Quanterix Corp
For the period ended Sep 30, 2024. Filed Dec 26, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Dec 26, 2024
QTRX$2.90+4.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001503274-24-000008
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-12-26.
0001503274-24-000031
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 96 previous paragraphs and 110 current paragraphs.
49 unchanged; 33 reworded; 25 added; 13 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
Restatement of Previously Issued Financial Statements
Current report
This Management's Discussion and Analysis of Financial Condition and Results of Operations reflects the effects of the restatement of our Consolidated Financial Statements as described in Note 1 -Restatement of Financial Statements(the "Restatement"). For further detail regarding the Restatement, refer to the sections titled “Explanatory Note” and “Part I, Item 4. Controls and Procedures.”
Current report
Agreement to Acquire Emission
Current report
On December 16, 2024, we entered into a Share Purchase Agreement (the “Purchase Agreement”) with Emission Inc. (“Emission”), the shareholders of Emission (collectively, the “Shareholders”), and Van Chandler, as the Shareholders’ representative. Emission is based in Georgetown, Texas and manufactures large-scale, highly-uniform dye-encapsulating magnetic beads designed for low and mid-plex assays and a mid-plex platform that reads its proprietary beads. The transaction is part of our plans to secure the use of Emission's highly controlled beads in our next generation platforms and expansion into a new multi-plex segment targeting third-party original equipment manufacturer ("OEM") customers.
Current report
Pursuant to the terms of the Purchase Agreement, we agreed to purchase from the Shareholders all of the issued and outstanding shares of capital stock of Emission (the “Transaction”) for an upfront payment of $10 million, with an additional $10 million payable upon completion of certain technical milestones. Additionally, the Shareholders may receive up to an additional $50 million in earnout payments through December 31, 2029, contingent upon the achievement of certain performance milestones. The Transaction is expected to close in January 2025 and either party may terminate the Purchase Agreement if the Transaction is not completed on or before January 31, 2025.
Current report
The Purchase Agreement also provides that, at closing, the parties will enter into a call option agreement (the “Option Agreement”), pursuant to which the Shareholders will have the right to repurchase all of the outstanding capital stock of Emission for $10 million after five years if Emission’s revenues do not exceed $5 million in any one year during such period. If the Shareholders exercise the right to repurchase Emission under the Option Agreement and consummate the repurchase, the Company will retain a perpetual, fully-paid, irrevocable license to all Emission intellectual property required to continue to manufacture and commercialize the Company’s products.
Current report
LucentAD Tests
Current report
In October 2024, we launched LucentAD Complete, a confirmatory blood biomarker test capable of providing results equivalent to cerebrospinal fluid ("CSF") biomarkers and PET imaging. This test combines p-Tau 217, Amyloid beta 42, Amyloid beta 40, GFAP, and NfL biomarkers, which are recognized by the Alzheimer’s Association as core biomarkers of amyloid and tau, or biomarkers of non-specific processes involved in Alzheimer’s Disease ("AD") pathophysiology. The LucentAD Complete test is intended for patients being evaluated for AD. The results from the LucentAD Complete test can aid in the earlier diagnosis of AD, as well as the development of personalized treatment plans.
Current report
Assay Redevelopment Program
Current report
Total revenues increased $4.3 million, or 13%, to $35.8 million for the three months ended September 30, 2024, compared to $31.6 million for the three months ended September 30, 2023.
Current report
Collaboration and license revenue was $1.9 million for the three months ended September 30, 2024, compared to $0.2 million for the three months ended September 30, 2024, an increase of $1.6 million, or 690%. The increase was primarily due to LDT-related license revenue.
Current report
Cost of product revenue increased $3.3 million, or 46%, to$10.6 million for thethree months ended September 30, 2024, compared to$7.2 million for thethree months ended September 30, 2023. This increase was primarily due tolower production volume and output, which led to decreased labor and overhead capitalization, as well as increased costs due to the introduction of new assays.
Current report
Cost of service and other revenue was$5.1 million for thethree months ended September 30, 2024, compared to$4.9 millionfor thethree months ended September 30, 2023, an increase of $0.2 million, or 3%. Although service and other revenue increased by 27% during the same period, these costs remained consistent with the same period in the prior year due to larger project sizes and improved efficiency delivering Accelerator Laboratory services.
Current report
Interest income decreased $0.6 million, or 16%, to $3.5 million for the three months ended September 30, 2024, as compared to $4.2 million for the three months ended September 30, 2023. The decrease was driven by lower interest rates and a lower balance of cash, cash equivalents, and marketable securities.
Current report
Other income (expense), net decreased $2.1 million, or 100%, to less than $0.1 million for the three months ended September 30, 2024, as compared to $2.1 million for the three months ended September 30, 2023. The decrease primarily relates to recognizing a $2.4 million receivable under the Employee Retention Credit established by the Coronavirus Aid, Relief, and Economic Security Act in the third quarter of 2023.
