Akoya Biosciences, Inc. (AKYA) on Q3 2022 Results - Earnings Call Transcript

Operator: Good day and thank you for standing by. Welcome to the Akoya Biosciences Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. please be advised that today's conference is being recorded. I'd now like to hand the conference over to your speaker today, Priyam Shah, Head of Investor Relations. Priyam Shah: Thank you, operator and thank you everyone who is joining us today on this call. I'm Priyam Shah, Head of Investor Relations at Akoya Biosciences. On the call today, we have Brian McKelligon, Chief Executive Officer; and Joe Driscoll, Chief Financial Officer. Earlier today, Akoya released financial results for the third quarter ended September 30, 2022. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward-looking statements. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. For a list and description of the risks and uncertainties associated with Akoya's business, please refer to the Risk Factors section of our Form 10-K filed with the Securities and Exchange Commission on March 15, 2022. We urge you to consider these factors and you should be aware that these statements should be considered estimates only and are not a guarantee of future performance. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, November 7, 2022. Akoya disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. We would like to inform listeners that Akoya will be participating in the upcoming Stephens NASH 2022 Investment Conference in Nashville. Additionally, we will be participating in the Canaccord MedTech and the Piper Sandler Healthcare Conferences in New York this month. please see our Investor Relations page for dates and webcast information. Lastly, we will be hosting our second Annual Spatial Day Virtual Event on December 15, registration information can be found in our press release today and we hope to see many of you attend. And with that, I'll now turn it over to Brian. Brian McKelligon: Thank you, Priyam and good afternoon to everyone, and thank you for joining us today. Akoya had a very strong third quarter of 2022 and continues to demonstrate success in revenue, total instruments placed and publications spanning the discovery, translational and clinical segments of the Spatial Biology market. We reported record revenue of $18.9 million in the third quarter, representing a 40% growth compared with the third quarter of 2021. Akoya's robust growth quarter-after-quarter is a byproduct of three key drivers, strategic product development, commercial execution, and a balanced portfolio of revenues by product category, by market segment and geography. We sold a total of 55 instruments in the third quarter, consisting of 17 PhenoCyclers and 38 PhenoImagers representing a 67% growth in placements from the prior year period. And we ended the quarter with an install base of 863 instruments on track to reach a 1000 in the next few quarters. The rapidly accelerating publication volume featuring Akoya's platform now over 690 to date and a year near doubling from a year ago is a key leading indicator that the adoption of our platforms will continue. Akoya's product portfolio is setting the industry standard for Spatial Biology and delivering meaningful value to our customers. Imaging based approaches now dominate in Spatial Biology, which gives affirmation to Akoya foundational cycling and imaging based NC2 technology on which the company was founded. We have built on the success now delivering second generation solutions that provide single cell phenotyping through industry leading optics and the fastest workflow available. Our platforms are each purpose built for the discovery, translational and clinical market segments, delivering meaningful discoveries in immunology, oncology, neurobiology, infectious disease, transplant medicine, and more. At the upcoming Society of Immunotherapy of Cancer Conference, or SITC, taking place this week in Boston and also announced today we will be unveiling our new PhenoCode signature panels previously referred to as our universal protein chemistry. The commercial launch will take place by year-end, and at SITC we will outline these new validated antibody panels for use on the PhenoImager platforms. The PhenoCode signature panels were created for the rapidly advancing immuno-oncology therapy landscape that includes nearly 6,000 ongoing clinical trials. With tissue-based biomarkers central to these trials, the need for a robust, rapid whole slide multiplex tissue imaging and analysis solution to identify prognostic and predicted biomarkers has never been more important. The PhenoCode signature panels are designed to run on our PhenoImager platforms. These pre-designed panels focused on distinct areas of tumor biology and response to therapy that are of greatest interest to translational and clinical researchers. Extensively tested by Akoya and available in modules with the flexibility to customize, the PhenoCode signature panels will rapidly accelerate biomarker acid development and validation for our PhenoImager customers, particularly in the fields of cancer and immunotherapy. With the launch of these panels, Akoya now provides a complete end-to-end solution for our translational and clinical customers now including the full suite of necessary antibody and reagents. To summarize, Akoya's new PhenoCode signature panels will, one, provide ready-made and customizable panels for our PhenoImager customers. The panels address distinct areas