Q3 2023 Quanterix Corp Earnings Call
Okay.
Good day and thank you for standing by welcome to the Quadrex Corporation Q3, 2023 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 star one one on your telephone you will then hear an automated message advising that your hand is right to withdraw your question. Please press star one one again.
Please be advised that today's conference is being recorded.
I would now like to hand, the conference over to your first speaker today, Ed Joyce. Please go ahead.
Thank you hope and good morning.
With me on today's call is Masood, Hulu, President and CEO of corn, Terex and bond enough Sriram, our chief Financial Officer joined US in August as Mike Doyle transitions into retirement in early 2024 before we begin I would like to remind you of a few things.
Call will be recorded and a replay will be available on the investor resources section of our website.
Today's call will contain forward looking statements within the meaning of the U S. Private Securities Litigation Reform Act. These forward looking statements are based on management's beliefs and assumptions and on information available as of the date of this call.
We may not 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 uncertainties that we face are described in our most recent filings with the Securities and Exchange Commission.
To supplement the company's financial statements presented on a GAAP basis. The company has provided certain non-GAAP financial measures.
It uses these non-GAAP measures to evaluate operating performance in a manner that allows for a meaningful period to period comparison and analysis of trends in its business.
The company believes such measures are important in comparing current results with other period results and are useful in assessing the company's operating performance.
The non-GAAP financial performance information presented here should be considered in conjunction with and not as a substitute for the financial information presented in accordance with GAAP investors are encouraged to review. The reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures set forth in the appendix of the presentation posted to our website and in the earnings release issued.
Today, I'll now turn the call over to Masoud. Thanks, Ed Good morning, everyone and thank you for joining us on our third quarter call.
We're pleased to announce the six quarter transformation plan, we laid out last year is expected to be substantially complete by year end with assays rolling off our new scalable production platform in January.
Incremental improvements made throughout this year have been positively reflected in our financial results and can you continue to do so in the third quarter with year over year revenue up 18% to $31 3 million non-GAAP gross margin, improving 300 basis points to 48, 6% and disciplined cash use.
Going from over $17 million for the corresponding prior year period to under $2 million this quarter.
And the foundation of this new ops platform, we will continue to improve gross margins and take our research business from one that's burning cash to one that's generating it.
We will deploy capital to first expand access to our platform and second enable patient testing with new biomarker solutions. We've recently developed.
<unk> continues to be the leader in measuring proteins at the lowest detectable levels and as we said at the beginning of this year our goals our ubiquity.
Such that CMO is not limited to just specialty labs.
Accessible by all lapsed.
Means additional biomarker diversity and instrument utility that insurers broad reach.
We spoke a lot this year about improving operating scale and margins.
In 24, we're going to talk a lot about increasing innovation rate a metric we're going to measure ourselves by.
Last month at the clinical trials for Alzheimer's disease, <unk> meeting small base blood Biomarkers testing was revealed in several clinical trials for monitoring.
Efficacy of narrow therapies and diagnostics.
Some of it was ultra sensitive digital immunoassay technology deliver scaled high throughput measurement of neuro degenerative blood biomarkers, including those for Alzheimer's disease.
All of these presentations, Eli Lilly presented analytical validation and clinical performance of our Pizza hut to 17 blood based diagnostic test to identify amyloid pet positivity using the <unk> platform.
This study included over 1000 samples and was run over multiple lots.
Operators and some other instruments.
The study demonstrated high correlation of <unk> 17 to amyloid pet with an area under the curve of 91, 6%.
Some of it was ultra sensitivity translates to very low limit of quantitation necessary for blood Biomarkers like <unk> 2017.
The UMC Medical center in Amsterdam presented phase one data highlighting the potential for a differential diagnosis of Alzheimer's disease and dementia.
Recall, we are working with at BMC and ADF on a clinical trial to support the diagnosis of Alzheimer's and determined through a multi modal algorithm threshold levels of key blood based biomarkers to differentiate other forms of dementia, such as frontal lobe or lewy bodies.
