Operator Hello, and welcome to today's call to discuss Quanterix's acquisition of Akoya Biosciences. At this time, our participants have been placed in listen-only mode. The call will be open for your questions following

Operator Hello, and welcome to today's call to discuss Quanterix's acquisition of Akoya Biosciences. At this time, our participants have been placed in listen-only mode. The call will be open for your questions following the prepared remarks.

As a reminder, this conference call is being recorded and the press release and slide presentation regarding the transactions are available at the Investor Relations section of each company's website. The archive replay can be accessed there following the call.

I would now like to hand the call over to Joshua Young, Head of Investor Relations at Quanterix. Please go ahead.

Joshua Young Thank you and welcome everybody. Today's discussion of Quanterix's proposed acquisition of Akoya, including the answers to your questions, will contain statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those expressed or implied by such forward-looking statements.

These risks include, among others, matters that we described in our press release announcing this transaction and in our SEC filings. Unless required by law, we disclaim any obligation to update these forward-looking statements and encourage you to review the important information included in our press release regarding forward-looking statements, the forthcoming registration statement filing and solicitation matters.

Our participants today include Quanterix's President and CEO, Masoud Toloue and Chief Financial Officer, Vandana Sriram. After our prepared remarks, we'll open up for Q A.

Now, I'd like to turn the call over to Masoud.

Masoud Toloue Thank you, Joshua. We're excited to speak with you today about the combination of our two companies. We believe that the transaction is a strong fit with our strategy and will create a true leader in our space with a one-of-a-kind integrated platform across the detection of blood and tissue-based protein biomarkers.

Our combined ability to serve customers with a fully integrated offering, unmatched innovation, speed, and reliability not only fills a void in the market, but is also expected to create significant value for shareholders of both companies.

The combined Akoya and Quanterix will serve three high growth markets across neurology, oncology, and immunology, and will go-to-market with a comprehensive suite of technology offerings backed by a strong cash balance, enabling us to reinvest in core growth opportunities and accelerate our path to profitability.

With that as a backdrop, I'll now spend a few minutes providing an overview of the transaction terms.

Akoya shareholders will receive 0.318 share of Quanterix stock for each share of Akoya they own. This represents a pro forma ownership of the combined company of 70% for Quanterix shareholders and 30% for Akoya shareholders.

As for leadership post-closing, Vandana and I will continue to lead Quanterix and we will operate under the Quanterix name. We look forward to welcoming two directors proposed by Akoya directors to our Board of Directors for a total of nine Quanterix directors.

As you have seen, certain shareholders controlling more than 50% of Akoya shares have signed a voting agreement in support of the transaction. Finally, we expect to close the transaction in the second quarter of 2025 following approval by both company's shareholders and satisfaction of various closing conditions and regulatory approvals.

So before Vandana and I review the many strategic and financial benefits of the transaction, I want to start by explaining why

Philosophically, this transaction is so important for both Quanterix and our industry. The Quanterix mission lies in the advancement of enabling early detection of disease before symptoms appear. Today, we're combining two companies focused on different aspects of detection to create an offering able to address a broader range of customer needs.

Diseases like cancer begin in tissue, spread to blood, and often end up in organs such as lung and liver that ultimately takes life. To effectively detect and treat disease, we must measure signals as they follow this pathway.

Typically, you have pathologists doing research in blood and other pathologists only measuring biomarkers in tissue. Our vision is to bring clinical and anatomical pathology together to solve this problem. By combining the leader in ultra-sensitive biomarker detection in blood, Quanterix, with the leader in measuring biomarkers in tissue, Akoya Biosciences, we are building the toolset for this mission and uniquely positioned to speed up market development of new tests.

With that foundation, let me now add some further context to what this transaction means for Quanterix and how it will accelerate our strategic plan to create a scalable platform.

Our overarching strategic plan focuses on three core areas. Number one, growing our menu. Number two, expanding into adjacencies. And finally, translating into Alzheimer's disease diagnostics. We have consistently made progress across each area, but where I want to spend the most time today is on pillar two, expanding into adjacencies, as this is really where Akoya will strengthen our position.