of tumor biology and response to therapy that are of greatest interest to translational and clinical researchers in cancer immunotherapy. And two, they will simplify and accelerate biomarker acid development and validation by delivering a full end-to-end Spatial phenotyping workflow. And three, they will drive higher system utilization and an increase in revenue per sample resulting in expanded pull-through on our PhenoImager platforms. We are progressing several additional initiatives in the downstream translational and clinical markets and our advanced biopharma solutions CLIA Lab out at Marlborough has become a valued resource for our biopharmaceutical partners, resulting in a material expansion of our pipeline and programs with leading oncology companies. As discussed last quarter, our agreement with Acrivon Therapeutics to develop and commercialize a first of its kind Spatial signature companion diagnostic for Acrivon's targeted oncology agent is an important milestone in developing an expanded clinical menu offering and indicates a clear path towards addressing the large Spatial Biology clinical tamp. Turning now to the upstream discovery market, we have several product innovations underway, including adding new applications, further platform advancements to drive additional speed at productivity and enabling expanded software solutions. First, we will be completing the automation of biotech's RNAscope on the PhenoCycler Fusion by year-end. RNAscope is the industry's leading Spatial transcriptomics technology with a focus on targeted applications with nearly 6,000 publications date and a massive customer base. By automating RNAscope on the PhenoCycler Fusion and co-marketing the shared offering with Bio-Techne, Akoya and Bio-Techne can accelerate the adoption of both platforms to drive incremental growth. In parallel, we are on track to complete our upgrade to the PhenoCycler Fusion by year-end. We will begin implementing this upgrade into production builds for new instruments by year-end, and initiating field upgrades in early 2023 for existing customers. This upgrade further increases the platform's speed and capacity and includes improvements to the hardware, fluids and software. For example, we will be delivering a multi-slide carrier for parallel processing of tissue samples. The result will be a near doubling of sample throughput. This upgrade is also required to support the RNAscope integration, so the launch of both is synchronized. These PhenoCycler Fusion speed and capacity increases and the addition of the RNAscope Spatial transcriptomics application are part of Akoya's ongoing efforts to simplify and accelerate our workflow, while simultaneously expanding available applications. It is the combination of the two more speed and more applications that are central to driving increased utilization and system poultry. Simultaneously, we continue to further develop our proprietary RNA technology, which we demonstrated at the AGBT conference in June. We highlighted a proof-of-concept for a 100 plex on the PhenoCycler Fusion. At the conference, we also showcased the industry's first proof-of-concept of a hundred plex RNA and protein on the same tissue section. And the months following AGBT emerging market surveys suggest an overwhelming demand for multi-omic analysis on the same tissue sample. We will be providing more details on our RNA portfolio and the timing for early access and commercial launch at our Spatial day in December. We do anticipate initiating early access by year-end. To summarize our third quarter, we are very pleased with our strong financial and commercial performance year-to-date as we continue to expand our leadership position in the Spatial Biology market. As we have outlined, we are focused on the following targeted initiatives for the balance of the year. First, drive the continued adoption and improvements of the PhenoCycler Fusion as the best-in-class in C2 imaging platform. Second, continue to deliver new applications and drive further workflow and speed improvements across the instrument portfolio to drive expanded pull-through. Third, expand and advance our partnerships with leading biopharmaceutical companies and medical centers to drive the adoption of the PhenoImager HT in translational research and clinical diagnostics. As Priyam noted, Akoya will be hosting our second Annual Spatial Day on December 15th. It will include a review of our new product introductions and presentations from top researchers in the discovery, translational and clinical markets, all of whom have found tremendous value in Akoya's product offerings. With that, I will turn the call over to Joe to discuss our financial results. Joe? Joseph Driscoll: Thanks Brian. Hello, everyone. As Brian highlighted, total revenue for the third quarter of 2022 was a record $18.9 million as compared to $13.5 million in the third quarter of 2021, representing 40% growth, year-to-date revenue of 53.6 million represents 38% growth over the prior year period. We see this as extremely strong performance year-to-date, given the challenging macro environment and gives us increasing confidence that we are in a high growth market that continues to be relatively insulated from the broader economic slowdown. Product revenue, which includes instruments, reagents and software, was $14.4 million for the third quarter compared to $10.9 million in the prior year period, representing 32% growth. Within product revenue, instrument revenue was $9.5 million