Q2 2021 Quanterix Corp Earnings Call
[music].
Good day and thank you for standing by welcome to the point of Terex Corporation Q2, 2021 earnings call. At this time, all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session.
To ask a question during the session you will need to press the star 1 on your telephone.
The required any further assistance. Please press star Zero I would now lots of hand, the conference over to your speaker today, Mike Doyle CFO. Please go ahead.
Thanks very much.
Afternoon, everyone and thanks for joining us today.
With me on today's call is Kevin <unk>, our chairman and CEO.
Before we begin I would like to remind you about a few things.
Today's call will be recorded and will be available on the investor resources section of our website.
Today's call will contain forward looking statements that are based on management's beliefs and assumptions and on information available as of the date of this call.
We made on actually achieve the plans intentions or expectations disclosed in our forward looking statements.
Forward looking statements involve known and unknown risks uncertainties assumptions and other factors that may cause our actual results performance or achievements to be materially different from any future results performance or achievements expressed or implied by the forward looking statements.
The risks and the uncertainties that we face of described in our most recent filings with the Securities and Exchange Commission.
During today's conference call, we will discuss some financial measures that are not presented in accordance with U S. Generally accepted accounting principles or non-GAAP financial measures and the Q2 earnings release and in the appendix of our presentation, which are available on our website you will find the additional of disclosures regarding these non-GAAP measures, including.
Filiation these measures the comparative GAAP measures.
Believe that these non-GAAP financial measures provide investors with relevant period to period comparisons of our operations.
Financial measures are not recognized under GAAP and should not be considered in isolation or as a substitute for a measure of financial performance prepared in accordance with GAAP.
With that I'll turn the call over to Kevin.
Thank you very much Mike and welcome on Board. It's Mike's first called me very excited to have Mike Doyle with us as our new CFO.
Today, we're going to go through 3 of major agenda items first the major advances that we've had in Q2 and really the first half of this year with accelerating our growth as well as.
Enabling a new term might just therapeutic drug discovery and development, but diagnostics therapeutics, which we think of the new category, that's pretty exciting for neuro.
Mike will then talk us through the financial results and I will then end up with the objectives and we'll open up for questions and answers.
So what does the start on slide 4 with some press that you're starting to see out there. This is what we've been the.
Describing for really the last 6.7 years and it's been a big component of our powering precision health ecosystem.
Foundation, it's about on board based the Biomarkers fast, becoming the gold standard.
The surrogates for traditional Tau and Alpha beta of pet imaging, so transforming drug discovery of neuro, primarily from spinal taps and imaging into the blood based is the key.
The opportunity of area that we're very focused on and making a lot of progress with them.
And the other closure coming from periods of biotech Lilly.
The launch of biomarker bombardment in Alzheimers of 2 new without a bad analogy.
And it's really ever since yesterday approved Biogen any size Alzheimers disease treatment out of home the buzzword of mind competing companies that become the biomarker and that's just.
What are your line Lilly has the offer with 2 new out of analyses on the candidates the mathematics, and we will describe in more detail of these opportunities.
Let me now turn to slide 5 where we really have.
The important news the conveyed we did have record growth.
Record adoption and we continue to evolve on what.
We would consider to be the the momentum for plasma Biomarkers and surprisingly.
Many of US were very much I'm excited to learn that there was a new alzheimers disease modulating therapy approved.
And whats also interesting is we've launched pizza out of 181 and also of neuro Plex, which has had very strong growth and it's continuing to accelerate we considered to be an important catalyst.
You may have also read from Lilly.
So heard from their presentation last week.
The mole of plasma peaked out to 17 correlates with the the now of the Mab efficacy reported by Lilly and Interestingly, our NFL, which we at 1 time call call day engine check light on the brain and we do think someday everyone should know the NFL number.
Case, they ever come in harm's way with nerve degeneration or concussions theres a lot of momentum continuing to advance the breadth of that biomarker as well on the business update standpoint strategy updates.
Payer adoption continues to be an area that we focus on because of the and getting these drugs paid for in approved we think diagnostics can play an important role the for monitoring drug performance and making sure there's real coverage with evidence.
We also as you know there was some of our technology are afraid of it down the Bethesda, Maryland to Anthony Vouchers labs and in those labs are looking at using our test measuring the answer Jim for new drugs and current drugs the better arrest the Covid virus and there's also a lot of.