Early data suggests that the combination of <unk> and NFL measurements can aid and discerning frontal temporal dementia from Alzheimer's disease with an area under the curve eight seven.
While there's much more work to be done in this study, including work at multi center clinical trial sites. The early insights are promising.
Reported in nature Medicine in July 1000, plus participant study examined why certain amyloid positive patients without cognitive impairment do not develop tau pathology.
<unk> platform was used to look at astrocyte activity by measuring <unk> levels in blood.
The study led by researchers at the University of Pittsburgh found Astrocyte reactivity influenced a beta effects on top of <unk> and preclinical Alzheimer's disease.
These studies emphasize two critical points first.
There's a lot more work left to be done with this terrible disease and we believe we're entering a decade, where significant effort and capital will be invested in research and clinical trials for Alzheimer's.
Second we're in the early innings of treatment, where there'll be a focus on screening and diagnostics expanding into prognosis and disease stage, Inc.
Both of which will require precise blood based biomarkers at the highest levels of sensitivity.
As an indication of the future and based on what we're observing with the latest results.
Trials and research.
Multiple neuro blood biomarkers measured together that will tell the whole story.
Finally, I'm happy to report that a few weeks ago, we signed a new agreement with Johnson <unk> Johnson innovative medicines and launched the Lucent.
<unk> 2017 blood based biomarker test, combining kwan terex ultra sensitivity similar technology and J&J <unk> antibodies.
Find high accuracy Alzheimer's disease testing.
<unk> 17 levels can become elevated in very early stages of Alzheimer's disease continuum, well before symptoms rise.
<unk> 17 test achieved sensitivity.
Specificity and an overall accuracy each exceeding 90% meeting the criteria outlined in the revised National Institute of aging and Alzheimer's Association Nia.
A criteria for diagnosis and staging of the disease.
These guidelines are important because the performance criteria for diagnostic use case with.
With a blood test.
It was defined for the first time with <unk> being the only plasma biomarker appropriate for accurately diagnosing amyloid pathology.
This validates the use of fluid based biomarkers and puts it on the same playing field at the historical standard of pet imaging.
We believe we are in a strong position to capitalize on these opportunities.
From supporting clinical trials to use in diagnosis.
With the simplicity of our sample to answer system and the number of new biomarker discoveries happening on our platform. We're in a great position to maintain our long term leadership role.
Now I'll turn the call over to London to cover our financial results.
Thank you Ms Howard good morning.
First let me start by saying that I'm thrilled to be part of the <unk>. It's a really exciting time to be here and after a couple of months in the role and even more impressed with our technology and its potential.
Today I'll take you through our third quarter results and an update on our guidance for 2023.
Our total revenue for the third quarter of 2023 was 31 3 million an increase of 18% from the third quarter of 2022.
Our instrument revenue was $3 7 million or <unk>.
Client a 53% over the third quarter of 2022 and up slightly versus the prior quarter.
Consistent with prior quarters.
In line with our peers, we continued to see capex constraints impacting the timing of instrument sales a trend we expect will continue in the fourth quarter.
Our consumables revenue increased to $16 2 million or 63% compared to third quarter of last year.
This speaks to the strength of our installed base as well as the improvements in our manufacturing processes as people are able to catch up with demand.
Revenue from our accelerator lab was $6 2 million more than double over the third quarter of 2022.
Our accelerator services continue to be a valuable and differentiated offering and have been especially effective in providing customers an alternative to continue that project in the current funding environment.
Now, let's move on to gross margin for the quarter.
Our GAAP gross profit margin was $17 8 million and 56, 8% for the third quarter of 2023.
<unk> to $10 9 million and 41, 1% in the third quarter of 2022.
non-GAAP gross profit and margin was $15 2 million and 48, 6% in the quarter.
As compared to $9 3 million and 34, 9% in the third quarter of last year.
Our corporate transformation has enabled us to reduce inventory losses and drive efficiencies in our processes and this is evident in our gross margin performance.
Our third quarter GAAP operating expenses, what $31 6 million compared to $47 5 million in the third quarter of 2022.
Excluding the impact of one time impairment charges of $20 3 million in the third quarter of 2022.