compared to $7.1 million in the prior year period, an increase of 34%. We had another strong quarter with 55 instruments sold, of which 17 were PhenoCyclers, and 38 were from the PhenoImager portfolio. This is 67% growth compared to 33 instruments sold in the prior year period. We have sold 166 instruments year-to-date, and the total installed base of instruments is now 863, which includes 229 PhenoCyclers and 634 PhenoImagers. As of September 30th, a total of 83 Fusion instruments have been shipped since the commercial launch at the start of the year, and we now have a total installed base of 72 for the combined PhenoCycler Fusion system sold either directly as a combined system or upgraded from a previous standalone PhenoCycler instrument. The number of combined units is an important metric because this combination is projected to drive significant increases in reagent pull-through over the next few years. We continue to track a very impressive Fusion to PhenoCycler attach rate of over 75% on directly sold combined systems, which is ahead of our expectations of 50% to 60% long-term. Reagent revenue was $4.7 million for the quarter versus $3.4 million in the prior year period, an increase of 38% with an annualized pull-through in the mid-$30,000 range per instrument for both the PhenoCycler and the PhenoImager HT. Today, we project the pull-through to increase significantly by as much as two to three times over the next several years across the instrument portfolio based on the following factors. First, as researchers become fully trained and expand the use of our rapidly expanding installed base of PhenoCycler Fusion. Second, new multi-slide and RNAscope upgrades on the PhenoCycler Fusion are up and running. Third, the new PhenoCode signature panels are utilized on the HT system, and finally, as our higher plex multi-omic content menus are rolled out commercially. We continue to project annual reagent revenue growth of approximately 40% per year for the next several years. Services and other revenue totaled $4.4 million as compared to $2.6 million in the prior year period, representing 69% growth. Our advanced biopharma solutions CLIA Lab continues to gain significant traction directed to large pharma and other meaningful clinical partnerships. Growth profit was $10.9 million in the third quarter compared to $8.5 million in the prior year period. This resulted in gross profit margin of 58% for the quarter consistent with the first half of this year. We continue to make investments in the CLIA Service Lab to support clinical trial enrollment and secure clinical diagnostic partnerships such as Acrivon Therapeutics, which has a near-term impact on margins. We have also experienced some impact on margin from inflationary cost pressures consistent with what most other companies are experiencing. Instrument pricing continues to improve compared to the promotional pricing on Fusion in the first six months of the year. Operating expenses for the quarter totaled $27.6 million as compared to $26.7 million in Q2 and $25.7 million in Q1, maintaining a consistently moderate increase in OpEx since the start of the year. Through the remainder of 2022 and in fiscal 2023, we will continue to make targeted investments in the company with a near-term focus on the commercial rollout of the PhenoCode signature panels and an R&D focus to further enhance our assay to analysis speed, multi-omic content menus and CLIA service capabilities. We ended the quarter with approximately $82 million of cash and cash equivalents. We project that cash will be more than $70 million as of the end of fiscal 2022, which provides us ample runway to continue to invest in the business. Common shares outstanding are 37.9 million as of September 30th and fully diluted shares, including the impact of outstanding options and unvested restricted stock awards, totaled 39.7 million. To summarize, we had another record breaking quarter with $18.9 million in revenue, a 40% increase over the third quarter in 2021. We sold 55 instruments across the product portfolio this quarter, 166 instruments year-to-date, and now have a total installed base of 863 instruments. The sale of 83 Fusions in the first nine months of the launch demonstrates the robust demand for our new instrument offering. We will remain very confident in our ability to deliver continued growth this year and are increasing our full year 2022 preliminary revenue guidance range to $73 to $75 million as we continue to see tailwinds for our business in the Spatial Biology market. Now I'll turn it back over to Brian for closing remarks. Brian McKelligon: Thank you, Joe. In summary, we're pleased to report a strong quarter and announce exciting new developments across the portfolio. We're thankful for the hard work of our fellow dedicated Akoyans as well as for the support of our customers and shareholders. Akoya remains very well positioned for growth, and we are excited about the opportunities that lie ahead as we deliver new Spatial solutions from the discovery to clinical markets. At this point, we will open the call up for questions. Operator? Operator: Our first question comes from Mason Carrico with Stephens. Your line is now open. Mason Carrico: Hey, guys. Thanks for taking the question. How's everyone doing? Brian McKelligon: Good. Mason, how are you? Mason Carrico: I'm doing good. Maybe to start off here, how are demand trends across geographies in Q3 and how have they trended in the fourth quarter so far? Have you seen