A long haulers that are continuing to be plagued with symptoms and those who have lots of taste and smell and have brain fog theres been a lot of publications now linking using our NFL Murphy on the light showing neuronal death, and there's growing concern there could be linkages and a lot of publications recently published between Covid and Earl.
All of the virus. So that's further fueling both of those categories. We also almost a 50% of our HD fleet because of a lot of sales of HD X primarily linked to all of zimmers on this.
<unk> the landscape for all the time of trials.
And growth we also as I mentioned, Mike joined Us, but so has masoud <unk>, who joined us from Perkin element of running our quad <unk> diagnostics the.
A vision plus.
Our overall president of of Quant codes.
We have nearly a half of $1 billion of cash on our balance sheet, which we were successful on raising a couple of times in the last year.
Both of them both of them were up rounds.
I mentioned the way.
<unk> had a lot of advances in the NFL, but just in general we had record publications on our Biomarkers in our disruptive technologies and new Biomarkers.
We also hired world guys to further advance and accelerate the scaling of our company to catch up to the demand that we're creating and that has been going very well he and his team he's recruited a lot of.
Top guns into our company to help us scale and catch up to the demand we do have some stock outs.
I mean from the increased demand that none of us probably expected this level of alzheimers enthusiasm and thats continuing to create a lot of opportunities of course in the future. So our timing of bringing in a team and was really quite.
Quite good now that we can look back given this advance in the Alzheimers landscape. We also are expanding our laboratory on the suite has taken over control of the the accelerator lab, helping us to further expand that because we do see linkages ultimately for diagnostics and we are continuing to progress on 100 ex or have had some.
<unk> hundred ex increase on sensitivity, which will allow us to see the vs. Even earlier, even sooner than we can today with many of the Biomarkers and enables certain biomarkers in the salmon suite today in the modern base of <unk>.
Samples white blood or saliva or breadth of condensate or nasal swabs on slide 6 we just wanted to let you know we had a pretty strong Q2, we had 86% we'll call it.
Non-GAAP growth the actual GAAP growth was 93%, we took a little bit of the Rad ex revenue.
Out of that because that was the 1 time event with the NIH around bringing our COVID-19 solutions to the market. We now have 2 easy ways, 1 for serology semi quantitative working for.
<unk> seen that with the Delta virus as well working towards the label claim for it and also the antigen test.
Of growth, primarily a lot of that was due the Q2 last year being pretty flat with the previous year or maybe even a little bit lower but.
But still when you look at our Tigers.
We see that we are.
Staying within the 30% to 40% from the 2019 based here, we're still advancing very productively and we continue to derisk that with all of this new momentum in Norway and on the right hand side, you can see that all of our strength here was in fact, the instruments I do believe by Lilly purchased 5 of HD Xs in Q2.
This is an example of that scaling up that they're planning for a lot of what they've got coming in there of neuro franchise as well as with all of them.
Alzheimers franchise in consumables fulfilling a lot of these trials is also up we expect of lab services to be flat at best and that's even more true now that many of our customers are buying new HD Xs in trying to run their trials out in pharma and so we'd know the per.
The next year or so we're gonna have on just a lot of stronger growth probably in consumables than we've had historically and some of that maybe at the expense of of our accelerator, which doubled.
Growth last year, because many of those labs from that were shut down for COVID-19 utilized on giving us a lot of.
The growth last year, and so we'll be able to at least achieve last years level and maybe even beyond that but the consumables will be the big story here and you can see.
That our overall growth.
Really also helped us with our gross margins on a non-GAAP adjusted basis, which again taking out the Rad ex revenue roughly 100 bps, which is of a very significant advance.
The next slide just shows you the same exact approach just looking at first half of our overall non-GAAP growth, which was slower than GAAP growth because we would remove the rad ex was 71% for the first half.
And on the right hand side, you can see of very similar story.
Pretty flat, an accelerator, but triple digit growth in the consumables.
And the instruments and very strong CAGR on those categories.
This just shows you on slide 8 the distribution and you can see we continue to evolve.
Our position.
The Europe and Asia. We also are seeing a 50.50 between academia, where a lot of the publications of coming from the fuel then ultimately pharma and see our OS with a lot of those new Biomarkers and neurology is now 80% of our focus and our achievement of incomplete and consumables now represent almost half.
