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 3,836 $ 9,209
Accrued compensation and benefits 10,658 13,252
Other accrued expenses 4,747 6,486
Deferred revenue 8,644 6,361
Short-term lease liabilities 2,687 1,428
Other current liabilities 386 241
Total current liabilities 30,958 36,977
Deferred revenue, net of current portion 1,415 1,099
Long-term lease liabilities 41,417 20,464
Other non-current liabilities 1,469 2,035
Total liabilities 75,259 60,575
Total stockholders’ equity 358,940 440,952
Total liabilities and stockholders’ equity $ 434,199 $ 501,527
Use of Non-GAAP Financial Measures
To supplement its financial statements presented on a GAAP basis, the Company presents non-GAAP gross profit and non-GAAP gross margin, which are calculated by including shipping and handling costs for product sales within cost of goods sold instead of within selling, general and administrative expenses. Management uses these non-GAAP measures to evaluate the Company’s operating performance in a manner that allows for meaningful period-to-period comparison and analysis of trends between the Company’s business and its competitors. Management believes that presentation of non-GAAP gross margin provides useful information to investors in assessing the Company’s operating performance within its industry and in order to allow comparability to the presentation of other companies in its industry where shipping and handling costs are included in cost of goods sold for products. Management also uses non-GAAP gross margin as a factor in assessing the Company’s progress against the strategic business realignment plan. The non-GAAP 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 below.
Reconciliation of GAAP to Non-GAAP Financial Measures
Quanterix Corporation
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(Unaudited and in thousands, except percentages)
Three Months Ended December 31, Three Months Ended
September 30, Three Months Ended
June 30, Year Ended December 31,
2022 2021 2022 2022 2022 2021
GAAP gross profit $ 12,592 $ 16,261 $ 10,944 $ 8,711 $ 46,806 $ 61,728
Shipping and handling costs (1) (1,926 ) (1,976 ) (1,636 ) (1,868 ) (7,206 ) (6,892 )
Non-GAAP gross profit $ 10,666 $ 14,285 $ 9,308 $ 6,843 $ 39,600 $ 54,836
GAAP Revenue 25,824 30,287 26,646 23,500 105,522 110,556
GAAP Gross margin (GAAP gross profit as % of revenue) 48.8 % 53.7 % 41.1 % 37.1 % 44.4 % 55.8 %
Non-GAAP gross margin (non-GAAP gross profit as % of revenue) 41.3 % 47.2 % 34.9 % 29.1 % 37.5 % 49.6 %
GAAP total operating expenses $ 34,547 $ 36,157 $ 47,547 $ 33,670 $ 148,510 $ 120,314
Shipping and handling costs (1) (1,926 ) (1,976 ) (1,636 ) (1,868 ) (7,206 ) (6,892 )
Non-GAAP total operating costs $ 32,621 $ 34,181 $ 45,911 $ 31,802 $ 141,304 $ 113,422
GAAP loss from operations $ (21,955 ) $ (19,896 ) $ (36,603 ) $ (24,959 ) $ (101,704 ) $ (58,586 )
Non-GAAP loss from operations $ (21,955 ) $ (19,896 ) $ (36,603 ) $ (24,959 ) $ (101,704 ) $ (58,586 )
(1) Shipping and handling costs, which include freight and other activities costs associated with product shipments, net of charges passed on to the customer, are captured within operating expenses in our consolidated statements of operations. During the three months and year ended December 31, 2022, we incurred $1.9 million and $7.2 million, respectively, of shipping and handling costs recorded within operating expenses. During the three months and year ended December 31, 2021, we incurred $2.0 million and $6.9 million, respectively, of shipping and handling costs recorded within operating expenses. During the three months ended September 30, 2022, we incurred $1.6 million of shipping and handling costs within operating expenses. During the three months ended June 30, 2022, we incurred $2.1 million of shipping and handling costs within operating expenses.