GAAP operating expenses increased 16%.
non-GAAP operating expenses were up 13%, primarily due to higher consulting fees and personnel costs.
Our net loss declined from $35 1 million in the third quarter of 2022 to $7 8 million in the third quarter of 2023 due to improved margins from our redevelopment program. The absence of the impairments from 2022 as well as higher interest and other.
Okay.
Moving on to liquidity, we ended the third quarter with $334 million in total cash and equivalents.
Net usage of $1 9 million during the quarter as compared to cash burn of $17 6 million in the third quarter of 2022.
Our efficiency gains have translated to significantly reduced year over year cash burden.
Turning to guidance now for the fourth quarter and full year of 2023.
As Mitchell mentioned, we've made great progress with our redevelopment efforts and are in the loss of the six quarter transformation process.
For the fourth quarter, we will be focused on upgrades and readiness of our production lines as they introduce new assets in 2024.
In executing on the final steps of our transformation.
With these objectives in mind, we expect our fourth quarter revenue to be between 27 and 29 million.
This increases our revenue guidance for the year to be in the range of $118 million to $120 million compared to our previous range of $110 million to $116 million.
We are also increasing our gross margin expectations for the year and now anticipate GAAP gross margin percent to be in the high Fifty's and non-GAAP gross margin percentage to be approximately 50%.
As we implement the upgrades to our production processes, we expect non-GAAP gross margins to be in the mid <unk> for the fourth quarter slightly lower than past quarters to account for potentially higher costs from these transitional changes.
Lastly, we now expect our cash usage for the full year to be in the range of 20% to 25 million.
An improvement from our prior estimate range of 30 to 35 million.
We expect higher cash outflow in the fourth quarter due to the timing of certain initiatives and statements.
For the year. This reflects a significant improvement in cash burn over 2022.
Our increased guidance across all our key metrics reflects the continued strong demand for our smart technology and our execution against our transformation goals, our balance sheet remains strong and we are well positioned to support our growth and strategic initiatives.
I will now turn it back over to <unk> before we take your questions.
Yes.
Thanks, Rhonda copiously, thank the entire <unk> team for their hard work.
And focused effort.
Dan <unk> COO and Darren our CTO have been relentless in this pursuit and as a result, theres been remarkable progress in building a solid.
And skilled operations platform for our existing products and developing the engine for new product releases to come.
If you can't tell we're super excited about next year.
Let's take some questions now.
Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one one and wait for your name to be announced to withdraw. Your question. Please press star one again please.
Please standby, while we compile the Q&A roster.
Our first question comes from Kyle <unk> with Canaccord.
<unk>. Please go ahead.
Yeah, Hey, guys. Thanks for taking my questions Congrats on the progress here.
Just starting off with the new <unk> 17 agreement with Janssen had a few questions about that.
First one could you talk about deal economics, I think with Lilly a year and a half ago that was about $11 million in accelerated revenue for like about a full year or so.
So there is a comparison here and then this agreement like was it brought hardly any change in the relationship with Lilly and does though we remain.
Partner for you going forward and then maybe just one clarification.
We will literally be using simo for its own Alzheimer's.
Because the company is working with other like analyzer and assay vendors as well so I'm just I get the question a lot about that thanks.
Thanks, Kyle yes, so the answer to your first question, we haven't announced any sort of deal economics on the.
J&J agreement that we signed.
However, and I would say that <unk> expect.
40 of the economics to come from.
Our <unk> and our kit sales and what we're doing with.
In the market and trying to get to 17 into a lot of folks' hands.
To your second question I think it was.
On the broad use of 217, our view on 2017 as that.
We want to try to get it into as many hands as possible we think that.
Our collaboration with Lilly continues and it's a very strong collaboration.
Some great data etsy tad onto <unk> platform and so we expect that relationship to continue.
And then on our LDP. It is using the J&J solution, but we we want to make both solutions available to this market.
I think you had a third question I may have missed it their call.
Yes, so far so good.
It was the is Lilly has its own Alzheimer's assay right is that going to be based on somehow or some other analyzer assay vendor.