Of our company.
<unk> mine is cheap because it's the fuel of our business on the publications of continue to roll in of are now up from nearly 1400 third party peer reviewed publications validating of across 432 different biomarkers and our instrument placements from consumer now up to 621 world.
Wide and we continue to run trials inside the accelerator phase 123 trials, there's been over 1000 range went through 3 trials running and that's the fastest adoption cycle, we've ever seen in pharma biotech over the last 5 years further testament to how the biomarkers, allowing you to see the deep noninvasively.
Before symptoms is a transformative value proposition and strategic approach for pharma.
The next slides of summarizes that we put.
Saying that we've got both execution and then aspiration the.
Execution is primarily around research and development, where we don't see regulatory of reimbursement of risk and you can see now we've got 3 major growth catalyst. These Pete the phosphorylated Tau that we mentioned the neuro flexes, where we've combined multiple biomarkers for all of zimmers as well as many of the other neurodegenerative diseases.
In this near term that we're calling in today the diagnostic therapies, we believe that by the point therapies before symptoms you actually bring on the level of value that we think is unprecedented for patient treatments and outcomes and the way. We think this actually brings a lot more values of diagnostics than we've ever seen before.
It plays a role now a complementary role with the therapy.
And revitalizing.
This whole alzheimer landscape is what happens when COVID-19 starts to trigger the concern around early alzheimers as well as having the drug actually does its first approval. It stimulated a lot of excitement and then you can see our third growth catalysts.
The ability to catch up to the man by just expanding the capacity with the.
The scaling of quanta.
On that program, we mentioned the HD X is having high throughput thousands of data points of day.
Fully automated and then expanding our laboratory longer term looking towards diagnostics and then bring it on the 100 ex them on the right hand side, where we know we've unlocked the much bigger tam by cutting the cros and so the diagnostic landscape on the $20 million, we got from the NIH for Covid, bringing 2 anyway.
With the use authorization diagnostics to the market allowed us to build our infrastructure and to attract people like masoud and we've even got dawn Mattoon, who had been running a lot of the research side of the business. She is now with Mark Rossi both of them.
Working with the strategic accounts across both research and diagnostic and so we're building out the right hand side and it's getting accelerated because of the bridge that was built from Covid from the left and so we do think that as we continue to build of some long term very interesting catalyst surround all all the.
Zimmer health screening diagnostics of monitoring weather.
Yes.
All of Zimmer.
Diagnostics therapies are in fact, bringing down plaque levels and bringing clinical benefit and the recent data from Lily says, bringing down plaque as evidenced by measuring on a peak is also correlated the clinical benefit and that's a pretty important breakthrough that we're all striving to achieve for helping all the time of <unk>.
Patients were also as we mentioned the increase on our accelerator footprint for all the team and we're working hard with the payers understand the health screens in the United Health Group now has our technology on their R&D Labs. You think this is an important test them include the advances.
So historically, we've shown the next couple of slides, where by just bringing sensitivity to protein measurements, where there had been about 200 IBD proteins being measured by primarily Abbott Siemens and Roche collecting $25 billion of revenue on di.
The lawsuits of proteins.
Pretty much of measuring disease. After symptoms Archie is by going down in sensitivity on slide 11, non invasive and before symptoms and we think theres a thousand proteins of reach on this translation going from research on the left the diagnostics on the right more of like taking the helm.
The phone of the yesteryear and moving it into the iPhone today, which are actually recording this conference on.
The next slide just shows you on the right hand side that there was about 100 of $110 billion of value and revenue on.
Cam that we think by seeing the disease before symptoms you increase the size of these markets even for Alzheimers, if you've looked at all of zimmers being defined as the moment you start having severe dementia and but if you can see at 5 years before and as you know.
The researchers on.
Third party peer reviewed publications have shown that you can see alzheimers as much of 15 years before dementia of using our biomarkers of non invasive blood you can significantly expand the size of that market by not only treating patients that haven't presented yet with dementia, but also increasing your chance of.
But youre going to be able to arrest that disease progression by getting to the disease. When it's still much more treatable and that's the the move a mantra that the slide 14 has always tried to showcase some of that is the many neuro patients don't even though they've got more to generation of until they see the symptoms.
Of dementia.
And you can see in the click 15, 3 slides coming from Lilly.