Our Simoa platform is able to detect over 550 biomarkers in blood, largely targeted to detect neuro disease. Throughout Quanterix's history, the company has been highly indexed and a leader in the neurology field, but our applications have also manifested in oncology and immunology. Both are two high growth adjacencies and represent two of the largest markets with the greatest position for early detection. Expanding into these adjacencies will enhance our offerings in research and in academic settings, improving our ability to participate in the most dynamic subsectors of healthcare.

Our approach to each market is slightly different. For immunology, we've been focused on the launch of our upcoming new Mid-Plex Simoa platform and for oncology, it is through tissue and blood biomarker monitoring and detection.

As we think about Akoya's profile, they check both boxes. Akoya's world-class spatial biology capabilities are the gold standard, with a roughly 1,300 installed base across oncology and immunology markets. And importantly, their instrument portfolio is highly complementary to Simoa.

Across our combined technology and service offerings, I like to think about our growth potential in three parts that will ultimately drive our continued strong double-digit organic growth.

First, menu. We'll apply our combined consumables product development engine to accelerate growth of new biomarker pairs across tissue and blood and deliver on the promise of our integrated platform, as I just described.

Second, services. We will replicate Quanterix's accelerator model to expand Akoya's tissue testing services portfolio. Our differentiated accelerator offerings have created a valuable franchise that has helped us deliver our consistent double-digit growth.

And third, footprint. Given the complementary nature of the transaction, there are significant new cross-selling opportunities across our combined installed base of over 2,300 instruments.

And when taken together, we now have the opportunity to go after a larger $5 billion Mid-Plex and spatial biology market, positioning us for sustainable growth and market leadership. So that is how we really look at the core pillar and the acceleration we'll see from Akoya.

As it relates to Diagnostics, we remain incredibly excited about our potential in the Alzheimer's diagnostics market. As Vandana will review in a moment, we will maintain our financial flexibility to continue building a leading global diagnostic testing infrastructure for Alzheimer's disease and strengthen our promising franchise.

Now, I'll turn the call over to Vandana to cover the financial profile of the combined company.

Vandana Sriram Thank you, Masoud. And I echo your excitement for the future of our combined company. The financial profile of this transaction sets both companies up on an accelerated path to profitability.

As Masoud mentioned, with our strong foothold in neurology and Akoya's in oncology and immunology, similar customer profiles, and our proven track record of execution, this transaction paves the way to expanded opportunities for both companies. This acquisition will provide us with the opportunity to thoughtfully invest in our combined R D and expand our commercial reach.

Additionally, there is significant opportunity to leverage a common operating and commercial infrastructure to realize considerable synergies of $40 million by the end of 2026. Of that, we expect to realize $20 million of savings within the first year after the deal closes.

These synergies will be achieved in three distinct areas. We expect to consolidate our commercial infrastructure by combining our geographic footprint and call points with customers.

On the operation side, Quanterix has already made significant investments in scalability as part of our transformation, and we will leverage those investments effectively in the combined company through driving synergies in testing and manufacturing.

And finally, streamlining duplicative corporate structures and general and administrative costs across our separate organizations will drive savings in the combined company.

Over a trailing 12-month period ended September 30, 2024, the combined company has generated revenues of approximately $220 million. We will provide an update on Quanterix's fourth quarter performance next week, and we expect the combined entity to support Quanterix's goal of achieving strong double-digit organic revenue growth.

With more than $300 million in combined cash today, we expect to have approximately $175 million in cash with no expected debt at the time of closing. This $175 million balance accounts for repayment of Akoya's debt, all transaction costs, and a $20 million payment for our previously announced acquisition of EMISSION. We continue to have sufficient capital to invest in growth opportunities, including our planned investment of $20 million by the end of this year to advance Alzheimer's disease diagnostics.

Over the last couple of years, we've reduced our cash burn by approximately 50%. Between our continued initiative to prudently manage costs and the synergies we expect to achieve with this transaction, we now expect to be able to accelerate our profitability targets and believe we have a path to being cash flow positive in 2026.

With that, let me turn it back to Masoud.

Masoud Toloue Thank you, Vandana. In closing, we're bringing together two highly complementary companies that will not only enhance the scale and efficiency of our organization, but will make a meaningful difference to our customers who are on the front lines of treating patients.

I'd like to personally thank the CEO of Akoya, Brian McKelligon, and his team. They have built a compelling portfolio with very attractive growth opportunities. With our combined world-class talent, I'm confident we will deliver on the promise of this combination.