Yes, yes, so I think.
There was some clarity at the Seatac meeting there.
There was a strong analytical and early clinical validation after some of our platform in 2017.
As I.
View that because theres a lot of different types of solutions and platforms in the market for Alzheimers detection.
We're one of the more sensitive ones around 2017 and.
I expect our efforts in collaboration to continue.
Okay. That's perfect. Thanks for that and it was good to see the NIH guidelines.
I was curious how influential those are two questions in terms of going against the grain and the kind of ordering with these novel products looks like these test that we're talking about here and then how could those guidelines if finalized impact CMS decisions regarding reimbursement as well like is that a key question.
Given the size of the test is still pretty early days.
Yes.
Agree with that call I think it was.
Nice to see the.
Nia guidelines and criteria and I think the while it is not a direct a clinical recommendation I think has a big influence and to your point.
<unk> effect for their decisions down the road.
I really.
In terms of a blood test.
If it's going to be a blood test that's on the same playing field as Pat.
2017 was it was a clear answer there and we've been working on this obviously with.
With our partners.
For years and the data has been pretty strong through the clinical trials and then too.
If you look at the accuracy thats required.
In blood it was high and and a sensitivity required is high and so.
Applaud organs.
Organization for.
Really picking and.
Great test and great marker for diagnosis.
Perfect well more of a I'll hop off.
Just on the P&L I guess as you kind of break out revenue.
You guys have a lot of one time items. If you parse those out product revenue was a little bit softer than service service was quite strong.
Product has the macro headwinds and thereby.
Instruments declined a lot year over year this quarter, but it is down I think 37% year to date.
Not just due to the recent capex constraints.
Maybe.
I guess why I mean, recognizing that overall revenues and solid and you have this program going.
<unk> product revenue has been relatively soft and particularly instruments recently and then for how much longer would you rely on kind of the service and excited with the revenue to drive growth.
At least more recently has been capex constrained capex related.
That has transferred to our accelerated program, where our people can do services I would say that what.
What you saw this year with our redevelopment program was really building.
Our platform I think if you think about say four or five quarters.
When we announced the program and we built that that quality wall we added.
Make sure I think going out the door, we're going to be.
Things are going to be scalable at the highest level of quality and so throughout the year.
There was always going to be.
There's always going to be a year of focus on our products and getting them in at the high.
This level to customers, so some back and forth, but overall the consumables.
Going out the doors of our customers.
<unk> and usage on a per platform basis is good and as you can see a lot of folks when it come and use our program our accelerator program to run. These trials. So we don't see any.
Softening on demand and desire using.
Using this platform.
Nor do we see it.
The area that we're in.
Yes, I'd just add within product revenue, if youre, combining instruments and consumables consumables are actually up 63% year over year and up 7% sequentially.
We're very pleased with the momentum we're seeing on consumables. Some of this was a catch up on demand as we streamlined our processes.
Instruments as you pointed out we continue to struggle with the overhang of the macro we saw a little bit of sequential improvement. This quarter, we were up about 5% one extra instrument, but we do expect.
As this overhang on instruments continues we do expect to continue to see volume come through the accelerator, which is helping to soften and balance that out for us.
Okay, and what is that what.
Was the catch up for consumables that was like Super helpful. Just to catch up if you can quantify that we're getting questions about that too. Thanks, yes, Im not sure we can quantify it in dollar terms, but if you just look at our sequential improvement.
Given that about 15 to last quarter, we went up about 1 million this quarter.
All of these have a little bit off just catching up on pent up demand.
Our team is now at the point, where they are mostly caught up bid or does that we couldnt close friends and we're now kind of back on a steady state.
Awesome, Okay, well, thanks, a lot guys I appreciate the time.
Thanks Bill.
Thank you one moment for our next question.
Yeah.
Our next question comes from Matthew <unk> with Goldman Sachs. Please go ahead.
Hi, This is Jake Allen on for Matt. Thank you for taking our questions I'll ask both my questions upfront first could you give us an update into the timing of FDA filing and approval for loosen in the IBD pathway for a broader menu of biomarker tests and then additionally, how should we be thinking about the longer.