Can actually see the Tao and the amyloid plaques growing of many times the.
The amyloid plaque is there before dementia and that's what they call the goldilocks.
Location, they're trying to find patients that have the amyloid beta but before they have mild cognitive impairment or when they only have mild cognitive impairment and then slide 16 is our goal to go with our new detection sensitivity to move this into monitoring patients. So you can see the beginnings of all the <unk>.
So I'm going to shrink very early this next slide is a new slide the I think it was trying to establish a new category of.
On the left hand side, you see there has been over the years much.
<unk> and protein and antibody discovery and its the farmers and the diagnostic companies that are the best in the world of doing that they feed their learning since the 2 primary categories..1 of them is of the diagnostics industry and the other 1 is a drug industry and then the center here I'm showing the brain with all of the Biomarkers now.
We have in our menu that are basically proteins that are being released from the brain and you can see the noninvasively in blood with our technology and its interesting that erosion of the 1 pharma, but how's the diagnostics position and interesting also is Lilly has some really strong.
Diagnostic capabilities that we've been able to team up with over the last 5 years, which makes them pretty impressive to work with on this new category that we're pointing the neuro diagnostic therapies and go on for coverage with evidence and getting better outcomes more efficiently is what we think can have.
And when you start to commercialize these drugs will deploy them before symptoms.
Next slide is the overall engine that we've used to build our company, we start with a biomarker being discovered by a researcher and then <unk>.
Farmers adopt it based on that research on those third party peer reviewed publications, where they may come to the powering precision health summit learn about it when they start to apply it that's the first phase of adoption and that's where you saw on the front page of New York Times and USA today, the ability to see Alzheimers 16 years before.
Using the NFL and also of <unk> through 17, and then it moves in the step 2 which is demonstrated clinically with high validity and utility of that's the phase. We're in right now around the phosphorylated Tau is the linking it as you've seen evidence from Lilly to specific disease pass on.
Allergy that can actually also be linked to the clinical benefit through cognitive impairment scores of historically, they've UCSF spinal tap cerebral spinal fluid spinal taps are cuts and to get that data and this is our disruption is this incredible correlation and see them.
And of very low cost non invasive blood tests, even earlier than what you can see it in many of these are more invasive techniques and so while you move from that number 2 category to actually then involved in it and so of diagnostic and the health screening that Tam goes from a half of 1 billion back in the research level.
The 20 times that so 11 billion once it becomes the true diagnostic.
By all along you're increasing the odds of the drug getting approval by the 300% based on farmers own data. So that's why we think we've got an engine here of value creation that is unprecedented with next slide says that it's the jigsaw puzzle of connecting the farmers with the payers with the FDA NIH where.
We've had a lot of advances because of the money the.
Which gave us on the rabbits program of Covid that infrastructure and the learning about the moa and quite charges from T. We've got all of these.
Crows in pharma partners too down on the bottom right corner of Quad Terex does and we've seen major progress on every 1 of these puzzle pieces over the last 8 to 9 months and that's creating the opportunity we think for disrupting the whole approach of bringing of diagnostic into a therapeutic.
Realm of benefit by moving these therapies earlier in the allowing that with disruptive technology and on 100 ex we liked the form partnerships now with pharma with our accelerator lab looking for Biomarkers, usually on 100 ex using our antibody in our assay capabilities with these kols around the world.
Tapping into the samples from pharma fill up them advance on every disease category. So it's not limited the neuro, but our initial focus on priorities are around the world I did want to point out the theres a lot of evolution that's occurred.
How do how all of them in a lot of controversy on the weather reducing class is ultimately going to lead to a new drug there is some great history and looking at HIV, where Biomarkers got started as maybe sell accounts and then they move them into the viral loads.
Once those biomarkers of established that led to some pretty significant advances going from CD 4 cell talents of the viral load you ended up.
20 years later with 29 therapies and.
You really know the HIV being somewhat chronic well I'd like to draw the parallel to the cholesterol market for the brain or for the heart, where there's still a lot of questions regarding the long term quality of linkage between cholesterol management and heart health and life expectancy, but yet there's a trillion dollar sat in market.
And the cancer World, There's a lot of evidence to accelerated drug approvals you can reduce the size of the tumor, but it doesn't necessarily mean, you're going to live longer but yet these are ways to get the drug the industry going down the path and I think the top right corner you were starting to see that in this landscape of of all.