With that, let's begin Q A.

Operator Ladies and gentlemen, we are now about to begin the Q A session. (Operator Instructions) One moment, please, for your first question.

Your first question comes from the line of Sung Ji Nam of Scotiabank. Please go ahead.

Sung Ji Nam Hi, thanks for taking the question. Just curious, I know for Quanterix, the end market customer, by customer type split is roughly 50-50 academic and biopharma. And I know you guys are also ramping on the clinical side, but I'm curious what the split might be for Akoya at this point.

Vandana Sriram Yes, I can take that, Sung Ji. As you mentioned, our split is approximately, you know, varies between 45 and 55 between pharma biotech and academia. For Akoya, the split is slightly more skewed towards pharma, a little over 60% for pharma biotech and CROs, and the rest is academic and government.

Sung Ji Nam Okay, great. And then just kind of curious, obviously, a lot of synergies here and also great opportunities for the integrated company. Just kind of curious for the, and you mentioned the large install-base, you know, combining the two companies. Just kind of curious, what you know -- what kind of portion of that, or if there are customers that are currently leveraging both types of applications and technologies, or is this largely aspirational at this point Just trying to get a sense of how much is currently in practice and how much of it would be contingent on you guys really building out capabilities to move easily from tissue to blood, et cetera.

Masoud Toloue Hey, Sung Ji. So, this is happening now. You know, I would say it's a very nascent and breaking scientific development. Researchers around the globe are looking at markers and tissue, and there are several publications that are coming out showing, you know key markers like ORF-1, PD-L1, and even HER2 showing up in

solubilized form in blood, or as cargo in tumor-derived extracellular vesicles and serving as markers for detecting cancer.

So, this is happening. We're seeing these publications. They are using and they require the sensitivity of our platform to make the detection as things move from tissue to blood, and so we have a good sign of this being impactful in the future.

Sung Ji Nam And just then a quick follow-up on that. Is there a lot of overlap between your customer base versus Akoya's at this point or

Masoud Toloue So, I would say between the combined 2,300 installed base, we see biomarker labs that are regularly using the great Akoya platform, and then across the hall they are using the Simoa platform, or in another lab, they are using the Simoa platform. So, in the end, we see biomarker labs who are interested in doing both, work in tissue and in blood, needing the combined platform for their discovery and for this new work.

Masoud Toloue We see biomarker labs who are interested in doing both, work in tissue and in blood, needing the combined platform for their discovery and for this new work.

Sung Ji Nam Great. Thank you so much.

Operator Your next question comes from the line of Kyle Mikson of Canaccord Genuity. Please go ahead.

Kyle Mikson Hey, guys. Thanks for the questions. Congrats on the deal. Congrats to Brian and Johnny over there at Akoya as well.

So I guess, first of all, could you talk about if the Akoya side is going to be changing its focus and strategy and spatial at all Is the company still going to be kind of focused on like, you know, higher plex I think that was kind of like the recent focus of Akoya. And then also, any interest on the Akoya side, and internal multi-omics program still that can detect just like RNA I think that was like a focus in the past or is there going to be like a partnership model remaining Basically, is the spatial business going to be High-Plex still as well as maybe, like a goal to get to multi-omics too Thanks.

Masoud Toloue Hey, Kyle, I'll reserve that question for Brian to answer, you know, once we have a chance to talk with Brian. And we're probably not going to comment on Akoya specifically on this call. We're really focused on this call on the combination of the two companies and what that means.

Kyle Mikson All right. So, that's fair. Thanks for that. I guess, you know, both companies have significant services businesses that have been relatively kind of healthy and insulated in this environment. What's the benefits of having such a large service revenue mix going forward, and how do you see that kind of playing out over time

Masoud Toloue Yes, that's a great question, Kyle. You know, we see three key growth drivers. First, there's menu, right Over the last two years, Quanterix has grown reagents by 24%. We're a life science tools company. That means menu through our platform, and that's a key focus.

The second key point or growth driver is what you just brought up, Kyle, which is Services. We're going to replicate the Quanterix Accelerator model to expand the Akoya's tissue testing services portfolio. As you know, over the last two years, with the investments that we've made, the Accelerator program has grown over 33%. And we see real opportunity there as a combined entity offering services. So it's a key part of the focus and a key part of the plan once we combine.