Term gross margin profile for the business given the progress that you've made on margin expansion, which has trended ahead of expectations. Thank you.
Hey, Jake.
So I'll take your first question.
The FDA.
We've always said our strategy is.
Organization is to ensure that we're getting these tests out there.
As early and as fast as we can and so that mechanism has been through our CLIA cap certified laboratory here in Boston and so that's.
Thats the start but we also believe that.
These tests should also go through <unk>.
<unk> approval and our plan is to do that within next several quarters to make sure. We have a submission on our 2017 to the FDA and then in terms of timing that.
That can take.
Some time of course depends on the agency, but in the meantime.
We think getting testing done through the CAC.
<unk> is going to be important.
Yeah and on gross margins, let me address.
Near term expectations, and then I'll talk a little bit about the longer term as well.
Near term I would say our gross.
Margin performance this quarter exceeded maybe expected it would be we had signals to an early mid forty's number for the quarter and we did much better than that.
Because if volume partly because of our improvements.
A similar trend going into the fourth quarter, but we do expect some amount of margin headwind as we implement all of our production changes.
Longer term however, we still we've previously guided to wanting to accomplish margins in the <unk> in the early sixties, we continue to work towards that Theres, obviously, a lot of factors that will impact that product mix being a significant part of that as well as timing of how quickly some of our production processes.
Got to spin out the nuances.
Got it thank you guys and congrats on the continued progress.
Thanks Jake.
One moment for our next question.
Our next question is from Dan Brennan with Cowen. Your line is now open.
Hey, good morning, Thank you for taking the questions.
Maybe the first one just on the guidance just.
You've had some really good success here year to date, just wondering on the fourth quarter kind of implied guide.
It looks like kind of it looks very conservative in light of kind of what you've done year to date compared to.
You did in 2022, so I'm just wondering can you give us a little color on how we should how should we be thinking about that fourth quarter Guide and then if we if we cycled past the fourth quarter or are we still thinking double digit.
Growth expectations for 'twenty for just any early read there.
The velocity at which our consumables go out on.
On the other hand for instrument you still have the macro overhang that others have talked about which is unpredictable hard pressed to get good line of sight on so keeping those in mind also keeping in fact that the fourth quarter has less working days, which impacts the services businesses, we basically try to balance out our gates to a reasonable number.
With that said.
We continue to work towards the double digit number for next year as we get into the February quarter will start to size that up more and define that a little bit more but for now.
Definitely expecting the fourth quarter to have some of these headwinds and planning for that.
Got it and then maybe just one on kind of Alzheimers, how should we be thinking about the sensitivity and specificity of a blood based test is compared to when we think about both rule out and.
And rule in and then B, how should we think about timing for Medicare coverage.
I'll comment on the various kind of test that youre looking to implement.
Yes.
Yes, so on the Alzheimer's side.
I think what we saw in the guidelines I would sort of direct folks for the NIH guidelines in there it was very clear.
First with need and accuracy.
That's about 90% and when we did this we did two two studies one with the Amsterdam Dimetric cohorts around 500 individuals were tested and then we also looked at the bio Hermes trial, which was a multi center.
<unk> 17 U S clinical sites and in both large studies.
We were able to achieve accuracy is at or above 90%, which is.
The guideline or that criteria in the in the draft Nia so.
Happy about that.
Think that's going to be the case for any sort of tests that wants to try to.
Be on the same playing field as Pat and then your second question was on timing of reimbursement was that was the question. Yes, yes, yes. It was on it was on Medicare how do we think the pathway forward for Medicare.
Yes.
Expect.
The Medicare path, maybe initially.
B laid out, thereby local coverage determination or maybe in the next year or so as this becomes.
More and more important and in the hands of neurologists and people performing testing that it becomes potentially.
<unk> in the future or hard to say from timing perspective, but we hope that.
It gets the attention it deserves.
Great. Thank you masoud.
Thanks, Dan.
Thank you.
One moment for our next question.