Current report
Income Tax Expense (Benefit)
Current report
Income tax benefit was $0.1 million for the three months ended September 30, 2024, as compared to income tax expense of $0.2 million for the three months ended September 30, 2023.
Current report
Total revenues increased $11.4 million, or 13%, to $102.3 million for the nine months ended September 30, 2024, compared to $90.8 million for the nine months ended September 30, 2023.
Current report
Collaboration and license revenue was $2.8 million for the nine months ended September 30, 2024, compared to $1.2 million for the nine months ended September 30, 2023, an increase of $1.5 million, or 123%. The increase was primarily due to LDT-related license revenue.
Current report
Cost of service and other revenue increased $1.7 million, or 12%, to$15.9 million for thenine months ended September 30, 2024, compared to$14.2 million for thenine months ended September 30, 2023. This increase was primarily due to the increase in demand for Accelerator Laboratory services and an increase in compensation and benefits costs related to increased headcount. Although service and other revenue increased by 32% during the same period, these costs did not increase at the same rate compared with the same period in the prior year due to larger project sizes and improved efficiency delivering Accelerator Laboratory services.
Current report
Interest income decreased $0.4 million, or 3%, to $11.2 million for the nine months ended September 30, 2024, as compared to $11.5 million for the nine months ended September 30, 2023. The decrease was driven by lower interest rates and a lower balance of cash, cash equivalents, and marketable securities.
Current report
Other income (expense), net was $0.2 million for the nine months ended September 30, 2024, as compared $1.9 million for the nine months ended September 30, 2023. The decrease primarily relates to recognizing a $2.4 million receivable under the Employee Retention Credit established by the Coronavirus Aid, Relief, and Economic Security Act in the third quarter of 2023.
Current report
Income Tax Expense (Benefit)
Current report
Net Cash Used in Investing Activities (As Restated)
Current report
Subsequently, on December 16, 2024, we entered into a Purchase Agreement with Emission. Subject to the completion of the transaction, which is expected to occur in January 2025, we will purchase Emission for an upfront payment of $10 million, with an additional $10 million payable upon completion of certain technical milestones. Additionally, we may owe up to an additional $50 million in earnout payments through December 31, 2029, contingent upon the achievement of certain performance milestones. Refer to the section titled "Recent Business Developments" for additional information.
Removed paragraphs (13)
Previous report
Total revenues increased $3.4 million, or 11%, to $34.4 million for the three months ended June 30, 2024, compared to $31.0 million for the three months ended June 30, 2023.
Previous report
Cost of service and other revenue increased$0.8 million, or 18%, to$5.5 million for thethree months ended June 30, 2024, compared to$4.7 million for thethree months ended June 30, 2023. This increase was primarily due to the increase in Accelerator Laboratory services.
Previous report
Interest income decreased $0.2 million, or 5%, to $3.7 million for the three months ended June 30, 2024, as compared to $3.9 million for the three months ended June 30, 2023.
Previous report
Other income (expense), net was less than ($0.1) million for the three months ended June 30, 2024, as compared to ($0.2) million for the three months ended June 30, 2023.
Previous report
Income Tax Expense
Previous report
Income tax expense was less than $0.1 million for the three months ended June 30, 2024, as compared to $0.2 million for the three months ended June 30, 2023.
Previous report
Total revenues increased $7.0 million, or 12%, to $66.4 million for the six months ended June 30, 2024, compared to $59.5 million for the six months ended June 30, 2023.
Previous report
Cost of product revenue increased$1.7 million, or 12%, to$16.0 million for thesix months ended June 30, 2024, compared to$14.3 million for thesix months ended June 30, 2023. This increase was primarily due to increases in overhead costs and increased consumables sales, and was partially offset by decreased costs due to lower instrument sales.
Previous report
Cost of service and other revenue increased$1.6 million, or 18%, to$10.8 million for thesix months ended June 30, 2024, compared to$9.2 million for thesix months ended June 30, 2023. This increase was primarily due to the increase in Accelerator Laboratory services and royalty payments.
Previous report
Interest income increased $0.3 million, or 4%, to $7.6 million for the six months ended June 30, 2024, as compared to $7.3 million for the six months ended June 30, 2023.
Previous report
Other income (expense), net was $0.2 million for the six months ended June 30, 2024, as compared $(0.1) million for the six months ended June 30, 2023.
Previous report
Income Tax Expense
Previous report
Net cash used in investing activities was not material during the six months ended June 30, 2023.
