Quanterix Corporation — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021; unaudited. Quanterix develops and sells ultra-sensitive Simoa protein-detection platforms, instruments, assays and related services, primarily for life-sciences research and diagnostics.
Financial results and liquidity
| Metric | Q1 2021 | Q1 2020 |
|---|---|---|
| Total revenue | $27.2 million | $15.7 million |
| Gross profit / margin | $16.3 million / 60% | $6.8 million / 43% |
| Operating expenses | $26.1 million | $18.5 million |
| Operating loss | $9.8 million | $11.7 million |
| Net loss | $10.1 million; $0.29 per share | $11.6 million; $0.41 per share |
| Cash used in operating activities | $14.1 million | $13.2 million |
- Revenue comprised product sales of $18.2 million, service and other revenue of $6.4 million, collaboration and license revenue of $0.3 million, and NIH grant revenue of $2.3 million.
- Cash and cash equivalents were $442.7 million at March 31, 2021; restricted cash was an additional $1.4 million. Current assets were $482.4 million and current liabilities were $36.5 million.
- Total debt was approximately $7.7 million, with principal payments scheduled in four installments beginning July 2021 and final payment due October 2021. Lease liabilities totaled approximately $22.8 million.
- Net cash from financing was $273.3 million, principally from the February public offering, which generated $269.7 million net proceeds. Shares outstanding rose to 36.3 million from 31.8 million at year-end 2020.
Changes versus the prior-year quarter
- Revenue increased 73%, led by product revenue, which rose 86% to $18.2 million. Management attributed growth to stronger instrument demand and increased consumables sales as customer laboratories reopened from pandemic-related disruptions.
- Service and other revenue increased 11%. Grant revenue of $2.3 million was recognized in Q1 2021, with no comparable grant revenue in Q1 2020.
- Gross margin rose to 60% from 43%. Management cited grant revenue, manufacturing efficiencies and higher average instrument selling prices; the grant contribution is an important factor in interpreting the margin comparison.
- Research and development expense increased 57% to $6.7 million, primarily reflecting work under the NIH RADx award. Selling, general and administrative expense increased 36% to $19.5 million, mainly due to added headcount.
- Net loss narrowed, but operating cash use increased by $0.9 million. The company reported lower interest results, shifting from $0.2 million of net interest income to $0.2 million of net interest expense.
Outlook, risks and notable items
- No specific revenue or earnings guidance was provided. Management expects significant expenses and operating losses to continue at least through the next 24 months, while stating that available resources should cover anticipated operating cash requirements for at least the next 12 months.
- The $18.2 million NIH RADx Workplan 2 award funds SARS-CoV-2 antigen-test development, manufacturing scale-up and deployment readiness through September 2021. Funding is milestone-dependent; the company cautioned it may not achieve all milestones or receive the full award. Q1 grant revenue was $2.3 million, alongside $1.8 million of related R&D expense.
- The FDA had issued Emergency Use Authorizations for the company’s Simoa SARS-CoV-2 IgG Antibody Test and SARS-CoV-2 N Protein Antigen Test. The company described plans to pursue additional sample types and explore screening-related uses; these plans are not assurances of authorization or commercial success.
- COVID-19 continued to create uncertainty, including effects on customer-site access, instrument installations and laboratory consumables demand. Management also cited future spending needs for growth, R&D, manufacturing capacity and sales expansion.
- The Abbott license may generate future milestone payments and royalties, subject to development, regulatory and commercialization milestones and product sales. No Abbott license revenue was recognized in Q1 2021.
- The company reported no material litigation, no material changes to previously disclosed risk factors, and effective disclosure controls. It had no material subsequent events through the filing date.
Important facts for investors to verify
- Whether revenue growth and consumables demand persist as COVID-related disruptions ease, and how much growth depends on instrument sales versus recurring consumables.
- How gross margins trend excluding grant revenue and whether manufacturing efficiencies continue.
- Progress against RADx milestones, remaining grant funding and the economics of any SARS-CoV-2 test commercialization.
- Operating cash burn, planned spending and the basis for management’s stated 12-month liquidity outlook.
- Completion of scheduled 2021 debt repayments and the effect of equity issuance and stock-based compensation on dilution.