The <unk>, where there hasnt been any drug modulating therapies approved we're getting started now with some biomarkers that might be game, changing and make them less invasive with our technology I don't want to predict though the NFL continues to be I think of long term and credible opportunity and there was some publications that came out this quarter what's the.
Across 40 different site 13 different neurodegenerative types of diseases, ranging from Parkinson's ABS AOS.
Down psychiatric disorders frontal temporal.
Dementia all of these show that the NFL levels elevated as the disease progressed, and we even found evidence that elevates faster if the psychological issues with the disease, nor the generous.
In order to generation. So these correlations are beginning to build a body of evidence around NFL of it makes it a real long term, we think check engine light for your brain health.
But everyone should some day no the NFL level. The next slide shows out of those 3 drugs of abuse NFL on our NFL to get themselves approved as the.
The secondary or primary endpoint and this is important because we also think if you can see in blood very rapidly and disease progression you can actually use it to get patients on the right drug sooner and allow them to get the benefit of the drug quicker.
And this slide 24, the shows that we bought the room on company, where we have just about every publication is either in our smaller <unk> those that antibody pair from Oman, which I think has led to a lot of advantage for us overall of the slides illustrates on 25, if theres a lot of the.
On the degenerative diseases. If you just look at the point when you have symptoms of 6 million patients worldwide, but if you again can move it forward 5 years that could double and our last slide here around the Biomarkers of show, how we're populating in blood with the various biomarkers.
Markers for the different diseases, allowing us to become the neuro degeneration leader and trying to help pharma bring them to bear on.
And I'll close by just saying that the phosphorylated Tau true 17 remains on our minds really interest when we launched the 181 and Theres now evidenced the he didn't even see the disease sooner with the $2.2017, with greater dynamic range, which makes it even a better possibility for becoming a diagnostic.
Mike I would like to turn it over to you for some.
The actual summary, and then we'll come back to close it off with our strategic objectives. That's great. Thanks very much Kevin.
Now let me provide some additional financial details about our second quarter of 2020 on performance and for your reference I'll be referring to slide 28.
As Kevin noted GAAP revenue in the second quarter of 2020 on was $25.4 million and included 900000 of revenue from erratic. The word awards. Excluding this non recurring items. Our non-GAAP second quarter 2021 revenue was 24.4 million from 86% increase versus the prior.
The year.
We had record product revenue in the second quarter of 2021 of $18.7 million in revenue an increase of 175% versus prior year.
Within product revenue consumables revenue grew 219% in the second quarter of 2021 compared to the second quarter priority of our prior year to a record $12.8 million driven by extraordinary demand for <unk> 181, and neuromuscular flex assay.
Like our like first quarter, our revenue performance of the second quarter May include some recovery of previously deferred demand due to pandemic as customers returned to more normal operations.
Service revenue decreased 11% in the second quarter to $5.6 million and was somewhat limited as compared to the second quarter of 2020 due to customer ramps opening back up from Covid related shutdowns resources and supply the rigs a quarter of strong consumable demand.
Year to date total revenues of $52.6 million excluding.
Excluding revenue from our nonrecurring that ex the board non-GAAP year to date total revenues of $49.3 million of 71% increase from year to date 2020.
On a GAAP basis, our second quarter gross margin was 54, 7% and was favorably impacted by <unk> grant revenue versus prior year gross margin of 39, 7%.
Our non-GAAP gross margin was 55, 1% in the second quarter, which is an approximate 1100 basis point improvement compared to 44, 1% from the same quarter of 2020.
Non-GAAP gross margin was 56, 8%.
For the year to date period, 2021, and approximate 1000.
Basis point improvement from the same period in 2020.
Our non-GAAP gross margin excludes the impact of erratic the board as well as noncash acquisition related purchase accounting adjustments related to our 2019 acquisition of <unk>, thus, providing investors with the relevant period to period comparisons of our operations.
Gross margin expansion was driven by volume productivity gains and price demonstrating the significant opportunity for gross margin expansion in the future as we evolve the mix towards higher margin consumables from <unk>.
All of our overall business reduce product cost.
Our GAAP operating expenses totaled $27.5 million in the second quarter of 2021.
Non-GAAP GAAP operating expenses, the primarily exclude nonrecurring expenses of 38 associated with <unk> Grant revenue totaled $26.4 million for the second quarter of 2021.