Reworded paragraphs (33)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited Consolidated Financial Statements and Notes to Consolidated Financial Statements in the section titled “Part I. Item 1. Financial Statements (Unaudited)” in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 29, 2024 (the “Annual Report on Form 10-K”). Certain columns and rows may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying unrounded numbers. In addition to historical information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results, performance, or experience may differ materially from those discussed below due to various important factors, risks, and uncertainties, including, but not limited to, those set forth under the sections titled “Part II, Item 1A. Risk Factors” and “Note Regarding Forward-Looking Statements” included in this Quarterly Report on Form 10-Q or under the section titled “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K, as updated by Part II, Item 1A. Risk Factors in our subsequently filed Quarterly Reports on Form 10-Q. Unless the context otherwise requires, the terms “Quanterix,” the “Company,” “we,” “it,” “us, “and “our” in this Quarterly Report on Form 10-Q refer to Quanterix Corporation and its consolidated subsidiaries.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited Consolidated Financial Statements and Notes to Consolidated Financial Statements in the section titled “Part I. Item 1. Financial Statements (Unaudited)” in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Amendment No. 1 to our Annual Report on Form 10-K/A for the year ended December 31, 2023, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on December 23, 2024 (the “Amended Annual Report on Form 10-K/A”). Certain columns and rows may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying unrounded numbers. In addition to historical information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results, performance, or experience may differ materially from those discussed below due to various important factors, risks, and uncertainties, including, but not limited to, those set forth under the sections titled “Part II, Item 1A. Risk Factors” and “Note Regarding Forward-Looking Statements” included in this Quarterly Report on Form 10-Q or under the section titled “Part I, Item 1A. Risk Factors” of our Amended Annual Report on Form 10-K/A, as updated by the section titled "Part II, Item 1A. Risk Factors" in our Quarterly Reports on Form 10-Q. Unless the context otherwise requires, the terms “Quanterix,” the “Company,” “we,” “it,” “us, “and “our” in this Quarterly Report on Form 10-Q refer to Quanterix Corporation and its consolidated subsidiaries.
Previous wording
We are a life sciences company that has developed next-generation, ultra-sensitive digital immunoassay platforms that advance life sciences research and diagnostics. Our platforms are based on our proprietary digital “Simoa” detection technology and enable customers to reliably detect protein biomarkers at ultra-low concentrations in blood, serum, and other fluids that, in many cases, are undetectable using conventional, analog immunoassay technologies. The ability of our Simoa platforms to detect proteins in the femtomolar range is enabling the development of novel therapies and diagnostics and has the potential to facilitate a paradigm shift in healthcare from an emphasis on treatment to a focus on earlier detection, monitoring, prognosis, and, ultimately, prevention. Our Simoa platforms have achieved significant scientific validation and commercial adoption, and our Simoa technology has been cited in more than 2,900 scientific publications in areas of high unmet medical need and research interest such as neurology, oncology, cardiology, infectious disease, and inflammation.
Current wording
We are a life sciences company that has developed next-generation, ultra-sensitive digital immunoassay platforms that advance life sciences research and diagnostics. Our platforms are based on our proprietary digital “Simoa” detection technology and enable customers to reliably detect protein biomarkers at ultra-low concentrations in blood, serum, and other fluids that, in many cases, are undetectable using conventional, analog immunoassay technologies. The ability of our Simoa platforms to detect proteins in the femtomolar range is enabling the development of novel therapies and diagnostics and has the potential to facilitate a paradigm shift in healthcare from an emphasis on treatment to a focus on earlier detection, monitoring, prognosis, and, ultimately, prevention. Our Simoa platforms have achieved significant scientific validation and commercial adoption, and our Simoa technology has been cited in more than 3,100 scientific publications in areas of high unmet medical need and research interest such as neurology, oncology, cardiology, infectious disease, and inflammation.
Previous wording
With our acquisition of Aushon BioSystems, Inc. in 2018, we acquired a CLIA certified laboratory and proprietary sensitive planar array detection technology. The Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) are federal regulatory standards that apply to all clinical laboratory testing performed on humans in the United States (with the exception of research testing that does not report patient specific results). Leveraging our proprietary sophisticated Simoa image analysis and data analysis algorithms, we further refined the planar array technology to develop the SP-X instrument to provide sensitivity similar to that found in our Simoa bead-based platform. We commercially launched the SP-X instrument in 2019.
Current wording
(“CLIA”) are federal regulatory standards that apply to all clinical laboratory testing performed on humans in the United States (with the exception of research testing that does not report patient specific results). Leveraging our proprietary sophisticated Simoa image analysis and data analysis algorithms, we further refined the planar array technology to develop the SP-X instrument to provide sensitivity similar to that found in our Simoa bead-based platform. We commercially launched the SP-X instrument in 2019.