any strengthening or weakening worth calling out, or has demand across most geographies has been relatively steady sequentially? Brian McKelligon: Yeah. I mean, I don't think we'll really comment on Q4 yet, but I think what we're seeing in the relative geographies is, is I think sort of reflective over numbers. North America, really strong, and EMEA, APAC delivered solid performance. I think as you noted from others, and I think as we had indicated prior, there's some increased scrutiny on capital purchases that's more a commentary on sale cycle versus demand. So, there's nothing that we're seeing in either direction, certainly in terms of headwinds that would cause us meaningful concern. I think that's why we took our numbers to the point where Joe talked about in raising our guidance slightly. Mason Carrico: Got it. That's helpful. And then maybe just a follow up here, two-part question. One, with the Fusion 2.0 launch universal chemistry RNA and multi-omics, what are your expectations for throughput per instrument next year as much as you can give there and maybe even qualitatively? Are you thinking about that increase over the next two to three years to be more linear, or should we expect more moderate step up next year and more material ramp in 2024 and 2025 starting to rollout? Brian McKelligon: Yeah. Yeah. I think what you'll see is, with all of those things sort of additive to driving application utility to driving samples pre in a time to driving dollars per sample, given that we're sitting on an install base of HTs plus Fusions, that's in the 380 ranges and 230 PhenoCyclers out there, it's going to be a conversion process for all of these things to get out and drive utilization. So with that, we expect the pull-through to grow consistently over time. And I think we've talked about that before. And with the Fusion 2.0, there's a pretty big range and this is where -- I mean, it gets difficult for you all. There's a pretty big range on throughput as you think about number of markers in tissue size. But you can maybe just think about the Fusion 2.0 you making your kind of 10 to 15 whole slide samples a week. Fairly straightforward. I'm talking about a kind of a whole tissue slide at single cell. Mason Carrico: Got it. Thanks guys. Brian McKelligon: Thank you. Operator: Please stand by for our next question. Our next question comes from Tim Chang with Capital One. Your line is now open. Unidentified Analyst: Hey, thanks. Brian, I wanted to just ask you, obviously you guys are doing well with the PhenoCycler Fusion launch. So, could you talk a little bit or provide a little bit of granularity on how you expect that product to ramp, not only in the U.S., but outside the U.S. I mean, it seems like you're doing pretty well with that ramp up in the States, but I was just curious how much visibility you can provide outside the U.S. Brian McKelligon: Yeah. I mean, I'll let Joe chime in. We don't really break down units ex-U.S., but I think we expect it to ramp equal contribution given the numbers I just mentioned, Tim, on the large install base. Still lots of room to upsell our existing customers, but also kind of driving into new customers. So, I don't think there's any sort of material meaningful regional difference in terms of how we think about scaling the product. Just differences in scale, frankly, Tim, was about 50% of our revenue kind of in North America and the rest equally split between EMEA and APAC. Joe, I don't know if you want to add anything beyond that. Joseph Driscoll: No. I think that's right on the money. I think we would expect this rollout to be comparable to the rest of our business. As Brian just said, 50% North America, 25% EMEA, 25% APAC. So that -- that's the way we're looking at it right now. Unidentified Analyst: Okay. Great. And just one quick follow up. I noticed your ASPs, they did increase -- actually I think they were what, north $170,000? I mean, is this a number that you expect to continue to grow as we head into 2023? Brian McKelligon: Yeah. Joe, you want to take that? Joseph Driscoll: Yeah. Sure. It's -- we had promotional pricing on the first six months of this year on the Fusion launch to really try to get -- take market share and get a lot of excitement in the marketplace. So, yes, the ASPs did go up in Q3. I think you'll see them tick up again in Q4 and then probably stabilize after that. I think we're finding where our sweet spot is in terms of pricing. Unidentified Analyst: Okay. Super. Thanks so much. Operator: Please stand by for our next question. Our next question comes from Mark Massaro with BTIG. Your line is now open. Mark Massaro: Hey, guys. Thanks for the questions and congrats on your third straight beat and raise this year. Maybe the first question is for you Joe, you just put up 40% growth here in Q3, recognizing that you guys are doing a great job executing this year, but I do want to ask about the outlook for Q4. It looks like it's a range of about 20% to 32% for Q4. So, is there any reason for us to kind of use some degree of caution? Because you're coming off of growth rates in the mid to high thirties to low forties. So, how should we think about the slight desell in Q4? Joseph Driscoll: Yeah. I think there's a couple of factors there. And one is last year's Q4 was extremely strong. And that's makes a little bit of a tougher comp. This year, the revenues have been, I guess, more balanced by quarter. And so, you're not seeing the massive spike between Q3 and Q4 that we've seen in