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Quanterix Hopes Ipo Will Help Drive Biotech, Pharma Business

Jan 17, 2018 | Adam Bonislawski 

NEW YORK (GenomeWeb) – Fresh off a $74 million initial public offering, Quanterix is looking to
make immediate inroads in the biotech and pharma research space with longer-term plans to
move into diagnostics and health monitoring.

The company believes its ultrasensitive immunoassay technology is well-suited to pharma
research where it can allow scientists to measure biomarkers undetectable by current methods
and improve upon the data quality of existing assays, said Kevin Hrusovsky, Quanterix’s
executive chairman and CEO.

The recent IPO, Hrusovsky said, was in large part done to help generate business from these

The company closed the IPO last month, selling more than 4.9 million shares of common stock at
$15 per share and raising $73.7 million in gross proceeds. Hrusovsky said that Quanterix’s
number one reason for going public was “to get further discovered by biopharmaceutical

“We know that our technology can play a significant role in helping them improve the efficacy and
safety of their drugs,” he said. “But they need to understand and learn about us, and by being
public we are getting a whole new level of exposure to [these companies].”

Quanterix’s Simoa technology uses arrays of femtoliter-sized reaction chambers designed to
isolate single molecules, enabling each well to serve effectively as an independent assay for a
single molecule. A detection system consisting of an optical fiber bundle to carry light in and out
of each well, a proprietary image-capture device, and image-analysis software allow researchers
to observe these assays on a single-molecule level.

Quanterix has marketed the technology primarily for use in drug development where it says it
allows researchers to measure extremely low-abundance biomarkers. This has relevance to a
variety of disease areas, but Simoa has found particularly strong uptake in neurology where its
high sensitivity allows researchers to measure brain-based biomarkers in blood, where they are
typically present in much lower concentrations than in cerebrospinal fluid. Blood is significantly
easier to sample than CSF, which is typically collected via lumbar puncture.

The company’s IPO was greeted with enthusiasm by several investment banks, with Cowen and
Leerink this month launching coverage of Quanterix with an Outperform rating and JP Morgan
initiating coverage with an Overweight rating. Leerink analyst Puneet Souda cited the company’s
focus on neurology research as an advantage, noting that this area has received growing funding
from the National Institutes of Health.

The analysts noted also that they see an opportunity for Quanterix to cut into the existing
research immunoassay market, where some 15,000 protein immunoassay instruments from firms
like Luminex, Millipore, and Bio-Rad are currently in use. Here, Hrusovsky said, Quanterix
believes its high sensitivity will prove advantageous by allowing researchers to measure higher abundance
biomarkers in smaller sample volumes. This, he said, will let researchers dilute their samples to reduce matrix effects that can contribute to background noise and variability.

Hrusovsky noted that Quanterix’s assays are around twice as expensive as conventional
immunoassays but said that the company plans to bring costs down through multiplexing. Key to
this plan is the release of its new SR-X platform, a benchtop system that can multiplex up to six
assays. Hrusovsky said that though the company plans to begin sales of the SR-X platform in the
first quarter of 2018, it placed five instruments in Q4 2017.

Proteins are Quanterix’s main area of focus, but the company has recently begun exploring use of
the system for detection of nucleic acids, and Hrusovsky said it can detect these molecules with
the same sensitivity as digital PCR. He added that Quanterix is currently working with several
pharma companies developing assays to particular microRNAs for monitoring drug efficacy.

In July, researchers from Quanterix, Destina Genomics. and the University of Edinburgh published
a study in PLOS One using Simoa to detect microRNA-122, a biomarker used for diagnosing liver

Quanterix’s pharma research revenues have risen rapidly in recent years, going from $4.5 million
in 2014 to $18 million in 2016. They are projected to be between $22.5 million and $22.9 million in
2017, Hrusovsky said. He said that over the last 2.5 years more than 500 clinical trials have used
the company’s technology. He added, though, that the company believes it has penetrated only 1
percent of the pharma research market to date.

“Our focus as a company for the next year or two is only on [pharma] research markets where
there is a no regulatory or reimbursement risk,” Hrusovsky said. He said that he expects the
company’s diagnostics efforts to begin generating revenue around 2020, adding that it plans for
its portfolio to consist of both laboratory-developed tests and in vitro diagnostics, with focuses
on neurology, oncology, and infectious disease.

On the IVD front the company has development deals with BioMérieux and Abbott, Hrusovsky
said. Under the terms of its deal, BioMérieux took a $15 million equity stake in Quanterix as part
of the company’s $18.5 million Series C financing round in 2012.

Hrusovsky said the company has also placed 22 instruments in facilities doing LDT development.
Quanterix’s success has not gone unnoticed by other immunoassay companies. Most notably,
MilliporeSigma this year launched its own ultrasensitive immunoassay platform, the SMCxPRO,
which the company said is aimed at competing with Quanterix’s Simoa technology. The SMCxPRO uses single-molecule counting technology developed by high-sensitivity immunoassay firm Singulex. MilliporeSigma (then EMD Millipore) acquired the rights to Singulex’s life sciences business in 2015.

When MilliporeSigma announced the SMCxPRO in the spring of 2017, it marketed the device as a
lower-cost, benchtop alternative to Quanterix’s Simoa HD-1 Analyzer. However, with the
introduction of the SR-X platform, Quanterix is competitive with the SMCxPRO both on price and
in terms of instrument footprint. The Quanterix instruments are capable of multiplexing assays,
while the SMCxPRO is a single-plex instrument.