Previous wording
As of June 30, 2024, we had cash, cash equivalents, and marketable securities of$296.9 million. Since our inception, we have incurred annual net losses. Our net losses were$9.5 million and$19.5 million for thethree and six months ended June 30, 2024, respectively, and$6.1 million and$12.2 million for thethree and six months ended June 30, 2023, respectively. As of June 30, 2024, we had an accumulated deficit of$454.0 million and stockholders’ equity of$336.8 million.
Current wording
As of September 30, 2024, we had cash, cash equivalents, and marketable securities of$293.5 million. Since our inception, we have incurred annual net losses. Our net losses (2023 amounts asrestated) were$8.4 million and$26.9 million for thethree and nine months ended September 30, 2024, respectively, and$6.7 million and$19.5 million for thethree and nine months ended September 30, 2023, respectively. As of September 30, 2024, we had an accumulated deficit of$458.5 million and stockholders’ equity of$338.9 million.
Previous wording
In March 2024, our Lucent AD p-Tau 217 blood test was granted Breakthrough Device designation by the FDA. This designation is granted to products that have the potential to offer more effective diagnosis of life-threatening diseases with an unmet medical need. Proposed indications for this blood test include use of the test results in patients presenting with cognitive impairment who are being evaluated for Alzheimer’s disease risk to aid in diagnostic evaluation. The test is not intended as a stand-alone diagnostic test and test results will be interpreted in conjunction with other diagnostic tools to establish a final clinical diagnosis. This test has not been otherwise cleared or approved by the FDA and Breakthrough Device designation does not guarantee that the FDA review and approval process will be shortened or that an application will be approved. We do not expect material revenue from this test, or other Lucent Diagnostics tests, until 2025 or later, if at all.
Current wording
Additionally, in March 2024, our LucentAD p-Tau 217 blood test was granted Breakthrough Device designation by the FDA. This designation is granted to products that have the potential to offer more effective diagnosis of life-threatening diseases with an unmet medical need. Proposed indications for this blood test include use of the test results in patients presenting with cognitive impairment who are being evaluated for Alzheimer’s disease risk to aid in diagnostic evaluation. The test is not intended as a stand-alone diagnostic test and test results will be interpreted in conjunction with other diagnostic tools to establish a final clinical diagnosis. This test has not been otherwise cleared or approved by the FDA and Breakthrough Device designation does not guarantee that the FDA review and approval process will be shortened or that an application will be approved.
Previous wording
During the fourth quarter of 2023, we substantially completed our six-quarter assay redevelopment program. The objective of this operational program was to improve our ability to manufacture and deliver high-quality assays at scale. Since then, and using the improved protocols resulting from the redevelopment program, we have launched our new Simoa Advantage PLUS assays and continue to transition existing assays to Advantage PLUS. The improved protocols leverage manufacturing efficiencies and reagent improvements to provide more consistent results and improved lot-to-lot consistency, which also enables production of larger lot sizes with extended shelf lives. Advantage PLUS assays began shipping to customers in the first quarter of 2024. We expect to continue to apply these improved protocols and manufacturing efficiencies to other existing assays, as well as assays that we may develop in the future.
Current wording
During the fourth quarter of 2023, we substantially completed our six-quarter assay redevelopment program. The objective of this operational program was to improve our ability to manufacture and deliver high-quality assays at scale. Since then, and using the improved protocols resulting from the assay redevelopment program, we have launched our new Simoa Advantage PLUS assays and continue to transition existing assays to Advantage PLUS. The improved protocols leverage manufacturing efficiencies and reagent improvements to provide more consistent results and improved lot-to-lot consistency, which also enables production of larger lot sizes with extended shelf lives. Advantage PLUS assays began shipping to customers in the first quarter of 2024. We expect to continue to apply these improved protocols and manufacturing efficiencies to other existing assays, as well as assays that we may develop in the future.
Previous wording
Comparison of Results of Operations for Three Months Ended June 30, 2024 and 2023:
Current wording
Comparison of Results of Operations for Three Months Ended September 30, 2024 and 2023 (As Restated for 2023 Amounts):
Previous wording
Product revenue of $19.9 million for the three months ended June 30, 2024 consisted of instrument sales of $2.5 million and sales of consumables and other products of $17.4 million. This represented an increase of $0.2 million compared to product revenue of $19.7 million for the three months ended June 30, 2023. The increase in product revenue was primarily due to a $2.2 million increase from growth in consumables demand. This increase was partially offset by a decrease from the one-time receipt of ordinary shares in UltraDx in the second quarter of 2023 with a fair value of $1.0 million that was recognized as variable consideration revenue under the UltraDx Agreement (as a Level 3 financial asset, the fair value was determined primarily using the third-party purchase price of similar instruments issued by UltraDx), and a $1.2 million decrease in instrument sales due to reduced demand in what we believe is a constrained capital funding environment. Based on the constrained capital funding environment, we expect softness in instrument sales to continue for the remainder of 2024.