prior years. So, I just think we're -- we've gotten more regular streams of business throughout the year this year as opposed to last year where there was a pretty big discrepancy between Q3 and Q4 last year. So, we're not concerned or anything like that. We're just trying to maintain a conservative posture in our guidance. Mark Massaro: Okay. Great. And nice to see the PhenoCode signature panels rolling out here. So, recognizing that the plan here is to now increase your region pull-through per box in the PhenoImager HT. Can you give us a sense for how you're thinking about pricing mix? And then, how should we think about incremental contribution to growth in 2023? Brian McKelligon: So, to the pricing question, maybe just directionally, as you look at -- let's say one of our customers on an HT system, that is building a panel and prior to PhenoCode, they would just get that fluorescent detection regions from us and largely source the antibodies themselves. So, in terms of their total spend, again, antibody prices can vary quite dramatically, but assume it's somewhere between 23%, 35% are kind of portion of that revenue. So, as you look at the pricing of the PhenoCode, knowing that we're going to price additional value into those, because a lot of the validation would work that we've done. I'm not going to give you a dollar price yet, but that should give you kind of a directional sense as we drive conversion of some existing panels. But primarily, Mark, it's going to be people developing new panels where this will help kind of accelerate that work. So, I think it's going to be -- similar to Mason's questions, kind of a step function as we walk through the year and see those conversions, but also getting new HT customers up and running a little bit faster. Mark Massaro: Okay. Great. And just last one for me, maybe for you, Brian. Can you just speak to any other developments going on and companion diagnostics with your business and any next catalyst to look for with the Acrivon partnership? And then, final question is, I know you have links to some of the events at SITC, but is there anything in particular we should be looking out for? Thanks. Brian McKelligon: Yeah. So, in terms of Acrivon specifically, we're going to follow obviously their lead on as they reveal advancements of their clinical program, because we're really sort of tied it to hip to that. In terms of milestones, I think it's going to be kind of more qualitative commentary from us. As we noted in the earlier comments that since the launch of ABS last year, the capabilities highlighted and codified with the Acrivon announcement. It's really just about, Mark, just expanding that portfolio of clinical trials we will participate in so that we have a higher, higher probability of another CDX deal, while most importantly, at the same time it's driving additional revenue, service revenue, but it also drives additional system placements. So that's kind of how I would address that again, qualitatively. And then at SITC, there's just going to be a lot of detail around these PhenoCode panels and their validation in their work. There's a large number of poster presentations, so I think that would be probably the core event. But I'd invite you to look at our earnings press release. There's a link there to the SITC event and what we're doing. Mark Massaro: Okay. Thank you. Brian McKelligon: Thanks Mark. Operator: Please stand by for next question. Our next question comes from Tejas Savant with Morgan Stanley. Your line is now open. Neil Vibhakar: Hi, this is Neil on Tejas. So, considering the strong demand some of your peers have begun to see, as they begun to launch in C2 images of their own. Any color on how this growing interest is translated for your own order books? And what gives you confidence that your incumbent band in terms of using an imaging approach will continue to resonate, just as strongly going forward, even after these new tissues platforms launch on the market? Brian McKelligon: Yeah. Maybe to your last question regarding, is imaging kind of the longstanding methodology? Just for clarity, our approach and our imaging methodology, we think that on its own, the way we do the imaging is a significant competitive advantage. The underlying microscopy technology, again, I'm a little bit biased, is arguably, but not even arguably -- I think it's the best fluorescent imager system on the market in terms of speed, resolution and quality. And with that imaging system tied to our assays, that's what gives us the power and the speed and the quality from the HT to the Fusion. And the commentary on imaging, what I would say is every single platform that's getting launched is an imaging based approach. So that's sort of now universally what's accepted in terms of next generation Spatial Biology is doing it via imaging. With respect to the competitors, the new systems that are coming out from our friends at 10X and Nanostring, those are really competing in the discovery market largely within genomic segment. The HT system is decidedly different and that sort of stands on it's own in the translational and clinical markets. Neil Vibhakar: Got it. Thank you. And given the recent revision to the product timelines, can you speak to what underpins your confidence in that decision? And any updates on that thinking over the last couple months and let us some of these moving pieces in the macro. Brian McKelligon: So, I'm sorry. Which changes are you referring to Neil? Neil Vibhakar: The