Our next question comes from Puneet <unk> with Leerink partners. Your line is open.
Hey.
Thanks for taking the questions. So first one maybe I don't know if this was covered but.
There was a discussion of two cut assay to drive performance improvement at sea Tad can.
Can you maybe just talk about that if the <unk> assay is a structured that way and sort of what's the performance level that we should expect here. There was also a quite a bit of discussion on the.
The performance that would be needed to.
Two.
To deliver on P till 2017 were.
Obviously similar has done well historically.
So maybe can you just talk about.
How similar is positioned.
So.
<unk>.
Products that are.
Hey, Puneet.
Can you hear me you got cut off there at the end, but I got the first part of the question.
You could also talk about reference labs competition too I mean, how do you what do you think about that thank you.
So the so as I said, we did the we looked at two different sample cohorts two large sample cohorts.
I think when you start to look at a blood test that's going to be on the same playing field there could be the diagnostic test meaning.
The rule in or rule out.
You, obviously doing it some comparator, either CSF or Pat and there.
The two cut off approach.
Incredibly important so we use the two cut off approach.
I think that.
If youre, if youre not going to be doing imaging or CSF and then in terms of the sensitivity required.
Idolize the requirement is above 90% accuracy, our assay had the sampson spec and accuracy in both cohorts. So that was incredibly promising and I just want to remind folks that.
It's measuring.
The <unk> 17, effectively in blood getting the Femto gram per milliliter sensitivity.
And I'm doing it and clinical samples, where you're looking at patients that are <unk>.
Early stage.
Subjective cognitive decline mild cognitive decline Alzheimer's dementia, that's a broad range.
And if you want a test that's going to be able to effectively measure folks in the early stages of cognitive decline in.
In the future pre symptoms you want a test that has the highest sensitivity that's going to be broad based for patients at all ends of the spectrum and so I think based on these guidelines and some of the things that data that we're seeing not all tests and not all platforms are going to be able to do that.
And we're happy that the <unk> and the 217 platform.
We will be able to cover the broadest range of patients.
Got it Super helpful.
And then just wanted to.
Clarify obviously you had the launch of 2017, but just sort of the timing for the multiplex and sort of how do you think additions to that $2 17.
Additional biomarkers would that 2017 are required or do you think 2017, given the significance of this biomarker is now sort of adequate enough for four for the field.
Yes.
Good question that we there was some of that discussion at the <unk> meeting in I think.
One thing I just want to make very clear is that 217.
It is very important for our diagnosis and that has been well established opex to what I said earlier.
I.
I also want to make clear that this is an evolving field, where prognosis staging differential diagnosis are all going to be important.
One patient comes in they're diagnosed and thats it.
Theres treatment monitoring there is following on the patient and what we're seeing if you look at the <unk>.
Its clinical trials in the research.
It's going to likely be several.
A multi marker tests and that sensitivity required for each of those biomarkers is going to be high and so having a platform where you have wide bandwidth wide sensitivity bandwidth to be able to measure it how at the same time as you're measuring a beta our chief App our NFL.
On the same run same patient sample.
It's going to be incredibly important and so.
I think youre right 217 is.
The single marker for diagnosis I think it can be enhanced with multi markers and staging measurement.
Patient over a period of time and the prognosis is likely to be.
Marker based.
Got it okay. Thank you.
Thanks Bonnie.
Thank you one moment our next question.
Our next question comes from Kyle <unk> with Canaccord Genuity.
Go ahead.
Yes, thanks for the follow up guys Swann 2024, if you analyze this fourth quarter guidance.
Full year revenue for next year, which is in line with this year's levels.
Obviously, if the macro improves and the like.
This fourth quarter on a run rate can be kind of.
But it sounds like the rollout of these new skus of assays could create some noise and possibly growing pains next year as well. So it's kind of this is kind of a lot going on so can you just kind of walk through the main swing factors that could get you to like a buffer below the double digit growth target for next year, and then maybe any thoughts on cash usage in 234 as well would be helpful too. Thanks.
Ill give a broad stroke there call on.