I'll need to crash the star 1 on your telephone to withdraw your question press the pound D. Please the standby well, we'll compile the queue and day roster.
Your first question comes from the line of style Mixon of <unk>. Your line is open.
Great. Thanks, Thanks for the questions.
Congrats on the quarter. So Kevin we're hearing from the number of companies talking about like an uptick in protein based research 1 company until you actually said protein based research applications applications are actually the on fire.
I was wondering if you were seeing anything similar on your customer base line, basically broadly speaking or the or the number of pretty almost research projects accelerating faster than the projects based on genomics and the nucleic acids. Thank you.
Yeah, you know in general previous calls Kyle I've actually shown slides, describing DNA and earn a in the pipeline in the evolution of of how that of ball vs proteomics and the way we see this pipeline evolving and 1 of the things that.
We've shown in those illustrations is.
If you can find the protein and you can find 1 that's got good clinical validity.
Large number of years trying to really put on the what we'll call precision health eyeglasses and looking at this proteomics landscape and to invest where we think the value and we actually see 90% of the Tam downstream. Once you can bring the utility into the diagnostic and Thats why.
We think the plane in the drug.
I'll call of drug development landscape with our pharma customers and translating the value of these proteins solutions and seeing them disease much earlier.
Probably going to in the long run showcase where the value creation is going to be greatest in so we're very of.
Excited about the upstream discovery work, that's going on and making sure that when of protein of interest is discovered we then hone in and bring its utility across translation with pharma on the drugs into the diagnostic landscape, where the combination diagnostic and therapeutic can be deployed.
Okay, perfect that was fantastic Kevin Thanks, a lot.
Also I was wondering about obviously with the Covid testing opportunity I guess, if thats going to be of material contract contributor in the second half of the year I guess and so we would imagine that with all the discussion around the antibody of losing their end to end of pathogenic properties or maybe the catering.
Maybe you thought there could be an uptick in demand for your serology test and if you think it will be material.
How should we just think about that contribution in terms of magnitude and pacing in the second half of the year.
Yes, we believe very much in serology and we also believe that.
Every person seems to have unique ways of.
Combating COVID-19 <unk>, comparing the vaccine, which sometimes creates its own side effects.
So what is that serology and each individual we think does spun a lot of opportunity for serology testing.
It's an area that we've invested in because of the need for the country and we believe we've got the ability to quantitate many aspects of the antibodies, which will be important we don't look at it as our number 1 priority from a business perspective, we're trying to do everything we can to build out those.
Assets and we feel very good that we will have some revenue in the second half, but we don't at this moment see it being explosive or plan on it being explosive because we don't wanted the.
The divert our attention away from the Alzheimer landscape, where we know right now that there will absolutely be just a lot of growth and so.
I think the answer Jim we actually rather play in Covid and the research landscape. That's got the sustainability beyond the current epidemic and Theres, many cohorts coming in the future and so having our technology for instance, the laboratories of Anthony <unk> and looking at how drugs are working against Covid either.
As an acute patient or as a long haul of patient. We think those are the areas of opportunity as well as our cytokines I think theres going to be up of major webinar coming up in the next few weeks showcasing our cytokines can really play a role of around a lot of the long hauler assess.
<unk> as well as acute management. So we do think that research might be.
Overlooked because everyone's so focused.
Uhm, uhm instruments, and the <unk> landscape and could actually.
And yourself.
150 to 200 per cent.
Okay. Thanks, very much sure.
Your next question comes from the line of Maxima Sushi of Calvin and <unk> <unk> Company Your line of service.
Hi, good afternoon, congrats on another great corridor.
So clearly there's been major focus on the narrow drug landscape lately for reasons discussed on this call and can you just give us a sense for how the recent breakthroughs in narrow have impacted your customer's desire to expand similar to be used an additional programs internally.
And then separately if it's led to any change in your pace of new customer wins.
Yeah. So first of all of congratulations Max on your new position real excited for you from 1 of the more impressive analysts over the years. So excited for your new opportunities.
I would say also over the years, you've got the know us incredibly well and as you know we had a slide back about a year ago that said if in all of Zheimer drugs ever gets approved there'll be a tipping point, but we never really expected it to happen in 2021 R V.