reprioritization on the product roadmap? Brian McKelligon: Yeah. I think the product roadmap has -- apologize if there's some confusion that's on me, but the roadmap has -- the priorities have remained really solid. So, I think what we announced today with the Fusion 2.0 hitting into production and that being tied to RNAscope, I think that's a refinement of our timeline. So, I hopefully that -- you see that as consistent with prior. And then the second part of your comment, Neil, was what? Your question rather. Neil Vibhakar: I guess, just kind of an idea on, how that that thinking has evolved over the last couple months in light of some of these moving pieces in the macro, whether it be budgetary concerns in Europe or some of the reagent headwinds in China. Brian McKelligon: Yeah. It's a good question. Nothing has really changed in terms of how we prioritize. Obviously, as we all kind of are looking in the face of a recession, just during our current strategic planning and budgeting process, you just become even more focused on every dollar in and the return on capital that comes out of that. It just is forcing a lot more rigor. And I think you see that reflected and that decision making is already reflected in the commentary Joe gave around or as OpEx spend quarter-over-quarter -- quarter-after-quarter rather sequentially in terms of our OpEx this year. Neil Vibhakar: Got it. Thank you. And then, one last from me. So, as you begin to make that push into the genomics market segment, what do you see as the key drivers there to really start building a awareness around the offerings given that this customer set is likely less familiar with Akoya? And would that introduce another ASP dynamic thinking about 2023 or? Brian McKelligon: Yeah. So I -- you cut out right with your money question. I think you said Spatial transcriptomics is the market segment you're asking about. Neil Vibhakar: Correct. Brian McKelligon: Yeah. So, I think for us, the way we look at that is how can we deliver with our existing core capabilities and expertise to protein? How can we think about delivering -- excuse me -- something that has differentiated value and some of the feedback that I alluded to, coming out of AGBT in the opening comments is really part of our current voice of customers and product roadmap decision making, which is how do we build a platform that leverages the best of our capabilities with proteomics and our growing capabilities in the RNA, both in the discovery setting and the validation setting with our own technology and RNAscope respectively. So, with that, we've been really exploring and doing a lot of work on exploring multi-omic solutions where you contemplate your protein content and your RNA content -- so that they become really catalytic in terms of the value they both bring to the scientist. Not so much focused on some sort of arbitrary plex more, but really focusing on the science and the panel development. Neil Vibhakar: Got it. I appreciate the time and congrats on the strong quarter. Brian McKelligon: Thanks Neil. Joseph Driscoll: Thank you. Operator: Please stand by for the next question. Our next question comes from Julia Qin with JP Morgan. Your line is now open. Unidentified Analyst: Hi. This is on for Julia. Thank you for taking my questions. So, first, congrats on the quarter. Very impressive. So, I did a quick math about the placement for Fusion this quarter. It seems like it's a -- it's like 21 compared to the last two quarter. It's a slightly drop. So, I'm just curious, like, how should I, or should we think about the driver for Fusion placements moving forward? Is it more relying on the attachment with the cycler or it's more relying on the standalone orders? Brian McKelligon: So, we don't really report out the Fusion separately, but I'll let kind of Joe take it from there. I think what you see, as Joe alluded to, we have a fairly consistent total instrument number quarter -- each of the quarters this year. There's always going to be a slight mix shift, as you go from a Q1 to Q2 to Q3. But overall, I think what we look at is that overall instrument number. And the Fusion placements are being driven both from paired with PhenoCyclers, but also to some extent selling it to our existing install base where they're upgrading from a third-party scope to the Fusion. Joe, I don't know if you want to add anything. Joseph Driscoll: Yeah. So, really the first six months of this year, we really went out with promotional pricing on the Fusion to really try to get market share, really try to convert existing PhenoCycler users to buy a Fusion. So that was really the driver of the -- kind of the units that you're looking at for the first six months of the year versus Q3, I'd say Q3 is a more normal quarter, I guess, in terms of a Fusion placements. And once again, just to reiterate, when we are selling a PhenoCycler, the attach rate with a Fusion to sell at the same time is exceeding 75% right now, which is way above our expectations. So, we're selling a lot more bundled PhenoCycler Fusions than what we had expected. But in the first six months of the year, you're really seeing the impact of that promotional pricing to really try to drive market share. Unidentified Analyst: Okay. Thank you. That's very helpful. My next questions about the ramp for the universal chemistry and the DAR panel next year. So, I'm just curious, like how should we think about their adoption on the Cycler Fusion customers compared to those Fusion or hydro standalone