Sort of the operational efforts and then bundle it can comment on.
On some of the margin and cash.
What we're doing right now in Q3, and Q4 is really focusing a lot of our resources on upgrades of the product line in preparation for the new assay deployments.
We believe and as you can see in the last several quarters that these new asset deployments are going to be gross margin accretive.
Now, while we're putting them into the line in Q3 and Q4, that's a lot of effort and a lot of focus from the team, but we expect those new product lines as we've been investing in the last six quarters will be positive for their business and we.
We'll be able to get those products to our customers.
In an efficient way and a lot faster. So we're bullish on that aspect of getting us there and as I said in the very beginning of the prepared remarks, we have.
Substantially completed a lot of the heavy lifting and we're going to be now doing implementation in the last couple of quarters. So.
And then on the.
The guidance for next year, and I think just similar to what <unk> said, we're going to talk about that in February and we'll have a better sense, but we still have a strong view that.
Our research business continues.
Continues to be strong and we're seeing that continued some of our demand.
For sensitivity and therefore our platforms.
And solutions.
Yes, I would say very consistent with everything <unk> said, we do expect 2024 to come in with a position of strength and for us to be able to keep building off of that.
On the cash side the only other thing that I would add is as <unk> mentioned in his prepared remarks. The way we think about the business is we will continue to drive the <unk> business to more and more efficiency.
Better performance.
Can better with our customers. So we'll continue to focus on that and we'll continue to drive it towards getting to cash flow breakeven. We've previously guided to that 170 to 119 number for cash flow breakeven and we continue to work towards that at the same time, we will deploy some capital into diagnostics right.
Right now, it's really small and right now it's really more focused on building out our infrastructure, but you will see us be very focused in we'll redeploy our capital and making sure that aligns to what strategy.
Okay that was great and then just one last one masoud.
Masoud as we stack up all these options in Alzheimer's diagnostics, one tariff clearly has the most sensitive tasks through 2017 kind of helped out with specificity, which I think is what will ultimately lead to that kind of rule type test for screening but.
How do you.
How do you think about like what's a clinically meaningful sensitivity level for neurology Biomarkers and then on that note.
Like what type of tests would be best positioned as a monitoring test and <unk>. Good luck with the number of markers or the levels of some of these metrics matter for that type of a product rather than the one you've already now to <unk>.
Yes, great question Carl.
The sensitivity I would expect.
A good test to have a sensitivity of 90% and above.
That's the I think the threshold.
Greater than 90% accuracy.
And to your point.
Strong specificity, if it's going to be a rule in test so.
I think that that's important for a diagnostic and then in terms of monitoring.
Staging monitoring first I believe that.
Tau marker.
As in that multiplex for monitoring.
And staging but we also are seeing the importance of NFL G fab and a few sort of new types of Tau variance that we've been doing a lot of.
Work on in our pipeline so.
From a monitoring perspective, I could see it being multi marker.
And then differential diagnosis.
Let's also consider that there are folks coming in to the neurologist office.
And there are signs of dementia.
We're not seeing the amyloid pathology.
Then what is that and are there I think the.
Need for a differential diagnosis is important and there you will for sure need additional markers beyond toll to be able to provide that differential diagnosis. So we're working with.
Several partners we're in a few clinical trials that are looking at this including our own.
Where we're looking at a broad based patient set in a multi marker setting.
And I think the point of all of this is to 17 is great.
We believe the best marker for the diagnosis or there's still a lot of work to do call in research and discovery.
Additional clinical work and testing for what's a much larger <unk>.
Sure and if you sort of look going out.
What we're seeing in the field and what's coming out.
From industry publications.
It's going to be a multi marker test that's going to require sensitivity for all the markers that would be able to tell the whole picture.
Got it okay. That's perfect. Thanks, Vasu thanks, guys.
Thanks Scott.
Thank you. This does conclude the question and answer session.
Thank you for your participation in today's conference. This concludes our program you may now disconnect.
Okay.
[music].
Yeah.
Yes.
Okay.
Yes.
Okay.
Okay.
[music].
Okay.
Okay.
Okay.