NEW YORK – Akoya Biosciences said after market close on Monday that it further reduced its workforce in July as part of ongoing cost-saving and restructuring measures. The company also lowered its 2024 financial guidance by $8.0 million to reflect more moderate growth for the second half of the year.
In combination with layoffs in January, the most recent reorganization reduced Akoya’s headcount by roughly 35 percent compared to year-end 2023, when the firm had 330 employees.
"We completed comprehensive reorganization efforts to optimize and align our teams with our corporate objectives," Akoya CEO Brian McKelligon told investors in a conference call on Monday recapping the company’s Q2 financial results. "We believe we now have the disciplined P&O necessary to support our financial goals and return to meaningful growth by the end of 2024."
Answering investors’ questions, McKelligon said the most recent headcount reduction affected both the company's R&D and operational functions. Akoya also consolidated its four office and production facilities into two core campuses based in Marlborough, Massachusetts, closing its offices and labs in Menlo Park, California.
"Our new manufacturing facility in Marlborough enables state-of-the-art molecular barcoding capabilities and has allowed us to consolidate functions that had been on both the East and West Coast under one roof," a spokesperson said in an email. "An important advantage is that R&D and operations can now work in closer collaboration as they expand and refine our menu of molecular barcoded antibodies."
McKelligon said he does not believe the restructuring will compromise the company’s long-term goals. "We certainly have not muted our growth," he said. "Given where we were in Q1 and given what is happening in the market, [we are] really trying to find a balance between investing in growth and driving profitability."
He added that the revenue-generating portion of the company’s commercial team was "slightly affected, but not in any significant way" by the restructuring and consolidation efforts.
For the three months ended June 30, the Marlborough-based firm posted revenues of $23.2 million, a 1 percent dip year over year compared with $23.5 million in Q2 2023 and just below the consensus Wall Street estimate of $23.6 million.
Product revenue, including instruments, reagents, and software, was $15.9 million, a 7 percent decline from Q2 2023’s $17.1 million. Within product revenue, instrument revenue was $8.3 million, a 27 percent decline from $11.3 million in the year-ago period, while reagent revenue was $7.4 million, up 26 percent from $5.8 million in Q2 2023.
During the quarter, the company sold 51 instruments. As of June 30, its installed base had grown to 1,264 instruments, a 19 percent increase from 1,064 in the prior-year period.
Service and other revenue was $7.2 million in Q2, representing a 13 percent increase from $6.4 million in Q2 2023.
"Services have been a growth segment for us, as our instrument warranty and field service revenues have rapidly expanded, coupled with our large installed base, in addition to our lab services business driving higher-value clinical studies through new and existing biopharma partnerships, " Akoya CFO Johnny Ek said during the call.
McKelligon highlighted the company’s rising momentum in the clinical and pharmaceutical market. For one, he said the company has seen a "rapid transition" of its CLIA lab services from translational research projects to now predominantly "higher-value, longer-term" clinical trials, which make up approximately 90 percent of the company’s ongoing service projects.
In addition, the company’s PhenoImager HT platform has recently received regulatory approval from China's National Medical Products Administration (NMPA), enabling the instrument’s integration into clinical workflows across hospitals throughout China.
Still, McKelligon acknowledged that the NMPA approval is "not going to have any immediate real impact" on the company’s businesses, as its business partner in China is still conducting a clinical utility and validation study in the country.
Akoya's net loss in the second quarter was $13.1 million, or $.27 per share, compared to a net loss of $20.8 million, or $.51 per share, in Q2 2023, on par with the consensus Wall Street estimate of a net loss of $.27.
Akoya's R&D expenses decreased 23 percent year over year to $5.3 million in Q2 from $6.3 million a year ago. SG&A costs dropped 20 percent to $19.1 million from $23.9 million in Q2 2023.
The firm ended the quarter with $8.9 million in cash and cash equivalents and $36.3 million in marketable securities.
Akoya once again lowered its guidance for full-year 2024. The company now expects revenues between $96.0 million and $104.0 million, down from a previous range of $104.0 million to $112.0 million, which it had already lowered from an initial $114.0 million to $118.0 million set at the beginning of the year.
Ek said the new revenue guidance reflects "a much more prudent second-half growth" and was informed by the scale and pace of the Q2 results as well as "continued macro pressure."
Some investors did not react favorably to the news. Investment bank J.P. Morgan, for instance, downgraded Akoya's stock from an Overweight rating to a Neutral rating following the company's lowered guidance.
"[W]hile we continue to believe Akoya is a leader in spatial technology, we believe the visibility across Akoya’s business remains limited given the broader macro backdrop which has pressured customers’ capital budgets," analyst Rachel Vatnsdal wrote in a research note. "Additionally, we look for greater clarity on the sustained growth following the company’s restructuring initiatives before adopting a more positive outlook."
Akoya reaffirmed its goal of achieving cash-flow breakeven by year's end.
In morning trading on the Nasdaq, Akoya's stock was down almost 2 percent at $2.11.