customers? Brian McKelligon: Yeah. Actually that's -- I really appreciate that question to help provide some more clarity. So, just a little bit of on the science. So, the PhenoCode chemistry is really essentially a hybrid between some of the underlying codex chemistry that runs on the PhenoCycler and the historical, opal chemistry. And that assay, the PhenoCode assay is really for the high plex capabilities, not the -- I'm sorry, the high throughput capabilities, not the high plex. So, that PhenoCode chemistry is really -- it will probably most widely adopted on the HT system. And so, you can think about the adoption of PhenoCode, again, qualitatively happening -- happening the fastest with new customers as they get new panels up and running and with existing customers as they migrate over from the historical opal chemistry to the new PhenoCode chemistry. So, it really is about -- it really is a solution for the HT system and the Fusion to some extent. Unidentified Analyst: Okay. I have one last question. I haven't had the chance to look at the CT posters. Maybe you guys can share with me on a high level about the PhenoCode. Like how many biomarkers are there, how many are fixed, how many are customizable? Are the customizable panels specifics to tumors or patients, any stages or is it scalable to clinical in the future or to other diseases just like such like infectious or neuro diseases, just give me a high overview. Brian McKelligon: Yeah. A high level I will tell you -- yeah, the high level I tell you is that we looked across several hundred publications and what you see is this histogram where 10 to 15 particular antibodies dominate the cancer landscape. And many of those are deployed across multiple cancers. And what we have are a series of panels that are generally about a five plex, which allows you to customize an open position or so. And they're designed to answer specific questions. For example, one is designed to look at immune cell exhaust. Another one is to look at macro face polarization. Another one is to look at tumor infiltrating lymphocytes. So, they're sort of thematically designed, but really highly validated. So, you can pick across one of those themes and then plug in kind of an antibody or so for yourself to customize. So, it's sort of a hybrid between fixed panels and hybrid -- and customizable panels that are designed to really accelerate the time to get those new panels up and running. Unidentified Analyst: Okay. That's very helpful. Thank you. Brian McKelligon: Okay. Operator: Please stand by for our next question. Our next question comes from Kyle Mikson with Canaccord. Your line is now open. Unidentified Analyst: Hi. This is Alex on for Kyle Mikson. So, concurrent with the earnings release, you also announced the shelf offering of $150 million. So, I was just curious, based on your current operating cash -- cast burn of roughly $10 million to $20 million per quarter, do you expect to obtain any other financing in the near-term? Thanks. Brian McKelligon: Yeah. I appreciate the question and I appreciate you kind of seeing all that come out today. So, maybe just to reiterate, as Joe noted, we've got $82 million in cash at the end of the quarter. So, really, really strong cash position. So, we do not have any need, any pressing need at all for additional cash. But I think as we noted in prior calls, we've been indicating that we sort of intended to be opportunistic. And one of those mechanisms is really non-dilutive capital. And we announced with that filing our expanded mid-cap facility that provides really cost effective capital. They've been really a longstanding partner of Akoya and we worked with them recently, as you'll note in the filing, a restructured debt facility that provides not only access to additional funds, but a longer interest only period. So that that mid-cap restructuring sort of further solidifies our cast position. But until today we didn't have a shelf in place, a shelf registration in place. And so, the filing today with that ATM is really com commonplace, and we sort of look at it as simply sort of good corporate housekeeping. But again, I just reiterate, we don't have a pressing need for cash. There's nothing immediate. There is really, as I noted, taking advantage of our partnership with mid-cap to give us another path for non-dilutive capital, restructuring that interest only period and just being prepared and staying close to watch the markets if there's an opportunity. Unidentified Analyst: Thank you very much for that color. And just one last one. So, you previously discussed that the promotional pricing was one of the key drivers for this higher attach rate that we're seeing for this PhenoCycler Fusion. I was just curious, how much longer do you think that we should expect to see this higher inflated attach rate of 70%-plus range, which is above that 50%, 60% range that quoted previously, in terms of trying to think about how we should model it out? Thank you. Brian McKelligon: Yeah. Joe, you want to take that? Joseph Driscoll: Yeah. Sure. It seems like that attach rate has been -- it's been relevant now for the last several quarters. So, we're still watching it closely, but I believe we are going to end up kind of increasing our 50% to 60% long-term attach rate to something more like 70%, maybe even more to 70% to 80% attach rate over time. That's what we're seeing now. People really see the value in buying the PhenoCycler and the Fusion as one combined unit. And so, I think