NEW YORK – Quanterix is laying off around 130 employees, or 25 percent of its workforce, as it refocuses its commercial efforts as part of a program intended to improve the quality of the company's assays and its ability to manufacture them at scale.
Quanterix President and CEO Masoud Toloue announced the plan during a conference call after the close of the market on Monday following release of the company's Q2 2022 financial results.
The company posted revenues of $23.5 million during the quarter, down 7 percent from $25.4 million in Q2 2021 and below the consensus Wall Street estimate of $30.1 million.
Its Q2 product revenues were down 21 percent to $14.8 million from $18.7 million in Q2 2021. Service and other revenues were up 52 percent to $8.5 million from $5.6 million in the prior-year period. Collaboration and license revenue was down 12 percent to $92,000 from $105,000 in Q2 2021. Development revenue was down 92 percent to $75,000 from $942,000 in the prior-year period.
Toloue said that Quanterix's "operations and ability to scale have not kept up with growth and customer demand" for its Simoa immunoassay technology.
He said that these issues have manifested in assay quality challenges that "will, in the near term, impair our growth rates."
"Costs to manufacture assays with current processes are not efficient in the long term," he said. He noted that assay quality problems have led to higher expenses for the company due to the costs and waste involved in reworking assays and the increased distribution costs involved.
To address this issue, Quanterix has launched "an assay redevelopment program with the objective of improving our ability to manufacture and deliver high-quality assays at scale," Toloue said. He added that the company has realigned its capital and resources to prioritize this goal and has taken actions — the announced layoffs being among them — to eliminate projects and reduce spending "on initiatives not related to assay redevelopment and innovative research."
He said the initiative would last into 2023 and anticipated that it would put the company in a position to achieve positive cash flow. He said that he did not expect the effort would impact any of the company's research collaborations with outside firms or government agencies.
In addition to the layoffs, the company is considering terminating the lease on its new facility in Bedford, Massachusetts, or subleasing some or all of the space in order to cut operating expenses, CFO Michael Doyle said during the call.
Toloue also announced that Kevin Hrusovsky, Quanterix's former president and CEO, would be stepping down from his role as executive chairman of the company's board. Martin Madaus, currently the lead independent director of the board, will be taking his place. Madaus was also previously president and CEO of Quanterix.
Quanterix's Q2 net loss was $24.9 million, up from $11.9 million a year ago. It didn't provide a loss per share figure. Analysts, on average, had predicted a net loss of $.48 per share.
Quanterix's R&D spending during the quarter was down 3 percent to $6.6 million from $6.8 million in Q2 2021, and its SG&A expenses rose 30 percent to $27.0 million from $20.8 million a year ago.
The company said it expects its full-year 2022 revenues to be flat compared with 2021.
Quanterix ended the quarter with $361.3 million in cash and cash equivalents and $2.6 million in restricted cash.