Current wording
Product revenue was $19.7 million for the three months ended September 30, 2024 and consisted of instrument sales of $2.4 million and sales of consumables and other products of $17.3 million. This represented a decrease of $0.2 million compared to product revenue of $19.9 million for the three months ended September 30, 2023. The decrease was due to a $1.5 million decrease in instrument sales and was partially offset by a $1.3 million increase in sales of consumables and other products driven by increased demand and higher selling prices. We believe the reduced instrument demand is due to a constrained capital funding environment and we expect softness in instrument sales to continue throughout 2024.
Previous wording
Service revenue was $25.5 million for the six months ended June 30, 2024, compared to $19.1 million for the six months ended June 30, 2023, an increase of $6.3 million, or 33%. This increase was primarily due to a $5.8 million increase in Accelerator Laboratory revenue driven by higher volumes of sample testing and assay development services, as well as higher selling prices. We expect to see continued growth in Accelerator Laboratory services through 2024.
Current wording
Service revenue was $13.8 million for the three months ended September 30, 2024, compared to $10.9 million for the three months ended September 30, 2023, an increase of $3.0 million, or 27%. The increase was due to higher volumes of sample testing and assay development services in our Accelerator Laboratory. We expect to see continued growth in Accelerator Laboratory services throughout 2024.
Previous wording
Total cost of goods sold and services increased$2.4 million, or 20%, to$14.3 million for thethree months ended June 30, 2024, compared to$11.9 million for thethree months ended June 30, 2023.
Current wording
Total cost of goods sold and services increased $3.5 million, or 29%, to$15.7 million for thethree months ended September 30, 2024, compared to$12.2 million for thethree months ended September 30, 2023.
Previous wording
Research and development expense increased $2.2 million, or 36%, to $8.1 million for the three months ended June 30, 2024, compared to $5.9 million for the three months ended June 30, 2023. This increase was primarily due to a $1.1 million increase in compensation and benefits costs related to increased headcount and a $0.7 million increase in outside services and research lab supplies and equipment to enable product development. We expect research and development expense to continue to increase throughout 2024 and into 2025 due to continued investment in new instrument and assay development.
Current wording
Research and development expense increased $0.4 million, or 5%, to $8.1 million for the three months ended September 30, 2024, compared to $7.7 million for the three months ended September 30, 2023. This increase was primarily due to a $0.7 million increase in compensation and benefits costs related to increased headcount and a $0.4 million increase in outside services to enable product development. These increases were partially offset by a $0.4 million decrease in lab supplies and equipment used in product research and a $0.4 million decrease related to the disposal of certain assets in the third quarter of 2023, which did not repeat in 2024. We expect research and development expense to continue to increase into 2025 due to continued investment in new instrument and assay development.
Previous wording
Selling, general and administrative expense increased $2.5 million, or 12%, to $24.1 million for the three months ended June 30, 2024, compared to $21.6 million for the three months ended June 30, 2023. This increase was primarily due to a $1.7 million increase in compensation and benefits costs and a $0.7 million increase in stock-based compensation expense, both due to increased headcount. Included within selling, general, and administrative expense are $2.1 million and $1.6 million of shipping and handling costs for product sales for the three months ended June 30, 2024 and 2023, respectively.
Current wording
Selling, general and administrative expense decreased $0.6 million, or 3%, to $22.9 million for the three months ended September 30, 2024, compared to $23.6 million for the three months ended September 30, 2023. This decrease was primarily due to a $0.5 million decrease in shipping and handling costs for products due to lower instrument sales, and the effect of more streamlined distribution operations. Included within selling, general, and administrative expense are $2.0 million and $2.6 million of shipping and handling costs for product sales for the three months ended September 30, 2024 and 2023, respectively.
Previous wording
Other lease costs decreased $0.3 million, or 20% to $0.9 million for the three months ended June 30, 2024, compared to $1.2 million for the three months ended June 30, 2023. We are not using two leased office and laboratory facilities and are evaluating alternatives, including sub-leasing the facilities. Other lease costs include amortization of the related operating lease right-of-use assets and other leased facility operating expenses from periods after determining that the facilities would not be used.
Current wording
Other lease costs were $0.9 million for both the three months ended September 30, 2024 and the three months ended September 30, 2023. We are not using a leased office and are evaluating alternatives, including sub-leasing the facility. Other lease costs include amortization of the related operating lease right-of-use asset and other leased facility operating expenses from periods after determining that the facility would not be used.