Was this was likely going to be 2022 of dust and the reason it's a tipping point is it's of creates a significant halo effect for all of those customers out there that have hopes and have what I would consider the oppressive agents to try to combat all drivers and.
What we're learning is is that if you can get to the disease pathology before symptoms you've got a significant opportunity that you never really had before so drugs could actually be rescued. The historically failed. So I think what you have is the beginnings of a drug rescue opportunity as well as new day.
Drugs that are focusing on some of these biomarkers and new unique ways and having the biomarker. This non invasive high throughput low cost creates an opportunity to design your programs around those biomarkers. So we see excitement for recruiting.
Using biomarkers to enhance the cohort for a better chance of of higher probability approval 2 ways, we see that occurring getting sort of disease earlier when they think the disease is more vulnerable to of drug treatment and then secondly, stratifying out of those cohorts.
Confusing.
Heights of pathology that historically were lumped into the Cold War, because there was no biomarker to separate them out and we have evidence with our pizza out 1 of the 1 for example, the lewy bodies dementia and front. So temple of dementia. We're both types of dementia that will be on invaded into many of the cold.
<unk> for all of his eimers, but those agents for all of the <unk> will not work for lewy bodies and poor front of a couple of dimension of that they work designed for that so getting a more pristine. The rat you know pure all of Zheimer cohort coupled with the D. N earlier that represents disruption and that disruption in research.
Also then finds its way and feeds its way into the landscape of getting approval and then commercializing that drug and haven't payers go really good about coverage with evidence and bringing better outcomes with much less investment. So we think that this whole diagnostic opportunity that we're starting.
Out in research evolves into the the clinic and once our technologies can play a role in helping pharma companies get payment with much lower cost ways to monitor disease minimum Dizzy original.
Minimum residual disease as well as try the screen people into the drug more progress we make on that front. The payers. We think the more excitement it's gonna create on the research side for other Biomarkers. So we do think that there is a halo effect on both research and diagnostics and neuro and we are CNS evidence and I think.
The best evidence is the mix, we went end of the year, saying at best we would sell 60% of our new H the exes as new placements.
And that 40% would be what we call Tre then taken the age the 1 on trading it in for an H the ex but once this way of starting to hit around enthusiasm many of our customers 1 of new age the axes and many of them couldn't even shut down on their H, the 1 because they needed the.
The city and that has shifted the per cent of all of our H. The ex is that our new purchases vs. Tradings I think right now we're running a year to day at about 70 per cent of our new Ht ex sales or new age the X sales vs tradings in the original.
Really again, we thought the best it'd be 60%. So I think that some of the evidence and I think we're also.
See in some stock out of some of these biomarkers that we just recently launched as we see people shifting their priorities towards drug trials that they had originally planned on running and that then creates move demand in areas that none of US predicted so I think all of its been boat.
Very well for the risking are 30% to 40% 5 year Tagger from 2019 for research products.
Absolutely the makes sense those are some great data points out I also on it extend the congrats to Mike on his appointment of CFO.
In the same vein just you know given the the recent breakthroughs heavier conversations with partners around and the use of companion diagnostics become I guess more increasingly productive in terms of how quickly and of <unk>.
The ex tasks can become the standard per narrow focus drugs.
I think the.
Well Todd of getting patients onto the right drug is going to create much better outcomes more efficiently for payers and payers on the and we think we'll bring them pretty important force of transformations of the traditional health care health care field.
Great. Thanks for taking the questions.
<unk> on the continued momentum.
Thank you Max.
Your next question comes from the line of Matt <unk> of Goldman Sachs. Your line is open.
Hey, Kevin and Mike Thanks for taking my questions I appreciate it.
Absolutely, Matt How're, you doing total well.
I just wanted to start on the.
The wanted to ex sensitivity pilot if it looks like it was success of congrats on that and just and in kind of 1 of your last slide you talked about the potential pathway for that is there any way you can kind of help us understand the potential timeline of pathway for getting that through the commercial just given the.
The kind of the advantage they would obviously of having the market.
And where you are on that.
Yes, it's interesting we've deployed it in a pilot in our Srs ex technology, which is truly a pilot at sort of alpha slash pilot and we have the.
Applauded it with 1 of our leading kols over in Sweden.
Its actually been somewhat the inventor of our biomarker for NFL on the homegrown. There's also been a.