Kyle Mikson And kind of maybe just clarify if Akoya strengthens your position in Alzheimer's diagnosis and the work that you've done so far, given that you can kind of target the tissue side maybe and maybe the kind of early research side of that area

Masoud Toloue Yes, that's a great question. You know, we learned through the process that obviously Akoya is very active in neurology and in a lot of the early discoveries related to neurological disorders, including Alzheimer's disease. You know, a lot of the customers we talk to are involved in translation, but they are working or they are partnering with people who are trying to understand the biology of Alzheimer's disease. And as you know, it's still not very well understood.

So, we're really taking and bridging and going from discovery, all the way to translation, and having a combined company to be able to offer that across neurology, immunology, and oncology is pretty powerful.

Kyle Mikson Awesome. And final one, Vandana mentioned over $200 million of capital allocated for 24 and 25 to advance diagnostics. Does that include any investment in Akoya's clinical work

Vandana Sriram To be clear, the 20 -- I referenced $20 million of investment in Alzheimer's diagnostics. This is the same $20 million that we had announced in the beginning of 2024. In the beginning of 2024, we had earmarked $20 million that would be spent between 24 and 25. And we remain committed to that investment and continue to move forward with that plan as we described before.

Masoud Toloue And then on the companion diagnostics part, Akoya, I think that, Kyle, that you were referring to Akoya has a great companion diagnostics business and we intend to make sure that that is moving forward, if not accelerating with investment.

Kyle Mikson All right. Makes sense. Thanks again, guys.

Operator Your next question comes from the line of Puneet Souda of Leerink Partners. Please go ahead.

Puneet Souda Hi, guys. Thanks for the questions here. So, first one is maybe a multi-part question. Masood, you know, why is now the best time to get into spatial technology Because when you look at the opportunities that are ahead of you, you have Alzheimer's diagnostics. It's not easy to drive diagnostics while running the tools business. So obviously speed is needed there. You have FDA approval potentially down the line, and you have reimbursement and other milestones. So just trying to understand why is now the right time to pursue this.

And then, could you elaborate a bit more on how much of the business is going to be now translational versus pure research And what can you do in the Accelerator part of the business, meaning how much that could actually help But at the same time, it looks like it could potentially even cannibalize some of the sales that are happening as pharma companies could shift over their work towards Accelerator. So maybe just talk to us about those points.

Masoud Toloue Thanks, Puneet. I'll start with your first question on now and why now. And you know, I want to just go back and reemphasize of the strategy that Quanterix laid out two years ago when we underwent a large transformation. And we said at the outset that our strategy is going to be centered around three key pillars. And we've repeated these over and over, which is you can use the acronym GET to remind you of the three pillars.

It's G, we've got to Grow Menu. We're going to extend our lead position in neurology biomarkers. That's key to maintaining our number one position in translational, ultrasensitive detection of these markers. That's a key focus for us.

Number two, Expanding into Adjacencies. The Simoa platform, while we have 70% focus in neurology, is already in immunology and oncology. And we need to expand those adjacencies and make sure that others who are working in these fields have the power of ultra-sensitivity. So we need to democratize the platform and get Simoa into more labs. And a big focus of our strategy has been expanding into immunology and oncology. Obviously, as I mentioned in the earlier remarks, Akoya is a big part of that.

And then finally, T, the third pillar of our focus, is we're a Translational company. On the backs of Quanterix, we've taken biomarkers all the way from research, through discovery, to translation and now diagnostics. And as Vandana mentioned, we're very focused on our allocation of capital and resources for testing and building that infrastructure.

So we believe that, hey, we're going to be able to march on these three pillars effectively. We have a talented team that can work through this. And if anything, with a combination of Akoya, and their diagnostics efforts, we see some real synergies.

On your third -- on your second question related to accelerator and cannibalization, our focus two years ago in accelerator had always been this is synergistic, meaning its first a

try -- it used to be a try before you buy, the Simoa platform. And it's become, hey, I have a fleet of Simoa or HDX's in my laboratory or in my pharma environment, but I have so many samples. I need to run these samples in a place where I have a high throughput ability to get data.