Previous wording
Comparison of Results of Operations for Six Months Ended June 30, 2024 and 2023:
Current wording
Comparison of Results of Operations for Nine Months Ended September 30, 2024 and 2023 (As Restated for 2023 Amounts):
Previous wording
Product revenue of $39.6 million for the six months ended June 30, 2024 consisted of instrument sales of $5.0 million and sales of consumables and other products of $34.6 million. This represented an increase of $0.6 million, or 1%, compared to product revenue of $39.0 million for the six months ended June 30, 2023. The increase in product revenue was primarily due to a $5.2 million increase in consumables from growth in both demand and selling prices. This increase was partially offset by a decrease from the one-time receipt of ordinary shares in UltraDx in the second quarter of 2023 with a fair value of $1.0 million that was recognized as variable consideration revenue under the UltraDx Agreement (as a Level 3 financial asset, the fair value was determined primarily using the third-party purchase price of similar instruments issued by UltraDx), and a $3.7 million decrease in instrument sales due to reduced demand in what we believe is a constrained capital funding environment. Based on the constrained capital funding environment, we expect softness in instrument sales to continue for the remainder of 2024.
Current wording
Product revenue was $59.3 million for the nine months ended September 30, 2024 and consisted of instrument sales of $7.4 million and sales of consumables and other products of $51.9 million. This represented an increase of $0.4 million, or 1%, compared to product revenue of $58.8 million for the nine months ended September 30, 2023. The increase was due to a $5.4 million increase in sales of consumables and other products driven by growth in demand and higher selling prices, and was partially offset by a $5.0 million decrease in instrument sales. Product revenue for the nine months ended September 30, 2023, also included the one-time receipt of ordinary shares in UltraDx in the second quarter of 2023 with a fair value of $0.8 million that was recognized as variable consideration revenue under the UltraDx Agreement (as a Level 3 financial asset, the fair value was determined primarily using the third-party purchase price of similar instruments issued by UltraDx). We believe the reduced instrument demand is due to a constrained capital funding environment and we expect softness in instrument sales to continue throughout 2024.
Previous wording
Service revenue was $13.5 million for the three months ended June 30, 2024, compared to $10.6 million for the three months ended June 30, 2023, an increase of $3.0 million, or 28%. This increase was primarily due to a $2.6 million increase in Accelerator Laboratory revenue driven by higher volumes of sample testing and assay development services, as well as higher selling prices. We expect to see continued growth in Accelerator Laboratory services through 2024.
Current wording
Service revenue was $39.3 million for the nine months ended September 30, 2024, compared to $29.9 million for the nine months ended September 30, 2023, an increase of $9.5 million, or 32%. This increase was primarily due to an $8.6 million increase in Accelerator Laboratory revenue driven by higher volumes of sample testing and assay development services, as well as higher selling prices. We expect to see continued growth in Accelerator Laboratory services throughout 2024.
Previous wording
Total cost of goods sold and services increased$3.3 million, or 14%, to$26.8 million for thesix months ended June 30, 2024, compared to$23.4 million for thesix months ended June 30, 2023.
Current wording
Total cost of goods sold and services increased $5.3 million, or 15%, to$41.3 million for thenine months ended September 30, 2024, compared to$36.0 million for thenine months ended September 30, 2023.
Previous wording
Cost of product revenue increased$1.6 million, or 22%, to$8.9 million for thethree months ended June 30, 2024, compared to$7.2 million for thethree months ended June 30, 2023. This increase was primarily due to increases in overhead costs and increased consumables sales, and was partially offset by decreased costs due to lower instrument sales.
Current wording
Cost of product revenue increased $3.7 million, or 17%, to$25.5 million for thenine months ended September 30, 2024, compared to$21.8 million for thenine months ended September 30, 2023. This increase was primarily due tohigher costs related to increased consumables sales, as well as increased costs due to the introduction of new assays, and was partially offset by decreased costs due to lower instrument sales.
Previous wording
Research and development expense increased $4.1 million, or 39%, to $14.8 million for the six months ended June 30, 2024, compared to $10.7 million for the six months ended June 30, 2023. This increase was primarily due to (1) a $1.8 million increase in compensation and benefits costs related to increased headcount, (2) a $1.0 million increase in costs of outside services and research lab supplies and equipment to enable product development, and (3) a $0.3 million increase in stock-based compensation expense due to increased headcount. We expect research and development expense to continue to increase throughout 2024 and into 2025 due to continued investment in new instrument and assay development.
Current wording
Research and development expense increased $4.2 million, or 22%, to $23.0 million for the nine months ended September 30, 2024, compared to $18.9 million for the nine months ended September 30, 2023. This increase was primarily due to a $3.3 million increase related to increased headcount, consisting of $3.0 million in compensation and benefit costs and $0.3 million in stock-based compensation, and a $1.4 million increase in costs of outside services and research lab supplies and equipment to enable product development. These increases were partially offset by a $0.4 million decrease from the disposal of certain assets in the third quarter of 2023, which did not repeat in 2024. We expect research and development expense to continue to increase throughout the remainder of 2024 and into 2025 due to continued investment in new instrument and assay development.