A major pioneer and our phosphorylated Tau 1 of the ones and as the evolving across all of the phosphorylated. Charles right. Now is early indications are very productive and what we're learning and the pilot is that every area of the body care for different proteins behave.
Differently as we use magnetics so.
Basically the increase.
And our accelerator lab as we take on larger deals.
Basically fulfill an opportunity to do biomarker research and so we've got several farmers now what the negotiate with us larger accelerator deals that might even play into the 100 ex earlier dividend earlier assets from an alpha standpoint, the see if we can help them advance biomarkers for key.
Therapies, they're trying to get approval force so again.
If you look at a product launch global earlier it would be the end of 2022 deployment in our accelerator I could see it happening. Even later this year, depending on how things of all from specific types of Biomarkers.
Got it and it's really helpful. Kevin and actually leads from my second question, which is about the accelerator and in obvious impact from from folks switching from of in a postcode environment to to their own instrumentation and consumables is the consumables growth, it's great high margin business.
But the accelerated.
Pretty powerful service for clients, either during COVID-19 or a post from and you mentioned.
The folks that are essentially using it for for the 100 ex at some point, but how are you thinking about investing in the accelerator. Obviously you are committing suits time to it but how do you think about it as a priority for for contacts moving forward.
Yeah. It's interesting we had a board meeting earlier this region and I've got 1 of the best boards and the landscape. These guys and men and women. We've put Laurie also the line recently, who ran a lot of strategy worked for Pfizer for many years under Ian Ian.
Read so we've got some real talented board members and day themselves also see the.
The the real significant opportunity of the accelerator, so bringing the Sudan, we wanted to make sure that we looked at the accelerator with a pair of eyes from the diagnostic industry. Because if you look at what exact Sciences garden, yet the Terror Foundation medicine.
You know, there's there's numerous companies that of use the LDC labs to get a quick entry into the diagnostic landscape with Max and the neighborhood evolve that can be taken the other they would of all of that with potentially national coverage by making it a single site LDP and so because of.
The advances with Covid, we actually see the opportunity to run Covid tests and of LD Chief framework, even before the end of this year by bringing the suit and his team in the suits already hired 4 of 5 key individuals and the accelerator to help us really expand model of the the ability to <unk>.
Work phase 2 or 3 trials using the clear but also this the the some advanced over on to the diagnostic side and while that's all strategic as you point out that it also each time, we run a trial it leads to someone buying an instrument because they they love to see the data and they come through our facility which is.
The also amazing that they did a chance to see this biomarker innovation, it's almost magical when they see it firsthand and then they want to have it in their lab right net leads into sterling instrument and and <unk> and the consumable sales. So we actually feel like this is an area that we're putting a lot of investment in the benefits of though.
I think you start to really statements of 2022, because we have nearly of 100 per cent growth last year and the accelerator because of those 1 time events. We think we can maintain that this year, but most of the growth of this year will probably come and consumables.
And.
An instrument.
And I think maybe by fourth quarter and you might start seeing the accelerator picking up again based on the impact and I say, but soon it's the team of people and the food's 1 of those cultural leaders that we are very focused on our people have been amazing through this whole COVID-19 crisis pivoting never missing work.
Trying to find ways to help the the nation in the World and now what we have is the team focused on the accelerator the brain.
We'll call Merlot trials advanced them very quickly and then advanced potentially across sense of some.
Regional Ldp's, so we'll see how that goes but I feel real good that this is an area of of our top priority and focus.
Thanks, Kevin Thanks, My current of helpful. I appreciate it.
Our pleasure.
And there are no second question at the time I will now turn to come over to Kevin Wysocki from closing remarks. Thank you very much he.
Like literally been with us for 2 weeks and mustard on what this for 2 weeks and I really want to thank our employees who of just whether it's so much progress over the last 18 months and it really is all about people and more so than at any time in my career of Soroush.
Added by the quality people that have a chance to truly impact of the world and bringing all of Zheimer diagnostics and sort of the world with therapies. So this is the big moment I think for the world and 4 of the United States not only because of the COVID-19, but because of the research going on in neurology.
1 of the thank the investors who have taught us so much over the last 5.7 years. Since then I've been involved for all of your keen insights and will continue to give you updates and thank you very much for listening today.
This concludes today's conference call. Thank you for participating you may now disconnect.
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