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Quanterix: The Improbable IPO


By Tom Taulli | Contributor

December is a time when you don’t see many IPOs. But this was not an issue for Quanterix (NASDAQ:QTRX), a developer of a next-generation digital immunoassay platform. The company went ahead with its public offering during this time as it issued 4.3 million shares at $15 each.

But this was far from the only unconventional move. “Unlike most other companies, our deal was not about the money,” said Kevin Hrusovsky, who is the CEO of Quanterix. “We looked at the IPO as a marketing event. Many of our institutional investors are also major holders of our target customers. It’s a unique strategy.”

Now before Hrusovsky came on board — which was about four years ago — the company was facing some major challenges. Note that during a seven year period there were four CEOs! Quanterix also suffered various manufacturing and regulatory challenges.

Yet Hrusovsky saw lots of potential – but also realized there needed to be a different strategy. There were the typical moves, such as cutting costs and bringing on new board members. But Hrusovsky also realized there needed to be a change in the focus.

It actually helped that he was not a scientist or had an extensive background in the blood test market. In other words, he could bring a fresh perspective to Quanterix but also express the messaging in layman’s terms.

“One of the things I understood was the importance of proteins,” said Hrusovsky.  “They are critical for treating diseases.  This is where healthcare will be transformed.”

The Research Opportunity

Note that the original target market for the company was on the diagnostics market. While it’s a massive opportunity, it can be a challenge to get traction.  Note that there are major competitors that have significant advantages.

So instead Hrusovsky looked at the research category. Not only was it more receptive to new approaches, there was also little regulatory or reimbursement risk. Essentially, there was much less friction for growth.

But of course, there were still difficulties. After all, the headlines from the implosion of Theranos had a jarring impact on the industry. Might other operators have major problems too?

“My advisors recommended that I avoid the topic,” said Hrusovsky. “But I disagreed. Theranos was the elephant in the room. It couldn’t be ignored.”

Besides, this was a good opportunity to discuss the different approaches. “We are about transparency,” said Hrusovsky. “Our systems have been the subject of over 200 peer-reviewed journals. We also have summits where we take in-depth looks at new solutions and trends. To be successful in the healthcare industry, you need to have credibility. And this means being an open book.”

All of this goes to Hrusovsky’s management philosophy, which he calls AT&T. It stands for accountability, teamwork and trust. “It’s a simple approach,” he said, “but it covers what is important. AT&T is about creating a culture of ownership, in which you can rely on others. There is no time for politics.”

As for the results for Quanterix, there are clear signs that the strategy is paying off. In the latest quarter, revenues shot up by 66% to $8.6 million. The company also sells consumables, which should provide a nice source of recurring revenues.

“We see this as a 10-year growth path,” said Hrusovsky. “But more importantly, we are helping to solve some of the world’s worst diseases in broad areas like oncology, neurology and cardiology.”