Previous wording
Selling, general and administrative expense increased $7.7 million, or 18%, to $50.1 million for the six months ended June 30, 2024, compared to $42.4 million for the six months ended June 30, 2023. This increase was primarily due to (1) a $4.8 million increase in compensation and benefits costs related to increased headcount, (2) a $1.9 million increase in stock-based compensation expense due to increased headcount, (3) a $0.9 million increase in software and technology expenses, and (4) a $0.8 million increase in distribution costs. Included within selling, general, and administrative expense are $4.2 million and $3.5 million of shipping and handling costs for product sales for the six months ended June 30, 2024 and 2023, respectively.
Current wording
Selling, general and administrative expense increased $7.4 million, or 11%, to $73.0 million for the nine months ended September 30, 2024, compared to $65.6 million for the nine months ended September 30, 2023. This increase was primarily due to (1) a $6.9 million increase related to headcount, consisting of $4.9 million in compensation and benefits costs and $2.0 million in stock-based compensation expense, (2) a $1.0 million increase in software and technology expenses, (3) a $0.5 million increase in travel and related expenses, and (4) a $0.5 million increase in marketing expense for promotion and branding. These increases were partially offset by a $0.5 million decrease in professional services and consulting fees. Included within selling, general, and administrative expense are $6.2 million and $6.0 million of shipping and handling costs for product sales for the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
Other lease costs decreased $0.1 million, or 4%, to $1.9 million for the six months ended June 30, 2024, compared to $1.9 million for the six months ended June 30, 2023. We are not using two leased office and laboratory facilities and are evaluating alternatives, including sub-leasing the facilities. Other lease costs include amortization of the related operating lease right-of-use assets and other leased facility operating expenses from periods after determining that the facilities would not be used.
Current wording
Other lease costs increased by less than $0.1 million, or 2%, to $2.7 million for the nine months ended September 30, 2024, compared to $2.7 million for the nine months ended September 30, 2023. We are not using a leased office and are evaluating alternatives, including sub-leasing the facility. Other lease costs include amortization of the related operating lease right-of-use asset and other leased facility operating expenses from periods after determining that the facility would not be used.
Previous wording
Income tax expense was $0.3 million for the six months ended June 30, 2024, as compared to $0.4 million for the six months ended June 30, 2023.
Current wording
Income tax expense was $0.4 million for the nine months ended September 30, 2024, as compared to $0.6 million for the nine months ended September 30, 2023.
Previous wording
Our principal sources of liquidity are cash, cash equivalents, marketable securities, and funds generated from sales of our products and services. As of June 30, 2024, we had cash and cash equivalents of$47.0 million and$249.9 million of available for sale marketable securities. Historically we have also financed our operations through equity offerings and borrowings from credit facilities.
Current wording
Our principal sources of liquidity are cash, cash equivalents, marketable securities, and funds generated from sales of our products and services. As of September 30, 2024, we had$29.3 million of cash and cash equivalents and$264.2 million of marketable securities. Historically we have also financed our operations through equity offerings and borrowings from credit facilities.
Previous wording
Our liquidity requirements have consisted, and we expect that they will continue to consist, of sales and marketing expenses, research and development expenses, working capital, and general corporate expenses. Our future capital requirements will depend on many factors, including, but not limited to, our pace of growth, expansion or introduction of instruments, assays, and services, including Lucent Diagnostics, and advancing access to our diagnostic tests, market acceptance of our products and services, regulatory requirements, regulatory approval of our products or services, and the effects of competition, technological developments, and broader market and economic trends.
Current wording
Our liquidity requirements have consisted, and we expect that they will continue to consist, of sales and marketing expenses, research and development expenses, working capital, and general corporate expenses. Our future capital requirements will depend on many factors, including, but not limited to, our pace of growth, expansion or introduction of instruments, assays, and services, including Lucent Diagnostics, and advancing access to our diagnostic tests, market acceptance of our products and services, regulatory requirements, regulatory approval of our products or services, and the effects of competition, technological developments, and broader market and economic trends. Additionally, we recently announced our agreement to acquire Emission, and we regularly assess other potential acquisitions and may need capital to pursue acquisitions of complementary businesses, services, and technologies.
Previous wording
We regularly assess potential acquisitions and pursue acquisitions of complementary businesses, services, and technologies. To the extent our existing cash, cash equivalents, and marketable securities are insufficient to fund future activities or requirements to continue operating our business, we may need to raise additional capital. If the conditions for raising capital are favorable, we may seek to finance future cash needs through public or private equity, debt offerings, or other financings.