And so a lot of our pharma customers have this dual model where they are running consumables, they have our instruments, they're adding instruments, but they need high capacity, high volume of the 24 systems we have here in accelerator. And you know, I can imagine, as we learn more and work together Akoya, this is going to be a similar scenario. So we don't see it as a cannibalization. In CapEx-constrained environments, as you can see, it's been very productive with our accelerator business growing at 33% over the last two years.

Puneet Souda Okay. That's helpful, Masoud. One question that we're getting from investors is, this year Akoya's expectation, I think, in Street numbers is about $92 million. Is that something you are still comfortable with And just want to clarify, I mean your expectations for 2025 given just the delays in the sales cycle, instrumentation sales and challenges that, I mean Akoya has seen. Obviously, they had to cut the guide for 2024. So just trying to understand, what are you baking in for our expectations this year

Masoud Toloue Yes, you know, so again, I'm not going to comment on Akoya specifically, and Akoya standalone as a growth -- and their growth rates. But Akoya, I would just emphasize, has the largest install-base and supporting publications in tissue and spatial biology. And that perfectly pairs with our solutions.

We have proven ability to sustain double-digit growth despite the CapEx environment. I've talked about three ways that we're going to be very focused upon integration, driving growth between the combined companies, and I think this complementary nature of the acquisition and the vision we laid out in the early remarks are going to bring not just strong top-line revenue growth, but help improve cost position across the combined enterprise.

Puneet Souda Got it. And just last one if I could, for Vandana. On the $40 million cost synergies, could you elaborate a little bit more on that How much of that is on the sales and commercial side How much is sort of on the facilities that you are planning to shut down potentially How much is, you know, maybe just to help us understand the overlap and redundancies

Vandana Sriram Yes, thanks for the question, Puneet. You know, we do think there's tremendous opportunity for synergies here. All of the items you mentioned, you know, they are all part of that construct. And we spent a lot of time really digging into this through the diligence process with the help and collaboration of Brian and the team.

So the three key areas are really, firstly commercial. There's a lot of overlap in geography, in the areas we operate, in our business model, as well as our key customers.

So bringing that together as a total solution through one sales and service team is great from a cost perspective, but will also give better outcomes to our customers.

Then on the operations side, you know there's definitely a facility element here, but there's also a fair amount of commonality in our fulfillment processes. We spent a lot of time and investment over the last couple of years, very specifically investing in the scalability of our operations. So that gives us a lot of leverage here.

And then, you know, we're two small-cap public companies, so there's a fairly significant overlap in terms of the corporate function of both companies that we'll be able to streamline.

So, we'll develop these specifics as we continue to plan our integration and as we continue to move this forward. But all of the areas you mentioned are contemplated in that $40 million.

Puneet Souda Good, thanks, guys.

Masoud Toloue Thanks, Puneet.

Operator Your next question comes from the line of Matt Sykes of Goldman Sachs. Please go ahead.

Matt Sykes Hi, good morning. Thanks for taking my questions and congrats on the acquisition.

Maybe just kind of starting off from the last question, I'm just curious about cross-selling examples. Meaning, if you can maybe outline one or two theoretical ways that you envision the cross-selling happening and what the opportunities would be there. And then in part with that, how do you envision the commercial strategy

Vandana, you kind of mentioned a little bit in the previous question, but I'm just curious about how do you maintain the specialist knowledge of some of the commercial field force on their respective instruments and offerings while at the same time trying to consolidate those two sales forces together And do you expect to do some cross-fertilization of salespeople or product specialists within each group in order to help identify cross-selling opportunities that might not be obvious to the original commercial salesperson at the individual companies

Masoud Toloue Hey, Matt. Yes, so I'll answer your first question first. And the first thing I would say is it's important to remember is that both companies measure biomarkers. Akoya is number one at measuring biomarkers in tissue. Quanterix is number one leader in ultrasensitive measure of biomarkers in blood.

And what we've seen and what we've already learned is that to measure, through our customers, we're seeing first signs of our customers measuring markers moving from tissue to blood. And that requires ultra-sensitivity.

So to date, about 20% of our install base is from oncology. However, within that base, we're showing new work that was traditionally just tissue. And I mentioned some of the markers, ORF-1, PD-L1 , HER2, showing up in blood or in extracellular vesicles and serving as markers for detecting cancer.

So, the amounts are small. Our customers need ultra-sensitivity for that detection. And by combining best-in-class tissue and blood detection, we're speeding up market development of new tests.