that attach rate is going to be probably higher than what our long-term estimates have been. Unidentified Analyst: Got it. Thank you very much. Operator: Please stand by for our next question. Our next question comes from John Peterson with Piper. Your line is now open. Unidentified Analyst: Hi, guys. This is John on for Dave. Thanks for taking the question. Could you just tell us about any differences in pull-through between the customers who have Fusions versus those who aren't currently utilizing them? Thank you. Brian McKelligon: Yeah. Thanks for the question, John. I think, as we said on the last quarter, it takes a few quarters to get sufficient data to be quantitative around the pull-through differences. But what I would say is that directionally we're seeing a pretty active shift now within many of our larger customers from running some of their larger projects on the PhenoCycler versus the PhenoCycler on the Fusion. You don't really want to change platform midstream. But I think as we get into perhaps next quarter, we can start being a lot more -- at the end of next quarter, increasingly quantitative around tracking those differences. But we do expect, as we've noted, for the pull-through number on the PhenoCycler Fusion to be higher than the PhenoCycler alone, just because of the speed, the increased plex capabilities, et cetera. Unidentified Analyst: Great. Thank you. And could you just talk about the appetite pharam spending generally? Brian McKelligon: The appetite for what? I'm sorry. Unidentified Analyst: For pharma spending? Brian McKelligon: Yeah. So, the pharma spending -- our HTs are actually increasingly going into large pharma. That's an area where we're actually seeing more penetration than historically. Whether it's pharma or other market segments, as I noted, there's some increased diligence around capital spend. We're not heavily reliant -- and I assume this might be kind of behind the question, we're not really heavily reliant nor largely penetrated in some of the small emerging biopharma. It's largely -- it's overwhelmingly the large, kind of more well funded biopharma that have multiple projects in queue and multiple biomarker projects where we're seeing a lot of our penetration, not a lot of the emerging biotech with this, but some commentary around funding challenges. Unidentified Analyst: All right. Great. Thanks for taking the question. Operator: At this time, I am showing no further questions. I would now like to turn the conference back to Brian McKelligon for closing remarks. End of Q&A: Brian McKelligon: Yeah. We already kind of spoke a little bit on the closing. I just wanted to reiterate and thank everybody for their time, their attention, the insightful questions. And Michelle, thank you for your help and support. So, we'll talk to you all soon. Thank you so much. Operator: Thank you. Thank you. Thank you for participating. You may now disconnect.
AKYA Ratings Summary
AKYA Quant Ranking
Related Analysis

Akoya Biosciences Inc Receives New Price Target from BTIG Analyst

  • Price Target Adjustment: BTIG analyst Mark Massaro has set a new price target for Akoya Biosciences at $6, indicating a potential upside of 45.63%.
  • Financial Performance: Akoya Biosciences reported a quarterly loss of $0.35 per share, showing improvement from the previous year's loss of $0.49 per share.
  • Revenue Challenges: The company's revenue for the quarter was $18.35 million, missing estimates and showing a decline from the previous year.

Mark Massaro of BTIG has recently adjusted the price target for Akoya Biosciences Inc (NASDAQ:AKYA) to $6, as reported by StreetInsider on May 14, 2024. This new target suggests a significant potential upside of about 45.63% from its current trading price of $4.12. Akoya Biosciences, operating in the competitive field of biomedical and genetics within the healthcare sector, is under the microscope for its financial performance and market position.

Akoya Biosciences reported a quarterly loss of $0.35 per share, which did not meet the expectations set by Zacks Consensus Estimate of a $0.30 per share loss. However, this result, shows an improvement from the previous year's loss of $0.49 per share. Despite the miss, the company has shown some resilience by reducing its losses compared to the previous year. This performance could be a factor in the analyst's optimistic view of the stock's future, as it indicates potential for improvement and growth.

The company's revenue figures for the quarter ending in March 2024 were $18.35 million, missing the Zacks Consensus Estimate by 23.94% and showing a decline from the previous year's $21.41 million. This shortfall in revenue, alongside the reported loss, paints a challenging picture for Akoya. However, it's noteworthy that Akoya has managed to exceed consensus revenue estimates in three of the last four quarters, suggesting some level of unpredictability and potential in its financial performance.

The stock's recent performance, with a decrease of 3.40% to $4.12, reflects the market's reaction to these financial results. The shares have seen a wide range of prices over the past year, from a low of $3.04 to a high of $8.8, indicating volatility but also the possibility for significant gains, as highlighted by the new price target set by Mark Massaro. With a market capitalization of approximately $203.45 million and a trading volume of 118,482 shares, AKYA remains a notable player in its industry, facing both challenges and opportunities ahead.