NEW YORK – Quanterix aims to roll out a new generation of more reliable, user-friendly instruments that are expected to drive consumables sales growth, the firm's President, Chairman and CEO Kevin Hrusovsky said this week.
Speaking on Quanterix's Q2 earnings call this week, Hrusovsky made the interesting comment that the company was aware that the technology underlying its HD-1 ultrahigh sensitivity immunoassay system "doesn't work all the time." That would seem like an admission against interest, but Hrusovsky raised the matter in the course of laying out his case for Quanterix's strong future prospects.
In the first place, he suggested that the fact that the company's user base and instrument utilization has seen solid growth despite imperfect reliability demonstrates the appeal of its technology. But, he said, it also suggests significant room for growth — particularly on the consumables side.
"We've actually been a little surprised by the level of usage of our technology despite some of the [technical] issues," he said, noting that according to a company analysis, a number of very high-level users are running their instruments at 100 percent capacity.
However, below that top tier is another set of users that Hrusovsky said he believes have been somewhat stymied by the instruments' lack of reliability and usability. Shifting these "middle-tier" users to higher levels of instrument utilization by providing new, more reliably instrumentation is key to the company's strategy, he said.
"A lot of why we are launching product lines like the HD-X and SR-X is to start to move these middle-tier customers to the [higher] utilization levels that we know they want to be in," he said, adding that the company believes it will be able to ramp its consumable sales significantly in coming years "just by making our technologies much more usable and repeatable and … getting a broader distribution of high use levels."
"Most of our focus right now is getting these lower-volume users a technology that they believe in and trust to where they don't feel like they are going to lose samples," Hrusovsky said.
"I think we see consumables being by far the easiest category for us to continue a very strong growth trajectory over the next … couple of years," he added.
Key to this strategy is the company's new HD-X instrument, an updated version of its original HD-1 system, which it plans to launch in the fourth quarter of this year. Compared to the HD-1, the HD-X offers improved reliability and multiplexing. It also features a magnetic bead-loading system that Hrusovsky said will improve efficiency of loading the antibody-linked beads used by the instrument from around 15 percent to the 80 percent to 90 percent range, which he said could substantially improve assay sensitivity.
Hrusovsky said that following launch of the HD-X, Quanterix plans to make converting over HD-1 users a point of emphasis, offering financial incentives for trading in the older system for the newer.
"We want to convert most of our installed base over to the HD-X in the coming years," he said, projecting that the company would manage to convert at least 50 percent of existing HD-1 customers.
The company also expects the recent release of its SP-X instrument to drive consumables sales. The SP-X, which launched in Q1 of this year, offers multiplexing of up to 10 analytes at a time and is aimed primarily at the oncology market, which Quanterix views as its next major opportunity.
In addition, Quanterix bolstered its consumables business with the $22.5 million acquisition of UmanDiagnostics, a supplier of antibodies and ELISA kits to neurofilament light chain (Nf-L), a neurology biomarker that has been linked to a variety of conditions including Alzheimer’s disease, multiple sclerosis, Parkinson’s disease, traumatic brain injury, ALS, and Huntington’s disease. According to Hrusovsky, sales of Nf-L currently account for roughly 20 percent of Quanterix's revenues and present a large potential opportunity moving forward as the company plans to explore how it might be useful for diagnosing and guiding therapy in conditions like multiple sclerosis and Alzheimer's.
Quanterix's Q2 consumables sales were up 77 percent year-over-year, though the were flat sequentially, following a 124 percent year-over-year rise in Q1 2019. Hrusovsky suggested the lack of sequential growth could stem from would-be HD-1 customers postponing instrument purchases until the HD-X became available.