Current wording
To the extent our existing cash, cash equivalents, and marketable securities are insufficient to fund future activities or requirements to continue operating our business, we may need to raise additional capital. If the conditions for raising capital are favorable, we may seek to finance future cash needs through public or private equity, debt offerings, or other financings.
Previous wording
Net Cash Used in Operating Activities
Current wording
Net Cash Used in Operating Activities (As Restated)
Previous wording
Net cash used in operating activities was $25.1 million and $8.9 million for the six months ended June 30, 2024 and 2023, respectively. The $16.2 million increase in net cash used in operating activities was primarily driven by an overall increase in our net loss, adjusted for non-cash items including stock-based compensation, accretion of our marketable securities, and depreciation and amortization. The increase was further driven by changes in working capital items, primarily (1) an increase in accounts receivable from sales timing and revenue growth, (2) an increase in inventory as a result of completing the assay development program and manufacturing and stocking new assays, and (3) increases accounts payable and accrued compensation.
Current wording
Net cash used in operating activities was $30.9 million and $12.7 million for the nine months ended September 30, 2024 and 2023, respectively. The $18.2 million increase in net cash used in operating activities was primarily driven by an overall increase in our net loss, adjusted for non-cash items including stock-based compensation, accretion of our marketable securities, and depreciation and amortization. The increase was further driven by changes in working capital items, primarily due to an increase in inventory as a result of completing the assay development program and manufacturing and stocking new assays and an increase in accounts receivable from sales timing and revenue growth. These were partially offset by increases in accrued compensation and benefits, accrued expenses, and other current liabilities.
Previous wording
Our primary investing activities consist of purchases of marketable securities. Additionally, we use funds towards capital expenditures for the purchase of property and equipment to support our expanding infrastructure and work force. We expect to continue to incur additional capital expenditures related to these efforts in future periods.
Current wording
Our primary investing activities have consisted of purchases of marketable securities. Additionally, we use funds towards capital expenditures for the purchase of property and equipment to support our expanding infrastructure and work force. We expect to continue to incur additional capital expenditures related to these efforts in future periods.
Previous wording
Net cash used in investing activities was $102.2 million during the six months ended June 30, 2024, which consisted of the purchase of $189.3 million of marketable securities and $2.1 million of purchases of property and equipment, offset by proceeds from maturities of marketable securities of $89.2 million.
Current wording
Net cash used in investing activities was $114.6 million during the nine months ended September 30, 2024, which consisted of the purchase of $271.0 million of marketable securities and $3.0 million of purchases of property and equipment, offset by proceeds from maturities of marketable securities of $159.3 million.
Previous wording
Financing activities provided $0.3 million and $0.7 million of cash during six months ended June 30, 2024 and 2023, respectively, from the issuance of our common stock under our equity incentive plans.
Current wording
Financing activities provided $0.4 million and $2.5 million of cash during nine months ended September 30, 2024 and 2023, respectively, from the issuance of our common stock under our equity incentive plans.
Previous wording
As of June 30, 2024, there have been no material changes to our contractual obligations and commitments from those described in the section titled “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K.
Current wording
As of September 30, 2024, there have been no material changes to our contractual obligations and commitments from those described in the section titled “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Amended Annual Report on Form 10-K/A.
Previous wording
In addition to the cash commitments disclosed in our Annual Report on Form 10-K, we may have other payables and liabilities that may be legally enforceable but are not considered contractual commitments.
Current wording
In addition to the cash commitments disclosed in our Amended Annual Report on Form 10-K/A, we may have other payables and liabilities that may be legally enforceable but are not considered contractual commitments.
Previous wording
Our critical accounting policies and significant estimates that involve a higher degree of judgment and complexity are described in the section titled “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies, Significant Judgments and Estimates” included in our Annual Report on Form 10-K.
Current wording
Our critical accounting policies and significant estimates that involve a higher degree of judgment and complexity are described in the section titled “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies, Significant Judgments and Estimates” included in our Amended Annual Report on Form 10-K/A.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
With our acquisition of Aushon BioSystems, Inc. in 2018, we acquired a CLIA certified laboratory and proprietary sensitive planar array detection technology. The Clinical Laboratory Improvement Amendments of 1988
Current report — wording carried from elsewhere
We do not expect material revenue from these tests, or other Lucent Diagnostics tests, until 2025 or later, if at all.
Current report — wording carried from elsewhere
Net cash used in investing activities was $127.1 million during the nine months ended September 30, 2023, which consisted of the purchase of $125.2 million of marketable securities and $1.9 million of purchases of property and equipment.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Net Cash Used in Investing Activities